NEW YORK - WITH just weeks before President-elect Barack Obama is sworn in, his choice for secretary of state, Mrs Hillary Rodham Clinton, is scrambling to reduce massive campaign debt before federal ethics rules prohibit her from doing so.

Mrs Clinton and her husband, former President Bill Clinton, will headline a major debt retirement event in New York Dec 15 with Ugly Betty star America Ferrera as master of ceremonies.

Tickets range from US$50 to US$1,000, with top donors earning a premium seat and a backstage photo with the former first lady.

Mrs Clinton also plans to sell a children's book, titled Dreams Taking Flight by author Kathleen Krull, about her pioneering candidacy.

Mrs Clinton's mother, Mrs Dorothy Rodham, planned to send an e-mail to supporters later this week asking them to purchase the book to help raise funds to pay down Mrs Clinton's debt.

On Tuesday, a day after Mr Obama announced she would serve as his top diplomat, Mr Bill Clinton signed an e-mail to supporters asking them to send a note of congratulations to his wife and including a link for contributing to her debt retirement.

The urgency is rooted in the size of the New York senator's unpaid bills and the fundraising restrictions she will face once she joins Mr Obama's Cabinet.

At the beginning of November, Mrs Clinton owed US$7.5 million (S$11.43 million) to vendors from her failed presidential bid, according to campaign finance records.

The largest share of the debt - about US$5.3 million - is owed to the polling firm of Mr Mark Penn, the Clintons' longtime political strategist.

She owes hundreds of thousands of dollars for printing, equipment rental, phone banks and other services.

Mrs Clinton has slowly been trimming the debt since suspending her campaign last June, partly with Mr Obama's help. But her fundraising efforts will be curtailed if she is confirmed as secretary of state and becomes covered by the Hatch Act, which regulates political involvement by federal employees.

A 2001 advisory opinion by the federal Office of Special Counsel said a federal employee with a campaign debt would be prohibited from 'personally soliciting, accepting or receiving political contributions.'

That means Mrs Clinton's political committee could keep raising money to pay off her creditors, but without her direct involvement.

The lack of access to Mrs Clinton could pose a disincentive for donors, said Ms Sheila Krumholz, director of the Centre for Responsive Politics, which tracks political donations.

'People write a check to get into the room with a candidate or government official. If she's legally barred from fundraising, the No. 1 reason for giving has been removed,' Ms Krumholz said.

'It's like attending a wedding and the bride isn't there.'

The advisory opinion does allow the former candidate to appear briefly at fundraising events and thank donors.

That restriction could suit Mrs Clinton well, according to some of her top bundlers who say neither she nor her husband has ever been good at asking for donations.

But none of the Hatch Act rules apply until Mrs Clinton is confirmed, so there's an opportunity for people eager to get some face time with the incoming secretary of state.

Aides said she will try to avoid doing anything that suggests she is leveraging her new post for fundraising advantage.

Mr Brad Smith, a former Federal Election Commission chairman, said Mrs Clinton would be wise to avoid any appearance of conflict of interest.

'If nothing else, there's the embarrassment element,' Mr Smith said.

'A secretary of state trying to raise campaign money is kind of ugly.'

Mrs Clinton's new job will help her avoid some pitfalls that loom when political access is linked to campaign donations. For example, foreign citizens, who might be interested in forging a relationship with an incoming secretary of state, are legally barred from contributing to US political campaigns.

Still, Ms Krumholz said, there are plenty of US citizens with strong ties to other countries who would welcome the chance to write Mrs Clinton a check.

'Wealthy people who have family overseas and are tied to issues in the country - human rights issues, for example - have more incentive to give,' Ms Krumholz said.

Analysts said that fundraising to retire a politician's debt - never easy - is more difficult during the recession. Also, Mrs Clinton is trying to pay off debts from the Democratic primaries, where many of her supporters already gave the maximum US$2,300 per person. They cannot be solicited again.

The large share of her debt owed to Mr Penn, a controversial figure and harsh Obama critic, also complicates matters for Clinton. Many Democrats blamed him for her strategic failings.

Mrs Clinton also has about US$6 million in her Senate re-election account; some of that could be used under strict restrictions to help pay these debts.

Under FEC rules, she would need to ask each contributor's permission to move the donation to her debt retirement account - and none could come from people who already contributed the maximum to her presidential bid. -- AP