- Associated Press - Friday, October 17, 2014

RALEIGH, N.C. (AP) - Republican Thom Tillis and his allies on Friday began running TV ads zeroing in on allegations rival North Carolina U.S. Sen. Kay Hagan benefited from federal stimulus dollars awarded to a company that her husband co-owns.

Hagan’s campaign rolled out its own ad denying she did anything unethical - and claiming Tillis, the state House speaker since 2011, is the one with his ethics problems.

Tillis and the group Freedom Partners Action Fund unveiled separate commercials in the close U.S. Senate race highlighting $390,000 in grants and tax credits the company called JDC Manufacturing received for energy efficiency upgrades to a building.

Hagan, a Democrat, voted in 2009 for the $787 million stimulus law, which many Republicans now pan as being ineffective. The grants were made in 2011. The Hagan ad’s narrator says Hagan’s family didn’t profit from the grants, which were cleared by an ethics lawyer, and the funding’s use was monitored by auditors. Hagan has said she and her office had nothing to do with the grant selection process.

The North Carolina Republican Party chairman already has filed a complaint with the Senate Ethics Committee asking whether Hagan used her position to help steer dollars to the Greensboro-based company co-owned by Chip Hagan. Tillis and his allies have seized on the issue in recent weeks and the ads ramp up their focus on the allegations.

“We’re starting to see more of that coverage picked up and be talked about more and more, and I think that’s something that folks are going to hear more about rather than less,” Rob Collins, executive director of the National Republican Senatorial Committee, said this week.

Freedom Partners Action Fund called the commercial part of a “seven-figure” campaign. The group didn’t respond to an email Friday seeking a more detailed figure for the purchase price of the ad and in which markets it was running. “Grants, tucked away in Obama’s stimulus, paid the Hagans,” says the narrator in Tillis’ ad.

Hagan’s ad says Tillis is desperate close to Election Day. He’s “even attacking Kay Hagan’s family,” the Hagan narrator says.

Freedom Partners has ties to financiers Charles and David Koch and is running ads in many states.

The two Koch brothers gave $2 million each to Freedom Partners fund through trust funds in the third quarter of this year, according to federal campaign reports. Other donors included Henderson-based Variety Stores, which gave $400,000. Variety Stores is led by Art Pope, a former North Caroilna state lawmaker, recent state budget director and conservative philanthropist. Freedom Partners reported taking in $15 million in the third quarter.

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Associated Press writer Ken Thomas in Washington contributed to this report.

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