A source close to Kentucky Attorney General Jack Conway said this week that the Democrat will run for Senate in 2010 and that he is expected to announce his candidacy as soon as early April.

Conway’s entry into the race has been telegraphed in recent weeks — and it will set up a primary battle with state Lt. Gov. Dan Mongiardo (D), who announced his intention to run against embattled Sen. Jim Bunning (R) in January.

The news comes amid another week of bad press for Bunning. On Tuesday, the junior Senator from Kentucky took aim at his party leadership, blaming them for impeding his fundraising efforts this quarter. Bunning began the year with a paltry $150,000 in the bank.

Bunning is widely considered the most vulnerable incumbent of the cycle. According to numbers obtained by Roll Call, a recent Democratic Senatorial Campaign Committee poll showed that less than 30 percent of respondents would definitely vote to re-elect him. The DSCC declined to confirm those numbers on Wednesday.

With Conway set to throw his hat in the ring, it appears that the other top Bluegrass Democrats who have considered challenging Bunning will stay on the sidelines. Conway, state Auditor Crit Luallen (D) and Rep. Ben Chandler (D) are all close allies, and party insiders don’t believe any of the three would challenge the others in a primary race.

Mark Riddle, a consultant for Conway, emphasized the strength of that relationship on Wednesday while going only so far as to say that the attorney general is “taking a very serious look— at a Senate bid.

“The attorney general is staying in constant communications with Auditor Luallen, Congressman Chandler and [Democratic Rep. John] Yarmuth and they are in the process of sorting out this important election,— Riddle said. “Obviously Jack is very humbled that people are talking about his candidacy and encouraging him to run.—

A Mongiardo-Conway primary would be a matchup of two high-profile Democratic quantities in the state.

Before being elected attorney general in 2007, Conway ran in Kentucky’s 3rd district against then-Rep. Anne Northup (R) in 2002. He spent more than $1.5 million on the race to Northup’s $3.2 million and lost by just 7,300 votes in a strong Republican year.

Conway is from Louisville, a Democratic stronghold in the state, and his alliances in Democratic circles would open up a good fundraising network.

In 2004, another Republican year, Mongiardo, then a state Senator, came just 2 points shy of beating Bunning in a race in which he was outspent by a nearly 2-1 ratio. Mongiardo, a physician from the state’s eastern mountains, raised about $2.3 million for that race but also invested a significant amount of his own personal wealth.

Some Kentucky insiders say Mongiardo still has some room to improve when it comes to fundraising.

“He’s got to prove he can run a well-financed modern race by himself without the help of the [DSCC] and others,— one of those Democratic insiders said on Wednesday.

Back in 2004, the DSCC invested heavily in the Kentucky race — especially in the final few months — in an effort to target Bunning. During one five-day span in October of that year, the committee dropped almost half a million dollars on the Kentucky contest.

Pointing to the hundreds of thousands of dollars of campaign debt — much of which he owes to himself — that Mongiardo continues to carry from that 2004 campaign, the Democratic source said, “If he is such a good fundraiser, why hasn’t he cleared that up?—

Mongiardo campaign spokesman Kim Geveden said the lieutenant governor proved his fundraising prowess in his 2004 race, noting that during that contest Mongiardo raised more money than any Democratic Senate challenger in Kentucky has before or since. And over the past four years, after going through another statewide contest, Mongiardo has only expanded his donor base and gained more experience, Geveden said.

Despite the continued talk of a Conway candidacy over the past few months, Geveden said he’s not convinced that Conway is really going to take the plunge anytime soon.

“The lieutenant governor would welcome the opportunity for Democratic voters in Kentucky to compare their records, their values and their stands on the issues and make a determination, and we are confident what that decision will be,— Geveden said.

After so many weeks of drama with Bunning, Republicans would be more than happy to see Democrats squirm a little in the Kentucky race.

“A divisive primary in Kentucky will certainly hamper the Democrats’ efforts to turn a red seat blue,— said Amber Wilkerson, an NRSC spokeswoman. “The more time and money the Democrats spend battling one another before Election Day, the more time the Republican Party can commit to discussing the issues that are important to voters, like job creation, cutting Washington’s bloated spending, and assisting families and small businesses that are struggling in an economic crisis.—