Campaign Contribution or Gift: John Edwards Has the Better Hand

The charges in the John Edwards Indictment are all premised on the assumption that the monies from Fred Baron and Bunny Mellon that ended up financing Rielle Hunter and Andrew Young's excellent adventures were campaign contributions rather than gifts. If they weren't campaign contributions, there's no crime.

There's no case law on point. There are no prior federal prosecutions alleging a candidate mislabeled a campaign contribution as a gift, thereby violating federal election law.

What the Government told Edwards' attorneys and election law experts prior to the Indictment was that there was a FEC civil advisory opinion in 2000 (the Harvey opinion) that supported its position. Team Edwards responded that opinion was distinguishable from his situation, and pointed out another advisory opinion (the Moran opinion) in 2002, closer to his situation which concluded the donated money was not a campaign contribution. The Wall St. Journal has more here, and also check out election law expert Rick Hasen at Slate.

Neither opinion is directly on point in Edwards' case. Both are distinguishable. And newer FEC advisory opinions clearly state the opinions are not only advisory, but that they are not to be relied on in cases with distinguishable facts. [More...]

The FEC issued an opinion in another case (the Fleischman Opinion) just last week. At the end, it states:

This response constitutes an advisory opinion concerning the application of the Act and Commission regulations to the specific transaction or activity set forth in your request, See 2 U.S.C. 437f The Commission emphasizes that, if there is a change in any of the facts or assumptions presented, and such facts or assumptions are material to a conclusion presented in this advisory opinion, then the requestor may not rely on that conclusion as support for its proposed activity.

Any person involved in any specific transaction or activity which is indistinguishable in all its material aspects from the transaction or activity with respect to which this advisory opinion is rendered may rely on this advisory opinion. See 2 U.S.C. 437f©(l)(B). Please note the analysis or
conclusions in this advisory opinion may be affected by subsequent developments in the law including, but not limited to, statutes, regulations, advisory opinions, and case law. (my emphasis)

DOJ is relying not on prior case law interpreting statutes pertaining to campaign contributions, but on an FEC opinion (Harvey) that is clearly not "indistinguishable in all its material aspects" from Edwards' case. According to the express language and caution included in recent FEC opinions, its opinions cannot be relied on when considering cases with distinguishing facts. I think a court would have a difficult time even relying on the Harvey opinion as guidance in Edwards' case -- let alone basing a jury instruction on it.

What's left in the Government's arsenal to convince a jury these were campaign contributions? Nothing that rises to proof beyond a reasonable doubt, especially when Edwards has two experts, Former FEC Chairman Scott Thomas and former FEC legal counsel Pat Fiori, in his corner and both say they are not. The Government might produce an expert with a contrary opinion, but in a criminal case, the test is not who the jury believes more, as it is in a civil case. It's proof beyond a reasonable doubt, and dueling experts in a criminal case (unless one side's experts are patently incredible) means reasonable doubt.

If Baron's and Mellon's funds weren't campaign contributions, the Government can't even win the false statement charge, which alleges Edwards concealed "hundreds of thousands of dollars in campaign contributions" received from Baron and Mellon from the John Edwards for President Committee, causing the Committee to file a false report.

Case over. The Government has not disputed Greg Craig's assertion that there is no case law supporting the Government's theory in any reported civil or criminal case. Since the facts in the FEC's Harvey opinion are distinguishable from those in Edwards' case, Harvey cannot be relied on to establish that Mellon and Baron's donations should have been treated as campaign contributions -- a necessary predicate to finding John Edwards is guilty of anything in this Indictment.

This case seems destined to be a colossal waste of two years of prosecutorial resources.

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    Let's hope so (5.00 / 0) (#1)
    by gyrfalcon on Fri Jun 03, 2011 at 11:40:02 PM EST
    This is just a horrible prosecution, IMO as a total layman.  I'd far rather have my money go to waste entirely than to have this prosecution succeed, frankly, because it's such insane overreach.

    Do you think there's any chance whoever the judge is might just toss it out?

    According to (none / 0) (#2)
    by Jeralyn on Sat Jun 04, 2011 at 12:04:56 AM EST
    Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, as reported in the New York Times, "I think this case could lose well before trial" on motions to dismiss."

    One expert in the article said:

    "The idea that this subjective intent of somebody making a payment, without more, turns the payment into a campaign contribution -- it's not the law, and it's just not a tenable theory...I just think it's a real stretch."

    Melanie Sloan (none / 0) (#20)
    by gyrfalcon on Sat Jun 04, 2011 at 06:11:05 PM EST
    Yeah, that's the name I couldn't remember.  She was on Piers Morgan with Dershowitz Friday night.  She ain't exactly a soft touch about this stuff and certainly doesn't go any easier on Dems. that GOpers, so it's encouraging she thinks that.

    Honestly, the prosecution theory on this amounts to thought crime, seems to me.



    out of curiousity, (5.00 / 1) (#8)
    by cpinva on Sat Jun 04, 2011 at 04:28:05 AM EST
    did either of the gifting parties file a gift tax return, reporting and paying taxes on those gifts? while not dispositive in and of itself, if the returns were timely filed, it would lend even more credence to the assertion that these were meant to be gifts, and not campaign contributions.

    frankly, given the basis of the government's case (which rests on very thin ice), i'm surprised DOJ went forward with it, except for the high publicity value. unfortunately, should they lose, it will be negative publicity.

    Point of clarification (5.00 / 1) (#24)
    by gyrfalcon on Sat Jun 04, 2011 at 06:25:15 PM EST
    DoJ per se isn't pursuing this, they're allowing the Bush-appointed U.S. attorneys to finish a case they started investigating before the election.

    Obama is a f***ing wimp, in my opinion, for not having fired the whole lot of Bush US attorneys when he came in, particularly given what we've learned about how they were all appointed.

    But Mr. PPUS didn't wanna do that for fear of being accused of being partisan, so he let these Ken Starr wannabes continue what they were in the beginning stages of.

    Once again, thanks, Barack!!!


    This case serves Obama's interests (none / 0) (#28)
    by scribe on Sun Jun 05, 2011 at 05:00:25 AM EST
    so he's acting rationally in letting the Bush USAtty continue it.

    Obama can only forestall a challenge from his left (or the populist, Real Democrat side, if you will) so long as he can keep the dissatisfaction on the left from coalescing around a particular candidate.  Thus, he has allowed a prosecution - persecution, really - of the one populist candidate with national experience who could challenge him from his left.  To effect this, the prosecution indicted a ham sandwich.

    I, for one, would love to know just what the vote was on each count.  I'd bet it either broke by one or two votes b/c the grand jurors recognized it was crap, or was a runaway b/c the prosecution misled the GJ.


    Not a chance (5.00 / 0) (#29)
    by gyrfalcon on Sun Jun 05, 2011 at 08:58:24 AM EST
    that Edwards could ever be a viable candidate once this stuff came out, prosecution or no prosecution.  None.  Zippo.  Nada.  There's zero need to prosecute him for political reasons.  He was burned toast politically anyway.

    That said, obviously nobody in the administration gives a darn if he is prosecuted.  They ought to, however, give a darn about the law and justice, and leaving these Bush-anointed fanatics in place was just asking for trouble.


    Unless you knew the remaining amount (none / 0) (#17)
    by Peter G on Sat Jun 04, 2011 at 04:13:03 PM EST
    of the "unified credit" (the same amount that is/was exempt from estate tax as of those years, 2007 and 2008) applicable to either of the donors you wouldn't know whether any tax was due on those gifts, if they were in fact personal gifts.  Very few people ever have to pay the gift tax.  However, if the amounts and date are as alleged in the indictment, it is true that a gift tax return would have been due from the donors, if the payments were gifts, since the amounts exceeded $12,000 (later, $13,000) per donee in a year. I agree that if the tax code required a gift tax return to be filed, and one was filed, it would be strong circumstantial evidence in Edwards's favor.  Since the indictment specifically alleges that the checks involved were written to another person's name and with a false purpose (e.g., "furniture") written on the subject line, I doubt very much that gift tax returns were filed.

    I confess (5.00 / 2) (#9)
    by jimakaPPJ on Sat Jun 04, 2011 at 09:01:07 AM EST
    I didn't like Edwards and don't like Edwards for a variety of reasons.

    But I really don't like the government wasting time and money on what should be a non-issue. Surely there are rich people more deserving of being charged and tried over using the people's money illegally... They could start looking on Wall St and Capital Hill for more deserving culprits.

    I'm getting the vapors, Jim (5.00 / 3) (#18)
    by Zorba on Sat Jun 04, 2011 at 04:34:58 PM EST
    Pass the fan and smelling salts.  This is the second or third time in recorded history that I actually agree with you.  Peace.   ;-)

    Same here (5.00 / 1) (#25)
    by gyrfalcon on Sat Jun 04, 2011 at 06:26:03 PM EST
    Breath-taking, isn't it?

    John Edwards is a man of great wealth (5.00 / 2) (#10)
    by KeysDan on Sat Jun 04, 2011 at 10:01:50 AM EST
    and could have provided for costs incurred for Young and Hunter.  The fact that money given by Mellon and Baron was used, instead, argues for an intention of keeping the extramarital affair from his wife and family.  And, such a cover-up would not necessarily have to do with a campaign.  Mrs. Edwards was ill and keeping the tawdriness of the circumstances under wraps (including a sex tape) as well as the embarrassment to Mr. Edwards, may have been the intention of the contributions, or, more reasonably, the gifting, by long-time supporters and friends of both Elizabeth and John.

    I had though of this as well. (none / 0) (#13)
    by Radix on Sat Jun 04, 2011 at 11:28:52 AM EST
    There could be a second reason as well. Had this information be revealed, it most certainly would have damaged his candidacy. If some part of him had done this to help his run, then could it not be reasonably seen as a campaign expense?

    Accordingly to the indictment (5.00 / 1) (#16)
    by KeysDan on Sat Jun 04, 2011 at 02:48:30 PM EST
    it could.  But disclosure would have damaged his reputation and impacted his life, political aspirations or campaigns aside.   And, of course, the affect it might have on his dying wife's course and his daughters would be a reasonable inference to make.  All enough for reasonable doubt.

    Does it pass the straight (none / 0) (#3)
    by oculus on Sat Jun 04, 2011 at 12:26:17 AM EST
    face test for Baron and Mellon to have contributed $1,000,000 to Young and Hunter irrespective of Edwards' candidacy?

    she didn't know at the time (5.00 / 2) (#4)
    by Jeralyn on Sat Jun 04, 2011 at 12:45:42 AM EST
    the money was going to Hunter and Young. She  sent the money to Young (and maybe Baron)for Edwards' personal expenses.  As far as Mellon's intent goes, she said it was to help John Edwards personally with things (like haircuts) the public would think unreasonable. If she gave carte blanche as to how to spend her gift, that might be silly on her part, but not illegal.

    As to Baron's money, Baron was a long time friend before he was finance chair. He had many millions and yes, I think he would have given the money to Young and Rielle if Edwards was not running for President -- so Elizabeth wouldn't find out and be devastated.

    None of this money went to Edwards or was deposited in any bank account affiliated with him or his campaign. Baron decided to use it for Hunter and Young. He said he never told John.

    I don't think the test is as simple as "irrespective of his candidacy." That's a playon whether it was "intended to further his candidacy" but not the same thing.

    Other factors go in to whether it's a gift or campaign contribution, including whether there was a prior history of donations, and Mellon had given millions to John Edwards in the past.


    Personal expenses, that's a blurry (none / 0) (#6)
    by Radix on Sat Jun 04, 2011 at 02:33:57 AM EST
    line in a campaign isn't it? The prosecution has a point when they argue the revelation of Edwards relationship with Hunter would have ended his, Edwards, bid for office. Campaigns spend allot of money on maintaining and bolstering a candidates image, do they not, how is this any different?

    It may not be, but (none / 0) (#21)
    by gyrfalcon on Sat Jun 04, 2011 at 06:18:24 PM EST
    where do you draw the line?  Seems to me essentially every single dime a candidate for public office spends on anything while he/she is running contributes one way or another to his/her image and thus his/her viability as a candidate.

    Seems to me also a dying life partner and soulmate is a far stronger motivation to keep the mistress and child under wraps than a campaign image.  Edwards is loaded with money.  If the primary motivation wasn't the attempt to conceal it from Elizabeth but from the public, he could have paid for it himself, seems to me.


    With repeated moves between hotels? (none / 0) (#23)
    by oculus on Sat Jun 04, 2011 at 06:20:56 PM EST
    Doubt it.  Plus, doesn't appear Mr. Edwards was all that concerned about his dying wife, unfortunately.

    correction, she sent the checks (none / 0) (#14)
    by Jeralyn on Sat Jun 04, 2011 at 12:43:45 PM EST
    to decorator Bryan Huffman, who turned them over to Young, according to Young.

    A darn good, common-sense point, oculus. (none / 0) (#15)
    by christinep on Sat Jun 04, 2011 at 01:19:15 PM EST
    No (none / 0) (#22)
    by gyrfalcon on Sat Jun 04, 2011 at 06:19:25 PM EST
    but they're not the ones being prosecuted, so their intent seems to me is irrelevant.

    Urine test? (none / 0) (#7)
    by Gerald USN Ret on Sat Jun 04, 2011 at 04:25:24 AM EST
    What is the deal with the urine test sample that Edwards were supposed to give before he left the Court House.

    That is the first I have ever heard of a potential drug or (health?) problem.

    Maybe I haven't followed this case close enough, or maybe I am following the darn thing too closely.  

    My only excuse is Edwards was raised not too far from where my mother now lives.

    it's routine (none / 0) (#12)
    by Jeralyn on Sat Jun 04, 2011 at 11:00:43 AM EST
    If he was suspected of drug use the judge would have checked the other box requiring random drug testing as well. He also has to surrender his passport, not because he's a flight risk, but because its routine. These conditions may not be mandatory like submitting a DNA sample, but they are routine.

    It may be routine, (5.00 / 1) (#19)
    by Zorba on Sat Jun 04, 2011 at 04:38:11 PM EST
    but it seems stupid and incredibly intrusive to me.  But then, a lot of what the government, including the judiciary, requires seems stupid and intrusive.  (Of course, I'm a long-time member of the ACLU, so perhaps I'm a bit prejudiced when it comes to civil liberties, intrusive government, and personal rights.)