John Edwards indictment: a case Justice Department can't afford to bungle

The indictment Friday of John Edwards on allegations of diverting campaign funds to hide a paramour during his 2008 presidential campaign is, in part, intended to send a message that the government is keeping an eye not just on how candidates collect money, but on how they spend it.

But the case is also a huge test for the Justice Department's small Public Integrity Section, which in 2007 bungled a corruption case against Alaska Sen. Ted Stevens (who died last year) by failing to disclose key evidence to the defense. That revelation led to the verdict against him being voided, an investigation into professional practices of the section, and the eventual suicide of one of the section's up-and-coming young prosecutorial stars.

Now, the Public Integrity Section's handling of the Edwards case is being closely watched.

"This case is just as important for the government as it is for Edwards," says Peter Henning, a law professor at Wayne State University in Detroit and co-author of "The Prosecution and Defense of Public Corruption." The Public Integrity Section "certainly understands they're under the microscope," he says.

The Public Integrity Section usually helps US attorneys go after low- to mid-level state politicians, and it has been involved in recent indictments against Alabama state representatives for corruption related to the gambling industry.

But it's also had recent misfires. A Senate Ethics Committee investigation against former Sen. John Ensign (R) of Nevada for alleged hush money he paid to his mistress and her husband was referred to the Public Integrity Section, but it dropped the case. Part of the problem may have been that the law is unclear about how Justice can handle information gleaned from congressional investigations.

The Public Integrity Section is not commenting on the Edwards case, but it's clear that past missteps have led to changes.

The unit has a new chief, former New York-based federal prosecutor Jack Smith, and the Justice Department has ordered training to make sure prosecutors disclose key evidence to defense attorneys.

"Will a federal prosecutor ever make another mistake in the course of complying with his or her disclosure obligations?" US Assistant Attorney General Lanny A. Breuer asked at a recent symposium. "Of course. We are human – and in an age when the discovery in a single case may consist of terabytes of information, the challenges are significant."

The Edwards case is certainly no slam-dunk. Mr. Edwards has maintained that he didn't know his aides were spending hundreds of thousands of campaign dollars from two major donors – Fred Baron and Rachel "Bunny" Mellon – to effectively hide his lover, campaign videographer Rielle Hunter, as the 2008 race shaped up. Also, Edwards is likely to fight hard because the outcome of the case could determine his ability to return to practicing law in North Carolina.

In the indictment, federal prosecutors allege that Edwards accepted nearly $1 million to conceal the affair and, more important, "protect and advance" his presidential campaign. Edwards's attorneys contend that the money was never intended to play a role in the campaign.

"Edwards knew that public revelation of the affair and pregnancy would destroy his candidacy by, among other things, undermining Edwards' presentation of himself as a family man and by forcing his campaign to divert personnel and resources away from campaign activities to respond to criticism and media scrutiny regarding the affair and pregnancy," the indictment reads.

If convicted on all six counts of conspiracy, accepting illegal campaign donations, and trying to conceal the money, Edwards could spend up to 30 years in prison. Sources say he will plead not guilty to the charges.

For prosecutors, the challenge will not be establishing facts, but proving intent on the part of Edwards to circumvent reporting laws. As with the Stevens case, they're relying on a shaky witness, former Edwards aide Andrew Young, who has previously told lies – in particular that he, not Edwards, was the father of Ms. Hunter's child.

But even as Public Integrity prosecutors are aware that the black eye from the Ted Stevens case could dog them in the courtroom, the Edwards indictment also represents a new focus for prosecutors: in trying to uphold campaign ethics at a time when the US Supreme Court has allowed the freer flow of interest-group cash into campaigns.

"All the focus in campaign spending has been on questionable conduct on the front end," says Mr. Henning. "But this is a very important case for the Public Integrity Section to send a message they want sent: that 'We're watching both sides of the ledger – not just the revenue side, but the dispersal side.' "