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Sen. Edwards' ethics questioned

Presidential hopeful Sen. John Edwards agreed to sell his home for $3.52 million to the public relations specialist hired by Saudi Arabia to counter charges it was soft on terrorism while Mr. Edwards was a member of the congressional investigation into U.S. and Saudi intelligence failures.

Mr. Edwards, a Democrat on the Senate Intelligence Committee, said yesterday he learned sometime during the course of the 2002 transaction -- months after the initial offer was signed but before the deal fell apart -- that Michael Petruzzello worked for Saudi Arabia.

Though the sale broke off nearly a year ago, Mr. Edwards hasn't returned or publicly disclosed Mr. Petruzzello's $100,000 deposit, which remains in a real estate escrow account as the senator decides what to do with it. Mr. Edwards recently sold the house to another buyer for a half-million dollars less than Mr. Petruzzello's offer.

The Senate ethics manual says lawmakers are obligated to avoid financial transactions that create even the "possibility or appearance" of a conflict of interest or if "they have personal financial stakes in the outcome of their official duties." Discretion is left to the senator.

Mr. Edwards said he handled the transaction through real estate agents and doesn't believe he had any obligation to try to learn about Mr. Petruzzello's clients.

Several ethics specialists who reviewed the transaction at the request of the Associated Press said they believed Mr. Edwards had an obligation to recognize the appearance of a conflict of interest once he learned of the Saudi connection, either disclosing the transaction or seeking Senate Ethics Committee clearance.

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