Henry says he set up an exploratory committee to look at running for U.S. Senate back in 2003. He collected about $200,000 in that effort including about $40,000 in 2006 when he was widely believed to be eyeing the governor's race, not a U.S. Senate race in 2008. Henry kept raising money for the off-the-books, unreported federal account until October, six months after telling me he was leaning toward running for governor. And folks who contributed to his federal exploratory committee told me they thought they were giving to a Steve Henry for Governor exploratory committee. Henry says he never told them that and in fact, only told folks it was an "exploratory committee" they were giving to. Henry says he realizes gubernatorial exploratory committees are no longer legal. So the simple question is, did Henry use this off-the-books federal account to raise money to run for governor? He says no, he knew the rules, checked with the FEC and Kentucky Registry of Election Finance and did everything by the book. But a former employee of Henry's, Leslie Holland, says she was recruited by Henry and paid $5,000 to work on his gubernatorial campaign last October. She says there was never any talk of a possible Senate run. Henry says Holland is "sadly mistaken". He says she was hired to remodel a building that would later become his campaign headquarters. Henry says Holland didn't do any political work and if she did, it was strictly voluntary. Holland says Henry has trouble with the truth.

Henry says he's refunding most of the senate exploratory committee money. But there's still a question about four donations from corporations. Henry says, technically, those contributions didn't go to a formal political campaign, were never reported to the FEC and therefore aren't illegal. An FEC spokesperson wouldn't comment. But common wisdom is that the rules that guide donations to regular campaigns also apply to exploratory campaigns.

Republican state senator , who helped write some of the current Kentucky campaign finance laws says he believes Henry violated the spirit of the law but it will be up to the Registry or others to decide if he actually broke the law. To my knowledge, no complaints have been filed against Henry with the FEC or Ky. Registry of Election Finance.

Good catch by a friend who notes that Steve Horner's blog reported that the IUE-CWA Local 761 endorsed Henry for GOVERNOR on APRIL 10, 2006. It was the first endorsement in the 2007 governor's race, with no mention by Henry that he might still be considering a race for U.S. Senate instead. That's about the same time he told me in an interview that he was "leaning" toward running for governor. Henry says no politicians will publicly lay all of their options on the table until they're ready to make a final decision.