Already under investigation by the state for possible election-code violations, City Councilwoman Carol Campbell yesterday agreed to a demand of the Philadelphia Board of Ethics that she stay out of decisions about how the city's Democratic Party spends its money for Tuesday's primary.

Campbell, who is up for reelection, is the party's secretary. However, the Ethics Board found that she acted as the de-facto treasurer of two of the party's political-action committees, making decisions about how they spent hundreds of thousands of dollars.

It is a violation of the city's campaign-finance law for candidates to use more than one political committee as they run for office.

In reaching a signed settlement agreement with the Ethics Board, Campbell avoided a board effort to take her to court. As part of the terms, she vowed to stay out of the finances of both PACs until after Tuesday's election. Also, the treasurers of the PACs promised to tell the board when it spends $1,000 or more, through Tuesday, and identify who gave the approval.

That monitoring action kicked in yesterday when the board received a report detailing $42,100 worth of checks cut Thursday to ward leaders and other political officials, in anticipation of the primary. Such money is used to pay election-day workers; distribute the party's sample ballots of its endorsed candidates; and fund efforts to get voters to the polls.

"The Ethics Board insisted on ongoing monitoring due to concerns it had over the lack of transparency and internal controls at the Democratic City Committee's PACs," said Shane Creamer, who oversees the board. Records show that the two PACs spent about $200,000 in the last four months, and have $220,000 on hand.

While agreeing to the settlement terms, the agreement states Campbell "denies that she has authority to authorize the financial decisions and/or expenditures" of the PACs, or that she violated the single-committee rule.

Mayoral candidate Bob Brady, who chairs the party, declined comment yesterday on the Ethics Board's action or its continuing investigation into the party's finances. As a congressman, Brady is prohibited by law from involving himself in how the party spends its money.

The action by the board - an independent city entity whose five members were installed in November - was unusual in that it forced the Democratic Party, a private organization, to open up its books.

In addition, the investigation leading to its action included sworn statements from Campbell as well as State Reps. Frank Oliver and Shirley Kitchen, who serve as the treasurer and assistant treasurer, respectively, of the Democratic Campaign Committee PAC, and Marty Weinberg, treasurer of the Finance Committee of the Philadelphia Democratic Executive Committee PAC.

Campbell did not return a call yesterday. In an interview Thursday, she said the board's investigation was politically motivated and that she had "filed charges" against Creamer with state and city authorities. Yesterday, there was no sign she had done so.

"All you have to do is look at what's going on," Campbell said. "This is a conspiracy to try to knock the Democratic Party down.

"What I'm saying is this is, 'Beat up on Carol Ann Campbell,' OK?" she said. "Because, yeah, I'm a strong personality. I have to be. I'm a handicapped person. You don't get through what I get through without being strong."

Also yesterday, the state Attorney General's Office confirmed that it also had been investigating Campbell since May 1 for possible violations of the election code. The investigation began after the office received a referral from District Attorney Lynne M. Abraham.

"She referred it to us out of potential conflict of interest because she's been a longtime political ally of Carol Campbell," said spokesman Kevin Harley.

Senior Deputy Attorney General Patrick Blessington - a member of the office's public corruption unit - is leading the probe, Harley said. Blessington is the same prosecutor who had Campbell indicted in 2001 for campaign finance violations involving two unrelated PACs she ran. Campbell entered a first-time offenders program and the charges were expunged.

Harley said the current investigation was not tied to either the Ethics Board action yesterday or to the 2001 grand jury probe.

Contact staff writer Marcia Gelbart at 215-854-2338 or mgelbart@phillynews.com.