The decision is most likely a blow to Gov. Sarah Palin.

She had pushed for a personnel board investigation rather than the now-completed probe conducted by the independent investigator Steve Branchflower and overseen by a council of 14 state lawmakers, 10 Republicans and four Democrats.

In September the McCain campaign argued that the personnel board, whose members were appointed by Palin, was better equipped to handle such an inquiry.

So far, it looks like the stall tactic has actually backfired for Palin. Not only was the first Troopergate investigation completed on schedule, before the November election, and resulting in a finding that Palin broke a state ethics law, now it looks like the political personnel board is actually taking the matter seriously.

Best case scenario: Palin doesn’t end up with a second finding against her.

Up until last week, seven potential witnesses said they would defy independent investigator Steve Branchflower’s subpoenas, a startling move considering Palin had welcomed a transparent process before Sen. John McCain, the GOP presidential nominee, tapped her as his running mate.

Eventually, Branchflower heard from almost everyone, including Todd Palin, though, in writing rather than in in-person interviews. The only person he never heard from was the governor herself.

McCain campaign lawyers argued that Branchflower should not have been handling the matter at all. Instead, the state’s personnel board, whose members are appointed by the governor, should investigate the matter.

Some of Palin’s critics doubted whether a review by political appointees would yield a fair result.

So far, though, it looks like the personnel board is actually looking into the matter. They’ve hired an independent investigator who has requested Branchflower’s investigation report and the accompanying evidence. The state legislature will vote this week on whether to hand over even the confidential evidence.

The personnel board’s investigation is also reportedly broader than the first Troopergate investigation — including other possible ethics violations by the governor.

The body is scheduled to meet twice before the November election, though it is unclear how long the full investigation will take to complete.

At the same time, some in the state legislature are uneasy with how the Troopergate report was conducted, saying the McCain campaign interfered — perhaps even illegally.

Last month, Rep. Les Gara (D-Anchorage) wrote to the Alaska State Troopers asking that they investigate potential witness tampering by the campaign. Gara noted that everyone had agreed to cooperate in the investigation — until Palin became the Republican vice presidential nominee.

In a meeting with Gara yesterday in Anchorage, he handed me a letter he received from the director of the state troopers, Col. Audie Holloway. Holloway told Gara that he “raise[s] a serious issue,” but that the troopers cannot handle such an investigation because they are so closely tied to the original investigation. Palin is accused of pressuring state employees to push the commissioner of public safety, Walt Monegan, to have her ex-brother-in-law, Michael Wooten, fired from his job as a state trooper.

Holloway writes:

[Alaska State Troopers] is a central figure in the circumstances surrounding the investigation you request. Even though I have no doubt that we would provide an unbiased investigation, it would never be perceived that way…

There are other venues which may be more appropriate such as a joint legislative/executive directive to AST to hire and manage an unbiased investigator for this type of sensitive investigation. But at this time, the further embroilment of AST into this would be detrimental to the agency and would not lead to any type of acceptable conclusion.

Holloway also cites a lack of resources as reason for not taking up Gara’s request.

If the personnel board’s investigation picks up steam, or if questions of witness tampering persist, Palin could find herself in even hotter water — if she finds herself back in Alaska.

Here’s what Palin told the Anchorage Daily News:

“Well, I’m very, very pleased to be cleared of any legal wrongdoing … any hint of any kind of unethical activity there,” the governor said from her car on the way to a campaign stop in Philadelphia.

Here’s an image of the report’s findings. Note finding No. 1:

For the reasons explained in section IV of this report, I find that Governor Sarah Palin abused her power by violating Alaska Statute 39.52.110(a) of the Alaska Executive Branch Ethics Act. Alaska Statute 39.52.110(a) provides

The legislature reaffirms that each public officer holds office as a public trust, and any effort to benefit a personal or financial interest through official action is a violation of that trust.

I’m not sure how to reconcile Palin’s statement on the report with, well, the report.