Today On The Jersey Corruption Beat: Bob Menendez

Hello again from the New Jersey Corruption Desk. Today we’re working on a new story about a story, first broken on CNN, that the Department of Justice’s public integrity section has gotten approval from Attorney General Eric Holder to prepare indictments against Sen. Bob Menendez, the senior senator from New Jersey.

The case revolves around Menendez’s longstanding relationship – partnership may be the better term – with a Palm Beach ophthalmologist named Salomon Melgen. Melgen is one of Menendez’s biggest donors and happens to be the top-billing doctor in the Medicare program in the United States. In the past, the two have been linked by reports that Menendez was flown to the Dominican Republic in 2010 aboard Melgen’s private plane, for which the senator later reimbursed the doctor $58,000. In a story both men vehemently denied, the Daily Caller in 2012 made a howling claim that Melendez and Melgen had cavorted with underage prostitutes at Melgen’s mansion during one of those trips. Local authorities later said that the women had been paid to level false claims against the two men. Rather than let it end there, Menendez last year asked the Justice Department to look into allegations that Cuban operatives had planted the underage prostitution story to deny him the chairmanship of the Senate Foreign Relations committee. Menendez and Melgen both actively welcomed Eric Holder’s investigation of those charges.

They may now wonder why they ever sent that letter. Questions have long lingered about what exactly Menendez was doing with Melgen in the Dominican Republic, particularly after the New York Times reported that the senator had pressed the State Department about a contract that the Dominican Republic’s government had with a port security screening firm acquired by Melgen in 2010. The government said that the terms of the contract were unfairly generous – $50 million a year for 20 years – but Menendez nevertheless pressed American officials to lean on the Dominican Republic’s government to begin making those payments to Melgen. In a 2012 Senate Foreign Relations subcommittee hearing, Menendez went even further on his friend’s behalf by publicly pressing State and Commerce department officials to exercise influence on behalf of Melgen with officials on the island. “You have another company that has American investors that is seeking to — has a contract actually given to it by the — kind of ratified by the Dominican Congress to do X-ray of all of the cargo that goes through the ports,” Menendez said, referring to Melgen’s company. “What are we willing to do?” to help Melgen, he asked the American officials, in the event that the Dominican Republic’s government insisted on not “liv[ing] by the contract.” Not long after Menendez made those comments, Melgen kicked $700,000 toward a Harry Reid-linked PAC that later spent $582,000 on Menendez’s 2012 re-elect.

Menendez also intervened on his friend’s behalf regarding a years’ long investigation into whether Melgen has been overbilling Medicare to the tune of nearly $9 million. Menendez has repeatedly questioned the federal audit showing wrongdoing by his friend and donor, and twice intervened with Medicare officials on his behalf in 2009 and 2012 and with HHS Secretary Kathleen Sebelius in 2012. In 2013, FBI agents raided Melgen’s office as part of that inquiry, and weeks later word broke that a Miami grand jury was probing the Melgen-Menendez alliance.

In recent weeks, two of the senator’s aides made news when a sealed document was inadvertently posted to the website of the Third Circuit Court of Appeals in Philadelphia showing they had refused to answer questions before a federal grand jury by invoking the Constitution’s “speech and debate” clause. That clause protects the legislative branch from executive investigations into internal deliberations. A three-judge panel decided that the presiding judge, Anne Thompson of New Jersey, must review the aides’ questions and answers on a case-by-case basis to determine whether the constitutional protection applies.

This news followed on the heels of the senator’s disclosure that he’d spent $206,000 on legal fees in the last quarter of 2014, along with $7,500 from his own defense account, bringing his total 2014 legal expenses to $782,500.

This isn’t the first time Menendez has been in legal trouble. In 2006, then-U.S. Attorney Chris Christie was reportedly looking into the propriety of Menendez’s connections to a Hudson County nonprofit agency that received federal grant money even as it paid the senator $300,000 in rent on a Union City property he owned. At the time, Menendez was in a tight senate race against Tom Kean, Jr., the son of legendary and popular former governor and 9/11 Commission co-chair Tom Kean. Menendez insisted there was no conflict of interest, but that investigation and others established Christie as a prominent corruption fighter in the state, setting the stage for his successful challenge to Gov. Jon Corzine in 2009.

In recent months, Menendez’s name has come up in grand jury material relating to a public corruption case being prosecuted by U.S. Attorney Paul Fishman against a former Bergen County Democratic party chairman named Joe Ferriero (here I should just disclose that I’ve probably had dinner with everyone in N.J. politics at some point in my life). According to documents filed by Ferriero’s attorneys, then-Rep. Bob Menendez between 2004 and 2006 helped win a federal permit for developers seeking to remake the Meadowlands into a retail and sports complex. Menendez lobbied the Army Corps of Engineers to speed consideration of a permit for the proposed $750 million project, and after the Corps approved it, he arranged for the developer’s representative to travel aboard an Amtrak train to Union Station in Washington to accept it in person from the colonel-in-charge. The developer suggested that this was a bizarre method for delivering a federal permit, but nevertheless called Menendez “a silver bullet.” Days later, Menendez or one of his representatives phoned to seek $50,000 in campaign contributions from the developer, and Menendez personally phoned when he fell behind in raising that sum.

Running for office is expensive, and running in New Jersey – with media markets in Philadelphia and New York – is especially so. Bob Menendez clawed his way into this senate seat after being brushed aside by then-DSCC Chair Bob Torricelli in 2000 (to make way for Corzine). He was appointed to the seat in 2006 by Corzine and won it in his own right later that year. Under N.J. election law, a special election to fill a federal Senate vacancy that occurs within 70 days of a primary would ordinarily be held in the subsequent year’s general election, i.e. 2016. New Jersey’s primary will be held on June 2, meaning we’re only 18 days away from that time period.

It is highly unlikely that Bob Menendez will simply resign this seat if he’s indicted. A spokesperson insisted late today that the senator’s actions were “appropriate and lawful, and the facts will ultimately confirm that.” If the seat does open up, Chris Christie – his old nemesis – will be choosing an interim senator and scheduling that special election. In the past Christie has said he would never want to be a U.S. senator, but that was when his presidential ambitions were in better standing. If current events convince Christie donors to become Jeb Bush donors, Christie’s calculus may change. Tom Kean, Jr., now a Republican leader in the New Jersey senate, may also want a second shot at the seat. And other Democrats, too, may be eager to see a truly open primary contest for the spot – they haven’t had one yet in the 21st century.

Brian Phillips Murphy is a historian who covers politics too and tweets at @Burrite.