Christine O’Donnell: Federal Investigation of Campaign Finances an “Establishment Trick”

Red alert for the former Delaware GOP U.S. Senate candidate Christine O’Donnell.

Defeated Tea Party candidate Christine O’Donnell, who ran for vice president Joe Biden’s former Senate seat, is reportedly under federal investigation for using campaign funds for personal expenses, the Associated Press reports.

The criminal probe is being conducted by two federal prosecutors and two FBI agents, an anonymous source told the AP. The matter has not yet been referred to a grand jury.

Spokespersons with the FBI in Washington and the Delaware Attorney General’s office declined to comment.

But O’Donnell campaign spokesman Matt Moran told ABC News the wire report was the first he had heard of an alleged investigation.

“The anonymous source seems politically-motivated and may well be tied to the ultra-liberal, George Soros-financed, former Sen. Biden staffer-run CREW [Citizens for Responsibility and Ethics in Washington] complaint,” Moran said.

The left-leaning watchdog group filed complaints with the Delaware U.S. Attorney’s office and Federal Election Commission in September alleging the Republican candidate misused campaign funds.

“These charges are already being addressed with the FEC,” he said. “We are confident that they will be resolved in the New Year, and put an end to the frivolous sensationalism regarding this matter.”

Moran called the allegations surrounding O’Donnell’s campaign finances unsubstantiated and “old news,” dating primarily to her 2008 campaign for then-Sen. Joe Biden’s seat. The issue first surfaced during O’Donnell’s repeat bid for the Senate earlier this year.

Christine O’Donnell has responded to the FLAP.

Christine O’Donnell on Wednesday night responded to reports her campaign is being investigated, saying the issue is being drummed up by liberals in an “establishment trick” to discredit the tea party movement.

The losing Republican Senate candidate issued a statement saying that Democrats had warned her about “phony” investigations.

O’Donnell’s campaign manager, Matt Moran, who will have a role in O’Donnell’s new political action committee, called the Associated Press report part of “the same unsubstantiated allegations and rumors that have been circulating in the press for months.” Moran said the campaign will cooperate with any investigation if one should materialize.

Moran also noted that Melanie Sloan of the ethics group Citizens for Responsibility and Ethics in Washington, which first raised questions about the campaign’s spending, was once a staffer for then-Sen. Joseph Biden. O’Donnell ran against Biden in 2008, and the Senate race in 2010 was for his former seat.

“There was no impermissible use of campaign funds. Period,” Moran said.

The O’Donnell statement:

“Since anonymous sources are being taken seriously, please allow me to share some tips I’ve received and keep the tipsters’ identities anonymous. We’ve been warned by multiple high-ranking Democrat insiders that the Delaware Democrat and Republican political establishment is jointly planning to pull out all the stops to ensure I would never again upset the apple cart.

“Specifically they told me the plan was to crush me with investigations, lawsuits and false accusations so that my political reputation would become so toxic no one would ever get behind me. I was warned by numerous sources that the DE political establishment is going to use every resource available to them.

“So given that the King of the Delaware Political Establishment just so happens to be the Vice President of the most liberal Presidential administration in U.S. history, it is no surprise that misuse and abuse of the FBI would not be off the table.  And further connecting the dots, do you think it is just a coincidence that Melanie Sloan was a senior Biden staffer just before she joined CREW and filed her complaint against me?!

“I have faith that our supporters and the general public will see right through these thug tactics. This is simply an Establishment trick to stop the anti-establishment Tea Party movement in its tracks.

“Heck, the Presidency is at stake in 2012.”