(Adds details, background)
By Molly O'Toole
WASHINGTON, July 21 The Federal Election
Commission approved a final audit on Thursday that concludes
former U.S. presidential candidate John Edwards' campaign owes
the government more than $2 million.
The former U.S. senator from North Carolina already faces
other legal woes. He was indicted on June 3 for allegedly using
nearly $1 million in illegal campaign funds to help cover up an
extramarital affair with Rielle Hunter, a campaign worker,
while he was running for president in 2008.
Hunter had a child by Edwards as a result of the affair.
"We'll call it the pink elephant in the room, talking about
the indictment," said FEC Commissioner Donald McGahn. "The
allegation from our end is that money was paid and in theory it
benefited the candidate."
The FEC voted 6-0 to approve the June 23 memorandum from
its chief compliance officer and audit division, which said the
Edwards campaign owed $2,278,315.
The report found John Edwards for President got matching
funds in excess of his entitlement as a candidate, misstated
its cash-on-hand balance by nearly $100,000, failed to itemize
loan repayments of more than $4 million and stale-dated at
least 128 checks worth $141,808.
The FEC, whose audit staff will prepare a proposed final
report within 30 days, may initiate an enforcement action
later. Edwards' lawyers may return to dispute the report and
already have registered objections.
"I think at this point I can support the audit report but
keep an open mind if they come back, which is their right,"
said McGahn. "I don't like micromanaging campaigns. I don't
think that's my job. But it's taxpayer money."
Federal law requires the FEC to audit every political
committee set up by a candidate who gets public funds for a
primary election campaign, commission members said.
The audit examines whether a candidate was entitled to the
matching funds received -- or more -- and whether the funds
were used according to election law.
The audit's overview of John Edwards for President found
receipts from individual contributions, matching funds and bank
loans of $57,119,378 but disbursements of $55,508,491. As of
March 31, 2008, it had $1,610,887 in cash on hand.
Edwards' lawyers object to repayment of the matching funds
for several reasons. They say a portion in question, exceeding
$500,000, was received before a date of ineligibility kicked in
and should be treated as a "qualified campaign expense" to
John Edwards for President also added a request for extra
funds for "winding down" costs to allow for fees incurred
during the legal process over the campaign money.
Edwards' lawyers declined the opportunity for an audit
hearing and did not respond to three of the audit division's
four findings. They have responded to prior drafts of the
report but Audit Manager Thomas Nurthen said on Tuesday that
the documentation so far provided was not sufficient.
In the federal prosecution, Edwards has pleaded not guilty
to six charges including taking illegal campaign contributions,
making false statements and conspiracy.
Edwards could stand trial as early as October. If he is
convicted, each count carries a sentence of up to five years in
prison and a $250,000 fine.
"This has not come up like this before," said McGahn. "This
can get more complicated before it gets simple."
(Editing by Jerry Norton and John O'Callaghan)