The city has an ordinance makes it a crime to issue false statements during a campaign. Nancy Jane Woodside, a volunteer on Dave Bailey's unsuccessful mayoral campaign, had asked Provo police to investigate the flier. She said it contained a fabricated quote and wrongly linked the two of them to Democratic National Committee Chairman Howard Dean.

The flier came from Provo Residents for Good City Government, a political action committee primarily funded by local businessmen Richard Rawle and Scott Felsted.

The police asked city attorneys to review the case only for possible charges against Rawle.

Robert West of the city attorney's office said the city law must be applied very narrowly to not violate free speech rights.

In this narrow interpretation, the law would ''prohibit only false statements where the person making the statement knows the statement is false and intentionally or recklessly publishes that statement,'' he said.

He said the investigation failed to produce evidence ''sufficient to prove beyond a reasonable doubt that Mr. Rawle knew the statement to be false and that he intentionally or recklessly published the statement knowing it to be false.''

The flier quoted Bailey as telling a Democratic Women of Utah County luncheon that he would appoint Woodside as his chief administrative officer if elected mayor - a statement that Bailey, Woodside and others at the luncheon said was never made.

West said the statement ''was a rumor that people on both sides of the political spectrum had heard; that it is unknown who started this rumor'' and that Rawle ''collected monies and paid for a flier he thought contained accurate information.''

Kena Jo Mathews, who chairs the Democratic women's group, said no one tried be responsible by verifying the information with people who were actually at the luncheon.