I was wondering how the payments to Edwards were made, and out of the blue I stumble across a PowerLine article that answers a few questions and asks a few more.
For example, I wondered whether the check from Bunny Mellon went straight into Edwards campaign fund. (This would have been a serious problem for Edwards.) From Scott Johnson:
Bunny Mellon made payments totaling $725,000 for the personal benefit of John Edwards beween June 2007 and January 2008. She knew what she was doing was wrong. She therefore attempted to conceal the true purpose of her payments. She made her checks payable to "a friend," left unnamed in the indictment, and falsely listed items of furniture on the memo lines of the checks (the indictment lists "chairs," antique Charleston table, and "book case" as examples).
Apparently, Mrs. Mellon field the appropriate "Gift Tax Return" for the money she sent Edwards. This will hurt the prosecution's case that this is a campaign finance law violation.
Gifts are not taxable income to the donee. They are taxable to the donor if over the annual exempt amount ($12,000 for the period 2006-2008). Mrs. Mellon has apparently filed the applicable gift tax returns. But based on the indictment, you have to wonder if Mrs. Mellon accurately listed the donee's name and address on the gift tax returns. That would be interesting to know.
Fred Barron, on the other hand, just paid the living expenses in cash.
Baron knew what he was doing was wrong. He provided cash to Young in an envelope that contained a note that read: "Old Chinese saying: use cash, not credit cards!" Baron's experience as a plaintiff's personal injury attorney had apparently served him well.
I am going with one of the comments posted at PL by Andy Tucker of Notre Dame:
While I am not one for conspiracy theories, I think it is possible that leaving out the tax issue is intentional. As you noted, the campaign finance violations will be very difficult to prosecute. I think that is the point. Everyone feels Edwards is a sleaze for cheating on his wife and everyone feels that taking money to pay for his mistress is wrong. Thus, people will feel the law should punish him somehow for that. Once the campaign finance law prosecution does not work, it becomes easier to argue for new changes to the campaign finance laws. A simple, and rather obvious, tax prosecution would not accomplish that goal.
http://www.powerlineblog.com/archives/2011/06/029180.php
