Ralph Reed had been the long-time favourite to win
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The former head of the US Christian Coalition, Ralph Reed, has lost the race to win the Republican nomination for Georgia's lieutenant-governor.
His opponent Sen Casey Cagle had highlighted Mr Reed's close ties to powerful lobbyist Jack Abramoff, convicted of fraud and corruption.
Mr Reed has not been charged over the case and denies any wrongdoing.
But his candidacy was viewed as a test of the Abramoff scandal on core Republican voters, correspondents say.
Mr Reed, who formerly led the Christian Coalition and Georgia's Republican party, had been seen as an early favourite in the race for the Republican nomination for lieutenant-governor.
But in a series of campaign advertisements, Sen Cagle drew attention to Mr Reed's long-time association with Jack Abramoff.
He was once one of Washington's most influential lobbyists who pleaded guilty in January to fraud, bribery and tax evasion.
Abramoff arranged for Mr Reed to receive money from Indian tribes that ran casinos.
Mr Reed has not been charged with a crime and says he regrets the work he did with Abramoff.
"It's clear that politicians that put money before their morals should be very worried by these results," David Donnelly, of Campaign Money Watch, told the New York Times.
But political analysts say Mr Reed's defeat may actually lessen the impact of the corruption issue that the Democrats have been using nationally in campaigns ahead of November's mid-term elections.