John Edwards: "I did not break the law"

Last Updated 4:09 p.m. ET

WINSTON-SALEM, N.C. - Former Senator John Edwards pleaded not guilty today to federal charges that he solicited and used campaign contributions to hide his mistress and their baby.

A federal grand jury in North Carolina indicted the two-time presidential candidate Friday over $925,000 spent to keep his mistress and their baby in hiding during the peak of his 2008 campaign for the White House.

Speaking outside the federal courthouse in Winston-Salem after his arraignment, the 2004 Democratic vice presidential nominee said, "There's no question that I've done wrong, 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've caused to others."

"But I did not break the law, and I never, ever thought I was breaking the law," Edwards continued. "Thank you all very much."

He was released without putting up bond, but he was required to surrender his passport and cannot travel outside the continental United States, CBS Affiliate WRAL correspondent Kelcey Carlson reports .

The judge also ordered Edwards not to have any direct or indirect contact with Rachel "Bunny" Mellon, a 100-year-old heiress and Edwards supporter who made more than $700,000 in payments.

Gregory Craig, lead attorney for Edwards, issued a statement this morning before Edwards appearance promising that the former senator would "tell the court he is innocent of all charges, and will plead not guilty. He did not break the law and will mount a vigorous defense." 

The case of USA v. Johnny Reid Edwards contains six felony counts, including conspiracy, four counts of illegal campaign contributions and one count of false statements. The indictment was returned in the Middle District of North Carolina Friday.

Justice Department officials decided that the hundreds of thousands of dollars that two Edwards donors gave to help keep his mistress in hiding were contributions that should have been reported publicly by his campaign fund because they aided his bid for the Democratic White House nomination.

The indictment said the payments were a scheme to protect Edwards' presidential ambitions. "A centerpiece of Edwards' candidacy was his public image as a devoted family man," the indictment said.

"Edwards knew that public revelation of the affair and the 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 regarding the affair and pregnancy," it continued.

The indictment and an arrest warrant were filed in Greensboro, North Carolina, which is in the district where his campaign was headquartered.

Craig called the government's indictment an "unprecedented" prosecution.

"Each and every one of the claims set forth in this indictment relies on the government's claim, the government's theory of the case, that the payments at issue here were campaign contributions, should have been treated as campaign contributions, and are therefore violations of the campaign finance laws," Craig said, disputing the charges that the payment ran afoul of the FEC.

Details from John Edwards indictment
Indictment: U.S.A. vs. Johnny Reid Edwards (pdf)

Negotiations between Edwards' attorneys and federal prosecutors to settle on a charge to which Edwards was willing to plead guilty continued through Thursday but proved fruitless, according to people with knowledge of the negotiations. Prosecutors had insisted on a plea to a felony, which would endanger his ability to keep his license to practice law.

The indictment is the culmination of a federal investigation that lasted more than two years and scoured through virtually every corner of Edwards' political career.

WRAL reports that the federal investigation zeroed in on money from Rachel "Bunny" Mellon, a 100-year-old heiress to pharmaceutical and banking fortunes and a major donor to Edwards' campaign; and from wealthy Texas lawyer Fred Baron, who served as Edwards' campaign finance chairman.

The indictment refers to $725,000 in payments made by Mellon and another $200,000 made by Baron. It said the money was used to pay for Hunter's living and medical expenses and for chartered airfare, luxury hotels and rental for a house in Santa Barbara, California, to keep her hidden from the public.

It accused Edwards of lying when he told the media he never knew about any payments.

"Democracy demands that our election system be protected, and without vigorously enforced campaign finance laws, the people of this country lose their voice," said U.S. Attorney U.S. Attorney for the Eastern District of North Carolina George E.B. Holding.

Edwards' lawyers have argued that the funds were gifts from old friends intended to keep the affair a secret from his wife, Elizabeth, who died of cancer in December.

WRAL's Carlson said the prosecution faces difficulties if the case does go to trial: Of two important witnesses, one (Mellon) is a centenarian who cannot travel due to health problem, and another (Baron) is dead.

Photos: Elizabeth Edwards: 1949-2010
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Edwards' attorneys have denounced the investigation as a waste of resources and contend he did not violate the law.

Andrew Young, a former aide to Edwards, initially claimed paternity of mistress Rielle Hunter's child and traveled around the country keeping her in seclusion. Young has said he received hundreds of thousands of dollars of support from two wealthy Edwards donors.

WRAL reports Mellon gave $3.4 million in late 2007 to The Alliance for a New America, a nonprofit supporting Edwards' candidacy. Young wrote last year in his tell-all book, "The Politician," that Mellon also gave Edwards $700,000 as a gift for personal use.

Young told WRAL News in a 2010 interview that Mellon was in the dark about how her money - campaign workers commonly referred to the checks she wrote as "Bunny money" - was being used.

Young, who initially claimed paternity of Hunter's child, has said Edwards was aware of the private financial support that helped keep the mistress satisfied and secluded. The case opens a new front in how the federal government oversees the flow of money around political campaigns.