WASHINGTON - Republican challenger Kurt Bills on Monday questioned U.S. Sen. Amy Klobuchar's connection to convicted Ponzi schemer Tom Petters, citing allegations in a conservative online magazine suggesting that the former DFL prosecutor failed to pursue Petters in the late 1990s when she was the Hennepin County Attorney.

Klobuchar and the Hennepin County Attorney's Office both issued statements denying allegations of wrongdoing, which are emerging in the late stages of Bills' long-shot campaign to unseat Klobuchar.

"Some troubling documents have come to light about Senator Klobuchar's relationship to Tom Petters' Ponzi scheme," Bills said in statement, which echoes a report published Friday in the Daily Caller. "Reports surfaced that, while Hennepin County Attorney, Amy Klobuchar may have caught Petters committing fraud and chose not to prosecute him."

The Hennepin County Attorney's Office said that "at no time" were county prosecutors presented with a case against Petters by any law enforcement agency.

The Daily Caller's allegation is based largely on Klobuchar's earlier prosecution of Petters associate Richard Hettler, who claims the Minnetonka fraudster was protected because of his political ties and contributions to Klobuchar and other top DFLers.

The claim comes nearly a year after the Star Tribune reported that bankruptcy trustees and receivers in the $3.6 billion federal fraud case have been attempting to recover some $500,000 in contributions by Petters and his associates to an array of politicians, including Klobuchar, former U.S. Sen. Norm Coleman, former Gov. Tim Pawlenty, and U.S. Rep. Michele Bachmann, who once sought a presidential pardon for Petters associate Frank Vennes.

Most, if not all, of those contributions to Minnesota politicians and both political parties have been returned or given to charity, including more than $122,000 given to Klobuchar's first Senate campaign and a joint fundraising committee.

Klobuchar spokesman Linden Zakula said any money Petters gave Klobuchar had either been donated to charity or handed over to the trustee.

The Daily Caller article suggests that Hettler and another Petters associate were targeted by Klobuchar's office using financial documents that also could have implicated Petters, nearly a decade before he was arrested and prosecuted by federal authorities.

"The allegations are inaccurate," Zakula said. "Senator Klobuchar did not ask her county attorney staff or law enforcement to refrain from investigating or prosecuting Tom Petters. She was not presented with evidence for prosecution of charges against him.

"Regarding the case of Richard Hettler," Zakula added, "that case was opened and charges were filed before Amy was elected County Attorney. She simply agreed to add a charge of unpaid child support against him."

Kevin Diaz is a correspondent in the Star Tribune Washington Bureau.