John Edwards pleads not guilty to campaign finance charges

By TOM BREEN and NEDRA PICKLER, Associated Press

WINSTON-SALEM, N.C. (AP) — Former presidential hopeful John Edwards pleaded not guilty Friday to federal charges that he solicited and secretly spent more than $925,000 to hide his mistress and their baby from the public at the height of his 2008 White House campaign.

In a 30-second statement to dozens of reporters and television news cameras that surrounded him outside the courthouse, he said he never thought he was breaking the law.

"There is no question that I have done wrong," he said. "And I take full responsibility for having done wrong. And I will regret for the rest of my life the pain and the harm that I have caused to others. But I did not break the law."

Edwards did not have to post bond, but he had to surrender his passport and is not allowed to leave the continental U.S. He also can't have contact with one of the wealthy benefactors who gave him money that prosecutors say was used to hide the affair.

The indictment contained six felony counts, including conspiracy, four counts of receiving illegal campaign contributions and one count of false statements for keeping the spending off the campaign's public finance reports.

It said the payments made with money from two wealthy supporters were a scheme to protect Edwards' presidential ambitions.

"A centerpiece of Edwards' candidacy was his public image as a devoted family man," the indictment said. "Edwards knew that public revelation of the affair and the pregnancy would destroy his candidacy."

"There is no question that I have done wrong ... but I did not break the law."

Prosecutors said the spending was illegal because the 2004 Democratic vice presidential nominee should have reported it on public campaign finance filings and because it exceeded the $2,300 limit per person for campaign contributions.

Edwards' lawyer, Gregory Craig, said there's no way that anyone, including Edwards, would have known that the payments should be treated as campaign contributions.

"This is an unprecedented prosecution," he said at the courthouse. "He has broken no law and we will defend this case vigorously."

The case opens a new front in how the federal government oversees the flow of money around political campaigns.

Citizens for Responsibility and Ethics in Washington, a private watchdog group often critical of the Justice Department for failing to pursue wrongdoing by government officials, was a surprising critic of this prosecution. Executive director Melanie Sloan said the case was "remarkably weak."

While Sloan called Edwards' conduct despicable, she said the government case rests on finding the payments by Edwards' two wealthy old friends to be campaign contributions "but no court has ever interpreted the definition of campaign contribution this broadly."

Edwards' defense team issued statements from experts who argued the payments were not campaign contributions. A former Federal Elections Commission chairman, Scott Thomas, said if the agency had investigated, it would have found the payments did not violate the law, even as a civil matter.

"A criminal prosecution of a candidate on these facts would be outside anything I would expect after decades of experience with the campaign finance laws," Thomas said.

In recent days, Edwards' team also argued that the secret spending was designed to hide the affair from his wife, Elizabeth, who died of cancer in December, and not to aid his campaign.

Negotiations between Edwards' lawyers and prosecutors to settle on a charge to which Edwards was willing to plead guilty continued through Thursday, but proved fruitless, according to people with knowledge of the negotiations. Prosecutors had insisted on a plea to a felony, which would endanger his ability to keep his law license.

If convicted, Edwards faces a maximum penalty of five years in prison and a $250,000 fine on each of the six counts. First-time white collar offenders usually don't receive prison terms in federal court, but the Justice Department typically presses for at least short prison sentences for public officials.

While Edwards was a private citizen as a candidate, he was receiving taxpayer money for his presidential campaign.

The indictment was the culmination of a federal investigation begun by the FBI more than two years ago that scoured virtually every corner of Edwards' political career, including his time as a U.S. senator, which ended seven years ago.

But the centerpiece has been the hundreds of thousands of dollars privately provided by two wealthy supporters — former campaign finance chairman Fred Baron and Rachel "Bunny" Mellon, the 100-year-old widow of banking heir Paul Mellon. That money eventually went to keep mistress Rielle Hunter and her out-of-wedlock baby in hiding in 2007 and 2008, during the apex of the Democratic nomination campaign.

The indictment cited $725,000 in payments made by Mellon and another $200,000 made by Baron. It said the money was used to pay for Hunter's living and medical expenses and for chartered airfare, luxury hotels and nearly $60,000 in rent for a house in Santa Barbara, Calif., to keep her hidden from the public. Other than Edwards, no one was named in the indictment, but the descriptions of others make clear who they are.

Mellon sent her money through her decorator. The indictment said she listed items of furniture in the memo lines of checks - written in amounts of $10,000-$200,000 for "chairs," "antique Charleston table," and "book case" — to hide the true purpose. It said Baron gave an envelope with about $1,000 cash and a note that said, "Old Chinese saying: use cash, not credit cards!"

The conspiracy count accused Edwards of lying when he admitted to the affair during an interview on ABC but denied knowing about any payments. "I've never asked anybody to pay a dime of money, never been told that any money has been paid," he said.

The indictment referred to Edwards' discussions with a former employee in summer 2009 in which they prepared a statement to the media in which he would admit he was the father of Frances Quinn Hunter. A person familiar with the investigation has identified the former employee as speechwriter Wendy Button. The indictment said Edwards told her that he was aware Baron provided money to hide Hunter from the media.

"Edwards further told the employee that this was a huge issue and that for `legal and practical reasons' it should not be mentioned in the statement they were preparing," the indictment said.

The statement Edwards eventually issued seven months later claiming paternity did not mention the money spent on Hunter.

Former campaign staffer Andrew Young, who initially claimed paternity of Hunter's child, also has said Edwards was aware of the private financial support that helped keep the mistress satisfied and secluded.

The indictment said Edwards and Young began discussing who could provide money to support Hunter in May 2007, around the time she told the candidate she was pregnant. It says Young read Edwards a note he got from Mellon saying she was "furious" over media criticism of the candidate's $400 haircuts.

"From now on, all haircuts, etc., that are necessary and important for his campaign — please send the bills to me," the indictment quoted Mellon as writing. "It is a way to help our friend without government restrictions."

The indictment said Edwards and Young then solicited money from Mellon.

Edwards and Hunter began their relationship in 2006, just as the 2004 Democratic vice presidential nominee was plotting a second run for the White House. She was hired to shoot behind-the-scenes video footage of the prospective candidate. Edwards' political action committee and a nonprofit affiliated with him each paid Hunter's video-production firm about $100,000 for the work.

Edwards initially denied having an affair with Hunter but eventually admitted to it in the summer of 2008. He then denied being the father of her child before finally confessing last year.

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Associated Press writer Mike Baker contributed to this report from Raleigh.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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