At a press conference in Chicago, Rutherford said, "Let me make this very clear, there is absolutely no truth to the allegations. No factual support or merit."
Rutherford says the staffer is represented by a lawyer who worked for Rauner. He says: "This thing smells."
"Christine Svenson is an attorney making demands on behalf of the accuser and is directly linked to my opponent Bruce Rauner," Rutherford said. Svenson demanded payment of [$300,000] for the employee to 'walk away and keep it under wraps.'"
It has been reported in the Springfield State Journal Register newspaper that Rauner has been quoted as saying he has a "book on all the Republican candidates" and he's going to "destroy every one of them."
Rutherford emphatically stated, "No one, including Bruce Rauner, is going to destroy me." The Republican from Chenoa refused to release details of the complaint.
Rauner spokesman Mike Schrimpf says the claims are false. He says Svenson worked for Rauner briefly last spring and the campaign never discussed anything regarding Rutherford with her.
"The campaign hired Ms. Svenson to review and edit our office space lease last Spring because our regular attorney had a conflict of interest with the landlord. We paid her a one-time fee of $3,500 for that service and never discussed anything with her related to the Treasurer," he said.
Rutherford, Rauner and state Sens. Bill Brady and Kirk Dillard are seeking the Republican nomination for governor. The primary is March 18.
"I'd love to be able to sit here right now and look every one of those cameras in the eye and each one of you reporters and you put it on tape exactly what was alleged against me, the time frame and the lack of information about it. But I can't," Rutherford said.
Svenson, whose client has not filed a formal complaint, also has not detailed the employee's accusations saying only, "These are serious allegations that involve an abuse of the employee's First Amendment, free speech rights."
The treasurer's lawyer did confirm that the employee in question still works for office, but he would not say if the worker was male or female or how long the person had worked for the state.
And while the big concern for the moment appears to be political, because it is a personnel matter, the state ? and therefore taxpayers - will pay for the cost of the investigation.
The Associated Press contributed to this report.