Sarah Palin: Report She Violated Ethics Laws Is 'Misguided' And 'Factually In Error'

WASHINGTON, July 22, 2009— -- Alaska Gov. Sarah Palin fought back against a report by an independent investigator that she may have violated ethics law by accepting private donations to pay her legal debts, calling the charges "misguided" and "factually in error."

She said, "I am informed that this fund was created by experienced attorneys in D.C. and was modeled after other similar funds established for senators and others. The fund itself was not created by me nor is it controlled by me," the former vice presidential candidate said in a statement through her spokesperson. "Neither I nor my lawyer has received a penny from this fund, and I am informed the Trustee was withholding any action or payment pending final resolution with the Personnel Board. This is the hallmark of legal compliance and prudent conduct."

According to a leaked confidential report filed July 14, State Personnel Board investigator Thomas Daniel found there is probable cause to believe Palin used or attempted to use her official position for personal gain.

Daniel conceded that if the trust was created completely independent of any actions of the governor, it would be difficult to conclude she used her position to solicit the donations. But because she authorized the creation of the trust and allowed her photo and to be used on its Web site, he concluded that the matter needs more investigation.

"An ordinary citizen facing legal charges is not likely to be able to generate donations to a legal defense fund," he wrote.

"In contrast, Gov. Palin is able to generate donations because of the fact that she is a public official and a public figure," his report said. "Were it not for the fact that she is governor and a national political figure, it is unlikely that many citizens would donate money to her legal defense fund."

But Palin's team is emphasizing that she didn't control the fund.

Her lawyer, Tom Van Flein, said Wednesday night in an e-mail to ABC News that Palin's close friend Kristan Cole is the trustee of the fund. Washington lawyer Randy Evans put the trust together as a legal entity. Van Flein also said none of the donated money has been given to Palin yet.

"The Trust itself has been waiting for a legal determination before distributing any money," Van Flein told ABC News.

Daniel's preliminary report also finds probable cause that contributors to the fund might expect something in exchange for their gifts to the governor, another violation of the state's ethics code.

The report states: "I find probable cause to believe that payment of the governor's legal fees by the Alaska Fund Trust will violate the Ethics Act prohibition against a public officer accepting gifts intended to influence performance of official duties."

Van Flein confirmed that Palin did receive the preliminary report a week ago, and her attorneys have been talking to the attorney who wrote it, arguing some of his points.

"Mr. Daniel and I were discussing the issues preliminarily raised, and we were providing to him supplemental information as we believed he got some facts plain wrong and misread the statute. That process of review and discussion is still ongoing. ... That is what makes the unlawful release of the letter prejudicial to the process," Van Flein said Thursday morning in an e-mail to ABC News.