If outgoing Sen. Peter Fitzgerald’s (R-Ill.) experience is any guide, retiring old campaign debts appears to be more difficult than retiring from the Senate itself. And campaign finance experts say the business of settling debts for self-financed candidates will get even stickier under provisions of the new campaign finance law.

More than five years after Fitzgerald tapped into his banking fortune to run for the Senate — the multimillionaire lawyer successfully knocked off then-Sen. Carol Moseley Braun (D) in 1998 — his campaign is still $2.9 million in debt, most of that stemming from a bank loan and loans from his own personal funds.

In addition to several outstanding bills from political consultants, Fitzgerald still owes approximately $2.1 million to LaSalle Bank, pursuant to a line of credit provided to Fitzgerald after he personally guaranteed the loan with stock holdings. The campaign owes another $772,500 to Fitzgerald directly.

But with little cash on hand — the campaign had only about $548,191 remaining in its coffers as of June 30 — it’s looking more likely that Fitzgerald might have to eat at least some of the costs of his first, and only, bid for Congress.

Fitzgerald isn’t the only sitting lawmaker who has been trying to recoup campaign debts years after being elected. Sen. Maria Cantwell (D-Wash.) — a dot-com executive who spent millions on her own Senate bid in 2000 — has spent years holding fundraiser after fundraiser to repay the millions of dollars in loans she made personally or took out through banks.

But under the Bipartisan Campaign Reform Act of 2002, all that will soon change.

In addition to banning soft money and regulating issue advertising, the new law places tight restrictions on how self-financed candidates’ political committees may repay personal loans to candidates that exceed $250,000.

Specifically, the law allows campaigns to use contributions made after Election Day to pay off up to $250,000 of a personal loan, but any amount above that threshold can be paid only with funds donated on or before the date of the election.

Experts say the new rules will make candidates think long and hard before committing their own funds to a campaign for Congress, because there will be no guarantee they’ll be able to recoup the money.

“It certainly changes the equation,” observed Paul Sanford, director and general counsel of the Center for Responsive Politics’ FEC Watch.

Sanford said the change “un-writes what has historically been a fairly cardinal rule of Washington and that is that money follows power and … [that once candidates are elected] they can repair whatever financial damage you’ve done to yourself to get there in the first place.”

Letters from Fitzgerald’s attorneys, Ben Ginsberg and Glenn Willard, to Federal Election Commission officials explained that the Senator is “returning to donors all funds contributed for the 2004 general election” but “seeks guidance on various options being contemplated for the remaining cash-on-hand.”

The options Fitzgerald is contemplating (and may combine) include: contributing money to nonprofit organizations; transferring the funds to national, state or local party committees; paying off the debts to LaSalle Bank and others; and refunding contributors.

At the same time, Ginsberg has asked the FEC to confirm that new regulations contained in BCRA won’t foul up Fitzgerald’s plans and “would have no application to the retirement of indebtedness incurred during the 1998 election cycle.”

Nonetheless, Ginsberg declined to tell the FEC how the Senator plans to divvy up his cash on hand, stating that once he receives an advisory opinion from the FEC “on the propriety of the contemplated uses irrespective of amounts” then “precise allocations will be made.”