The following article is reprinted with permission from The News & Observer of Raleigh.

BY ANNE BLYTHE

The News & Observer

Wade Smith, the courtly Raleigh lawyer known by many as the dean of the defense bar, is bowing out of the criminal case against John Edwards.

His exit comes after prosecutors raised questions about a 2009 conversation he had with Alex Forger, a New York lawyer who had been advising Bunny Mellon, one of the key figures in the case.

That discussion two years ago could put Smith in the position of being a witness in a trial that is expected to test the sweep of federal campaign finance laws.

Edwards, 58, is accused of violating those laws by secretly obtaining and using contributions from Mellon and another wealthy supporter to hide his pregnant mistress from the public during his 2008 presidential run.

The payments covered living, medical and other expenses for Rielle Hunter, a videographer with whom Edwards had an extramarital affair and a child.

Prosecutors argue the donations exceeded legal limits and were campaign contributions because they were meant to hide the affair so Edwards could keep his Democratic presidential bid alive.

Edwards, who grew up in Robbins, has said he did not break the law.

Defense attorneys contend Edwards was trying to hide his infidelity from his wife and that the $900,000 in question went from his affluent friends to others, not him, and should be considered gifts.

In this latest turn in a case that's scheduled for trial in January, prosecutors contend that Smith told Mellon's attorney the payments could have been beneficial to Edwards.

Smith declined to discuss the contentions or the case.

But that discussion could mean that prosecutors or defense attorneys could call him to the stand to elaborate on what was said.

A trial court lawyer cannot also be a trial witness in the same case.

So Smith has stepped aside from a defense team that is honing arguments for a scheduled hearing on Oct. 26, when a federal judge will weigh whether the case should be thrown out before trial.

Defense attorneys argued in court documents last month that the charges against Edwards are unconstitutionally vague, that no crime occurred and even if one had, the government did not give him a "fair warning" that his conduct could be in violation of campaign finance laws.

The lawyers also described the case as an abuse of prosecutorial discretion, a political persecution lodged by a prosecutor angling for a run for Congress.

George Holding, the former U.S. attorney at the helm of the investigation and a George W. Bush appointee, has announced his plans to seek a congressional seat as a Republican in 2012.

Prosecutors responded late last month that the case had merit and it should be put before a jury. They disputed the characterization of the case as a political persecution, saying career prosecutors led the investigation into allegations of abuse of campaign finance laws.

Prosecutors have also raised conflict-of-interest questions about another member of the Edwards' defense team - Abbe Lowell, a prominent defense attorney who has represented such high-profile defendants as lobbyist Jack Abramoff and Sen. John Ensign, a Nevada Republican being investigated over claims similar to those against Edwards.

Lowell has represented two possible witnesses in the case, Lisa Blue Baron, the widow of Fred Baron, a Texas lawyer who made payments central to the case, and Harrison Hickman, a political adviser to Edwards.

Prosecutors have sought a hearing on the matter.

Baron, a longtime friend of Edwards, provided cash to help fly Hunter on private jets from one end of the country to the other.

His money helped pay for exclusive hotels and rented homes.

Lowell, if found to have a conflict of interest, could be excluded from parts of the case while continuing to participate in others.