John Edwards, the former Democratic senator, vice presidential nominee and presidential candidate, faces up to 30 years in prison and $1.5 million in fines if convicted in a six-count felony indictment he heard in the Winston-Salem federal courthouse on Friday.
Edwards pleaded not guilty in the Ward Federal Building, then talked to reporters outside, his daughter, Cate, by his side.
"There's no question I've done wrong ... but I did not break the law," Edwards said. "I never, ever thought I was breaking the law."
Edwards is accused of accepting contributions in excess of the limits allowed by federal law during his 2008 campaign for the Democratic nomination for president. He did so, according to the U.S. Department of Justice, "to protect and advance his candidacy from disclosure of an ongoing extramarital affair and the resulting pregnancy."
Federal prosecutors say Edwards received more than $900,000 from two individuals: Rachel "Bunny" Mellon, the 100-year-old widow of banking heir Paul Mellon, and Edwards' former finance chairman, Fred Baron. In 2008, an individual could contribute no more than $2,300.
Edwards is charged with one count of conspiring to violate campaign finance laws and making false statements to the Federal Election Commission; four counts of accepting and receiving illegal campaign contributions; and one count of concealing the illegal donations. Each count comes with a maximum penalty of five years in prison and a $250,000 fine.
When asked by the magistrate if he understood the charges, Edwards answered: "Yes, sir. I'm an attorney."
As part of the conditions of his release, Edwards is not allowed to have any contact with Mellon.
She is at the core of the investigation. Mellon and Baron privately provided hundreds of thousands of dollars that eventually went to keep Edwards' mistress, Rielle Hunter, and her out-of-wedlock daughter in hiding in 2007 and 2008, during the height of the Democratic presidential nomination campaign.
Among the other release conditions, Edwards must surrender his passport, cannot travel outside the continental U.S., must provide a urine analysis and DNA sample, can't have a firearm and can't change his address without telling the court. Also, if he gets even a traffic stop, he must tell his pretrial officer.
After the 2:30 p.m. hearing, Edwards made a short statement to the media. As he left, he answered only one question. When asked what he told his younger children, Jack and Emma Claire, he responded: "That I love them."
The case of USA v. Johnny Reid Edwards was filed Friday morning in U.S. District Court in Greensboro because that is where his campaign was headquartered. The hearing was held here because the magistrate rotation from week to week in the Middle District of U.S. District Court happened to be here today. Edwards lives in Chapel Hill.
Edwards' attorneys and federal prosecutors negotiated through Thursday to try to reach agreement on a charge to which Edwards was willing to plead guilty, according to people with knowledge of the negotiations, The Associated Press reported. Prosecutors had insisted on a plea to a felony, which would jeopardize Edwards' ability to keep his license to practice law. The talks failed.
Accompanied by three suited men, Edwards discreetly entered the Ward Federal Building at 12:55 p.m. on Friday through the back receiving dock as a crowd of reporters, photographers and TV camera crews waited at the front of the courthouse.
Before the hearing began, defense attorney Gregory Craig said in a news conference outside the courthouse that the prosecution against Edwards is unprecedented in campaign finance history.
"He has broken no law, and we will defend this case vigorously," said Craig, of the law firm of Skadden, Arps, Slate, Meagher and Flom in Washington, D.C.
"This is an unprecedented prosecution, much less an unprecedented civil case," Craig said.
"No one would have known or should have known or could have been expected to know that the payments would be treated or should be considered as campaign contributions, and there is no way Senator Edwards could have known that fact, either.
"In the history of the federal election campaign law, no one has ever been charged either civilly or criminally with the claims that have been brought against Senator Edwards.
"It's all about the question of whether these payments should have been treated as campaign contributions or not. There is no claim in this indictment that there was any misuse of campaign funds."
The U.S. Justice Department said in the indictment that payments to Hunter were a scheme to protect Edwards' White House 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 by, among other things, undermining Edwards' presentation of himself as a family man and by forcing his campaign to divert personnel and resources away from other campaign activities to respond to criticism and media scrutiny regarding the affair and pregnancy," the indictment said.
The indictment is the culmination of a federal investigation that lasted more than two years and scoured through virtually every corner of Edwards' political career. That included his political action committees, a nonprofit and a so-called 527 independent political group. The investigation also examined whether he did anything improper during his time in the U.S. Senate, which ended in 2005.
The indictment refers to $725,000 in payments made by Mellon and $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 rental for a house in Santa Barbara, Calif., to keep her hidden from the public.
It accused Edwards of lying when he told the media he never knew about any payments.
Former campaign staffer Andrew Young, who initially claimed paternity of Hunter's child, has said Edwards was aware of the private financial support that helped keep the mistress satisfied and secluded. Prosecutors believe the private gifts should have been considered campaign contributions since they aided his candidacy.
The case opens a new front in how the federal government oversees the flow of money around political campaigns. An attorney for Edwards said last week that the government's case was "novel and untested" and argued that the government's theory was wrong on both the facts and the law.
Edwards and Hunter began their relationship in 2006, just as the 2004 Democratic vice presidential nominee was planning 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 both 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. His wife, Elizabeth, died of cancer in December.
Young has said that Edwards agreed in 2007 to solicit money directly from Mellon. And the longtime Edwards aide, now estranged from his former boss, has said he received hundreds of thousands of dollars in checks from Mellon — some hidden in boxes of chocolate.
Mellon and Edwards are still friendly despite the glare of the investigation. They had lunch at her Virginia estate last week.
Baron's support was even more direct. The wealthy trial lawyer said in 2008 that he helped Young and Hunter move across the country to protect them from media scrutiny. Baron, who died a few months later, said Edwards wasn't aware of the aid, but Young has said that Edwards did know.
Young, Hunter and Baron's wife were among many Edwards aides and backers who were called to testify before a grand jury or have been interviewed by investigators.
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