Questions Swirl Around Payments to Family of Ensign's Mistress

July 10, 2009— -- If you're having trouble keeping track of the Republican sex scandals these days, you're not alone.

There's the one that sounds like a seedy romance novel, complete with trips to Argentina. And there's the gritty Las Vegas scandal in which a U.S. senator now admits his parents gave cash gifts to his mistress's entire family.

Sen. John Ensign admitted last month that he slept with his best friend's wife: Cynthia "Cindy" Hampton, his campaign treasurer. Her husband, Doug, was Ensign's top aide.

"Our children referred to him as 'uncle.' We had dinner together," Doug Hampton recalled in an interview earlier this week with the Las Vegas Sun.

When Hampton told his side of the story he brought with him a handwritten breakup letter from the senator to Cindy Hampton.

"Plain and simple, it was wrong; it was sin. God never intended for us to do this," the letter said in referring to the affair.

But despite the letter's repentant tone, Doug Hampton told the reporter what happened next: "24 hours later, he's with Cindy back in Las Vegas!"

Hampton claims the senator was willing to pay big bucks in the hopes the problem would just go away.

Asked by the Las Vegas Sun if Ensign paid $25,000 severance to Cindy Hampton out of his own pocket, Doug Hampton said, "To my knowledge, that's correct," though added that he did not know how much money might have exchanged hands.

The senator now acknowledges that his parents paid the Hamptons nearly $100,000.

Ensign's mother and father paid out $12,000 each from his mother and father to Cindy Hampton, Doug Hampton and each of their two children. Because Ensign's parents doled out the payments in smaller chunks, the recipients could potentially avoid paying taxes on the money.

Ensign Payments Raise Questions About Appearance

"Of course, it's a problem when a U.S. senator appears to be paying off a family in order to keep his affair quiet," said Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, or CREW. "But it also looks like they chose this route of having Sen. Ensign's family come in and pay off the money so they could avoid reporting this so that we would all not find out about the payment to the Hamptons sooner."

Crew has called on the Justice Department to investigate the matter.

"It certainly sounds like hush money," said Sloan.

"If it was a severance payment, there's a serious legal problem because nobody ever reported to the FEC [Federal Election Commission] that the Ensigns had made a contribution to the Ensigns' PAC [political action committee], and failure to report this kind of contribution is a criminal violation of campaign finance law," Ensign said.

The senator's lawyer issued a statement denying that the payments were hush money.

Instead, he called them "gifts out of concern for the well-being of long-time family friends during a difficult time … consistent with a pattern of generosity by the Ensign family to the Hamptons and others.

"When you have an affair with someone in your office who is married to someone else in your office and then you fire them both -- and then on top of it you have your rich parents come in and pay them off, I think it's hard to imagine a situation that is more embarrassing," Sloan said.

Ensign could face multiple investigations as a result of the situation. ABC News' chief Washington correspondent George Stephanopoulos noted on "Good Morning America" that the Senate Ethics Committee is taking a look at the situation, though it's not yet clear whether the panel will launch a full investigation.

The Justice Department and the FEC have also received requests to open investigations, he added.

The "key thing[s] to watch" are the payments, said Stephanopoulos.

"The $96,000 from Sen. Ensign's family, the $25,000 from Sen. Ensign himself to Ms. Hampton. They say they were gifts, they say they were not severance," he said. "If through the course of investigating this it's discovered and there's evidence that these were in fact severance payments or hush money, then those would be in-kind contributions to Sen. Ensign's campaign. That would be a felony. That would put Sen. Ensign in far more trouble."

In his interview, Doug Hampton boiled down his view of the situation by saying, "This is unbelievable. This is so unbelievable from so many angles."