John Edwards faces campaign fund investigation

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/05/05/edwards.john.getty.art.jpg caption= "Federal investigators are looking into payments from former presidential candidate John Edwards' campaign to his mistress."]

A sex scandal helped ruin his reputation and now former presidential candidate John Edwards could be in serious legal hot water. Federal investigators want to know more about over $100,000 his campaign paid to his former mistress’s company.

CNN Senior Legal Analyst Jeffrey Toobin joined John Roberts on CNN’s “American Morning” Tuesday to talk about the investigation.

John Roberts: $114,000 was paid by Edwards’ campaign to Rielle Hunter, his mistress, for video production services. If that's what the money was going toward, is there a problem here?

Jeffrey Toobin: There is no scandal if that's the case. The good news for John Edwards legally is that Rielle Hunter did in fact work for the campaign. So payments to her might have a legitimate explanation. There is a certain pattern in the payments and the amount is such that there are certain suspicions, but, if it's simply payment for video services, there's no scandal.

Roberts: Okay, so how difficult would it be to prove that these were not legitimate payments, if, in fact, they were payments to her as his mistress under the guise of legitimate services provided?

Toobin: That's where the detail of the investigation comes up. And there is at least one occasion where it does look like there's a very suspicious pattern. He had a PAC [political action committee] as well as a campaign. At one point, there was a $14,000 payment from the campaign to the PAC and the form says it was for furniture services. At almost the same time, that PAC then paid Rielle Hunter $14,000 – suggesting that money might have been laundered from the campaign through the PAC to Rielle Hunter. The question, of course, is will the campaign, will the people who cut the checks have a legitimate explanation for what looks like a curious transaction?

Roberts: In politics, you don't necessarily have to deliver something concrete either. It could be a consulting fee, it could be anything. You could say we tried to make a spot and it didn't work. We incurred the cost of $14,000. It hit the cutting room floor and never saw the light of day.

Toobin: Exactly. And campaigns are almost by definition kind of disorderly operations. They don't always have perfect record keeping. We don't put people in jail for those kinds of mistakes. If, however, this was the only transaction within months regarding this PAC and that sort of an amount, it again begins to raise suspicions. But this is why we have an investigation.

Roberts: We don’t put people in jail for certain political things. But do we put people in jail if they launder money through a PAC from a campaign to a mistress?

Toobin: Absolutely. The law is clear that if you have campaign money in a PAC or in a campaign itself, it can't go for personal use. You can't put it in your own pocket. You can’t give it to your mistress. You can’t give it to the charity of your choice. There are certain broad rules about what you can do with campaign money and giving it to a girlfriend or keeping it yourself is clearly illegal and there have been prosecutions for that. Not often, but it has happened.