The Federal Bureau of Investigation is probing Christine O’Donnell’s finances to determine whether the tea party favorite violated federal law in her unsuccessful bid for Delaware’s open Senate seat, according to the Associated Press.

It’s unclear if this is simply part of an older complaint from the national ethics group, Citizens for Responsibility and Ethics in Washington, or if the feds have taken the investigation to another level. CREW had pushed the Federal Election Commission to investigate O’Donnell’s campaign spending for weeks.

O’Donnell has not responded to news of a federal investigation, but consistently defended her spending practices throughout the campaign.

The AP first reported the story Wednesday afternoon, quoting a “person with knowledge of the investigation,” who spoke on the condition of anonymity to protect the identity of a “client” who was questioned in the probe.

Specifically, investigators are looking at O’Donnell’s use of campaign donations to pay personal expenses. Allegations that she improperly used campaign cash to pay the rent on her town house and other personal expenses dogged the Republican for much of her surprising bid for higher office. O’Donnell defeated  popular Rep. Mike Castle in the GOP primary before being soundly beaten in the general election by Chris Coons (D), who was seated last month.

The case has been assigned to two federal prosecutors and two FBI agents in Delaware, but has not been sent to a grand jury, the AP reported.

O’Donnell, who had run for Senate twice before with little success, caught fire with the national tea party movement in the final weeks of the 2010 midterm elections. Having taken in less than $63,000 in her first Senate campaign, the 41-year-old media consultant raised $7.3 million this cycle.

The river of money allowed O’Donnell to spend heavily on staffing, including a position for her sister, Jennie O’Donnell, who was brought on in the campaign’s final weeks.  She received weekly payments of $1,000 that were initially described as “salary” and later as “political strategy consulting” as they continued through the general election, according to the FEC filings.

Between Sept. 8 and Nov. 19, Christine O’Donnell’s campaign paid her sister $26,000, according to a Roll Call analysis of her most recent federal filing.

Christine O’Donnell finished the cycle with more than $900,000 in the bank, designed in part to help handle lawsuits expected in the wake of the high-profile campaign. She told Roll Call earlier in the month that she’s also in the process of forming a political action committee to help inexperienced conservative candidates avoid mistakes, including campaign finance errors.

Update, 6:40 p.m.: O’Donnell responded in a long statement, charging the claims of an investigation are an “establishment trick.” Read her response here.

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