Recent events suggest that legal fights could become even costlier for Members of Congress and candidates.

Under the new campaign finance law, legal defense funds, popular vehicles embattled Members of Congress have relied upon for years to help them pay hefty legal bills, may not enjoy the same widespread appeal they used to, according to campaign finance experts.

At the same time, the Justice Department is urging the Federal Election Commission to reject a former New Jersey Senate candidate’s request that he be able to use leftover campaign funds to defray legal bills associated with a federal corruption case.

For years, lawmakers facing legal troubles have alternatively relied on either their campaign war chests or separate legal expense funds to pay off certain legal bills.

Legal expense funds, however, have certain advantages — namely, that lawmakers can raise money from a variety of sources, including corporations, and they can raise the money in larger chunks than are allowed for campaign donations.

But Glen Shor, associate legal counsel for the Campaign Legal Center, said legal defense funds are no longer viable in certain cases because of new prohibitions in the Bipartisan Campaign Reform Act.

“The reform act says that Members of Congress can’t raise anything but hard money in connection with a federal election. It also says organizations or entities controlled by Members of Congress can’t receive or spend anything but hard money,” Shor explained. “The question is going to be when you have an organization [like a legal defense fund] that’s controlled by a Member of Congress, and it’s spending money that’s not subject to the prohibitions and limitations, the question you have to ask is, is this spending in connection with a federal election.”

While each instance would need to be assessed on a case-by-case basis, Shor said that if a lawmaker’s legal expense is directly related to federal election activity he or she will have to abide by hard-money limits and other prohibitions contained in BCRA.

Other experts agreed.

“There is no exemption for legal defense funds,” said Larry Noble, the executive director of the Center for Responsive Politics and former FEC general counsel.

Noble said his reading of the law, which bans soft money, is that it also closes the door on legal expense funds, which have largely operated outside the purview of the FEC in recent years.

The House and Senate ethics committees generally oversee such accounts, which have certain advantages for financially strapped lawmakers caught up in legal quandaries. Contributors to legal defense funds may give up to $5,000 a year and the money may come from corporations or individuals, although registered lobbyists and foreign agents are prohibited from donating to such funds. The donations also don’t count against overall limits on donations to other accounts, such as campaign committees or leadership political action committees.

“What you have here is a federal officeholder soliciting soft money,” said Noble. “I don’t see an exception for the legal defense funds. They can use their own campaign funds for legal defense works, but the ability to set up legal defense funds has been greatly deterred by BCRA.”

Legal expense funds have been widespread on both sides of the aisle over the past several years as a number of Members have endured lengthy and costly legal battles.

Among those raising money under the auspices of legal defense funds in recent years have been former Sen. Robert Torricelli (D-N.J.), who was the subject of Justice Department probes, and former Rep. James Traficant (D-Ohio), who recently went to prison after being convicted on bribery, racketeering, tax evasion, fraud and obstruction of justice charges.

Other have included Rep. Jim McDermott (D-Wash.), who has been involved in a long-running dispute with Rep. John Boehner (R-Ohio), and Rep. Tom DeLay (R-Texas), who was involved in a lawsuit brought by House Democrats charging him with racketeering.

But when Rep. Denise Majette (D-Ga.) recently sought an advisory opinion from the FEC as to whether she could establish a legal expense fund to pay legal expenses related to a civil lawsuit brought against her by supporters of her 2002 primary opponent, some watchdog groups cried foul.

Majette’s name was eventually dropped from the lawsuit, but she still managed to incur some hefty expenses, and her attorney, G. Scott Rafshoon, argued that a legal expense fund for this limited purpose shouldn’t be subject to federal contribution limits or restrictions.

Shor wrote his own letter to the FEC asserting that Majette’s request failed to take into account new rules under BCRA.

“As an entity ‘directly or indirectly established, financed, maintained or controlled by or acting on behalf of’ a Federal officeholder, the contemplated Legal Expense Fund itself may not solicit, receive, spend, direct or transfer funds in connection with an election to Federal office, unless the funds are subject to the limitations, prohibitions and reporting requirements of” federal campaign laws, Shor wrote.

Shor argued in his May 12 letter that the funds would be “in connection with an election for Federal office” since the need for the money originates in a lawsuit surrounding her primary election and her status as a candidate and the legal defense fund would be under Majette’s control.

“This would foreclose any possibility of this Fund’s receiving even limited donations from corporations and labor organizations,” Shor stated. “Contributions from individuals to the Fund would be capped under FECA’s amount limitations. Moreover, donations to and spending by this Legal Expense Fund would have to be reported to the FEC.”

The FEC recently announced a time extension to deal with the matter, giving the watchdog agency until Aug. 26 to render a decision.

However, another campaign finance lawyer who advises a number of federal candidates, corporations and trade associations said he also believes the federal soft-money ban poses problems for Majette.

“I agree … that BCRA supercedes the FEC’s prior advisory opinions on legal expense funds and that 2 U.S.C. 441i(e) applies to legal expense funds and, therefore, would prevent Rep. Majette from raising soft money in $5,000 increments from corporations,” the lawyer explained.

The lawyer noted that Majette, even under BCRA, should still be able to use campaign funds to defray her legal costs.

In an unrelated development, U.S. Attorney Christopher Christie recently wrote to the FEC urging the agency to reject former GOP New Jersey Senate candidate James Treffinger’s request that he be allowed to use excess campaign funds to pay for his legal defense in a federal corruption case.

Treffinger recently pleaded guilty to conspiring to hinder a federal investigation into his conduct as an Essex County executive and his commission of mail fraud to defraud the county and its citizens.

“As a matter of public policy, the [FEC] should find that Mr. Treffinger’s legal fees are personal expenses, incurred irrespective of his campaign, because his criminal acts were committed in his capacity as County Executive and constituted an abuse of that position of public trust,” Christie wrote.

“Moreover, with his plea, Mr. Treffinger acknowledged that $29,471 of the funds in his campaign accounts were misappropriated from the Essex County payroll and constitute criminal proceeds, not campaign funds,” Christie continued, urging that “those funds should be safeguarded for restitution rather than spent on any campaign expense.”