John Edwards Defense Dealt a Blow By Judge's Ruling

GREENSBORO, N.C. May 16, 2012— -- John Edwards rested his case today, but his defense was dealt a blow when the federal judge said she will set a lower bar than Edwards' legal team had sought for convicting the former presidential candidate of violating the federal campaign finance law.

The judge's decision about how she will instruct the jury came just hours after Edwards' lawyers ended their case, not with the bang of the candidate and his mistress testifying, but with a series of bank statements, phone records and Federal Election Commission memos and a final shot at the credibility of Edwards' chief accuser.

Edwards is on trial for allegedly using nearly $1 million in donations from wealthy backers Fred Baron and Rachel "Bunny" Mellon to keep his affair secret with mistress Rielle Hunter in order to protect his presidential ambitions and later his hopes of winning a spot as vice president or attorney general.

If convicted, Edwards could be sentenced to 30 years in prison.

Edwards' lawyers hoped the case would rest in part on Judge Catherine Eagles' interpretation of the word "the."

The statute governing illegal receipt of campaign contributions "means any gift, subscription, loan, advance, or deposit of money... for the purpose of influencing any election for federal office."

The words "the purpose" suggests that in order for a conviction, the sole reason for the money would have to be to finance a presidential campaign.

Edwards' legal team argued that his main reason for hiding his mistress was to keep her secret from his wife, Elizabeth, who was dying of breast cancer.

The judge, however, decided the government will not have to prove that sole and only purpose of the hush money was to influence the election. It could be to keep it from his wife and to influence his political chances.

Closing arguments are set to begin Thursday morning and Edwards' lawyers will likely use them to take aim at the credibility of Edwards' primary accuser, Andrew Young.

Edwards' attorney Abbe Lowell reminded the jury today that Young and his wife Cheri considered selling a sex tape they found that had been made by Edwards and his mistress Rielle Hunter.

They "had in their possession a private video of Rielle Hunter and John Edwards. They considered selling the private video," Lowell read into the court record.

Lowell had to be asked by the court to also read the part of the statement that said the Youngs "did not sell" the tape.

Introducing the Youngs' talk of selling the sex tape was apparently meant to leave the jury with the impression that Young, who is key to the prosecution's case, was not a credible person.

The courtroom had been braced for blockbuster testimony from Edwards' mistress, Edwards' daughter Cate, or Edwards himself.

All three were on a list of possible witnesses for today, but the defense rested without calling any of them.

Cate Edwards, who has sat behind her father nearly every day of the trial, was not present today, although Edwards' elderly parents did attend.

Hunter has not appeared at the trial either as a witness or a spectator, although the fact that she was on the list of potential witnesses would normally prevent her from attending the trial.

The evidence presented by the defense contrasts starkly with the dramatic and often emotional testimony of presented by the prosecution detailing Edwards' attempt to keep his affair and the birth of their baby a secret, huge amounts of money spent to hide the affair, his distraught wife's discovery of the continuing fling, and the unhappy last days of Elizabeth Edwards.

Edwards' lawyers put on a concise defense drawing the jury's attention to campaign finance laws and away from the steamy details of his affair.

Edwards' defense is that the money was gifts from wealthy backers, not campaign donations. And that it was used to hide his mistress from his wife, not the voters.

The defense called only seven witnesses compared to the prosecution's 24. The government took 14 days to present its case, while the defense used only three.

Young, the prosecution's key witness, spent 20 hours on the stand, longer than it took the defense to present its entire case.

The prosecution called no rebuttal witnesses, setting the stage for lawyers to make their closing arguments beginning Thursday.

"I was a bit stunned and I think the courtroom was stunned when the defense announced it was going to rest its case," said Kieran Shanahan, a former federal prosecutor watching the case.

"The defense did a good job redirecting the jury's attention to the campaign finance laws. And that's what the case is about. They've put the case in the position where they needed it to be to be able to argue it to the jury," Shanahan said.

John Edwards Abruptly Rests His Case

Edwards' lawyers wrapped their case with introducing a Federal Election Commission memo that found the nearly $1 million in donations used to hide Edwards' mistress and love child were not campaign contributions, according to documents his defense team filed late Tuesday.

Edwards' lawyers asked the judge to admit an audio recording of the July 2011 FEC meeting when the audit was closed. Defense lawyers say the recording shows Commissioner Donald McGahn stating, "It's odd for me to say that the transaction is a campaign transaction" and "I'm not sure that [the monies paid by Mellon and Baron are] a reportable. Actually I can say [the monies are] not a report, in my view, not reportable."

The commission voted unanimously to close the audit.

The judge, however, refused to allow the jury to hear the audiotape.

One of those commissioners, Scott Thomas, was on the witness stand at Edwards' trial Tuesday morning. However, Eagles would not allow Thomas to tell jurors his view on how the law applied to what Edwards' allegedly did in 2007 and 2008. Eagles has said the jury should decide, without guidance from experts, what the purpose of the gifts were.

Edwards' lawyers also filed an opinion by the Justice Department's Election Crimes Branch that suggested the agency set aside one of its standing policies in campaign finance cases in order to seek Edwards' indictment.

"For such a criminal violation to occur, the application of the law to the facts of a matter must at the very least be clear, and there must be no doubt that the [Federal Election] Commission considers that the underlying conduct presents a [Federal Election Campaign Act] offense," Craig Donsanto wrote to Citizens for Responsibility and Ethics in Washington in a Jan. 16, 2009 letter.

A spokeswoman said the Justice Department declined to comment on the 2009 letter.

ABC News' Matthew Mendez contributed to this report