MATT APUZZO | October 10, 2008 11:47 PM EST |

ANCHORAGE, Alaska — Sarah Palin unlawfully abused her power as governor by trying to have her former brother-in-law fired as a state trooper, the chief investigator of an Alaska legislative panel concluded Friday. The politically charged inquiry imperiled her reputation as a reformer on John McCain's Republican ticket.

Investigator Stephen Branchflower, in a report to a bipartisan panel that looked into the matter, found Palin in violation of a state ethics law that prohibits public officials from using their office for personal gain.

The inquiry looked into her dismissal of Public Safety Commissioner Walter Monegan, who said he lost his job because he resisted pressure to fire a state trooper involved in a bitter divorce and custody battle with the governor's sister. Palin says Monegan was fired as part of a legitimate budget dispute.

Monegan's firing was lawful, the report found, but Palin let the family grudge influence her decision-making _ even if it was not the sole reason Monegan was dismissed.

"I feel vindicated," Monegan said. "It sounds like they've validated my belief and opinions. And that tells me I'm not totally out in left field."

Branchflower said Palin violated a statute of the Alaska Executive Branch Ethics Act. Lawmakers don't have the authority to sanction her for such a violation, and they gave no indication they would take any action against her.

Under Alaska law, it is up to the state's Personnel Board _ which is conducting its own investigation into the matter _ to decide whether Palin violated state law and, if so, must refer it to the Senate president for disciplinary action. Violations also carry a possible fine of up to $5,000.

Palin attorney Thomas Van Flein disagreed with Branchflower's conclusions. "In order to violate the ethics law, there has to be some personal gain, usually financial. Mr. Branchflower has failed to identify any financial gain," he said.

Palin and McCain's supporters had hoped the inquiry's finding would be delayed until after the presidential election to spare her any embarrassment and to put aside an enduring distraction as she campaigns as McCain's running mate in an uphill contest against Democrat Barack Obama.

After a court fight to block the report failed, the panel of lawmakers voted to release it _ though not without dissension. The panel did not vote on whether to endorse its findings.

"I think there are some problems in this report," said Republican state Sen. Gary Stevens, a member of the panel. "I would encourage people to be very cautious, to look at this with a jaundiced eye."

The report was made public the same day an Anchorage judge issued a temporary restraining order forcing the state of Alaska to preserve any government-related e-mails that Palin and top aides sent from private accounts in what critics contend was an effort to conceal that they were doing political business while working at state government jobs.

The state paid Branchflower, a retired state prosecutor, $100,000 to prepare the nearly 300-page report. He interviewed or accepted affidavits from about two dozen people in the eight-week investigation.

"Legislative Council seriously overreached, making a tortured argument to find fault without basis in law or fact," McCain campaign spokesman Meg Stapleton said.

The Legislature could vote next year to censure Palin, but committee members appeared divided over the report and Democratic state Sen. Kim Elton, the committee's chairman, gave no indication that would happen.

Stapleton also dismissed the report as "a partisan-led inquiry run by Obama supporters." The inquiry has been dogged by such criticism since Democrat Hollis French, who oversaw the investigation, predicted an "October surprise" for the McCain campaign.

Elton rejected the accusation of partisanship.

"When we began investigating this, we had no idea that Sarah Palin would be a part of the national ticket," said Elton, an Obama supporter.

The report notes a few instances in which Palin pressed the case against trooper Mike Wooten, but it was her husband, Todd, who led the charge. Todd Palin had extraordinary access to the governor's office and her closest advisers and he used that access to try to get Wooten fired.

Gov. Palin knowingly "permitted Todd to use the governor's office and the resources of the governor's office, including access to state employees, to continue to contact subordinate state employees in an effort to find some way to get Trooper Wooten fired," Branchflower's report reads.

Wooten had been in hot water before Palin became governor over allegations that he illegally shot a moose, drank beer in a patrol car and used a Taser on his stepson. The Palins said they feared for their family's safety after Wooten made threats against them.

In proceedings revealed by the report, former Alaska State Trooper Col. Julia Grimes told investigators that Sarah Palin called her in late 2005 to discuss why Wooten hadn't been fired, and Grimes told her the inquiry was confidential by law.

"Her questions were how can a trooper who behaves this way still be working," Grimes said. "I asked her to please trust me, that because I can't tell her details I would ask her to please trust me that I would take the appropriate action if and when I knew what the findings were. ... I couldn't have another conversation with her about it because, again, it's protected by law."

Grimes said Todd Palin also contacted her by telephone in late 2005 to discuss the confidential investigation of Wooten.

Wooten's disciplinary case was settled in September 2006 _ months before Palin was elected governor _ and he was allowed to continue working as a trooper.

After Palin's election, her new public safety commissioner, Monegan, said he was summoned to the governor's office to meet Todd Palin, who said Wooten's punishment had been merely a "slap on the wrist." Monegan said he understood the Palins wanted Wooten fired. "I had this kind of ominous feeling that I may not be long for this job if I didn't somehow respond accordingly," Monegan told the investigator.

For months afterward, Todd Palin filed complaints about Wooten, saying he was seen riding a snowmobile after he had filed a worker's compensation claim and was seen dropping off his children at school in his patrol car.

Monegan said Wooten's doctor had authorized the snowmobile trip and his supervisor had approved his use of the patrol car. Monegan said Alaska's attorney general later called him to inquire about Wooten, and Monegan told him they shouldn't be discussing the subject.

"This was an issue that apparently wasn't going to go away, that there were certainly frustrations," Monegan said. "To say that (Sarah Palin) was focused on this I think would be accurate."

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Associated Press writer Adam Goldman contributed to this report.