"Soft money" refers to contributions to political parties' "non federal accounts," which are not subject to the legal "hard money" limits set by the Federal Election Campaign Act (FECA). Technically, soft money contributions should go only to such state and local political activities as voter registration, get-out-the-vote drives, and bumper stickers.

In 1978, however, the FEC permitted the Kansas Republican State Committee to use corporate and union funds to finance voter drives for both federal and state candidates. This created a new loophole in the federal election laws, and by 1980 both major parties were using soft money contributions for "party-building" activities in support of their federal candidates.

The soft money loophole allows the parties to accept unrestricted contributions directly from corporations and unions (which may not give directly to candidates), and from PACs and wealthy individuals.

The parties cannot give soft money to candidates or spend it on media that advocate specific votes. But they may spend unlimited funds on ads, phone banks or mailings that praise a candidate, his or her issues, or that criticize or attack an opponent.

Since 1991, when the FEC began requiring disclosure of soft money sources, official totals have grown steadily with each election cycle. According to CRP, during the 2000 election, the chemical industry made $5.55 million in regulated, direct contributions. In addition, it contributed $5.51 million in unregulated soft money.

The table below shows that the chemical industry's unregulated contributions to both parties have consistently grown in relation to regulated contributions since 1990.