MILWAUKEE -- A former state worker has been freed from prison Thursday after an appeals court acquitted her of fraud charges.

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A three-judge panel of the 7th Circuit Court of Appeals vacated Georgia Thompson's convictions and ordered her immediate release from the Illinois prison she entered in November.

Thompson was sentenced last year to 18 months in prison after she was convicted by a federal jury of steering a state travel contract to a company that donated money to Gov. Jim Doyle. She has said that she is not guilty and was just trying to save taxpayers money.

The appeals court didn't immediately issue a ruling explaining its decision, but during oral arguments on Thursday morning, the judges called the charges against Thompson unfounded. Judge Diane Wood told prosecutors their case was "beyond thin."

During oral arguments, the judges seemed to focus on the fact that the government never proved that Thompson even knew about donations.

Legal analyst Chris Van Wagner said that the court's ruling Thursday was extraordinary.

"That is more than a legal ruling; it's a slap in the face," Van Wagner said. "This, no question about it, is a major affront to the government in many ways. Most significantly, it said you should have never brought this case."

Gov. Jim Doyle said Thompson was an innocent woman and was used as a political football by political opponents and the media. Doyle said that Thompson's conviction was a "terrible injustice," and that she is entitled to her job back at the Department of Administration.

"This is a woman who I've never met who has never been part of any political process at all. She's doing her job," Doyle said. "Can you imagine the horror of this? She's doing her job and then she gets caught up in all of this."

Thompson, who was a state Department of Administration purchasing supervisor, was convicted on charges of causing a misapplication of state funds and participating in a scheme to defraud the state of the right to her honest services.

During her trial, prosecutors had accused Thompson of guiding a contract to book state travel to Adelman Travel Group in 2005. The Glendale-based firm's CEO gave $10,000 to Doyle before and after winning the contract, which was worth an estimated $750,000. They said that Thompson illegally steered the contract so that Adelman would win over rivals because of pressure from her bosses.

However, no one else was ever charged with applying that pressure on Thompson, and Doyle has always denied any wrongdoing.

Doyle said that Thompson should be entitled to the same benefit as other state employees, which is likely the payment of legal fees for state employees who did nothing wrong.

In a news conference on Thursday, Doyle also made a point to call out certain media organizations that he thinks crossed a line in their coverage of the story.

"I hope we are all learning an important lesson in all of this. The news accounts in many instances against Ms. Thompson were sensationalized and overstated," Doyle said.

Van Wagner said that the court's decision Thursday was rare and remarkable. He said that two or three cases out of 100 are vacated. This case wasn't just vacated and sent back for a retrial, but rather the judges ordered an acquittal.

Van Wagner said that this is the first time he has ever seen three judges hear oral arguments and decide immediately on an acquittal.

Steve Hurley, Thompson's attorney, released a statement criticizing the government for pursuing the case, WISC-TV reported.

"The government charged Georgia Thompson with conduct that did not constitute a crime," he said in the statement. "It cost Georgia her job, her life savings, her home and her liberty; and it cost Georgia her good name. At sentencing, the government urged a longer period of incarceration because Georgia did not accept responsibility. Today, the government ought to accept responsibility for the consequences of its acts."

Stay tuned for continuing coverage.