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A former Arizona attorney general insisted Thursday that Gov. Evan Mecham could not legally loan $80,000 from his protocol fund to his automobile dealership because the funds were public money.

Jack LaSota, testifying a second day at Mecham's Senate impeachment trial, said the money raised at Mecham's inaugural ball belonged to the state because it was transferred to the governor's office, not Mecham personally.Had the money been transferred to Mecham, LaSota said it would have been private money. Such a gift would have had to been reported on Mecham's personal financial disclosure form for 1987, LaSota said.

The defense contends the money was private. However, it was not reported on Mecham's financial report, which was filed in February.

The question of whether the money was public or private is central to the prosecution's claim that Mecham broke the law in loaning the $80,000 from his so-called protocol fund to his Pontiac dealership in July 1987.

Mecham claims the money was for use at his discretion and that the loan was a good investment because it earned 9 percent interest instead of the 5 percent it was earning in the bank.

LaSota, who also served as chief of staff under Democratic Gov. Bruce Babbitt, declared Wednesday, "That money in my view was public money," and said lending it was illegal. He said that even if the money was considered to be private gifts or donations, the law restricts spending to promoting the interests of the state or promoting and encouraging citizens' public service.

Certified public accountant Randall Soresnen, hired by the prosecutors to inspect the auto dealership's records, testified Wednesday that Mecham Pontiac would have been overdrawn by more than $60,000 within in a week without the $80,000 loan.