An appeal set up by MP George Galloway did not spend money improperly but should have been registered as a charity, a year-long inquiry has found.
Mariam and grandmother Umm Hamza with Mr Galloway
The Charity Commission started the inquiry into the Mariam Appeal after a complaint that some of the funds had been used to fund Mr Galloway's travel.
The inquiry says the appeal, set up to help Iraqi children, broke some rules but there was no bad faith.
The Glasgow Kelvin MP says he is
"delighted" with the report.
The appeal was established in 1998 and named after Mariam Hamza, an Iraqi girl suffering from leukaemia.
Mr Galloway said at the time that it was aimed at saving Mariam's life and demanding the lifting of sanctions on Iraq.
But after a newspaper article about the fund, there was a complaint to the attorney general's office claiming some of the donations were used to pay Mr Galloway's travel expenses.
Announcing the inquiry's findings on Monday, the Charity Commission's director of operations, Simon Gillespie, said: "The commission's thorough inquiry found no evidence to suggest that the
large amounts of money given to the Mariam Appeal were not properly used."
Mr Galloway assured the inquiry the funds paid to him covered expenses which had been incurred in his duties as the appeal's chairman.
But the report said the purposes of the appeal were charitable and it should have been registered as a charity.
The commission accepted that the appeal's founders did not intend to create a charity and were given legal advice that it was not a charity.
But the inquiry said salaries had been paid to two appeal trustees - Amineh Abu-Zayyad and Stuart Halford.
Those payments were "unauthorised benefits", it said.
"The commission accepts that none of the executive committee acted in bad faith and that the services provided were of value to the appeal," the report continues.
It says some of the appeal's activities were "political by nature" but still consistent with the appeal's purposes.
The inquiry team obtained details of the appeal's bank accounts but was unable to get all its books and records, some of which had been sent abroad.
Mr Gillespie said: "Whenever people collect money from the public, it's always good practice to
keep proper records to be able to show how the money's been spent.
important to remember that these funds might be charitable and subject to
charity law which imposes a legal requirement to keep records."
Mr Galloway, who was thrown out of the Labour Party for comments about the Iraq War, said he was delighted to have been cleared of any wrongdoing.
"As I have previously stated I had no intention of setting up a charity and was surprised to find that I had," said the MP.
"The commission has acknowledged that there was
no intention to set up a charity and confirmed that despite one being established nothing untoward took place that warrants further investigation."
He added: "Claims made that I had mis-spent the Mariam Appeal money by pursuing the
campaign against sanctions and funding visits abroad to further this end, have
been proven to be false."