(AP) GREENSBORO, N.C. - A former campaign spokeswoman for John Edwards testified Wednesday that his wife angrily confronted a key donor about his support for the presidential candidate's pregnant mistress in 2007 at a hotel in Iowa.
Jennifer Palmieri also said she eventually distanced herself from the former candidate after he acknowledged the affair in an August 2008 television interview because he hadn't been truthful about the baby he had with his mistress. The former aide later began crying while discussing her friendship with Elizabeth Edwards from the stand at Edwards' corruption trial.
She said the candidate had called her to the Davenport, Iowa, hotel room where Elizabeth Edwards was arguing with campaign finance chairman Fred Baron and his wife about the couple's financial help to Rielle Hunter.
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Palmieri had become close friends with Elizabeth Edwards, and her husband hoped her presence could help calm the situation. Palmieri is now the deputy communications director for President Barack Obama.
That day in October of 2007, Palmieri said Baron's wife, Lisa Blue, admitted to Elizabeth Edwards that she had flown Hunter to Los Angeles for a shopping trip.
"You've got to hold your friends close and your enemies closer," Palmieri quoted Blue as telling the enraged wife. Blue added that Hunter was a "loose cannon" who could have exposed the affair to the media, Palmieri said.
At the time, a tabloid was publishing an article about the affair, and Palmieri said the campaign was absorbed with keeping the story from crossing over into the mainstream media. Edwards had told his wife he had a brief fling with Hunter, but that he had ended the affair many months earlier, according to earlier testimony.
In fact, Edwards had continued the affair and Hunter was then pregnant with his child. A close aide to Edwards, Andrew Young, had rented the mistress a home a few miles away from the Edwards family estate in Chapel Hill. The candidate had kept the arrangement secret from his wife.
Palmieri said Elizabeth Edwards couldn't comprehend why Baron and Blue would have any contact with Hunter.
"She didn't understand why they were embracing her, spending time with her," Palmieri said.
Asked what Edwards was doing during the argument, Palmieri said she didn't remember him saying much.
"He was more of a spectator than a participant," she testified.
How much Edwards knew about the money spent in the effort to cover up his affair is a critical question at his trial. Edwards has pleaded not guilty to six counts for campaign finance violations related to about $1 million in secret payments from Baron and 101-year-old heiress Rachel "Bunny" Mellon.
Edwards has denied knowing about the money, much of which was used to hide the pregnant mistress as he campaigned for the White House. Baron flew Hunter across the country in his private jet, paid for stays in luxury resorts and secured a $20,000-a-month rental mansion in California.
On Tuesday, campaign speechwriter Wendy Button testified that Edwards had later admitted to her he knew "all along" that Baron had been supporting his mistress and baby. The girl was born in February 2008 a few weeks after he suspended his presidential campaign after poor showings in the early primary states.
That contradicts what Edwards has said about his knowledge of the money, most notably in a nationally televised network interview in August 2008.
On Wednesday, Edwards' defense lawyer Abbe Lowell admitted his client had "lied quite extensively" in that interview, saying he had only a brief sexual relationship with Hunter and denying he fathered her baby.
Palmieri said she had advised Edwards against doing the interview, which came shortly after tabloid reporters photographed Edwards visiting his mistress and baby at a Beverly Hills hotel.
"I said I did not want him doing the interview if he was going to lie," Palmieri recounted. "Even I didn't believe what he was saying."
But Palmieri said Edwards decided to go ahead anyway after his wife pressed him to make a public statement denying the baby was his.
In an attempt to mitigate the damage, Palmieri said she selected ABC's Nightline as the venue for the interview because the news show was going up that night against the opening ceremony of the Beijing Olympics on rival NBC, which was expected to get far bigger ratings.
"If John couldn't do the interview and tell the truth, it was a mistake," Palmieri said. "I didn't think it would be great if the whole country watched."
After the interview, Palmieri said she asked a friend of Edwards' to deliver him a message that she didn't want him to call her for help any more.
"I believed John was continuing to lie and trying to drag me into it," Palmieri said.
She did see him occasionally because she remained friends with Elizabeth Edwards. Palmieri was with the Edwards family when Elizabeth Edwards died in December of 2010 after battling cancer.
Palmieri broke down in tears describing what Elizabeth Edwards told her about one of her fears of dying.
"She was concerned that when she died, there would not be a man who loved her there," Palmieri said, though she noted that John Edwards was there in the end.