A legal defense fund set up for Sarah Palin when she was Alaska governor was illegal, an investigator for the state Personnel Board said Thursday.
Investigator Timothy Petumenos said the Alaska Fund Trust inappropriately used the word "official" on its website to describe it, wrongly implying Palin's endorsement as governor.
Palin's attorney, Thomas Van Flein, said she will return the money from the fund, which brought in almost $390,000.
Petumenos, however, found that Palin - the 2008 GOP vice presidential nominee - acted in good faith and relied on a team of attorneys to make sure the fund was lawful.
Thursday's findings are an outgrowth from a preliminary, confidential report by another board investigator that also implicated Palin. The earlier report was issued less than two weeks after she announced she was resigning from office last July.
In announcing her resignation, Palin cited the toll of the ethics probes as one of the reasons she was stepping down. She has said she racked up at least $500,000 in legal fees.
Palin's friends and supporters created the Alaska Fund Trust in April 2009, limiting donations to $150 per person. The ethics complaint was filed soon after by Eagle River resident Kim Chatman, who alleged Palin was misusing her official position and accepting improper gifts.
The multiple ethics complaints include an investigation by state lawmakers over Palin's firing of her public safety commissioner in the so-called Troopergate scandal, as well as a complaint over state-paid trips Palin took with her children as governor.
In the family travel complaint, also investigated by Petumenos, Palin agreed to reimburse the state about $8,000 for costs associated with nine trips taken by her children.