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FEC Orders Edwards to Pay Back $2.3 Million

The Federal Election Commission ruled that former Sen. John Edwards (D-N.C.) will have to pay the government almost $2.3 million following an audit of his 2008 presidential bid.

The payments are mostly a result of Edwards’ acceptance of federal matching funds beyond the limits that he was entitled to and not connected to allegations that he used campaign funds to cover up an extramarital affair.

By a unanimous vote, agency leaders ruled that the Edwards campaign has to pay back the government more than $2.1 million in primary matching funds that were “in excess of the candidate’s entitlement.” The FEC also said the campaign may have to pay $142,000 to the Treasury Department for 128 stale-dated checks.

The agency’s decision may deplete most of the remaining $2.6 million that John Edwards for President reported having in cash on hand at the end of June.

“This is a perfectly ordinary event in the lives of publicly funded campaigns,” Democratic FEC Commissioner Ellen Weintraub said. “If you are going to take taxpayer money, then you have to subject yourself to an audit to make sure that taxpayer money was appropriately spent.”

In addition to these issues, the audit also found that the campaign misstated financial activity on reports and failed to itemize more than $4.4 million in loan payments.

Republican FEC Commissioner Donald McGahn, who has criticized the agency’s audit division in the past, voted in favor of the recommendations, saying “sitting here today it seems as though the auditors have done what they are supposed to do.”

McGahn also addressed “the pink elephant in the room,” which is how he referred to the technical reporting issues that relate to Edwards’ extramarital affair, his alleged payments to cover it up and the resulting federal investigation.

The 2004 Democratic vice presidential nominee has been indicted and a criminal trial is expected to begin in October over accusations of campaign finance violations in relation to an affair that he had with Rielle Hunter, who briefly served as the campaign’s videographer. The indictment states that Edwards used campaign cash to funnel almost $1 million to Hunter in order to conceal their extramarital affair. Edwards later admitted to the affair and said he fathered a daughter outside his marriage.

“The allegation, for our purposes, is that money was paid and the theory is that it somehow benefited the candidate,” McGahn said about the large in-kind contribution from a wealthy donor that was used to hide Edwards’ affair. “Let’s assume that legal theory is correct and let’s assume the jury agrees. Would they have to then amend [campaign filings] and show all of that?”

Commissioners also questioned the rules concerning more than $800,000 that the Edwards campaign has paid in legal fees since the election, including some that may have gone toward defending the former North Carolina Senator from federal allegations. The commission took no action regarding these funds.

The FEC’s audit of Edwards recent campaign is the sixth such routine investigation of 2008 presidential candidates by the agency so far. Other released audits have included those for Democrat Joseph Biden, Libertarian Mike Gravel and Republican Duncan Hunter.

The commission has yet to release its audits of Democratic candidate Hillary Rodham Clinton, Republican nominee John McCain or President Barack Obama. Roll Call first reported this spring that the FEC is also conducting an audit of Obama’s campaign even though it did not accept the federal funds that would legally trigger such an audit.

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