By Peter J. Henning
The criminal investigation of former Senator and presidential candidate John Edwards for secretly funneling money to his ex-lover Rielle Hunter is moving toward a conclusion, and there is a good chance he will be indicted if federal prosecutors can link the payments to his campaign committee or find that contributors were deceived about the purpose of the donations.
Voicemails released by North Carolina television station WTVD show Edwards’ connection to keeping his affair with Ms. Hunter secret. An NBC New report in February disclosed that federal prosecutors were planning to take the deposition of one of the sources of nearly $1 million used to keep Ms. Hunter out of sight while she was pregnant with their child.
The investigation into payments made to Ms. Hunter while Mr. Edwards was running for the 2008 Democratic nomination for President has been going on for almost two years. According to campaign records, she was purportedly paid for producing campaign videos. A former top aide to Mr. Edwards, Andrew Young, originally claimed to be the father of the child, but has now turned on his former boss and described in detail how large sums were provided to support Ms. Hunter, who is not a target of the investigation.
Sex scandals involving politicians normally just end the person’s political career, at least in this country. And paying off a secret lover to buy silence is not normally a crime, at least when the politician uses his own money. According to Mr. Young, however, the money came from wealthy donors, including $700,000 from Rachel “Bunny” Melloon, an aged wealthy patron of Mr. Edwards, who gave personal checks hidden in candy boxes.
The funds provided for Ms. Hunter pose a problem for Mr. Edwards if the money was collected for his presidential campaign committee and instead was tapped to make payments on her behalf, or even given directly to her. Politicians once viewed their campaign accounts as something akin to a personal piggy bank, and the money can still be used for a number of things that have little to do with actually running for office, like paying for an attorney to defend against an ethics investigation or even a criminal investigation.
Mr. Edwards would not be the target of a grand jury investigation were it not for a provision added to the federal campaign finance laws in 2002 as part of the Bipartisan Campaign Reform Act. That law, codified at 2 U.S.C. § 439a, states that a campaign contribution or donation “shall not be converted by any person to personal use.” The statute contains a list of uses that would be considered “personal,” such as buying clothes or paying for a vacation. While it does not specifically list payments to an ex-lover to keep the person quiet while running for President, that would certainly seem to come within the term “personal use.”
The issue for prosecutors is whether the money passed through Mr. Edwards’ campaign committee, or whether it was simply presented to donors as a way to “support” the candidate but never intended to be a campaign contribution. Federal law imposes strict reporting requirements on campaign contributions, and limits donations to an individual candidate to $2,500. The amount of money collected on behalf of Ms. Hunter clearly exceeded statutory limitations, which may show that the payments were never meant to be related directly to Mr. Edwards’ short-lived campaign for the presidency. Apart from the campaign finance issue is the question of whether financial support provided to Ms. Hunter was properly reported as taxable income.
Another potential problem for Mr. Edwards involves what the donors were told about the purpose of the payments. If they were told that the money was indeed a campaign contribution and not funds to be used for personal purposes, then they could be the victims of a fraud. Prosecutors could use the federal mail and wire fraud statutes to make out a case that the donors were deceived, but it would depend on what they were told about the reason for providing money to show that they would not have given otherwise.
According to media reports, the main donors were Ms. Mellon and Fred Baron, a wealthy Texas lawyer who served as campaign finance chair for Mr. Edwards and died in October 2008. What they were told about the purpose of the donation and its likely use would be crucial to any criminal case against Mr. Edwards because they would be the victims of a fraudulent scheme, if there was one.
Mr. Baron’s widow is reported to have testified before a federal grand jury. The deposition of Ms. Mellon is an unusual step in a criminal investigation that may indicate prosecutors are preparing the case for trial rather than just gathering information. Taking a potential witness’ deposition before a defendant is indicted is almost unheard of in a federal criminal investigation, done only when there are extraordinary circumstances. In this case, that circumstance is Ms. Mellon is over 100 years old, so there is a reasonable possibility she will not be around if Mr. Edwards is indicted and goes to trial, which could take up to two years.
The investigation is in its final stages, and the government will have to decide whether it has enough evidence of a crime, or whether this was just an unseemly effort to cover up for a philandering presidential candidate. Sex and politics do not mix together well, and for Mr. Edwards they could make him into a defendant in a criminal prosecution.
Peter J. Henning is Professor of Law at Wayne State University Law School. His scholarship focuses primarily on white collar crime, constitutional criminal procedure, and attorney ethics. Before entering law teaching, he was a senior attorney in the Division of Enforcement at the U.S. Securities and Exchange Commission from 1987 to 1991, and a trial attorney in the Criminal Division of the U.S. Department of Justice from 1991 to 1994. Professor Henning is author with Lee Radek of The Prosecution and Defense of Public Corruption: The Law and Legal Strategies.