Gov. Dannel P. Malloy’s 2014 re-election campaign and the Connecticut Democratic Party may have settled their fundraising dispute with state regulators, but a party official confirmed today that they are cooperating with a new investigation by the U.S. Attorney’s office into claims of illegal fundraising.

Citing unnamed sources, the Hartford Courant is reporting that criminal subpoenas have been issued by U.S. prosecutors and a grand jury has been convened in recent weeks to look into the Democrats’ fundraising efforts to get Malloy re-elected in 2014.

Leigh Appleby, a spokesman for the Connecticut Democratic Party, said Friday that the party is cooperating with the action by federal authorities.

“We have advised authorities of our intent to cooperate and will continue to do so in order to bring this to a close and continue to do the work of our party to elect Democrats on all levels,” Appleby said.

Appleby maintained that the party “fully complied with both state and federal laws throughout the 2014 cycle.”

However, that compliance was still being questioned in state court by state election regulators up until June, when the State Elections Enforcement Commission decided to settle the case before the discovery phase of the trial.

The commission settled its nearly two-year fight with the Democratic Party and the Malloy campaign with a settlement that included a $325,000 payment by the party to the state general fund. The agreement also set forth future conditions for the party’s fundraising efforts and ended the state investigation into how the campaign spent approximately $250,000 on Malloy’s re-election effort.

“Since 2013, we have shared information and had extensive discussions regarding the laws under which we are governed,” Appleby said Friday. “We have sought an objective view from the courts regarding the intersection between state and federal law. As is well known, we have worked out an agreement with the State Elections Enforcement Commission to resolve all issues arising out of the 2014 election.”

In October 2014, shortly before the election, the Democrats sought a ruling from the Federal Elections Commission regarding the use of money from their federal account for a mailer featuring Malloy that included a get-out-the-vote message. Under the state’s Clean Election Law, Malloy, a publicly financed candidate, was barred from using donations from state contractors for his re-election.

But under federal law, political parties are allowed to accept state contractor donations in their federal accounts to support congressional candidates.

The Democrats asked the FEC for a ruling on whether they could use money from their federal account to pay for the mailer. Their argument has consistently been that federal law trumps state law when you include a get-out-the-vote message, and as such they should have been allowed to use the federal funds.

However, a leaked copy of the FEC’s draft decision showed that federal election regulators were poised to rule against the Democrats’ use of the funds.

But the party then withdrew that request for the ruling before it was finalized and went ahead with the mailer.

The Connecticut Republican Party subsequently filed a complaint with the State Elections Enforcement Commission, which until June, had been fighting for information from the Connecticut Democratic Party and the Malloy campaign so it could determine if there were any violations of the state’s law.

Prompted with news of the federal grand jury, Republican Party Chairman JR Romano said the Connecticut Democratic Party and Malloy were willing to pay $325,000 to avoid scrutiny.

“They don’t think the rules apply. They believe in a political class and they don’t have to follow the rules we do,” Romano said.

News of the federal grand jury investigation comes just days before Malloy is expected to take the stage at the Democratic National Convention in Philadelphia. Malloy is the co-chairman of the party’s platform committee and is expected to be speaking as part of the program on Monday.