Sen. Jeff Hayden and his wife, Theresa, will pay $2,750 to settle claims alleging the couple personally benefited from the defunct nonprofit Community Action of Minneapolis.
Earlier this year, a receiver overseeing the organization's finances claimed the couple received $3,500 in trips, spa treatments and other perks.
The couple has denied personally benefiting from the organization.
Community Action of Minneapolis was a taxpayer-funded organization tasked with providing heating assistance and weatherization to low-income residents. A Department of Human Services (DHS) audit last year found that the nonprofit misspent at least $800,000 between 2011 and 2013 for everything from a car loan for the chief executive, Bill Davis, to travel, golf and other unauthorized expenses.
Davis is facing federal criminal charges for alleged theft and fraud.
Hayden served on the organization's board, and his wife was his proxy. Hayden resigned from the board when the DHS audit was released.
Charles Nauen, Hayden's attorney, said the Haydens did not personally profit from the organization. Their trips and other expenses were incurred while on business with the organization.
"Jeff and Terri are putting this matter behind them," Nauen said.