The Alaska governor was Sen. John McCain's pick for vice president. The purchases from such high-end stores as Saks Fifth Avenue and Neiman Marcus drew criticism for Palin, the self-described hockey mom.
The Republican National Committee told the commission that party money rather than candidate campaign money was used for the purchases.
"We have no information to the contrary," the FEC wrote in its decision.
The RNC also argued that the shopping spree was allowed under campaign finance rules that let the party spend on behalf of and in coordination with presidential campaigns.
The RNC spent at least $150,000 on designer clothing, accessories and hair and makeup services for Palin after she became McCain's running mate in September. The high-end duds contrasted with the down-to-earth image that Palin and the campaign sought to craft for her.
The purchases included $75,062 worth at Neiman Marcus in Minneapolis; $49,425 at Saks Fifth Avenue; $9,447 at Macy's; and $789 at the luxury retailer Barneys New York. Goods were also bought for Palin family members, such as $4,902 spent at upscale men's store Atelier and $92 at Pacifier, a Minneapolis baby boutique.
Melanie Sloan, CREW's executive director, argued that the commission's decision opens the door for political parties to buy lavish wardrobes for candidates to use, and that contributes to the public's cynicism about politicians.
"It's typical of the FEC to never take on anybody for anything," Sloan said. "It seems like the kind of thing they should have come down on, but they seem to think their hands are tied."
The commission in March asked Congress to expand the ban on personal use of campaign funds to include party money, Sloan noted. Congress has yet to act, she said. CREW plans no further action on its commission complaint, Sloan said.
The RNC did not immediately respond to a message seeking comment.
The controversy over Palin's clothing overshadowed the Republican campaign in the final weeks.
The McCain-Palin campaign said some of the clothing was returned almost immediately because it was the wrong size. After the November election, the RNC sought to get all the items back and planned to return them to the stores or give them to charity.
The McCain campaign and Palin characterized the purchases as legitimate campaign expenses and said there was never any plan for Palin to keep the items.
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