Timeshare owners in Florida and elsewhere were misled into donating to the political fundraising arm of the U.S. vacation ownership industry while paying their regular property fees, according to a new federal audit report.

Tens of thousands of small contributions -- most $3 to $5 -- were collected by property management firms around the country and funneled to a political action committee set up by the American Resort Development Association.

The management firms billed the contributions to individual timeshare owners along with their tax and maintenance charges but usually didn't mention the contributions were voluntary, say Federal Election Commission auditors.

The report calls the billing scheme an ''improper solicitation of contributions'' and says it went on through 2006 -- although at least one major timeshare developer continues to collect the money.

Auditors found the American Resort Development Association-Resort Owners Coalition PAC also violated other federal election laws.

Their report, focusing on the 2003-04 election cycle, says the PAC secretly raised and spent more than $1.8 million during that time. The PAC also accepted thousands of dollars of prohibited contributions from corporations and foreign nationals, it said.

PAC treasurer Sandra DePoy would not discuss the report's specific findings.

''The audit was initiated more than two years ago and helped us identify areas we needed to improve for more accurate reporting,'' the American Resort Development Association said in a prepared statement. ``Since that time, we have used the feedback from the FEC to put into place more diligent reporting practices.''

The FEC does not comment on its audits. But similar findings about other PACs have led to civil enforcement actions by the agency and even criminal probes by the Department of Justice.

The sale of vacation timeshares is a multibillion dollar industry that's been hit hard by the nation's credit crisis. Last month, ARDA strongly supported enactment of the $700 billion bailout bill.

The FEC's unflattering audit of the PAC comes as ARDA has approached Washington for help in the bailout.

Howard Nusbaum, ARDA's president, said the trade group asked the Treasury Department to consider backing timeshare developers' short-term corporate loans in exchange for fees as part of a wider effort to vouch for ''commercial paper'' throughout the economy. Although timeshare developers usually borrow against the mortgages they issue to buyers, frozen credit markets have hampered those multimillion-dollar transactions, Nusbaum said.

''We don't want a bailout. We don't think we need a bailout,'' Nusbaum said. ``We wanted to have a credit enhancement. We would pay the government for it.''

In 2007, 4.4 million households owned one or more weeks in one of 176,000 timeshare units at 1,600 U.S. resorts, according to ARDA's website. And Florida has more timeshares, by far, than any other state.

The timeshare industry is heavily regulated. And ARDA, its Washington, D.C.-based trade association, is a major behind-the-scenes player in both federal and state politics.

This year alone, ARDA spent $540,000 lobbying against mortgage reform legislation on Capitol Hill, including the expansion of truth-in-lending requirements to timeshare buyers.

ARDA also donated $814,000 to federal candidates and causes of both major parties.

In Tallahassee this year, ARDA paid its lobbyists up to $270,000. It spread another $237,000 by contributing to the campaigns of dozens of legislators, the Republican Party and the House and Senate victory committees of both parties.

The source of all that money, along with most of the funds ARDA raised in years past, is the river of cash that flows from the contributions of timeshare owners who pay them via the property management companies.

''Contributions are then forwarded to ARDA-ROC PAC without a record identifying the individual contributors,'' the report says.

Boca Raton-based Bluegreen, one of the nation's largest timeshare companies, participates in collecting money that way for the PAC.

General counsel Michael Kaminer said the charges are billed to timeshare owners as ``the ARDA fee.''

''We don't call it a contribution to the PAC,'' Kaminer said. ``We regard it as mandatory. We've never had anybody come back and say I don't want to pay that.''

Specifically, they looked at 47,715 contributions totaling $235,517 -- or about 10 percent of the amount donated to the PAC in 2003-04.

The report says nearly 8 percent of that money -- more than $18,000 -- came from illegal sources, corporations or aliens.

In response to those findings, the PAC later turned that money over to the Treasury.

Miami Herald staff writer Douglas Hanks contributed to this report.

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