Former lieutenant governor and gubernatorial candidate Diane Denish endorsed Hector Balderas' Senate candidacy Wednesday, citing his "fiscal accountability" as one of her main reasons for backing him.

"He has a real understanding about work and respecting opponents as well as supporters," Denish, who served under former Gov. Bill Richardson for eight years and lost the election to Republican Gov. Susana Martinez last fall, told reporters in a phone conference. "These are values Washington could use right now."

It's a key backing for Balderas, the Democratic state auditor, who will face steep competition in the primary from Rep. Martin Heinrich, D-N.M. Heinrich, a two-term congressman in the Albuquerque area, has support from organized labor and leads Balderas by a 47-24 margin in a recent Public Policy Polling survey. Both are vying to replace Democratic Sen. Jeff Bingaman, who will retire after the 2012 election.

"When we got into this race we knew it would be a battle," Balderas told reporters in a phone conference. "We're still the underdog and have a long way to go."

But Denish's endorsement adds momentum, he says. It also comes a day after Balderas announced that he raised $400,000 in the first two months of his candidacy, which he declared in April.

Balderas was reelected state auditor last fall by a 55-45 margin over Republican opponent Errol Chavez.