HARTFORD, Conn. — Connecticut Democrats and the State Elections Enforcement Commission settled a case on Wednesday involving Democratic Gov. Dannel P. Malloy's 2014 re-election campaign.

The Democratic State Central Committee, which helps to oversee the party, and Malloy's campaign committee, agreed to make a $325,000 payment to the state in order to end the dispute over whether it illegally spent money from a federal account on mailers to benefit Malloy. They also agreed to use funds that comply with state law for any future campaign activity.

Elections commission members voted 2-1 in favor of the agreement, which effectively settles two lawsuits and a complaint. The payment is the largest levied by the commission.

The agreement comes as a superior court judge is expected to decide whether to compel the Democrats to comply with the commission's investigative subpoena and turn over certain documents. The federal account can accept political contributions from state contractors, unlike the party's state account. Connecticut law prevents contractor money from being spent on state political races.

JR Romano, chairman of the Connecticut Republican Party, said the Democrats have "gotten away with illegal campaign spending." His predecessor had filed the original complaint alleging the Democrats tried to circumvent the state's campaign financing law, passed following a public corruption scandal that ensnared former GOP Gov. John G. Rowland. That law also included a voluntary publicly-funded campaign system.

"By allowing the Connecticut Democrats to get away with these violations, the SEEC has missed the chance to set a precedent declaring that illegal campaign spending will not be tolerated in our state," Romano said. "This settlement weakens and waters down enforcement of clean campaign laws by pretending that the Democrats did nothing wrong. It is outrageous and flippant disregard for fair elections."

But Michael Brandi, executive director of the State Elections Enforcement Commission, said the agreement eliminates a loophole that allowed federal funds, including those contributed by state contractors and lobbyists, to be spent on state elections. He said the agreement also creates a new structure for raising money that complies with both state and federal election law.

"We didn't get everything. It is a settlement," Brandi said. "But what we got is a good deal for the citizens of Connecticut."

Michael Mandell, executive director of the Connecticut Democrats, called the settlement a "positive step forward for the Democratic Party" that will clarify the process and "help ensure the continued viability" of the state's public campaign financing program.