John Edwards owes taxpayers but spends freely

John Edwards owes taxpayers $2.1 million, federal auditors say. But a new report shows his long-dead presidential campaign spent more than $836,000 in 2011 on airfare, hotel rooms, salaries and other items.

Michael Biesecker, a reporter for the Associated Press, says a required report filed by Edwards on Jan. 31 "provides little insight into what political purpose some of the campaign's recent expenses might serve." Using campaign funds for personal expenses is illegal.

Edwards' campaign spent more than $15,000 last year on airfare, including $2,268 on Alaska Airlines. It spent nearly $13,000 on hotel rooms. More than $266,000 was for salary and benefits and $315,000 went to the Washington law firm defending Edwards against the Federal Elections Commission. The FEC says Edwards' campaign took $2.1 million in taxpayer matching funds that he was not eligible for.

Biesecker details his exhaustive but unsuccessful efforts to reach Edwards or any official with his campaign. This is just another questionable chapter in the very ugly demise of Edwards' career. The public is owed an explanation.

Here's Biesecker's full story:


By Michael Biesecker
Associated Press
RALEIGH, N.C. (AP) – Federal election officials say John Edwards owes taxpayers more than $2.1 million in public matching funds improperly received after he dropped his 2008 run for the White House, yet disclosure reports show his failed campaign is still spending freely.
Edwards' hopes for the Democratic presidential nomination imploded in a sex scandal four years ago that left him facing criminal charges. But reports filed last week show his 2008 primary campaign spent $836,712 in 2011 on airfare, hotel rooms, cell phones and other expenses.
The campaign reported $2.1 million in cash remaining as of Dec. 31, a figure close to what the Federal Election Commission says the former North Carolina senator still owes the U.S. Treasury.
Patricia A. Fiori, one of four lawyers working for Edwards in the FEC case, said this week she could not comment, referring questions to the campaign.
Attempts by The Associated Press to find anyone who could comment for the campaign were unsuccessful. A phone number Fiori provided to contact the campaign rang busy for days, even at midnight.
Judith Ingram, the FEC's spokeswoman, said Wednesday she could not comment on whether the agency has a pending enforcement action against Edwards.
In a separate criminal case filed by the U.S. Justice Department last year, Edwards, who made millions as a trial lawyer, is accused of concealing nearly $1 million provided by two wealthy donors to hide his pregnant mistress as he ran for president.
Politicians are barred by law from using campaign funds for personal expenses. The required year-end report filed by Edwards on Jan. 31 provides little insight into what political purpose some of the campaign's recent expenses might serve.
Melanie Sloan, executive director of the campaign-finance watchdog group Citizens for Responsibility and Ethics in Washington, said it's not unusual for presidential campaigns to remain open years after the election is over, especially if there is an unresolved audit or unpaid debts.
“All they are allowed to do are activities to wind down the campaign,” Sloan said. “If these are legitimate expenses, then the Edwards campaign should be willing to explain them.”
Edwards' campaign reports show more than $15,000 spent in 2011 on airfare, though the destinations or purpose of the travel were not listed. In January, August and December, the campaign spent $2,268 for tickets on Alaska Airlines, a transcontinental carrier that does not offer flights between East Coast cities such as Raleigh or Washington.
Most of the $12,811 in credit card charges for lodging were made to websites such as Hotels.com and Kayak.com, providing no information about where the rooms were booked, when or for what purpose.
More than $266,000 was paid for salary, payroll and health insurance premiums, along with $1,116 for cell phones. Though the campaign appears to have no office, it paid $428 to a bottled water delivery company.
The largest expense, $315,000, was paid to Utrecht & Phillips, the Washington law firm fighting last year's unanimous FEC ruling that Edwards must return its remaining funds to taxpayers.
The Chapel Hill street address listed for the number Fiori provided belongs to the former office of Edwards' defunct anti-poverty foundation, The Center for Promise and Opportunity. A receptionist for the management company that owns the building said Edwards had not been a tenant for more than three years.
Julius L. Chambers, listed as campaign treasurer on last week's 2011 finance report, is a Charlotte lawyer who retired as chancellor of N.C. Central University. He did not return calls to his office. Chambers' assistant said he was no longer associated with the Edwards campaign.
Lora M. Haggard, who co-founded the Georgia-based firm H+P Political Compliance, is listed as receiving an after-tax salary of nearly $70,000 from the campaign in 2011, with paychecks issued every two weeks. Her business partner, Jay Petterson, was paid more than $51,000.
Haggard declined to speak.
“Yes, I'm handling the reports, but as long as the audit process is ongoing I can't comment,” Haggard said. She had no contact information for Edwards or his campaign, she said.
Calls to the home of Susan W. Jackson, a Chapel Hill woman listed as getting more than $34,000 in biweekly payments, were not returned.
Edward L. Niles, a former Edwards campaign staffer who got nearly $31,000 in consulting fees, said the payments had nothing to do with his current job as targeting director at The Atlas Project, a political consulting firm in Washington. He declined to say what work, if any, he performed for Edwards in 2011.
“You'll have to talk to the campaign about that,” Niles said. Asked to provide the name of anyone at the campaign a reporter could try to reach, Niles said he didn't know of anyone.
A male voice who answered the intercom at the locked gate at Edwards' sprawling Chapel Hill estate hung up when a reporter asked to speak to Edwards or anyone affiliated with his presidential campaign.
Edwards received more than $12.9 million in federal matching funds, the money generated from the $3 box that taxpayers can check on their tax returns. Most of the public money came after he dropped out of the race Jan. 30, 2008. For weeks the married candidate had been dogged by tabloid reports of an affair with campaign staffer Rielle Hunter. After withdrawing from the race and months of public denials, Edwards eventually admitted he had fathered Hunter's baby.
In July 2011, Edwards was indicted on six criminal counts related to campaign finance violations over the money used to hide Hunter during the campaign. He has pleaded not guilty. A trial set to begin Jan. 30 was delayed when Edwards' lawyer revealed in court filings that Edwards has a serious heart condition that requires treatment.
In the separate civil action, FEC auditors concluded earlier this year that Edwards' campaign understated the amount of money it had on hand in its accounts on two separate occasions, failed to itemize more than $4.3 million in loan repayments and owed the government nearly $142,000 in checks the campaign issued that were never cashed.
The federal audit also determined Edwards got more than $2.1 million in public matching funds after his campaign was no longer eligible to receive such payments.
The bipartisan Federal Election Commission voted 6-0 on July 21 to order the Edwards campaign to return the money. Records show the campaign repaid the $142,000 in uncashed checks on Sept. 1, but has thus far failed to return the remaining taxpayer money.
Edwards, who served a single term as a U.S. senator from North Carolina, was the Democratic vice-presidential nominee in 2004. The current year-end report for his 2004 primary campaign, Edwards for President, shows that earlier committee still lists nearly $334,000 in unpaid bills.
About $65,000 of that remaining 2004 debt is owed to the Chicago firm of Democratic political strategist David Axelrod, who in 2008 helped then-Sen. Barack Obama trounce Edwards in the Iowa caucuses.
John Kupper, a senior partner at AKPD Message & Media, said the firm has little hope Edwards will ever pay up.
“There have been no negotiations in years,” Kupper said. “We've written it off as uncollectible.”