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Palin's PAC spent $63,000 buying copies of her own book shortly after it was released. So her PAC collects money from supporters, uses that money to buy an enormous number of books, which she earns royalties off of, thus allowing her to pocket those contributions. The manufactured boost in her sales numbers is a nice bonus, too.
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If she uses the books as giveaways to PAC contributors that probably makes the expenditure OK. I’d like a pile of her books right now, they might keep me nice and warm during snOMG! Nothing burns like “righteous” indignation ;)
If she’s given them all away in that manner then, yeah, you’re surely right that it’s OK in the legal sense, though if I were a donor to her PAC, I don’t think I’d find it OK in the moral sense. OTOH, clearly I don’t understand much about the mentality of people who support Palin, so maybe I’m not in a position to say. :)
Your final point hit it squarely on the head.
What, she hasn’t read it yet?
(sorry, too easy)