Edwards' nonprofit kept his profile high

The center raised and spent $1.3 million in 2005, according to the IRS report, and it employed several staff members who now work for Edwards' 2008 campaign. The center also appears to have paid for some of Edwards' travels across the country that year.

Scott Thomas, a former FEC chairman who works as an attorney in Washington, said there's nothing wrong with the approach Edwards took _ so long as he did not conduct any campaign-like activities, such as disproportionate travel to early voting states or using funds to maintain a political staff.

"The FEC may take issue with Edwards if he had already made up his mind to run as a candidate and there was an intentional effort to utilize an outside nonprofit to float the campaign for a while," Thomas said.

In 2005, the nonprofit paid for Edwards' "Opportunity Rocks" tour of college campuses nationwide, where he worked to mobilize students to address poverty _ the signature issue of his presidential campaign. Stops included Arizona, North Carolina Missouri, Connecticut, Massachusetts, New Hampshire, Texas, California, Wisconsin, Florida and Michigan.

Slide show   A public life Former Sen. John Edwards has faced public and private challenges throughout his life. more photos

The nonprofit also hosted seminars to discuss foreign policy and Iraq. In November 2005, Edwards wrote in The Washington Post that he was wrong to have voted in favor of the war, a key turning point in his foreign policy stance and one that continues to drive his current position.

The nonprofit had five officers in 2005: Miles Lackey, a senior Edwards adviser; Peter Scher, an Edwards adviser and former campaign manager; David Ginsberg, a senior campaign adviser; Ed Turlington, Edwards' former campaign chairman and current adviser; and Alexis Bar, Edwards' former scheduling director.

All worked for the Edwards campaign in 2004, and all but Bar now work for his 2008 campaign. About 20 percent of the nonprofit's budget went to unnamed consultants, according to IRS filings. Another 37 percent went to salaries and wages.

Tax laws, however, raise different issues.

"The tax definition for 'candidate' is a lot fuzzier than the campaign definition of a candidate," said Lloyd Mayer, a Notre Dame law professor and nonprofit tax expert who has represented major advocacy groups, including the NAACP National Voter Fund.

"For tax law, it's more of a 'walk like a duck, talk like a duck' rule," he said. "If you look like a candidate and act like one, the IRS may consider that the nonprofit is doing too much political advocacy."

Edwards did have a political action committee. But unlike the nonprofit, his One America Committee was subject to the FEC's strict transparency and oversight rules that require the disclosure of expenditures and the source of donations.

"Since it does appear that candidate Edwards was using his nonprofit to build his national profile up to his presidential campaign, it would be nice to know who was backing and who was financing that," Ritsch said.

Web extra video In his own words Former Sen. John Edwards, D-N.C., touches upon the primary themes of his presidential campaign -- labor unions, Iraq and health care. NBC News Web Extra

Edwards also had his personal fortune at hand. Last month, he and his wife, Elizabeth, reported $29.5 million in assets.

In explaining Edwards' activities, Schultz also pointed to the work of a second nonprofit, the similarly named Center for Promise and Opportunity Foundation, which raised $70,000 in 2005 to help coordinate Edwards' College for Everyone scholarship program at a rural and impoverished high school in Greene County, N.C.

Bradley Smith, a former FEC chairman appointed in 2000 by President Clinton, said Edwards shouldn't face any trouble from federal regulators unless he was explicitly campaigning for the Democratic nomination.

Edwards traveled to Iowa and New Hampshire at least four times each in 2005.

He took care not to say he was running until late 2006, after a year in which he spent much of his time traveling in early primary states, particularly Iowa. He visited the Hawkeye State more than a dozen times before announcing his candidacy.

Because the nonprofit has yet to file its IRS report for 2006, its not clear how much it supported Edwards or his staff that year. Much of his travel was funded by the One America Committee, a political action committee that spent $1.56 million to fund travel officially aimed at supporting Democratic candidates in the months leading up to the 2006 election.

It wasn't until Jan. 3 that Edwards, almost a week after kicking off his second bid for the White House from the front yard of a Hurricane Katrina-ravaged home in New Orleans, filed the paperwork to open "John Edwards for President," his official campaign committee, with the FEC.

"We all know that he was a candidate for president, but if he wasn't going around saying, 'I'm running for president,' he's probably all right," Smith said.

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