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John Edwards: $2.3 million must be paid back by campaign committee

John Edwards $2.3 million: Attorneys for Edwards' campaign committee say they will appeal the decision, which otherwise would take effect when the audit is completed in about 30 days.

By Craig JarvisMcClatchy Newspapers / July 22, 2011

John Edwards (r.) leaves the federal courthouse with attorney Wade Smith, in Greensboro, N.C., on, June 21. Edwards has pleaded not guilty to four counts of illegal campaign contributions and charges of conspiracy and making false statements.

Chuck Burton/AP

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RALEIGH, N.C.

The Federal Elections Commission on Thursday voted unanimously to require former U.S. Sen. John Edwards' presidential campaign committee to pay back about $2.3 million, mostly in federal matching funds it received after he pulled out of the race in January 2008.

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Attorneys for Edwards' campaign committee say they will appeal the decision, which otherwise would take effect when the audit is completed in about 30 days.

Every presidential candidate who receives federal matching money is audited. Campaign committees can't zero-out books until there has been a final audit, which takes years. Several members of the six-person commission stressed that this was a routine case.

"Basically, this is a math problem," Commissioner Ellen Weintraub said in the hearing in Washington, D.C. "When he stopped running for president we take a look at, as of that point in time, what were the net outstanding campaign obligations? What did he owe? We compare that against how much money he got in matching funds. It's either a subtraction or an addition problem."

But the audit adds up to one more problem for the one-time presidential candidate . Last month he was indicted on federal charges that he used nearly $1 million in campaign contributions to keep secret an affair. That money never went through his campaign committee, and Edwards contends it came as gifts, not political contributions.

As of June 30, Edwards' campaign committee had $2.6 million on hand, according to FEC records.

Besides the math, at issue in the audit is how and when the money was spent: Was it part of what he owed at the time he bowed out of the contest on Jan. 30, 2008? Or was it part of "winding-down" money to close out his campaign?

Candidates' committees can use federal matching money to defray the cost of outstanding campaign expenses incurred up until the point they stop running, if they have used all their private contributions. Financial statements the John Edwards for President committee filed indicated that additional matching funds were justified to satisfy outstanding debts. But auditors found the campaign had overstated its accounts payable by $4.5 million and understated its cash-on-hand and winding-down expenses.

Auditors want the campaign to repay $2.1 million of the nearly $13 million in matching funds it received. They also recommend the committee repay nearly $140,000 in 128 checks that were refunded to individual contributors who wanted their money back .

When Edwards abandoned the campaign, he had about $11 million in outstanding obligations, auditors found.

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