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RALEIGH Kay Hagan's chief rival in the Democratic primary for U.S. Senate has accused the state senator of using her status as a powerful and politically connected committee chairwoman to intimidate his potential supporters.

"There is an inside machine that is working very hard to lock down the money in the state," said Jim Neal, a Chapel Hill investment banker and Greensboro native. On the stump and in phone calls to potential donors, Neal has told audiences that potential supporters were being "muscled" by political operatives friendly to Hagan.

"Someone will agree, 'Jim, I'll throw a fundraiser for you.' And then all of a sudden we won't hear from them for a while and the next thing you know, they're throwing a fundraiser for Kay (Hagan)," Neal said when asked to describe how this muscling worked.

Hagan said she had "not heard of this at all" and said she was shocked Neal was making the allegation as part of his stump speech.

Neal and Hagan are the front-runners in a race whose winner will almost certainly face Republican incumbent Elizabeth Dole on Nov. 4. Fellow Democrats Duskin Lassiter, Howard Staley and Marcus Williams are behind in fundraising, media attention and support in opinion polls.

Neither Neal nor his campaign staffers would provide the names of those who might have been coerced as described. So it's unclear whether potential supporters are facing unusual pressure or just feeling the typical arm-twisting from a political establishment backing one of its own.

Certainly the story burnishes Neal's credentials as a political outsider, someone who rooted beyond the political culture of Raleigh and Washington. This is Neal's first campaign, but he is not a political novice. He has been a fundraiser for campaigns such as former U.S. Sen. John Edwards' 2004 presidential bid.

Hagan is a state senator from Greensboro and the co-chairwoman of her chamber's appropriations committee, a powerful post that is a choke-point for billions in state funding. Her campaign is openly backed by the likes of Gov. Mike Easley, former Gov. Jim Hunt and Senate President Pro Tempore Marc Basnight.

When first told of Neal's statements, Hagan said she didn't understand exactly what she was being accused of doing.

"I have a great record in the state Senate, I am a public servant, and I cannot think of a higher compliment than for people to tell one of my opponents that they're supporting me because of the good job and good work I've done," she said. When pressed on the notion that Neal said she was using her legislative power to influence the flow of campaign money and endorsements, Hagan said that wasn't true.

"I have not heard of this at all, and I'm pretty shocked," she said. "It's sort of a twisted logic to me the way he's spinning that to make it sound negative."

It's not unusual for high-profile political operatives to sit out primaries, since intervening can cause bad blood with potential allies.

"I stay out of primaries," said Jim Long, the state's long-serving Insurance Commissioner who said the Neal campaign tried to enlist his support.

"They wanted me to issue an endorsement on him, and I said I just didn't do it," Long said. "I don't need to be involved in a primary between him and Sen. Hagan and the others."

Long said he was focusing his political attention on helping to elect his deputy and former state legislator Wayne Goodwin as his successor.

Other natural allies could be blocked by institutional policy. For example Neal lists serving as a fundraiser for UNC system President Erskine Bowles during his 2004 U.S. Senate campaign. Bowles, however, has not come out for either candidate.

A spokeswoman for Bowles points to a UNC policy that requires the president and senior administrators to steer clear of political involvement.

"I have not and will not endorse any candidate for any office," Bowles wrote in an e-mail, noting he will vote and will tell friends privately if asked who he is voting for.

"There's no doubt in my mind that the establishment wants badly to win that seat and has the reflexive reaction that Jim (Neal) can't do it," said Paul Hardin, who retired as chancellor of UNC-Chapel Hill in 1995 and openly backs Neal. Hardin said many political insiders believe that because Neal is gay and relatively unknown he can't unseat Dole.

"I think they've cut off some funding and they have brought pressure on other people," Hardin said. He points to reports last fall that the Neal campaign was initially shunned by the national Democratic Senatorial Campaign Committee. Neal has said the committee and his campaign have "called a truce."

Political consultant Brad Crone, who is working for neither U.S. Senate candidate, said Neal is running into an age-old complication of raising money in primaries. Democratic donors form a complex web of alliances, and there will be those who don't want to offend Hagan or, by extension, powerful allies in the state Senate.

Hagan, Crone said, may run into problems fundraising from donors because she backed state Treasurer Richard Moore in his primary with Lt. Gov. Bev Perdue for the Democratic gubernatorial nomination.

A flagging economy and aggressive fundraising by other campaigns are sucking funding from the U.S. Senate campaign, he said.

"You will see all types of maneuvering," he said.

Contact Mark Binker at(919) 832-5549 or mbinker@news-record.com