- Associated Press - Friday, June 3, 2011

RALEIGH, N.C. — A federal grand jury charged two-time presidential candidate John Edwards on Friday with soliciting and covering up the secret spending of more than $925,000 to hide his mistress and their baby during the peak of his 2008 campaign for the White House.

The grand jury’s indictment in the case of USA v. Johnny ReidEdwards contained six felony counts, including conspiracy, four counts of receiving illegal campaign contributions and one count of false statements for keeping the spending off his public campaign finance reports.

The indictment said the payments were a scheme to protect EdwardsWhite House ambitions. “A centerpiece of Edwards‘ candidacy was his public image as a devoted family man,” the indictment said.

Edwards knew that public revelation of the affair and the pregnancy would destroy his candidacy,” the indictment added.

The indictment and an arrest warrant were filed in Greensboro, N.C., which is in the district where his campaign was headquartered. Edwards, 57, was scheduled to make an initial appearance Friday afternoon before U.S. Magistrate Judge Patrick Auld in Winston-Salem, N.C.

Edwards attorney Gregory Craig issued a brief statement in advance of the hearing. “John Edwards will tell the court he is innocent of all charges, and will plead not guilty. He did not break the law and will mount a vigorous defense,” Craig said.

Negotiations between Edwards‘ attorneys and federal prosecutors to settle on a charge to which Edwards was willing to plead guilty continued through Thursday, but proved fruitless, according to people with knowledge of the negotiations. Prosecutors had insisted on a plea to a felony, which would endanger his ability to keep his license to practice law.

If convicted, Edwards faces a maximum penalty of five years in prison and a $250,000 fine on each of the six counts. First time white collar offenders usually don’t receive prison terms in federal court, but the Justice Department typically presses for at least a short prison sentence for public officials. While Edwards was a private citizen as a candidate, he was receiving taxpayer money for his presidential campaign.

Edwards‘ attorneys issued statements from campaign finance experts who argued the payments were not campaign contributions. One, former Federal Elections Commission Chairman Scott Thomas, said if the FEC had investigated it would have found the payments did not violate the law, even as a civil matter.

“A criminal prosecution of a candidate on these facts would be outside anything I would expect after decades of experience with the campaign finance laws,” Thomas said.

In recent days, his legal team also argued that the secret spending was designed to hide the affair from his wife, Elizabeth, who died of cancer in December.

Prosecutors said the spending was illegal because Edwards should have reported it on public campaign finance filings and because it exceed the $2,300 limit per person for campaign contributions.

The indictment was the culmination of a federal investigation begun by the FBI more than two years ago. The probe scoured virtually every corner of Edwards‘ political career. That included his political action committees, a nonprofit and a so-called 527 independent political group. It even examined whether he did anything improper during his time in the U.S. Senate, which ended seven years ago.

But the centerpiece of the investigation has long been the hundreds of thousands of dollars privately provided by two wealthy Edwards supporters — his former campaign finance chairman Fred Baron and Rachel “Bunny” Mellon, the 100-year-old widow of banking heir Paul Mellon. That money eventually went to keep mistress Rielle Hunter and her out-of-wedlock baby in hiding in 2007 and 2008, during the apex of the Democratic nomination campaign.

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