by Channel 2 News staff and wire reportshttp://www.ktuu.com/Global/story.asp?S=10764445July 21, 2009ANCHORAGE, Alaska -- An independent investigator has found probable cause that Gov. Sarah Palin's legal defense fund is in violation of state ethics laws.The report obtained by The Associated Press says Palin is securing unwarranted benefits and receiving improper gifts through the Alaska Fund Trust, set up by supporters.Investigator Thomas M. Daniel, hired by the state Personnel Board, says in his July 14 report that there is probable cause to believe Palin used or attempted to use her official position for personal gain because she authorized the creation of the trust as the "official" legal defense fund.The fund aims to help Palin pay off debts stemming from multiple ethics complaints against her, most of which have been dismissed. Palin says she owes more than $500,000 in legal fees.Palin issued a formal statement Tuesday evening that seems at odds to the findings laid out in the report."I find the notion that I have taken any action pertaining to the legal defense trust fund misguided and factually in error," she said. "I am informed that this fund was created by experienced attorneys in DC 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. 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."In the report Daniel says he interviewed Kristan Cole who founded the fund. She told the investigator, "... that the governor gave her approval to create the trust as the 'official' legal defense fund for the governor and authorized the use of her photograph on the trust's website."In light of the evidence that the governor expressly authorized the creation of the trust and the fact the trust website quite openly uses the governor's position to solicit donations, there is probable cause to believe that Governor Palin used, or attempted to use, her official position for personal gain in violation of Alaska Statute 39.52.120(a)."Regardless, the issue is not final, Palin's attorney Thomas Van Flein said via e-mail from Salt Lake City."I have been working with the investigator regarding supplemental information," Van Flein said. "The matter is still pending. Whatever you have seen was released in violation of law. The investigator's preliminary thoughts on this are simply that the issue is not frivolous. There has been no Board finding of an ethics violation and there is a detailed legal process to follow before there is a final resolution."The final determination of whether or not the legal defense fund is in violation of ethics laws is ultimately up to the Personnel Board, but Daniel's report contains much more information than deciding the complaint "is not frivolous," and at no point in the nine-page document is the report referred to as preliminary."In sum, I find probable cause to believe that payment of the governor's legal fees by the Alaska Trust Fund will violate the Ethics Act prohibition against a public officer accepting gifts intended to influence performance of official duties," Daniel wrote."I cannot verify the validity of this claim," Palin spokesperson Meghan Stapleton said, also by e-mail. "There is no final report. The Investigator is still confidentially reviewing this matter."It appears suspect that in the final days of the Governor's term, someone would again violate the law and announce a supposed conclusion before it is reached."Cole -- a long-time friend of Palin's who, according to the report, was appointed to the Board of Agriculture and Conservation and the board of the Royalty Oil and Gas Commission by the governor -- echoed those statements in another e-mail."I haven't seen any report and as a matter of fact was just asked for additional information as of yesterday, July 20, 2009," Cole wrote. "Just a reminder that this legal expense fund was thoroughly vetted by numerous attorneys from Alaska to the East Coast. The purpose of the Trust is to help the Governor with the crushing legal fees she has incurred solely because of her public service."Palin's formal statement and another statement issued by Van Flein accused the complaint's filer, Kim Chatman of Eagle River, of illegally leaking the report to the AP, a charge Chatman denies. Daniel's report is sympathetic to public officials forced to pay their own legal expenses defending frivolous ethics complaints, but he notes that his conclusion is based on the law, as it is written.This is the second independent investigator's report to determine Palin violated state ethics laws. In October, an investigator hired by the Legislature determined Palin had abused her power in attempting to get her former brother in-law fired as an Alaska State Trooper.The Legislature declined to pursue any punishment for the violation.A parallel investigation performed by the Personnel Board at the behest of Palin did not find any wrongdoing.The Personnel Board is composed of three members appointed by the governor and confirmed by the Legislature. All three current members were appointed by former Gov. Frank Murkowski. One was reappointed by Palin in early 2008.Associated Press reporter Rachel D'Oro, and Channel 2 News staff Megan Baldino, Jason Lamb, Andrew Hinkelman and Casey Grove contributed to this report.