"We are not investigating her," FBI spokesman Eric Gonzalez told the paper. "Normally we don't confirm or deny those kind of allegations out there, but by not doing so it just casts her in a very bad light. There is just no truth to those rumors out there in the blogosphere."
The unusual step from the FBI comes after Palin's attorney threatened legal action over the weekend to those who "propagate defamatory material" about the former Republican vice presidential nominee.
"To the extent several websites, most notably liberal Alaska blogger Shannyn Moore, are now claiming as 'fact' that Governor Palin resigned because she is 'under federal investigation' for embezzlement or other criminal wrongdoing, we will be exploring legal options this week to address such defamation," Thomas Van Flein said in a statement. "This is to provide notice to Ms. Moore, and those who re-publish the defamation, such as Huffington Post, MSNBC, the New York Times and The Washington Post, that the Palins will not allow them to propagate defamatory material without answering to this in a court of law."
The Anchorage Daily News reports that Moore, who alluded to the investigation during an appearance on MSNBC, fired back at Palin during a press conference on Sunday. She called Palin "a coward and a bully" and that she never claimed the rumors were fact but only pointed out they existed. "Shannyn Moore will not be muzzled," she said.
Palin's attorney Van Flein responded to Moore via the paper: "The Constitution allows anyone to print what they want, but it does not say you can do so with impunity and with a total disassociation from reality ... to be blunt: falsely implying that the governor, or her husband, are under federal investigation, is not free speech."