Background

After Nine days of deliberations, the jury could not come to a consensus in former presidential candidate John Edwards’ campaign finance fraud case. While federal prosecutors insisted that using unreported campaign funds to cover up an illicit affair was illegal, the jury could not agree. They acquitted Edwards on one count, and United States District Court Judge Catherine Eagles dismissed the remaining five charges.

Charges

The United States Attorney charged Edwards with six federal felony offenses, including four counts of accepting illegal campaign contributions, one count of conspiracy to violate federal election campaign laws and one count of making false statements.

These charges are all connected to the Edwards’ 2008 presidential campaign, during which time he allegedly used campaign contributions to cover up a scandal involving the married candidate’s pregnant mistress.

Court Documents

Facts

The United State Attorney has indicted former presidential candidate John Edwards for various counts of campaign fraud, all related to an extramarital affair he had during his 2008 bid for the White House.

According to prosecutors, Edwards used contributions to his presidential campaign to cover up the affair with actress and film producer Rielle Hunter that led to a child. The government is also alleging the Edwards instructed a married campaign staffer, Andrew Young, to assume responsibility for the affair and Hunter’s pregnancy. Young did in fact tell the media that Hunter was his mistress and that her child was his during the campaign.

Edwards did not admit to the affair and claim paternity of the child until 2010.

The money that prosecutors claim was used illegally — nearly $1 million from two wealthy donors, philanthropist Rachel “Bunny” Mellon and the late Fred Baron, a Texas trial lawyer — allegedly funded Hunter’s medical bills and paid for Hunter, her daughter, Young and Young’s family to relocate around the country to avoid media attention. The government claims that the money was used to influence the election by hiding Edwards’ philandering nature.

Edwards and his lawyers, however, contend that the money was not campaign contributions but rather gift money from concerned friends who were helping Edwards hide the affair from his wife, Elizabeth, who was extremely ill and receiving breast cancer treatments. They pointed out that the money was declared and taxed as gift money and that it was not given to Edwards via campaign channels.

Prosecutors pointed out that indeed the money did not come in the regular way — in one instance, a check lined the bottom of a box of chocolates. In another case, cash was given to Young with a note that said “Old Chinese saying: Use cash, not credit cards!”

101-year-old Mellon, one of the donors, said of the money that she was “sitting alone in a grim mood — furious that the press attacked Senator Edwards on the price of a haircut. But it inspired me — from now on, all haircuts, etc., that are necessary and important for his campaign — please send the bills to me. … It is a way to help our friend without government restrictions.”

Andrew Young, the campaign staffer who initially claimed paternity of Edwards’ child with Hunter, testified on April 24, 2012, after taking an immunity deal with prosecutors in exchange for his testimony. Young cannot be prosecuted for his involvement in this scandal.

Young testified that money to support Hunter came from both Mellon and from Baron. According to Young’s testimony, Mellon would write checks to her interior decorator, who would then co-sign on the checks using Young’s wife’s name, and then Young and his wife deposited the money into their personal account before disbursing a monthly cash allowance to Hunter which ranged from $5,000 to $12,000. Once the Young family and Hunter went into hiding to avoid media attention, the money came in cash from Baron.

Throughout, the Youngs alone received the payments. Young testified that Edwards reminded Young that Edwards was not supposed to know about the money. Edwards also told Young that he had consulted with campaign finance experts, who affirmed that the scheme was legal. Young testified that he thought it was fishy, but he went along with it because Edwards, a noted attorney, knew the law better.

Players

John Edwards – American politician and former United States senator for North Carolina. He was the Democratic Vice Presidential nominee in 2004 and ran for President of the United States in 2008. Before embarking on a political career, Edwards was a respected Raleigh trial lawyer who represented plaintiffs in medical malpractice and personal injury lawsuits. In 1998 Edwards was elected to represent North Carolina in the United States Senate as a Democrat.

Andrew Young – The campaign staffer for Edwards who told the press that Rielle Hunter was his mistress and her child with Edwards was his own child. In 2010 he published the tell-all book The Politician: An Insider’s Account of John Edwards’s Pursuit of the Presidency and the Scandal That Brought Him Down, claiming that Edwards had asked Young to take public responsibility for the affair and pregnancy of Rielle Hunter to save Edwards’ campaign.

Rielle Hunter – Hunter is an actress and a film producer who was hired by the Edwards campaign to make promotional internet video shorts (the campaign referred to them as webisodes) intended to go viral. The videos showcased the “behind-the-scenes” elements of the campaign. Hunter and Edwards began their affair during his 2008 bid for the Presidency and have a daughter together, Quinn Hunter.

Elizabeth Edwards – An attorney and health-care activist in addition to being John Edwards’ wife of more than 30 years, Elizabeth Edwards was undergoing breast cancer treatment during his presidential campaign. Ultimately John Edwards used Elizabeth’s illness as his reason for stepping down from his run for the White House.

Fred Baron and Rachel “Bunny” Melon – Baron, the late Texas trial lawyer, and Melon, a 101-year-old philanthropist and heiress, allegedly donated money to Edwards that was used to cover up the affair with Hunter. Both Baron and Melon have said that the money they gave was a gift to Edwards personally, not to his campaign.

Videos

Edwards Judge Limits Key Defense Testimony

First Person: The Case Against John Edwards

Legal Commentary

The prosecution’s theory was a novel one, apparently too novel for the jury to convict. They alleged that the money used to cover up Edwards’ affair with Hunter influenced the election and thus qualifies as campaign contributions. Both of the donors, Mellon and Baron, had given the maximum allowable individual contribution to the campaign — $2,300 a piece — but prosecutors argued that the gift money they gave to help with the Hunter affair functioned as donations to the campaign and thus violated federal campaign finance laws for exceeding the legal limit of individual donations.

This interesting, and unprecedented, argument was ultimately too vague to sustain the convictions the Justice Department sought. By this analysis, money used by a politician to cover personal expenses (think grooming, entertainment and medical expenses — haircuts, gym memberships, personal medical bills, clothing, spray tanning, medications, tickets to the movies or sporting events) could be considered campaign contributions and could be subject to very strict government regulation and a comprehensive paper trail.

The Department of Justice argued that the campaign contribution limit “applies to anything of value provided for the purpose of influencing a federal election” including “payments for personal expenses of a candidate unless those payments would have been made irrespective of his/her candidacy.” Basically, they claimed that getting around campaign finance limits with so-called gift money is illegal.

The Edwards legal team, in contrast, argued that while Edwards’ actions were undoubtedly despicable, they were not explicitly illegal. This money, they argued, would have been used to hide the affair with Hunter whether or not Edwards was running for office, because Edwards had a compelling reason to hide the affair — his wife’s grave illness.

Edwards has said repeatedly that he would not have acted in any way that was inconsistent with federal election laws and believed that the money was used lawfully.

Ultimately, the law on this subject was too indefinite to sustain a conviction. It’s possible that we might see a major change in the laws to explicitly criminalize this conduct, but for now, John Edwards is a free man.