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The indictment of John Edwards: What is a campaign contribution?

By Peter J. Henning

The felony indictment of former Senator and presidential candidate John Edwards on six counts of conspiracy, false statement, and campaign finance violations contains many tawdry details of his affair with Rielle Hunter and subsequent payments and benefits of over $900,000 she received as part of an effort to hide her from the media while she bore his child.  The key question is not whether the affair took place or how Ms. Hunter’s expenses were paid during her pregnancy, but whether the money used constitutes a “contribution” to Mr. Edward’s campaign subject to the annual limits and reporting requirements of the federal law.

The government alleges that “Edwards knew that public revelation of the affair and pregnancy would destroy his candidacy by, among other things, undermining Edwards’ presentation of himself as a family man and by forcing his campaign to divert personnel and resources.”   While that may be true, it was not a federal crime for a candidate to hide a secret lover and pay her neonatal expenses.  Nor was it unlawful for Mr. Edwards to have his long-time aide, Andrew Young, claim that he fathered the child.  Mr. Edwards’ lies to the press about his relationship with Ms. Hunter and their child were unseemly, but no candidate has even been charged with a crime for being untruthful in the media.

The indictment details money provided by two long-time contributors to Mr. Edwards, identified only as “Person C” and “Person D” in the indictment but they have been revealed as wealthy philanthropist Rachel “Bunny” Mellon and Fred Baron, a former finance chair of Mr. Edwards’ 2004 campaign committee.  Ms. Mellon sent 7 checks in 2007 and 2008, totaling $725,000, to help Mr. Edwards, funneling the money through a friend who passed it on to Mr. Young’s wife.  Mr. Baron paid over $200,000 for charter flights, hotel bills, and rent in December 2007 and January 2008 on behalf of Ms. Hunter.

While the indictment asserts that the money constituted a “contribution” to Mr. Edwards’ presidential campaign, it is not clear whether the funds fall within the federal campaign finance laws.  The applicable statute, 2 U.S.C. § 431(8)(A)(i), defines a “contribution” as “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.”  Federal law limits individual contributions to a candidate to $2,300 per election, so the funds furnished by Ms. Mellon and Mr. Baron clearly exceeded that limitation.

The Department of Justice is taking a very broad approach to the phrase “for the purpose of influencing any election” in bringing the indictment.  The government’s legal theory is that the payments to Ms. Hunter, which were not directly related to Mr. Edwards’ presidential campaign nor used personally by him or any of his aides, were sufficiently related to it because of the need to maintain his positive public image.  Under this view, almost any payment or benefit, like buying someone a beer or giving a free t-shirt, could conceivably impact a candidate’s campaign and therefore be considered a contribution.

The Federal Election Commission issued Advisory Opinion 2000-08 about whether an individual who wanted to give a gift to a candidate was making a “contribution” when it was intended to be unrelated to the actual campaign and only a personal gift.  The FEC took the position that it was a “contribution” under federal law, explaining that

The Act and Commission regulations also prohibit the conversion of campaign funds to any personal use.  Notwithstanding that the use of funds for a particular expense would be a personal use, payment of that expense by any person other than the candidate or the campaign committee shall be a contribution to the candidate, unless the payment would have been made irrespective of the candidacy.

Relying on this analysis, the Justice Department views the payments on Ms. Hunter’s behalf as related to the campaign because they would not have been made “irrespective of the candidacy,” and in fact were the exact opposite because it was crucial to the viability of Mr. Edwards as a presidential contender that the affair (and pregnancy) remain secret.  Mr. Edwards could counter that argument by claiming that he would have paid Ms. Hunter to keep their affair secret from his wife, but whether Ms. Hunter and Mr. Baron would have been so generous if he was not running for President is an open question.

There is a certain logic to the government’s argument that the money was related to the campaign and not a personal gift.  If one were allowed to give unlimited amounts just by labeling the payment as a “gift,” then the campaign finance laws would be a hollow shell.  The problem for prosecutors is that the term “contribution” has never been applied to this type of payment, and judges tend to adopt a restrictive view of statutory terms when asked to apply them in a criminal prosecution.

The Justice Department’s view of what constitutes a contribution has been criticized by former FEC chairman Scott Thomas, who was retained by defense lawyers, who may even try to have him testify as an expert at trial about the meaning of the campaign finance laws.  Mr. Thomas issued a statement in which he asserted, “I do not believe that there is any prior case that states that the conduct at issue in the Edwards matter, or even conduct substantially similar to it, constituted a violation of the statute.”  He expressed doubt that the FEC would find the payments on Ms. Hunter’s behalf to rise to the level of even civil violation of the campaign finance laws, a much lower threshold than for a criminal prosecution.

I expect the first major battle in the case will a defense motion to dismiss the charges on the ground that the payments were not a “contribution” to the Edwards presidential campaign.  This will be an argument over the legal meaning of the term, which will require the court to engage in statutory interpretation to determine whether the campaign finance laws cover such use of funds.  If not, then the charges will be dismissed because there was no legal violation.  The Department of Justice could pursue an appeal to the United States Court of Appeals for the Fourth Circuit if it loses on this issue, which would mean the case could stretch out well into 2013 before there is a trial.

If the indictment survives the motion to dismiss, then the focus will be on whether Mr. Edwards intended to violate the campaign finance laws.  For a criminal prosecution, the applicable statute, 2 U.S.C. § 437g(d)(1)(A), requires the government to prove a defendant “knowingly and willfully” violated the law, which is a high standard.  In our recently published book, The Prosecution and Defense of Public Corruption: The Law and Legal Strategies, Lee Radek and I analyzed the term “willfully” as imposing the highest intent level in the criminal law – that the defendant intend to violate a known legal duty.

Mr. Edwards has already indicated that he will pursue this line of defense.  After the charges were unveiled, he said, “I did not break the law and I never ever thought that I was breaking the law.”  The second part is the key, because ignorance can be a defense when the government must prove the defendant acted “knowingly and willfully” in violating the law.

Making the government’s case even more complicated is the fact that the two donors are not going to be witnesses at the trial.  Mr. Baron died in 2008, while Ms. Mellon is 100-years old and unlikely to be an effective witness against Mr. Edwards.  The indictment is careful not to make them into the bad guys in the case, to make it more difficult for Mr. Edwards to deflect attention from himself by blaming others.

To prove the charges, prosecutors will have to rely on the testimony of Mr. Young regarding what Mr. Edwards knew about the payments and the need to report them as campaign contributions.  Unfortunately, Mr. Young lied about the relationship with Ms. Hunter, just like his former boss, and lately has been involved in a nasty legal battle over his possession of an alleged sex tape of Mr. Edwards and Ms. Hunter.  That may not make him the most credible witness, and proving intent to violate the campaign finance laws could be a difficult challenge without other evidence beyond Mr. Young’s testimony showing Mr. Edwards knew he was skirting the campaign finance reporting requirements.

The prosecution is certainly not an easy one for the Department of Justice on the both the law and the facts.  If it can convict Mr. Edwards, though, this case will send a strong message to other candidates about how they deal with donors, and to be careful about the use of any money that could arguably be connected to a campaign.

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. Read his previous OUPblog posts here.

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