A legal battle involving the State Ethics Commission and the Office of State Auditor could end up costing taxpayers $40,000.

The N.C. Attorney General's Office has determined that it has a conflict in representing either party in a lawsuit the commission filed earlier this month, reports Dan Kane.

So both sides are hiring private lawyers to handle the matter. Gov. Mike Easley authorized an initial cap of $20,000 for each party.

Noelle Talley, a spokeswoman for the attorney general, said chief deputy Grayson Kelley had unsuccessfully sought to mediate the dispute.

The battle is over whether the commission has to comply with the auditor's investigation into an allegation of preferential treatment for Lt. Gov. Beverly Perdue, the Democratic nominee for governor. A Perdue aide visited the commission's office to review Perdue's financial disclosure statements and was allowed to look at them alone in a vacant office.

Since then, a log noting the arrangement was altered and the employee who made the notation has been fired. Ethics commission officials say nothing was improper in the visit and the employee was not fired as a result of the notation.