The accusations came up at a forum Monday night that included two other republican candidates for governor.
"Treasurer Rutherford, are they any more allegations of sexual harassment coming at you from anyone else?" asked State Sen. Kirk Dillard, Republican candidate for governor. There were some boos from the audience and Rutherford called the question inappropriate.
"There's no truth to it. It should have been brought up years ago if there was some truth to it and it wasn't," said Rutherford.
The lawsuit, filed in federal district court in Chicago Monday afternoon, names Rutherford and Rutherford's chief of staff Kyle Ham as defendants. It comes five weeks before the March 18 primary, in which Rutherford is a candidate for the Republican nomination for governor.
Ed Michalowski, a former lawyer and director in Rutherford's office, alleges in the lawsuit that Rutherford's sexual advances began in April 2011, shortly after Michalowski began working in the office, and continued for more than two years. The lawsuit also claims Rutherford asked Michalowski to set up meetings with potential donors for campaign contributions and organize parades and petition drives while he was working for the state.
Michalowski's attorney Christine Svenson recounted an alleged incident in April of 2011 when Michalowski attended an overnight office retreat at Rutherford's home in downstate Livingston County.
"It's quite unfortunate that Mr. Rutherford entered my client's bedroom and grabbed his genital area. My client immediately forced him off of him, gathered his belongings and left," said Svenson.
The 43-year-old Michalowski-- who ran for a Cook County judgeship in 2009--worked for the City of Chicago after law school, then for over a decade in Secretary of State Jesse White's office. He joined the treasurer in 2011.
He resigned last Friday and on Monday began his new job as legal counsel for Cook County Recorder of Deeds Karen Yarborough, whose spokesman John Mirkovic said Michalowski's hiring was "months in the making" and had "no connection to his other issues."
The lawsuit also alleges that Rutherford tried to force Michalowski to do political work on state time, coveting Michalowski's wide-ranging political contacts.
"Mr. Rutherford knew that and constantly demanded that my client go through his list of contacts and solicit donations from them," said Svenson.
Michalowski also claimed that he complained about those and other harassment incidents to the treasurer's chief of staff, Mr. Ham, who allegedly said repeatedly "at least we have job security."
Michalowski also accuses Rutherford of "repeatedly hitting" on him and making promises regarding Michalowski if Michalowski went along with Rutherford's advances.
The plaintiff also alleges in his lawsuit that during the summer of 2011, Rutherford's political director texted him saying the treasurer wanted Michalowski to wear a tank top to an event.
Rutherford denies sexual harassment, political coercion allegations
Rutherford called a news conference late Monday, where he spoke at length about the allegations in that lawsuit as he tries to keep his race for race for governor alive.
"To make false accusations against the state treasurer, that is totally political," said Rutherford.
Rutherford may claim the accusations are political, but they're also potentially fatal to his campaign for governor. He denied wrongdoing in any form or fashion, starting with the insinuation that he came on to a male employee.
ABC7 Reporter Ben Bradley: "The elephant in the room. Are you gay?" Rutherford: "No. Next question."
Rutherford points out his accuser Ed Michalowski never filed a formal complaint about inappropriate sexual advances, or any other wrong doing, until now, weeks before an election. But yes, Rutherford says, the two did share a hotel room with his male subordinate Ed Michalowski on at least two occasions.
"This is something you do in small business, in the NFL, NHL. It's something you do to save resources," said Rutherford.
Rutherford claims Michalowski offered to drop his claims for a $300,000 payout-- that's when Rutherford decided to make the allegations public.
"When you start going though one is going through bankruptcy, one is dealing with bankruptcy and foreclosure, he's filed for divorce. I think a lot of pressure on this man right now," said Rutherford.
The question in political circles Monday night: Can a candidate accused of sexual harassment by another man win the Republican primary?
"I'm absolutely going to win this thing. I'm not cowering down from this. If I cower down from this - then the bad guys, the bad ones, out there will have won. I'm running for the nomination and I'm going to win," said Rutherford.
A new Tribune poll shows first-time candidate Bruce Rauner with a commanding lead polling at 40%, State Sen. Bill Brady at 20% support, Dan Rutherford at 13% support, and State Sen. Kirk Dillard in 4th place at 11% support. The poll was taken Wednesday through Saturday after Rutherford revealed that an employee had accused him of wrongdoing, but before his detailed and very forceful denials on Monday.
The Associated Press contributed to this report.