Texas Sen. Phil Gramm acknowledges a $7,500 investment he made in 1974 was supposed to help finance an R-rated movie called Beauty Queens.
He says that the film was never made and that he lost track of his money.
But Gramm, who is seeking the Republican presidential nomination, vehemently disputed an account of it given by his former brother-in-law.
The former in-law, George Caton, told The New Republic magazine, in an article to be published in its June 5 edition, that Gramm took an interest in movie investing after watching a soft-porn film, Truck Stop Women.
Caton said Gramm, then an economics professor at Texas A&M University in College Station, deliberately kept his name off the contract because he planned to run for office. Caton said Gramm was offered his money back after plans for Beauty Queens were scrapped, but he insisted it be invested in a movie sharply critical of President Richard Nixon.
Gramm said each of those statements was clearly false or totally false.
"We obviously have an old family vendetta here," Gramm said in an interview. "I have nothing to hide here."
Gramm said he was confident voters would accept his account over Caton's. He said he had called key supporters of his presidential campaign around the country to reassure them.
Gramm has tried to position himself as the leading conservative in the GOP field and has spent considerable effort making overtures to religious and other social conservatives.