John Edwards Affair: Grand Jury Indictment Decision Expected Soon

Jan. 18, 2011— -- A long-running federal grand jury probe of John Edwards 2008 presidential campaign is nearing its conclusion as investigators wrap up an inquiry now broadened to include issues beyond the money allegedly used to conceal Edwards' affair with Rielle Hunter. Multiple sources with knowledge of the investigation tell ABC News that a decision on whether to seek an indictment of Edwards is expected within the next several weeks.

Federal investigators have recently dedicated significant resources to gathering evidence and interviewing key witnesses in North Carolina, Washington, D.C., and elsewhere. Former Senator Edwards and his attorneys have acknowledged the grand jury investigation but have denied wrongdoing.

The focus of the case remains on the money allegedly spent - upwards of $1 million - to seclude Hunter and former Edwards staffer Andrew Young, who had falsely claimed paternity of Hunter's child, while Edwards continued his pursuit of the nomination.

But the government has also been digging deeper into Edwards' past, scrutinizing the transactions of a web of loosely-connected political committees, corporations and non-profit organizations associated with his failed campaign, looking for potential violations of campaign finance and tax laws, according to several witnesses who have been interviewed in the probe.

Among the groups facing scrutiny is a non-profit organization - created by former Edwards' staffers and advisers - known as The Center for Promise and Opportunity. Tax records show the center received more than $2.2 million in 2006 from undisclosed donors and spent hundreds of thousands of dollars funding events and travel for Edwards and associates - as he sought to enhance his credentials before officially entering the race. Such tax-exempt organizations are permitted to engage in some political activity so long as that it not the primary focus.

One of the center's expenditures that has piqued investigators' interest, according to sources, is a payment of more than $120,000 to Hunter's company in the summer of 2006, ostensibly for video footage of Edwards' work for the organization. At the time, Hunter's company was also under contract with Edwards' political action committee - which paid $114,086 for a series of so-called "webisodes," featuring behind-the-scenes footage of political events and some now-infamous clips of Edwards engaged in flirtatious banter with Hunter.

Sources say investigators are also looking into a center-funded trip Edwards took in October, 2006 to the African nation of Uganda, which aimed to highlight that country's refugee crisis. Hunter went along with a video camera and – according to Andrew Young's account – she later told friends that during that trip, Edwards first told her he loved her.

A lawyer for the now-defunct center refused comment to ABC News but - in a Newsweek report last year - confirmed the payments to Hunter and defended the deal as "completely appropriate" and "not based on any personal relationship." Hunter has since publicly acknowledged that her affair with Edwards began in February of 2006, several months before her company was hired to produce the videos. Sources say her hiring happened only after Edwards repeatedly pressured reluctant staffers to put Hunter on the payroll.

The federal grand jury investigation of Edwards' finances was launched in late 2008, shortly after Edwards - in an exclusive "Nightline" interview - admitted to a brief affair with Hunter while steadfastly denying paternity of her daughter, Quinn. Both Hunter and Young testified before the grand jury in 2009.

The criminal probe appeared to go dormant for several months last year, until a review by prosecutors at the Department of Justice resuscitated the investigation. A new round of subpoenas was issued late last year.

Sources with direct knowledge of the recent subpoenas tell ABC News that the government is also seeking information about the arrangements made to keep Andrew Young employed, even after Young says his primary function became supporting Hunter and hiding her from the press and Elizabeth Edwards. Young had been employed by the Edwards campaign until Hunter – about five months pregnant – moved into his home in a gated community outside of Chapel Hill, to try to escape the National Enquirer reporters who were on her trail.

At that point, Young says he was informed that Edwards had ordered that he be removed from the campaign staff and placed on the payroll of a private company run by Nick Baldick, a longtime Democratic consultant who was working on Edwards' soft-money operation. Young claims he got a salary boost of about $30,000 and also received a series of checks, described as commission payments for money Young raised earlier in the year, from another Baldick entity, Those checks were made out to Young's wife, Cheri, in her maiden name.

Baldick has declined numerous requests from ABC News for comment. His attorney recently told the Associated Press that Baldick is not a target of the grand jury probe. The grand jury subpoenas also focus on the now familiar names of Fred Baron and Rachel "Bunny" Mellon. Baron, who died in October of 2008, was the national finance chairman for Edwards' presidential campaign.

A few months before his death, Baron publicly acknowledged spending unspecified sums to move Hunter and Young out of North Carolina to a gated-community in California to escape the scrutiny of reporters investigating the affair. Baron said at the time that the money he spent was his own and that he never told John Edwards about the payments.

But in his memoir, "The Politician," published last year, Young claimed that Edwards was aware of Baron's support, which he said eventually ran well into the six figures. In Edwards' only interview on the subject – with ABC's Bob Woodruff in August 2008 – he disavowed any knowledge of Baron's money being used on his behalf. But several sources familiar with the grand jury probe say that Edwards has since admitted privately to several friends and associates that he had known about Baron's contributions from the start.

Mellon, a reclusive heiress to two family fortunes, was a major but largely unknown supporter of Edwards' campaign, donating several million dollars to political committees and non-profit groups associated with the former North Carolina senator's presidential efforts. Over six months beginning in mid-2007, Mellon also sent a series of personal checks totaling more than $700,000 to a friend in North Carolina, who then signed the checks over to Young's wife.

Young told ABC News that Mellon's money was used to support Hunter, lease her a car, rent and furnish a home and to pay medical bills Mellon's attorney has insisted that the money was intended as a personal gift to Edwards, and that she knew nothing of how her money was being used.

Hunter gave birth to Quinn in California in February of 2008. Two weeks before the publication of Young's book, Edwards finally acknowledged that he was Quinn's father. Shortly thereafter, Edwards and his cancer stricken wife, Elizabeth, separated. Elizabeth Edwards died last month at home in Chapel Hill.