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John Edwards and his wife say they don't believe there was any financial wrongdoing.

WASHINGTON (CNN) - While acknowledging federal authorities are investigating the finances related to John Edwards political efforts, he and his wife say they don't believe there was any financial wrongdoing.

Investigators are focusing their inquiry on the more than $114,000 in payments from July 2006 through February 2007 by Edwards' political action committee to a production company owned by Rielle Hunter, a woman he had an affair with, according to the Raleigh News & Observer.

Hunter recorded web videos of Edwards for the political action committee. The payments were listed in federal election records as related to website/internet services work.

After months of tabloid rumors, Edwards admitted last summer he and Hunter had a previous affair.

In a statement given to several news organizations, including CNN, Edwards for the first time acknowledgedthere is an ongoing federal probe but would provide no further details.

"I am confident that no funds from my campaign were used improperly," Edwards said in the statement. "However, I know that it is the role of government to ensure that this is true. We have made available to the UnitedStates both the people and the information necessary to help get the issue resolved efficiently and in atimely manner."

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Former Sen. Tom Daschle's withdrawal may be a setback for the Obama administration's heath care agenda.

WASHINGTON (CNN) - Former Sen. Tom Daschle's decision to withdraw his nomination to head the Department of Health and Human Services has observers buzzing about what the loss means to President Obama's health care agenda.

Daschle had been fighting to save his nomination after facing controversy regarding his tax records - filing amended tax returns and paying more than $140,000 in back taxes and interest - and questions over his work in a field that some consider lobbying.

Obama stood by Daschle's side despite the criticism until Tuesday when the former Senate majority leader formally withdrew his bid for HHS secretary. The president said he accepted Daschle's decision with "sadness and regret."

White House press secretary Robert Gibbs said the health care crunch is more important than any one politician.

"I don't think the effort for health care slows down, and I think Daschle and others would agree the effort for health care is greater than any individual," Gibbs said at a press briefing Tuesday.

But Senate Majority Leader Harry Reid, D-Nevada, said finding a new nominee quickly was imperative.

"You have 50 million people with no insurance, and we need to step forward on health care for the American people," Reid said.

So how does the prospect of a sweeping health care overhaul look now that Daschle won't spearhead it?

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Computers at the headquarters of the Obama and McCain campaigns were hacked CNN confirms.

WASHINGTON (CNN) – Computers at the headquarters of the Barack Obama and John McCain campaigns were hacked in mid-summer by a foreign government or organization, a source with knowledge of the incidents confirms to CNN.

Another source, a law enforcement official familiar with the investigation, says federal investigators approached both campaigns with information the U.S. government had about the hacking, and the campaigns then hired private companies to mitigate the problem.

U.S. authorities, according to one of the sources, believe they know who the foreign entity responsible for the hacking is, but refused to identify it in any way, including what country.

The source, confirming the attacks that were first reported by Newsweek, said the sophisticated intrusions appeared aimed at gaining information about the evolution of policy positions in order to gain leverage in future dealings with whoever was elected.

The FBI is investigating, one of the sources confirmed to CNN. The FBI and Secret Service refused comment on the incidents.

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Pastor John Hagee endorsed McCain earlier this year.

(CNN) - In the face of mounting controversy over headline-grabbing statements from Pastor John Hagee, CNN has learned presumptive Republican nominee John McCain has decided to reject his endorsement.

The Huffington Post had published a recording of Hagee saying that Adolf Hitler had been fulfilling God’s will by hastening the desire of Jews to return to Israel in accordance with biblical prophecy.

“Obviously, I find these remarks and others deeply offensive and indefensible, and I repudiate them. I did not know of them before Reverend Hagee's endorsement, and I feel I must reject his endorsement as well,” McCain said in a statement to CNN Thursday.

He added that his relationship with Hagee did not compare with Obama’s lengthy association with Rev. Jeremiah Wright. “I have said I do not believe Senator Obama shares Reverend Wright's extreme views. But let me also be clear, Reverend Hagee was not and is not my pastor or spiritual advisor, and I did not attend his church for twenty years. I have denounced statements he made immediately upon learning of them, as I do again today,” said McCain.

The Arizona senator had earlier renounced comments from Hagee that termed the Catholic church "the great whore" and "an apostate church."

Update after the jump: Hagee rescinds McCain endorsement

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