A dispute between the city Board of Ethics and City Councilwoman Maria Quinones-Sanchez landed in court yesterday, with the board accusing her of violating the city's campaign-finance ordinance in 2007 and seeking $7,500 in fines.

Quinones-Sanchez and her campaign treasurer, Peter Winebrake, acknowledged "a technical violation" of the campaign-finance law, based on their use of an independent political-action committee to save $2,500 on a series of newspaper ads.

Quinones-Sanchez said that her campaign organization had been prepared to settle the matter by paying a $4,500 fine. But she said that she balked at the terms of a settlement agreement proposed by Shane Creamer Jr., the board's executive director, fearing that it would expose her to lawsuits challenging her seat on Council.

"We wanted an opportunity to make our case in front of the Ethics Board, but that was denied," Quinones-Sanchez complained. "We were just flabbergasted that we would be denied."

There appeared to be little dispute about the underlying facts of the alleged campaign-finance violations.

In April 2007, about three weeks before the primary election, six Democratic Council candidates agreed to form a political-action committee called New Direction Philly.org.

The Inquirer and Daily News offered the group a couple of advertising packages: 10 ads for $15,000, or 20 ads for $25,000.

Initially, New Direction agreed to buy the 10-ad package, touting all six candidates.

But after Quinones-Sanchez won an endorsement from Gov. Rendell, her campaign decided to run 10 more ads, focusing on her and the endorsement.

Instead of Quinones-Sanchez's campaign organization paying another $15,000 to buy those ads, New Direction Philly expanded its purchase to 20 ads, and her campaign agreed to pay $12,500 to New Directions, covering half the ads.

Quinones-Sanchez's own campaign reports from 2007 disclosed $8,500 in payments to New Direction Philly, for expenditures described as "advertising" and "newspaper advertising."

In addition, the Ethics Board lawsuit alleged yesterday that Tomas Sanchez, the candidate's husband, solicited donations from El Medini, a developer living and working in Quinones-Sanchez's 7th Council district.

Instead of making the donations to Quinones-Sanchez, two of Medini's companies made $1,500 in contributions to New Direction Philly.

The Ethics Board contends that those arrangements violated a basic principle of the city's campaign-finance laws requiring candidates to raise campaign funds and make campaign expenditures through a single committee. *