Final answer:
The 'soft-money loophole' refers to the ability of political parties to raise unlimited funds for party-building activities, a situation that arose from the Supreme Court's ruling in Buckley v. Valeo and was later addressed by the Bipartisan Campaign Reform Act (McCain-Feingold Act) in 2002.
Step-by-step explanation:
In the case of Buckley v. Valeo, the Supreme Court ruling enabled political parties to raise funds without strict federal limits for activities not directly advocating for the election or defeat of a candidate, creating what is known as the soft-money loophole. This term refers to the ability of parties and interest groups to spend money on campaigns through party-building activities like get-out-the-vote efforts without it being subject to federal regulation. Efforts to close this loophole led to the enactment of the Bipartisan Campaign Reform Act in 2002, commonly known as the McCain-Feingold Act, which sought to limit the influence of soft money in politics by setting limits and prohibitions on these types of unregulated contributions.