Mississippi Republicans have good things to say about Rep. Steven Palazzo: He’s a genuinely nice guy, he’s on the right committees, he’s building his influence as a member of the GOP whip team, and he makes the right votes for his district.

But increasingly in Magnolia State political circles, there are two words used to describe the freshman Member: in trouble.

He went through two chiefs of staff before hiring his current one during the summer. A raucous house party arranged by Palazzo staffers in October led to the dismissal of his scheduler and a legislative correspondent. And on Thursday, Roll Call reported that in complying with House ethics rules, Palazzo may have bumped up against Mississippi law when he moved his certified public accounting firm to his wife’s name.

“He’s starting to look a little toxic,” a Republican strategist deeply familiar with Mississippi politics said. “This is another straw — I don’t know if it breaks the camel’s back, but it has the potential to create increasing interest in a primary challenge.”

The source said the question is whether the drumbeat of stories and innuendo in the state — and the possibility that there might be more to come — is enough to push a credible challenger to pull the trigger before the qualifying deadline of Jan. 13.

Who might that be? Republican state Sen. Michael Watson has been eyeing the seat for a long time, people familiar with state politics said. Also mentioned is state Sen. Chris McDaniel (R), but he told Roll Call definitively he is not running for Palazzo’s seat.

Repeated efforts to reach Watson on Friday were unsuccessful.

If Watson were to enter the race, there is the potential for a real primary fight, but any decision by Watson to launch a campaign will have to come very soon. The primary is scheduled for March 13.

State political operatives say a primary challenger would have to address two urgent matters in a bid against Palazzo: narrative and money. Creating a sufficiently potent story about why the Congressman, who has been in office only since January and has voted with the district, should be unseated would be tough if there are no further revelations. Getting that story out to the point of saturation among the primary electorate would be another difficult task.

Palazzo raised $155,000 in the third quarter and had $264,000 in cash on hand at the end of September. For an opponent to get a similar fundraising operation up and running so quickly would be a climb.

Still, plugged-in strategists say, there is some vulnerability. “Rookie mistakes many people are willing to forgive him for,“ one Mississippi-based Republican consultant said. “Him being unable to correctly and legally take care of his responsibilities,” that’s a different story altogether, the source said.

Palazzo’s team pushed back.

“He’s gone out of his way from day one to make sure he was compliant with any state or federal law or rule,” Palazzo Chief of Staff Jamie Miller said. Miller also noted that Palazzo had gotten positive feedback from his constituents on the service and responsiveness of the office.

The 4th district is staunchly Republican, and a viable general election challenge is seen as extremely unlikely. Redistricting is not yet complete in the state, but the new lines — to be drawn by a court — are unlikely to change the makeup of the 4th in a substantive way.

Despite his recent troubles and freshman status, Palazzo has powerful friends.

“I think Steven has been doing a good job. He’s working hard,” ex-Sen. Trent Lott (R-Miss.) said. While the former Majority Leader noted Palazzo “had some problems getting his staff squared away,” Lott said he was “going to be supportive of Steven.”

“He may be challenged,” he said, “but I think Steven is well-positioned to get re-elected.”