May 19, 2012 | Commentary on Legal Issues
The defense team for John Edwards has ended its case, doing its best to convince a jury that their client (who did not testify) may have betrayed his wife, but he did not violate federal law when two of his maxed-out political donors paid off his mistress to try to save his presidential campaign. We will have to wait and see whether they were able to convince the jury, but they have already apparently convinced most of the political pundits in Washington of this legal proposition. The mistress, it is said, was not a campaign expense, so payments to her were not governed by campaign-finance law.
Judging from the facts brought out by the government’s witnesses, though, the pundits are wrong. While this may be an unprecedented prosecution for the Justice Department, it is not a novel issue for the Federal Election Commission. It is true that there has never been a case involving payments to a presidential or vice-presidential candidate’s mistress, but the FEC has looked at the legality of gifts being given to candidates for other offices to pay their personal expenses and those of a mistress. And the money used to pay off Edwards’s personal obligations to Rielle Hunter could be considered campaign contributions that violated the maximum limit allowed under the Federal Election Campaign Act.
Based on testimony by the prosecution’s witnesses, the government claims that Virginia philanthropist Rachel “Bunny” Mellon and Texas billionaire Fred Baron provided nearly a million dollars in funds for Hunter and the daughter she had with Edwards, as well as for former political aide Andrew Young, who claimed publicly (after Edwards “persuaded” him) that he was the father of the child. Witnesses testified that Edwards knew the donor money was being provided to support Hunter and their daughter. Neither Mellon nor Baron had any familial relationship to Hunter or Edwards or any prior history of making gifts to Hunter; they were maxed-out campaign contributors who wanted to see Edwards succeed in his election campaign.
Misinformed critics of the government’s prosecution claim that such gifts of funds are not covered by campaign-finance law. But federal law limits the amount that a donor can contribute to a federal candidate under 2 U.S.C. §441a. That amount is indexed for inflation and was $2,300 in 2008, when Edwards was a candidate for the Democratic presidential nomination. 2 U.S.C. §431 defines “contribution” to include a gift or “deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.”
Candidates can make unlimited campaign expenditures out of their own personal funds, and under FEC regulations (11 CFR 110.10), that includes gifts of a personal nature that had been customarily received prior to candidacy. Federal law also prohibits the conversion of campaign funds to any personal use (2 U.S.C. §439a). Most important, FEC regulations state that the payment of a personal expense by any person other than the candidate is considered a contribution to the candidate, unless the payment would have been made irrespective of the candidacy (11 CFR 113.1). As the FEC said in a prior advisory opinion (AO 2008-17), the key question is, “Would the third party pay the expense if the candidate was not running for Federal office?”
The testimony of government witnesses makes it pretty clear that the payments by these donors would not have been made if Edwards had not been running for office. Edwards is a multimillionaire; he could easily have afforded to make the payments (including legally obligated child support) out of his personal funds. But such personal payments would have blown up his candidacy and made it impossible to hide what he clearly wanted to keep hidden. The payments by his maxed-out campaign contributors were clearly intended to “influence” the 2008 presidential election by keeping Edwards in the race and protecting his reputation.
In 2000, the FEC issued an advisory opinion to Philip Harvey of DKT International, a nonprofit that promotes contraceptive use in poor nations. Harvey wanted to know whether he could make gifts of $10,000 to candidates for federal office. He did not want to “directly support” the campaign of the candidates and asserted that the gifts were not intended “to influence a Federal election.” Instead, Harvey wanted to make the gifts “to express my deep appreciation to this individual for forgoing opportunities in the private sector in order to serve his country.” The gift would not be received or deposited or reported by the candidate’s campaign committee.
The FEC told Harvey in no uncertain terms that what he proposed to do was illegal and a violation of federal law. Since Harvey’s proposed gifts “would not be made but for the recipient’s status as a Federal candidate,” the FEC concluded that they were “linked to the Federal election.” Thus they “would be considered a contribution” under the law and the FEC’s regulations. These gifts could not be viewed as constituting personal funds exempted from the law since they “would not be gifts of a personal nature which had been customarily received prior to candidacy.”
Edwards’s defense might seem to find support in a 2010 case involving Senator John Ensign (R., Nev.). In that case, the FEC ruled legal a payment Ensign’s parents made to the treasurer of his campaign committee and PAC after it was disclosed that the treasurer and Ensign had had an affair. But according to the “Statement of Reasons” released by the five FEC commissioners, Ensign’s parents had a longtime personal relationship with the treasurer and her family and a history of making numerous gifts of cash and other payments. That is an important factor absent in the Edwards case, according to the government’s evidence. And although Edwards’s lawyers are claiming that he got a clean bill of health from the FEC based on an audit, the issue of these gifts was never squarely before the FEC during its audit.
There is certainly room for debate on this issue, and Edwards’s lawyers unsuccessfully tried to present the opinion of former FEC commissioner Scott Thomas that these gifts were not campaign contributions. But under Thomas’s view, there would be nothing to prevent campaign contributors such as Baron and Mellon from paying all the personal legal obligations, debts, and living expenses of a candidate and his family. Such a rule would greatly benefit someone running for president, since, as the FEC said in a 2002 enforcement action (MUR 5141), it “would free-up other funds of the candidate for campaign purposes.” It would obviously be a way to get around contribution limits and the restrictions on conversion of campaign contributions to personal use.
My experience on the FEC led me to conclude that federal campaign-finance laws are too complex, too ambiguous, and too restrictive. They help ensure the safety of incumbents and make it much more difficult for challengers. We would be better served with a system that did not limit the amount of campaign contributions, but simply required full disclosure of all donations so that voters can make their own decisions on how important it is to them that candidates are receiving funds from particular contributors.
But the gifts made on behalf of Edwards by his campaign contributors to keep this potential scandal quiet were intended to help him stay in the 2008 presidential race as a viable candidate. They would not have been made if not for Edwards’s status as a federal candidate, and they were linked to a federal election. They should be considered illegal campaign contributions under federal law and applicable FEC regulations and advisory opinions. A jury may end up disagreeing that Edwards knew that what he was doing was illegal, but if the government’s facts are correct, then John Edwards should be held accountable for violating federal law.
First Appeared on the NationalReview.com