This sounds like a plausible argument to me, but it's not at all my field:
Arizona LP files suit to stop state funding of presidential debate: Arizona Libertarians have filed a lawsuit that could stop Arizona State University from sponsoring the third presidential debate between George Bush and Sen. John Kerry, scheduled for Oct. 13. The lawsuit maintains that by spending up to $2 million to sponsor the event in Tempe, the university is making an illegal campaign contribution to the Republican and Democratic parties.
“It's a clear case of misusing state funds,” said David Euchner, attorney for the Arizona Libertarian Party (AZLP).
“Arizona recognizes three political parties,” Euchner continued. “A debate which included all three of those parties would be a legitimate expenditure on education and public information. A debate including only two of the three candidates is a partisan campaign commercial — and an illegal donation to partisan political associations.”
Having said it's plausible, if the money has been paid over, I don't see what they can do about it except set an Arizona precedent for any next time, unless Arizona has funny third-party restitution laws. But if the money hasn't been paid over…