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DOJ taking hard line on any Edwards plea deal

John Edwards arrives at a memorial for U.S. Sen. Edward Kennedy at the John F. Kennedy Presidential Library August 28, 2009, in Boston, Massachusetts. Chris Hondros/Getty Images

Sources close to the case tell CBS News that a criminal indictment of John Edwards for violating federal campaign finance law could come as soon as Wednesday, when the grand jury meets in Raleigh. A plea deal before the indictment still is a possibility, the sources say, but the Justice Department is taking a hard line that he plead guilty to a felony for taking about $1 million from two different donors to keep his mistress secret during his presidential run.

Prosecutors are arguing that the money should have been treated as a campaign contribution, and not a gift, because it was designed to further his campaign for the presidency. Campaign contributions can't be spent for personal use.

Edwards' legal team argues that the prosecution's theory is unprecedented and wrong. They say there is only one case involving gifts to federal candidates that's even remotely comparable -- and it not only is distinguishable, but also was merely an advisory opinion by the FEC that never has been cited as authority for a criminal prosecution.

In that case, the FEC said a proposed gift to a federal candidate was illegal because the donor wouldn't have made it if the candidate weren't running for office. Edwards, on the other hand, had long-standing personal relationships with donors Fred Baron and Bunny Mellon that continued after he withdrew from the race. In fact, Edwards had lunch with Mellon on Thursday.

As Edwards weighs whether to take a plea, he has to game out whether he believes he can win the case. There's no question the case against Edwards will be difficult for prosecutors as Baron is dead, and Mellon is 100 years old. And a key witness, Andrew Young, could have credibility problems. On the other hand, Edwards isn't a sympathetic figure -- so he could find himself before a hostile jury.

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