WASHINGTON — A two-year grand jury investigation of John Edwards has reached a decisive point. Prosecutors believe they have a strong case, but have not yet gotten a green light from the Justice Department to charge the former presidential candidate, NBC News has learned. The issue: did Edwards violate election laws by trying to cover up his affair with a campaign videographer, Rielle Hunter.
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Sources close to the investigation say Justice Department attorneys are now conducting a final review of evidence, and an indictment could come within days or weeks. In what could be an ominous development for Edwards, prosecutors already are making arrangements to record the sworn testimony of a key witness for possible use in a future trial, said the sources, speaking on condition of anonymity.
“It would be surprising now if he wasn’t indicted,” said Stephen Saltzburg, a former federal prosecutor and George Washington University law professor. “If John Edwards was aware that money was being paid to hide his mistress... and it was done to help his campaign, then he’s in trouble.”
Edwards’ attorney, Wade Smith, recently said, “We do not believe there is evidence that John has violated any election laws.” John Edwards, 57, has repeatedly said that he did nothing wrong, and a spokesperson said he remains optimistic that the investigation will confirm that.
Flurry of activity
A parade of grand jury witnesses and a flurry of new subpoenas over the past few months suggest the probe intensified as Elizabeth Edwards died of cancer in early December. Edwards’ friends in North Carolina say the timing could not be worse as “John has moved back into the family home so that he can take care of his children... John is working every day to be a good father and this is an inopportune time for this to occur," said a source close to the family.
Federal prosecutors are trying to prove Edwards had a hand in the payment of more than $1 million provided by two key supporters…money used, according to numerous sources, to keep Hunter quiet and out of sight. Prosecutors are examining whether the money spent on Hunter should have been treated and reported as campaign contributions, since keeping her way from the press was crucial to Edwards remaining a viable candidate. One year ago, Edwards admitted he fathered a little girl with Hunter. Frances Quinn Hunter turns 3 on Feb. 27.
“We already know that John Edwards acted badly. We already know that he lied to his supporters. We know he lied to his family and wife,” said political consultant and watchdog Joe Sinsheimer. “The only remaining question: Were John Edwards’ activities criminal or not?”
Paper trail: a complex puzzle
FBI and IRS agents are searching the records of the Edwards campaign and at least five organizations with links to Edwards, according to sources once close to the former candidate. The organizations include the One America Committee, a political action committee; the Alliance For A New America, a tax-exempt political organization; and the Center for Promise and Opportunity, a nonprofit that once addressed global poverty issues with Edwards as its honorary chair.
The PAC and nonprofit equally split payments totaling nearly $250,000 to Rielle Hunter’s company, Midline Groove Productions, for video she produced in 2006, according to a source familiar with many of the organizations associated with Edwards. Hunter famously followed Edwards on pre-campaign appearances in Iowa and New Hampshire, and made a trip with him to Africa.Video: Prosecutors gear up to charge Edwards in criminal case (on this page)
More than a dozen witnesses have testified before the grand jury at the U.S. Courthouse in Raleigh, N.C., including campaign managers and political operatives, Edwards’ friends and his former mistress, who arrived with Edwards’ baby in her arms. But the central witness may be former campaign staffer Andrew Young, an aide apparently so devoted that he falsely claimed paternity of the child and lived with Hunter in hiding before finally turning on his boss with a tell-all book, titled "The Politician." Insiders say another group put the former aide on its payroll and gave him a raise while he was engaged in the cover-up.
Focus on two wealthy donors
The money used to support Hunter and Young in hiding came from two wealthy Edwards donors: a reclusive heiress, Rachel “Bunny” Mellon, and Edwards’ former finance chairman, Fred Baron. Insiders say, each provided hundreds of thousands of dollars, for a total of more than $1 million.
Baron said, shortly before his death in 2008, that Edwards knew nothing about the money, which Baron spent to fly Hunter and Young around in his private jet, and to hide Hunter in lavish rented homes in Santa Barbara, Calif. The owner of one home in a gated community near Oprah Winfrey’s mansion, told NBC News that Baron paid a monthly rent of $20,000. Edwards said in a televised interview in August 2008 that he didn’t know anything about the money.
The denials by Edwards and Baron are vigorously disputed by Young, the former aide, who says Edwards solicited money and helped orchestrate the cover-up.
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Young has written that he received about $700,000 in checks from Mellon, one of Edwards’ largest political contributors: “Finally we focused on Bunny Mellon, who had made it clear she would give Edwards money for extraneous expenses with no explanation required. Edwards called her, and the ‘Bunny money’ began to flow.”
Young said Mellon wrote checks to a North Carolina interior decorator, Bryan Huffman, who then forwarded the checks to Young. The decorator told NBC News the checks came with little notes that said things like “this is to save the nation” and “for the rescue of America.” One check was enclosed in a box of chocolates, said Huffman.
Young has written that he spent the money on Hunter’s living expenses and to buy her a $28,000 BMW: “After I received each check, it was deposited in joint accounts I held with (my wife), to be used to keep Rielle happy and hidden from the media, Mrs. Edwards and anyone who might divulge her existence. This is the arrangement the senator expected me to follow so he would have 'plausible deniability.'”
Special arrangements for key testimony
Prosecutors plan to visit the 100-year-old Mellon at her estate in Upperville, Va., to record her testimony, so it’s preserved for any future trial, according to sources with knowledge of the case. Edwards’ attorneys would be allowed to cross-examine Mellon and Edwards has the right to attend, should he choose to.
Andrew Young and Mellon’s attorney, Alex Forger, have said Mellon understood her payments were a “gift” for a personal matter but that she had no idea she was paying to hide a mistress.
Case observers say the government must prove the money from Mellon and Baron was not a gift, but actually political support for Edwards. And Saltzburg, the former prosecutor, said prosecutors need evidence that Edwards had knowledge of the cover-up: “As long as he’s a knowing participant, then he is liable for what happens and indeed will probably be called a co-conspirator.”
The issue troubles Sinsheimer, the political consultant, who argues that to allow spending of this magnitude by wealthy donors makes a sham of campaign finance limits.
“I mean the whole thing is outrageous... Can Bunny Mellon give $700,000 to a presidential candidate of her choice just because she wants to? Is it proper for a presidential campaign to accept six-figure contributions from somebody and claim it’s just personal monies?”
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However, some former federal prosecutors questioned the amount of resources poured into this case, pursued for more than two years now by U.S. Attorney George Holding, a Republican. Prosecutors have spread a wide net, interviewing staffers all the way back to Edwards’ campaign for the Senate.
“There must not be much other crime in North Carolina,” said one former public corruption prosecutor. “What’s the point of pursuing this kind of case against a guy who’s already been thoroughly disgraced?”
Saltzburg said he also is surprised the investigation is still going on. “It does seem like old news and it seems like there is a lot more that’s worth investigating.
Lisa Myers is NBC News senior investigative correspondent; Michael Austin is a free-lance producer