Former Sen. Larry Craig (R-Idaho), arrested in 2007 during a bathroom sex sting, on Friday lost his latest challenge to a ruling that he improperly used campaign funds while paying legal fees stemming from the arrest.

A federal appeals court upheld a lower court's decision that ordered Craig to pay $242,535 to the government.

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Government officials are not allowed to use campaign resources for personal expenses, including legal bills for charges that could have happened irrespective of whether the person is a federal officeholder.

Craig’s lawyers argued, among other things, that his status as a sitting senator at the time of the charges heightened the media attention to a national level, something that would not have happened to a private citizen.

“Nor would the publication of such a plea have normally engendered immediate professional repercussions — including congressional investigations and loss of professional stature and authority — for a private individual,” his counsel said in legal arguments.

Merrick Garland, chief judge of the U.S. Court of Appeals for the District of Columbia Circuit, wrote a 37-page decision upholding the lower court's ruling that Craig had violated the Federal Election Campaign Act (FECA), which governs how campaign funds can be used.

“The appellants note that Senator Craig suffered ‘severe professional and personal consequences’ as a result of his arrest for disorderly conduct,” Garland wrote. “That is no doubt true, but those were not the consequences of any liability flowing from his FECA violation.”

The Federal Election Commission (FEC), however, had allowed Craig to use campaign funds to pay for legal fees stemming to a Senate Ethics Committee investigation into his arrest and public relations fees to respond to media inquiries.

At one point, Craig’s lawyers said his use of the funds was acceptable because the decision to challenge the plea was an effort to remain in office, something a private citizen may not do.

“Surely there are members of Congress who regard owning homes in their districts, improving the quality of their clothing, or obtaining advanced degrees as necessary to increase their electoral chances,” Garland said. “Because Congress’ examples leave no room for consideration of a candidate’s motive, neither does the general ban” on how the funds are used.

Craig's counsel also challenged that his six-figure fine for violating FECA be transferred to the Treasury Department, arguing that it should instead be placed back into his campaign committee. Lawyers for Craig argued that the lower court violated the First Amendment rights of donors, citing Supreme Court cases that say that campaign contributions are protected free speech.

Garland shot back: "But the disgorgement order is not a campaign finance restriction, and it does not limit donors’ campaign contributions."

Rather, he said, "the court’s order does no more than enforce the obligation of a campaign committee to follow laws that are unrelated to the restriction of free expression."

The lower court had argued that its order for Craig to pay $242,535, which is much lower than the federal maximum fine for his violations, was not a punitive measure.

"The court did not direct the funds to the Treasury to punish Senator Craig," Garland said, "but rather to ensure that they were not returned to the person who had misused them."

Craig was arrested in a Minnesota airport in June 2007 for soliciting sex in a public restroom. He immediately pleaded guilty and paid a $575 fine associated with his criminal misdemeanor charge of disorderly conduct, but he later attempted to withdraw his plea.

In December 2008, after more than a year of legal battles, the Minnesota appellate court rejected his plea withdrawal.

Craig initially announced he would retire but remained on Capitol Hill for the remainder of his term, which ended in January 2009.