John Edwards, a two-time candidate for the Democratic presidential nomination and a former U.S. senator from North Carolina, today has denied felony charges of conspiracy, false statements and campaign law violations leveled against him in a grand jury indictment.

The indictment, which culminates a two-year federal probe, was issued by a grand jury this morning. It alleges that nearly $1 million illegally flowed from two wealthy Edwards supporters to pay costs for Rielle Hunter, who is his former mistress and mother of his now-3-year-old daughter, and campaign staffer Andrew Young.

The money was illegal campaign contributions, the indictment alleges.

After proceedings inside the courthouse, Edwards spoke to reporters on the steps of the courthouse.

"I have done wrong," he said. "And I take full responsibility for having done wrong. And I will regret for the rest of my life the pain and the harm that I have caused to others. But I did not break the law. And I never, ever thought that I was breaking the law."

The purpose of the money was to protect Edwards' self-proclaimed public image as a family man by keeping secret his extramarital affair with Hunter, the indictment said.

Edwards lead lawyer Gregory Craig said in a statement. "He did not break the law and will mount a vigorous defense."

The indictment was issued from the Middle District of North Carolina, where Edwards lives and where many of the financial transactions occurred. A grand jury in Raleigh had been convened for months to hear the case. It expired, and the charges were issued in the new venue today.

The indictment charges that Edwards led a conspiracy with four others, labeled as Persons A, B, C and D, but clearly identifiable as former staffer Young (Person A), mistress Hunter (Person B), multimillionaire heiress Rachel "Bunny" Mellon (Person C), and Texas trial lawyer Fred Baron (Person D.)

"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 other campaign activities to respond to criticism and media scrutiny," according to the 19-page indictment.

In May 2007, Edwards and Young discussed people whom they could ask to financially support Hunter, who was pregnant, the indictment alleges.

About that time, Young read a note that Mellon had sent to Edwards: "The timing of your phone call on Friday was 'witchy.' I was sitting alone in a grim mood - furious that the press attacked Senator Edwards on the price of a haircut. But it inspired me - from now on, all haircuts, etc. that are necessary and important for his campaign - please send the bills to me.... It is a way to help our friend without government restrictions."

Mellon is an heiress who lives in Virginia and turned 100 years old last year.

Over the next eight months, Mellon sent checks totaling $725,000 through a friend to Young, whose wife cashed the checks, the indictment said.

Mellon concealed the purpose of the checks by falsely filling the memos lines with items like "chairs" or "antique Charleston table" or "book case." Young used the money for Hunter's rent, furniture, car, medical care and other expenses.

In December, Edwards asked Young to claim paternity of Hunter's child, telling Young that "his efforts to win the presidency - and everything they had fought for - depended on it."

Young did, and his family joined Hunter in hiding.

At that point, Baron began picking up the tab for Hunter and Young, spending about $183,000 on planes, hotels and rental houses as the unlikely couple jetted from Raleigh to Florida to Colorado and California, the indictment said.

Baron also gave Young $1,000 in cash in an envelope marked, "Old Chinese saying: use cash, not credit cards!" He wired another $10,000 to a bank account controlled by Young, according to the indictment.

While Young and Hunter were fleeing the media, Edwards dropped out of the race on Jan. 30, 2008.

Edwards continued to deny that he was the father of Hunter's child. He also denied on national television that money was paid to hush up the affair: "I've never asked anybody to pay a dime of money, never been told that any money has been paid. Nothing has been done at my request. So if the allegation is that somehow I participated in the payment of money - that is a lie."

The indictment also mentions an unnamed former staffer who worked with Edwards to craft a statement in which Edwards would admit he was the father of Hunter's child, the indictment said.

Edwards told the former staffer that he knew during the campaign that Baron was paying to keep Hunter hidden from the media.

"Edwards further told the employee that this was a huge issue and that for 'legal and practical' reasons' it should not be mentioned in the statement they were preparing," according to the indictment.

In recent months, Edwards' lawyers have tried to persuade prosecutors in the U.S. Justice Department's Public Integrity Section to drop the investigation.

Those efforts ended with today's indictment, which starts an even tougher legal battle.

The Edwards legal team released a statement from former FEC chairman Scott E. Thomas, questioning the prosecution.

"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. "The Federal Election Commission would not support a finding that the conduct at issue constituted a civil violation much less warranted a criminal prosecution."

The key questions of law in the case are whether payments to Hunter and Young were intended to keep Edwards' 2008 presidential campaign alive, and whether Edwards knew about those payments.

The payments for Hunter never touched campaign accounts and weren't reported on campaign disclosure forms.

Prosecutors are alleging that the money qualified as campaign donations — intended to save the campaign by keeping Edwards' affair with Hunter secret — and thus illegal because it exceeded limits and went unreported on required disclosure forms.

Edwards' lawyers, on the other hand, say that the money was intended merely to conceal the affair from Edwards' late wife, Elizabeth, and was not connected to the campaign. As such, they argue, the payments were not illegal.

In his statement today, Thomas, who served as an FEC commissioner for 20 years, said he based his opinion on facts as presented most favorably to the government, including "that the payments were motivated in part by a desire to elect Senator Edwards to (the presidency)."

Thomas said he met with prosecutors in late April.

"These payments would not be considered to be either campaign contributions or campaign expenditures within the meaning of the campaign finance laws," he said.

Investigators have been curious about Edwards' relationship with Mellon, whom Edwards courted for financing during his second failed bid for the Democratic presidential nomination, in 2008.

Baron, a former Dallas trial lawyer who was finance chairman for the Edwards campaign, said before he died that he provided financial support to Young and Hunter.

The saga that led to today's charges began when Hunter, a videographer, secured work with Edwards' 2008 campaign in 2006 and 2007. According to campaign finance disclosures, she received $114,000 to film Edwards' travels across America and abroad to raise awareness about poverty. Hunter's "webisodes" were posted on the Internet.

When Hunter got pregnant in 2007, her role in Edwards' world shifted.

Edwards, a trial lawyer himself, was elected U.S. senator from North Carolina as a political novice in 1998, defeating incumbent Republican Lauch Faircloth. He chose not to seek re-election in 2004, running for president instead. Eventual Democratic nominee John Kerry chose him as his running mate that year.

A South Carolina native, Edwards lives in Orange County. His wife died of cancer last December.

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