WASHINGTON - Although the California attorney general claims the Richmond Unified School District's defaulted lease deal was illegal, an internal memorandum shows it was endorsed by a state education department attorney shortly after it was issued in 1988.

The memo goes to the heart of a pending court case in which Attorney General Daniel E. Lungren is defending the state for its role in the default of the $9.8 million certificates of participation issue last year. The state now maintains that the May 1988 issue was illegal and unconstitutional because about two-thirds of the proceeds were used to finance the school district's deficits, rather than capital projects as prescribed by law.

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