HARRISBURG Two weeks after state Attorney General Kathleen G. Kane challenged Philadelphia's district attorney to take over the sting investigation she shut down, her office said Wednesday that she would not turn over the case file until certain legal issues were resolved.

In a letter to Williams, Kane raised "potential conflicts" Williams faced in handling the case, her spokesman J.J. Abbott said. He also cited, without elaboration, concerns about privacy provisions of the Pennsylvania Wiretap Act.

Abbott would not release the letter, saying it contained confidential information about the case.

Williams said Wednesday that he faced no conflict and accused Kane of raising bogus issues.

"It has been almost two weeks to the day that Ms. Kane requested that I take this case, and I find it odd that in all of this time she has never mentioned this so-called conflict of interest," he said.

"It is apparent that Ms. Kane doesn't really believe I have a conflict, or she wouldn't have repeatedly suggested I take over this case."

The letter to Williams was Kane's first communication to him since April 9, when Williams took her up on her offer - made that day - that his prosecutors review the case. Kane had secretly shut down the investigation, which caught five Philadelphia Democrats on tape taking money or gifts. Kane brought no criminal charges and said the case was "not prosecutable."

In a rare quarrel between top Pennsylvania Democrats, Williams has emerged as one of Kane's toughest critics since The Inquirer broke the news of her decision to end the investigation.

A source close to the attorney general said the letter says a possible conflict could arise from the fact that at least two of the five Philadelphia Democrats ensnared in the sting were campaign supporters of Williams.

They are State Reps. Ronald G. Waters and Vanessa Lowery Brown, who sources say were among those captured on tape accepting money from the sting's undercover operative, Tyron B. Ali. Both endorsed Williams when he ran for district attorney in 2009.

The source said the office "would love to turn over the case," but wants Williams to be aware of the possible conflict before accepting the case. Kane would let Williams decide whether there is a conflict, the source said. The letter to Williams was signed by a top Kane aide, Lawrence Cherba.

In a statement, Williams dismissed Kane's suggestion of any conflict.

"The fact that political figures endorse a prosecutor for office should not grant them immunity from prosecution," he said. "These same representatives endorsed Ms. Kane for office, but that did not excuse her from her duty to investigate and prosecute them under the law."

The delay in turning over the case file is another tense twist in a case that has galvanized and divided the state's political and legal circles.

The sting was launched in 2010, when Republican Tom Corbett, now governor, was attorney general. After Kane, a Democrat, took office last January, she shut it down.

Kane has said she shuttered the case because she believed it was poorly managed and possibly tainted by racial targeting. All five officials captured on tape are black.

The prosecutors and the investigator who launched the sting - and who now work for Williams - have said it was a solid investigation that had ensnared elected officials and had the potential to garner more targets. They have denied any racial targeting.

There was an element of turnabout in Kane's saying that Williams might face a conflict.

The sting's lead prosecutor, Frank G. Fina, sought to remove the case from Kane's control shortly before she took office, saying he believed she faced a conflict and should not be making decisions in the case. Kane said she faced no conflict.

Fina said a conflict was posed by the fact that two Kane campaign supporters, including Philadelphia Common Pleas Court Judge Daniel D. McCaffery, had had dealings with Ali.

Before he became a confidential informant in the sting investigation, Ali arranged, through straw donors, to give $10,000 to McCaffery's campaign in 2009, according to people close to Kane, Fina, and Ali.

At the time, McCaffery was seeking the Democratic nomination for Philadelphia district attorney, a race he lost to Williams.

Ali also alleged, in newly unsealed court documents, that he gave McCaffery's campaign $8,000 in cash. Ali's lawyer, Robert J. Levant, contended that Ali secretly taped a conversation in which a top McCaffery campaign aide discussed this cash donation.

People close to McCaffery's 2009 campaign have denied ever receiving cash from Ali.

Numerous sources familiar with Ali's activities told The Inquirer that Levant's account was mistaken. Ali never made such a tape and there is no evidence beyond Ali's account to back up his story of the cash, the sources agreed. Levant has declined to comment.

Undisputed is that McCaffery's campaign reported the illegal donations to the Attorney General's Office and cooperated with law enforcement looking into the matter. No charges were brought in connection with the straw donations.

After she was elected, Kane tapped McCaffery to be the master of ceremonies at her inaugural. In addition, a former campaign lieutenant for McCaffery later served as a top campaign aide for Kane.

Fina viewed these connections as a conflict for Kane, and shortly after she was elected, he delivered the case file to federal prosecutors in Philadelphia. The U.S. Attorney's Office did not pursue the case. The Inquirer has reported that federal prosecutors had only started looking into the sting's case file when Kane's staff asked them not to proceed so her office could evaluate the case.