John Edwards Faces Hometown Jury in Campaign Finance Trial

Two-time U.S. presidential candidate and former North Carolina Senator John Edwards is about to learn his fate on charges he violated campaign finance rules to hide a mistress as the process to select a jury begins.

An initial pool of jurors assembled today before U.S. District Judge Catherine Eagles in Greensboro, North Carolina. The pool was split into two groups of about 96 jurors each, who filled out questionnaires and listened to instructions from Eagles on trial conduct before being dismissed until April 17.

The process of choosing a 12-member jury and four alternates is scheduled to be completed on April 23 followed by opening arguments in the case, according to court documents.

“We’re not here for entertainment,” Eagles told jurors. “This case is not about whether John Edwards was a good husband or good politician.”

Edwards, 58, was indicted by a federal grand jury in June on six counts including conspiracy, false statements and accepting illegal campaign contributions. Prosecutors allege Edwards orchestrated a scheme to use campaign funds to conceal his relationship with filmmaker Rielle Hunter while running for the Democratic Party’s nomination for president in 2008.

Prosecutors and Edwards’s attorneys may call Hunter as a witness for their side, lawyers for both sides said in a court filing today.

“It’s unquestionably a precedent-setting case for the government,” Robert Mintz, a former federal prosecutor who’s now a partner with McCarter & English LLP (1389L), said in a phone interview. “It’s the first time prosecutors have gone after someone for campaign finance violations when money was paid to a third party.”

“The government’s legal theory is largely untested and represents by all accounts a fairly aggressive interpretation of the campaign finance laws,” Mintz said.

Fathered a Child

Edwards who was married at the time and fathered a child with Hunter, allegedly used more than $925,000 in contributions from Rachel “Bunny” Mellon, a 101-year-old multimillionaire heiress, and now-deceased trial lawyer Fred Baron to hide the affair. Each of the six counts he faces carries a maximum five- year prison term and $250,000 fine.

Edwards, who was the subject of a two-year investigation, has repeatedly denied the charges, saying he never thought he was breaking the law.

“Mr. Edwards has been waiting for some time and is looking forward to his day in court,” Abbe Lowell, an attorney for Edwards with the firm Chadbourne & Parke LLP (1224L), said in an e-mail. “So much has been said about his life and his case; the time has come for the evidence.”

Middle District

The jury pool, mostly white and split evenly between male and female, was pulled from North Carolina’s entire middle district, an area that includes 24 counties in the central part of the state.

Edwards, his oldest daughter and his parents were present in the courtroom as Eagles addressed jurors.

“The Constitution states trial by jury, not trial by Internet or trial by gossip,” Eagles said, cautioning jurors not to “friend” potential witnesses, lawyers or Edwards on Facebook.

At the heart of the case is the Federal Election Act Edwards is charged with violating. The law, which prohibits using campaign funds for personal use, caps the amount individuals may contribute to candidates. In the case of the 2008 presidential primary, that limit was set at $2,300, according to court documents.

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.

‘Uphill Battle’

The disputed payments were made on behalf of Edwards because of his pre-existing friendships with Mellon and Baron, the group said. Payments that would have gone to a candidate regardless of the candidacy aren’t subject to campaign laws, the group said.

The case “is an uphill battle for the Department of Justice and hopefully they will wind up with egg on their face that they so richly deserve for bringing this prosecution,” Melanie Sloan, CREW’s executive director, said in a phone interview. “There is no precedent for this case. In the U.S. we punish people for bad conduct not bad character.”

Lawyers for Edwards argue that Edwards couldn’t have known that the payments would be treated as campaign contributions. Two former Federal Election Commissioners, Scott E. Thomas and Robert Lenhard, are expected to testify on Edwards’s behalf as expert witnesses.

Campaign Expense

Thomas, a 20-year veteran of the commission and past chairman, is expected to testify that the payment of living, medical and other expenses of a candidate’s mistress isn’t a campaign-related expense, according to court documents. Lenhard, who served as FEC chairman in 2007, is also expected to testify that the complexity of the federal election laws makes third- party expenditures, like those in the Edwards case, unclear, lawyers for Edwards said in court papers.

Eagles could still dismiss the case given the lack of legal certainty, Rick Hasen, a professor at University of California Irvine School of Law, said in an interview.

“The question is whether under the rules this should be treated as an excessive contribution or whether it was not campaign related,” said Hasen, who blogs about the federal election law.

“There is some legal complexity and I think the judge has reserved the decision of whether to dismiss the case,” he said.

2006 Relationship

There may not be any direct evidence of Edwards’s state of mind leaving the unpopular ex-senator at the mercy of a jury that could be disinclined to believe what he has to say, Hasen said.

In an interview with ABC News in August 2008, Edwards said his relationship with Hunter began in 2006 after he met her in a bar in New York. He later hired her to produce Web videos for his campaign.

In a 2009 book, “Resilience,” Elizabeth Edwards said her husband confessed to the affair in the final days of 2006, after returning home from a tour announcing his second run for president. Elizabeth Edwards died in December 2010 after a six- year battle with breast cancer.

In exchange for some immunity, Hunter has acknowledged that she got benefits including medical care and living expenses as part of Edwards’s effort to support her, prosecutors said in court papers.

Mellon E-Mail

Prosecutors said Hunter’s immunity only covers her testimony and she could still be charged in the case. As part of her agreement with prosecutors, Hunter gave testimonial, documentary and physical evidence during the investigation, according to court documents.

Edwards and former campaign aide Andrew Young allegedly solicited money from Mellon starting in May 2007 after receiving an e-mail from her asking Edwards to forward “all bills” necessary and important for his campaign directly to her to avoid government restrictions, according to the indictment.

Mellon, who has given more than $4 million to organizations and political committees supportive of Edwards’s 2008 presidential bid, allegedly wrote $725,000 in seven personal checks to Edwards, according to court documents.

Mellon allegedly made the checks payable to an interior- decorator friend and falsely listed in the memo lines that the money was for antique furniture. The friend in turn sent the checks to Young, whose wife endorsed and deposited them into the Young family’s bank account. The funds were ultimately used to finance Hunter’s living and medical expenses, according to court documents.

‘Use Cash’

Baron, a Dallas-based lawyer who died in October 2008, allegedly paid for chartered flights and accommodations valued at more than $200,000, including the rental of a home in Santa Barbara, California, to support and hide Hunter from the media, according to the indictment.

In one instance, prosecutors said Baron had a Federal Express envelope containing $1,000 in cash delivered to the Youngs at a hotel with a handwritten note stating “Old Chinese saying: Use cash, not credit cards!” according to court documents.

Young, Edwards’s former aide, detailed the affair and alleged conspiracy in his 2010 book “The Politician.” Young, who was named in documents as a possible government witness under an immunity agreement, was a central figure in the conspiracy who allegedly helped plan and coordinate multiple transactions between Edwards, Baron and Mellon over a period of months, prosecutors said.

‘Soap Opera’

In February, Young settled a lawsuit filed by Hunter in 2010 over the return of property including an alleged sex videotape of her and the former presidential candidate.

“The tale of this case from the standpoint of the general public plays out more like a soap opera than a criminal trial,” Mintz said. “We’ll have to see whether the public still has an appetite for the story of John Edwards’s dramatic fall from grace.”

Young’s credibility will be crucial to the case since he’s the link between Edwards and the donors, Mintz said.

“His conduct presents some problems for prosecutors but prosecutors deal with witnesses who bring baggage into the courtroom all the time,” Mintz said.

Edwards, for years a wealthy plaintiff’s attorney, entered politics by defeating Republican Senator Lauch Faircloth in 1998, two years after the death of his 16-year-old son Wade in an automobile accident. He served one term before seeking the Democratic Party’s nomination in the 2004 presidential election.

Edwards, who spent his teenage years in Robbins, a North Carolina town of about 1,200 people, ran populist campaigns in which he railed against the divide between rich and poor while frequently referring to his father’s work in a textile mill.

“There’s no question that I’ve done wrong,” Edwards told reporters in June. “I take full responsibility for having done wrong. But I did not break the law.”

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

To contact the reporters on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net; John Peragine in Greensboro, North Carolina, at drjohnnd@hotmail.com

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

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