U.S. Rep. Neil Abercrombie, who is thinking about running for governor in 2010, has a potential $1.2 million challenge.

The Hawai'i Democrat has the money left over in his congressional campaign account, but under state law, he is unable to transfer it directly to a campaign for governor.

The price tag for a realistic shot at Washington Place is estimated at $3 million to $6 million, so the pressure to raise money early may influence the timing of when Abercrombie and other potential candidates enter the race.

Abercrombie has not made a commitment but said last week that he does not have ambitions for the U.S. Senate or with President-elect Barack Obama's administration.

Asked whether he would run for governor, the congressman said: "The legs aren't on the table yet."

"I think it's very, very important that we leverage the governor position with regard to the congressional delegation and the fact that we have somebody who understands and is sympathetic to Hawai'i in the White House," he said. "I think it's an ideal opportunity."

Although the Democratic choice in traditionally blue Hawai'i will have built-in support from the majority party, labor unions and many business interests, fundraising ability could be an important criterion, especially if there is a competitive primary.

Lt. Gov. James "Duke" Aiona, the Republican candidate for governor, has already raised more than $1.5 million and hopes to approach the record $6.7 million Gov. Linda Lingle collected for her 2006 re-election campaign.

Abercrombie and other potential Democratic candidates — Honolulu Mayor Mufi Hannemann, state Senate President Colleen Hanabusa and former U.S. Rep. Ed Case — have never raised that much money.

The 2010 campaign also will be the first full election cycle where candidates for governor will have to abide by a state law limiting Mainland donations to no more than 20 percent of total contributions each reporting period. The restriction narrows Abercrombie's ability to fully use his national connections in Washington, D.C., to raise money.

Under federal campaign-finance law, Abercrombie could offer to refund some of the $1.2 million in his congressional account back to his donors and then ask those donors for contributions to a campaign for governor. But he would probably not recoup all of the money.

Federal law allows excess campaign funds to be used to defray office-related expenses, to donate to charity, and to give to political parties or candidates. Excess campaign money cannot be diverted for personal use, but the Federal Election Commission has ruled in advisory opinions that it can be converted to state campaigns. An advisory opinion issued in 1997 specifically found that it was permissible for a congressman to offer refunds to donors and then solicit contributions for a governor's campaign.

HANNEMANN'S EDGE

Barbara Wong, the executive director of the state Campaign Spending Commission, said the distinction between federal and state campaign money exists because of the different guidelines in federal and state law.

"That money was raised under different rules," she said.

State campaign-finance law allows state candidates, such as Hannemann and Hanabusa, to use surplus money in their state accounts for other state races, which could put Abercrombie at an early fundraising disadvantage.

Hannemann has more than $1 million left from his re-election campaign for mayor that he could use to run for governor. The money gives Hannemann more time to consider his options and, sources say, the mayor does not want to be boxed in to a decision based on fundraising or what Abercrombie or others might do.

Hanabusa has about $198,000 remaining in her Senate re-election account. Analysts say the senator will have to make a decision about running for governor soon to be able to compete in fundraising with Abercrombie, Hannemann or Case.

Aides say Hanabusa has been talking with her supporters and will be meeting with allies on the Neighbor Islands who helped with her unsuccessful 2006 campaign for Congress in the 2nd Congressional District.

Hannemann and Hanabusa would have to resign their current offices once they file nomination papers to run for governor.

Case, who has wanted a U.S. Senate seat, said in an e-mail last week that he would be a candidate in 2010 for either governor or Congress. If no Senate seat becomes available, and Abercrombie runs for governor, Case said, he would either run for governor or for Congress in Abercrombie's 1st Congressional District.

"I believe Hawai'i will be facing very significant challenges at home in the next years to which my background and experience can be effectively applied," he said. "On the other hand, so will our country, as will Hawai'i's own needs in D.C., and with my general background and my specific seniority and experience in D.C., I can hit the ground running again there and serve constructively over time."