Bloomberg News

Edwards Said Not Likely to Face Retrial in Campaign Case

June 01, 2012

Edwards Not Guilty of One Count, Mistrial on Five Others

John Edwards and his daughter Cate Edwards leave for lunch on the ninth day of jury deliberations at federal court on May 31, 2012 in Greensboro, North Carolina. Photographer: Sara D. Davis/Getty Images

Former presidential candidate John Edwards isn’t likely to be retried for using illegal campaign contributions to hide an extramarital affair after a jury acquitted him on one count and failed to reach a verdict on five others, according to a person familiar with the matter.

A federal jury of four women and eight men in Greensboro, North Carolina, yesterday found Edwards not guilty of one count of violating campaign finance laws. On that charge, the U.S. alleged that in January 2008, about the same time he withdrew from the campaign, Edwards knowingly accepted more money from campaign donor Rachel “Bunny” Mellon than was allowed by law.

U.S. District Judge Catherine Eagles declared a mistrial on the five other counts. The government has the option of retrying him.

The U.S. Justice Department isn’t likely to retry Edwards, said the person familiar with the matter, who wasn’t authorized to discuss the case publicly and didn’t want to be identified.

Edwards, a Democrat who was U.S. Senator John Kerry’s running mate in the 2004 presidential election, faced a maximum of 30 years in prison if convicted on all counts.

Edwards, who didn’t testify, appeared on the courthouse steps after the verdict flanked by his oldest daughter, Cate, and his parents. He thanked his family for standing with him throughout the case and acknowledged Frances Quinn, the daughter he fathered with his mistress, Rielle Hunter.

“My precious Quinn,” Edwards said. “I love her more than you could ever imagine.”

“While I do not believe I did anything illegal or ever thought I was doing anything illegal, I did an awful, awful lot that was wrong and there is no one else responsible for my sins,” he told reporters.

Unemployed Filmmaker

Prosecutors alleged Edwards used almost $1 million in payments from Mellon, a 101-year-old multimillionaire heiress, and Fred Baron, a now-deceased trial attorney, to conceal his affair with Hunter, an unemployed filmmaker. The case marks the first time the government has prosecuted someone for campaign violations when money was paid to a third party.

The donations, in 2007 and 2008, were used to cover rent, medical visits and prenatal expenses for Hunter, in addition to travel and hotel accommodations to hide her from the public.

Prosecutors declined to comment on yesterday’s verdict. Abbe Lowell, an attorney for Edwards, also declined to comment. Alisa Finelli, a Justice Department spokeswoman, said she had no comment.

Juror Comments

Juror Ladonna Foster told the NBC’s “Today” that the prosecution failed to meet its burden of proof. Foster and another juror, Cindy Aquaro, both said on the show that they believed Edwards was guilty of breaking campaign finance rules.

“He was just smart enough to hide it and we could not find the evidence,” Aquaro said.

“This case was a monumental waste of time from day one,” said Kenneth Gross, a former lawyer for the Federal Election Commission who’s now a partner at Skadden Arps Slate Meagher & Flom LLP in Washington. “The case should never have been brought.”

Gross was involved in the case when Edwards was first indicted. Other Skadden Arps lawyers worked on Edwards’s defense.

Jurors deliberated for nine days before reaching a verdict. Their initial notes to the judge requested exhibits that focused on Mellon, including an April 2007 letter Mellon sent suggesting Edwards send her “all bills” necessary and important for his campaign. The note was sent after media reports criticizing the price of Edwards’s haircuts.

‘Clear-Cut Evidence’

“The verdict reflects a struggle that the jury appears to have had in finding some clear-cut evidence of criminality,” said Robert Mintz, a former federal prosecutor who’s now a partner with McCarter & English LLP. “They could not agree, no matter how morally reprehensible his conduct was, that it added up to a criminal violation.”

Edwards, a former U.S. senator from North Carolina and presidential contender in 2008, was indicted last June after a two-year investigation. He has claimed that he never thought he was breaking the law and that the disputed payments were gifts, the fruit of his pre-existing friendships with Mellon and Baron.

In 2008, Andrew Young, a former Edwards campaign aide, cashed two checks from Mellon totaling $375,000. Both checks were deposited into a bank account belonging to Young and his wife, Cheri, after Edwards suspended his campaign for president, according to defense exhibits entered as evidence during the trial.

Mellon Checks

Mellon wrote one of the checks for $175,000 in December 2007 after asking her longtime attorney Alex Forger for help in making it out. When asked about the purpose of the check, Mellon told Forger it was “for the benefit of John Edwards,” Forger testified during the trial. Mellon acknowledged she knew the limits on campaign donations in that conversation and said the money was a personal contribution and obviously a gift, Forger testified.

Much of the four-week trial focused on Young’s role. Young, who testified under an immunity agreement, said he helped plan and coordinate multiple transactions between Edwards, Baron and Mellon over a period of months. He testified that Edwards targeted other supporters before agreeing on Mellon and assured him the plan to support Hunter was legal.

Defense lawyers argued that Young was an opportunist who approached Mellon on his own and used most of the money she provided for vacations, cars and a $1.5 million home in Chapel Hill, North Carolina.

Enters Politics

Edwards, who made his fortune as a personal-injury lawyer, entered politics two years after the death of his 16-year-old son, Wade, in an automobile accident by defeating Republican U.S. Senator Lauch Faircloth of North Carolina in 1998. He served one term in the Senate before seeking the Democratic nomination in the 2004 presidential election, eventually signing on as Kerry’s running mate.

In December 2007, when Edwards was again seeking the presidential nomination, photographers took pictures of a pregnant Hunter leaving a North Carolina supermarket. Already the subject of tabloid reports of an extramarital affair, Edwards needed a way to protect his nomination chances and persuaded Young to claim paternity, prosecutors said.

In January 2008, Edwards withdrew as a presidential candidate. The baby, Frances Quinn, was born in February 2008. In August of that year, Edwards publicly acknowledged the relationship with Hunter. He acknowledged his paternity the following year. Elizabeth Edwards, his wife, died of cancer in 2010.

Paternity Ruse

Young said he went along with the paternity ruse because he wanted Edwards to be president.

“Being friends with the most powerful person on earth has benefits,” he testified.

In all, Mellon wrote checks totaling more than $725,000, prosecutors said. The checks were made payable to an interior decorator who endorsed them and sent them to the Youngs, prosecutors said. The money went toward a monthly allowance of $5,000 to $6,000, a BMW for Hunter and the rental of a house in a gated community in Chapel Hill.

The Federal Election Act prohibits using campaign funds for personal expenses and caps the amount an individual may contribute to a candidate. In the 2008 presidential primary, that limit was $2,300.

Election Commission

Eagles refused to let Edwards show the jury a 2009 letter from the Justice Department that stated the government wouldn’t prosecute someone if the Federal Election Commission found no criminal liability. Eagles also denied a defense request to admit a recording of an FEC meeting in July 2011 during which commissioners said the payments in dispute weren’t campaign donations.

Scott E. Thomas, a 20-year veteran of the Federal Election Commission and past chairman, testified that the payment of living, medical and other expenses of a candidate’s mistress isn’t a campaign-related expense.

In September, advocacy group Citizens for Responsibility and Ethics in Washington filed court papers in support of Edwards, arguing that prosecutors were improperly applying election laws to seek a criminal conviction. Payments that would have gone to a candidate regardless of the candidacy aren’t subject to campaign laws, the group said.

‘Black Eye’

CREW Executive Director Melanie Sloan applauded the trial outcome as a “black eye” for the Justice Department and a “knockout punch” for its Public Integrity Section. The public integrity unit came under scrutiny for its handling of the corruption case against the late Senator Ted Stevens, an Alaska Republican.

“It’s hard to imagine DOJ will retry Edwards, but given the choice to bring this case in the first place, anything is possible,” Sloan said in a statement.

Mark Lanier, a Houston-based plaintiffs’ lawyer who said he was friends with the former senator and his late wife, said Edwards probably won’t be able to return to his litigation practice.

“It will be really hard for him to ever set foot in a courtroom again,” said Lanier, who won the first jury award against Merck & Co. in the litigation over side effects from its Vioxx painkiller in 2005.

Lanier, 51, also was friends with Baron, a Dallas-based plaintiffs’ lawyer who made millions of dollars representing asbestos claimants. Lanier said he represented Baron’s wife, attorney Lisa Blue, in connection with the government’s probe of the payments for Hunter’s upkeep.

Lanier said Edwards could try to work as a mediator or become an adviser to a law firm.

“But I’d say his future as a trial lawyer is finished,” he said. “He would be too much of a lightning rod. Every hand in the jury pool might go up when the judge asks if anyone knows the lawyers in the case.”

The case is U.S. v. Edwards, 11-00161, U.S. District Court, Middle District of North Carolina (Greensboro).

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net; John Peragine in federal court in Greensboro, North Carolina, at drjohnnd@hotmail.com; Seth Stern in Washington at sstern14@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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