Could this be a contradiction in Newton's laws

Perpetual motion does not violate newton's law or any of physics. The energy that keeps it spinning is the same energy that you gave it in the first place by pushing it. On earth, the energy would be tranferred to the air as it pushes the air away from it, which also slows it down (as an example). In space there is no air to transfer energy to, so it stays spinning. Attaching it to a generator would slow it down to a stop though (due to the fact that turning the turbines would require energy or push). It would be more efficient however (as i said before, none of the energy would be given to the atmosphere).

Newton's laws:
1. an object in motion will stay in motion unless acted on by an external force
2.F=ma
3. for every reaction there is an equal and opposite reaction

What you are suggesting does not contradict any of these. What you are implying it contradicts is you can't have perpetual motion.

The generator will not turn forever because there will be friction in the magnetic bearing you are suggesting and there is a resistance force generated by the generator turning. you never get anything for free.

Oh by the way this could be done on earth in a vacuum chamber too.

It's simply this.
A generator converts mechanical energy into electricity, ultimately. Thus it must have energy inputted.
If its rotor was simply rotated to speed, it could uses the kinetic energy imparted to it and generate a bit of power, but as there is no further energy available, it will stop.
The energy put into spinning it up will also be greater than the energy it generates. You waste energy, for no return.

Because turning a generator requires the rod to turn a crack, the crack would provide resistance that would slow it down.