Fellow Republican John Mason, the former chairman of the Nevada Republican Party, accused James of an incident involving Mason's teenage daughter that occurred five years ago in Washington, D.C., according to a report by KLAS-TV, Channel 8. No details of the allegation were given.

"We plan to press ahead with the commission and with Bruce James as our chairman," Kieckhefer said. "Bruce James vehemently denies he did anything wrong."

Kieckhefer said James, a Lake Tahoe resident chosen by Gibbons in April to head the Spending and Government Efficiency Commission, was given the opportunity to step down from the volunteer post but chose not to do so.

Neither James nor Mason could be reached for comment.

James will head an as yet unnamed panel of business people charged with eliminating government waste. James and the other members of the panel will work for free and pay their own expenses.

Kieckhefer said he became aware of Mason's concerns Thursday. There was no criminal investigation and no charges were ever filed, he said.

Gibbons, a member of Congress at the time the incident is alleged to have occurred, was made aware of the concern, but it wasn't an issue when James was tapped for the SAGE panel, he said.

There is a history of bad feelings between James and Mason. James was reported to have been given the task by Gov. Kenny Guinn of informing Mason that he was being replaced as head of Nevada's Republican Party in 2000.

Mason has faced his own credibility issues. He once claimed to have played guitar for the 1960s rock group the Surfaris, but he is not listed as one of the group's members. The issue surfaced when Mason, an attorney, announced a bid for the state Supreme Court in 1994.