July 30, 2014 SIGN IN | REGISTER
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John Edwards Case Tests Campaign Finance Law

Q: I heard that Citizens for Responsibility and Ethics in Washington is lobbying for the dismissal of criminal charges against John Edwards for allegedly violating campaign contribution laws in handling his relationship with his former mistress. This took me aback because I have always thought of CREW as an aggressive advocate for ethics in government. What is it about the charges against Edwards that might be different?

A: On June 3, the Department of Justice filed an indictment against Edwards for alleged violations of federal campaign finance laws. The primary law in question is the Federal Election Campaign Act of 1971, which at the time established a $2,300 limit on the amount that an individual could contribute to a candidate each election. It also requires federal election campaign committees to file periodic reports disclosing each person who contributed more than $200 to the committee within a given period.

The indictment alleges that Edwards conspired with others to violate these laws by accepting and failing to disclose hundreds of thousands of dollars in payments from Bunny Mellon and Fred Baron in order to “conceal Edwards’ extramarital affair” and his mistress’s pregnancy with his child.

According to the indictment, “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 away from other campaign activities to respond to criticism and media scrutiny regarding the affair and pregnancy.”

The case against Edwards hinges on whether the payments by Mellon and Baron qualify as campaign contributions. If they do, Edwards could face liability because he allegedly conspired to receive and not disclose the payments, which far exceeded the annual limit per donor. If, however, they do not qualify as campaign contributions, federal campaign finance laws would not be implicated at all and there would be no basis for the charges against Edwards.

This is where CREW comes in. Last week, CREW made a court filing in support of Edwards’ motion to dismiss the charges against him. CREW states that while it “generally supports the Department of Justice (DOJ) against politicians charged with corruption ... it took the unusual step of filing on the side of Sen. Edwards because of the unique nature of the case.”

At issue, CREW says, is whether the government “can broaden the meaning of ‘contribution’ to prosecute Mr. Edwards for receiving and failing to report payments that were made by two personal friends to his mistress to cover certain of her personal expenses.”

CREW argues that the payments from Mellon and Baron do not qualify as campaign contributions under federal election law. Federal law defines a contribution to mean anything of value that is provided “for the purpose of influencing” a federal election.

According to CREW, the purpose of Mellon’s and Baron’s payments was not to influence an election. Rather, Mellon and Baron “made a series of third-party payments to private individuals based on their pre-existing friendships with Mr. Edwards and completely independent of his candidacy for president.”

CREW says Mellon’s and Baron’s purpose was to do a personal favor for Edwards and notes that the payments continued even after Edwards ended his campaign. Moreover, CREW argues, the payments cannot be considered campaign contributions because federal election law would prohibit the use of campaign funds for the uses to which the payments were put. In other words, Edwards could not have used campaign funds to make hundreds of thousands of dollars in payments to his mistress. Had he done so, CREW argues, he could have faced liability for misusing campaign funds.

Perhaps most significantly, CREW warns of the potential consequences of convicting Edwards based on Mellon’s and Baron’s payments to his mistress. According to CREW, the government’s position appears to rest not on Mellon’s and Baron’s intent in making the payments, but rather on the incidental benefit that Edwards’ campaign received from the payments, i.e., preserving the “family man” image that was part of Edwards’ campaign.

CREW argues that this position rests on a “near boundless theory of criminal liability” that “would sweep in anything of value given directly or indirectly to a candidate for federal office.”

So is the case really as significant as CREW suggests? Possibly yes. If payments to Edwards’ mistress were to be considered campaign “contributions” solely because of some incidental benefit received by Edwards’ campaign, the effect indeed could be far-reaching. As CREW points out, under similar reasoning, payments to a candidate to help pay off personal, private debts would be treated as campaign contributions (as opposed to gifts, which other federal laws require candidates to disclose). Any time a federal candidate received anything of value, federal campaign laws could be implicated.

From the indictment alone, it is not yet clear whether the DOJ really is advocating such a broad reading of what counts as a “contribution.” Indeed, the indictment alleges that the payments were made “in order to protect and advance Edwards’ candidacy for President.”

Nevertheless, CREW’s filing is a reminder that the proceedings against Edwards merit close attention from anyone involved in campaign finance. There is at least the potential for campaign finance laws to be extended further than ever before.

C. Simon Davidson is a partner with the law firm McGuireWoods. Click here to submit questions. Readers should not treat his column as legal advice. Questions do not create an attorney-client relationship.

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