Senator Robert Menendez (D-NJ) was indicted this afternoon on 8 counts of bribery, 3 counts of honest services fraud, one count of conspiracy, one count of violating the travel act, and one count of making false statements. His largest political backer, Dr. Salomon Melgen (in photo on left) was also charged by the U.S. Attorney for the District of New Jersey.
The indictments were the result of a lengthy federal investigation that was initiated after media reports that Menendez attempted to intervene to thwart a Medicare-fraud investigation of Melgen, and that Menendez pressured government officials to further Melgen’s interests in a port security deal in the Dominican Republic.
Based on information provided by NLPC, the New York Times first reported on February 1, 2013 that Menendez went to bat for the Dominican port security deal that would have resulted in a "highly lucrative windfall" for Melgen.
The port security deal and Menendez’ efforts to promote it were uncovered by Tom Anderson, director of NLPC’s Government Integrity Project.
Despite having no experience in border security matters, Melgen bought an ownership interest in a company known as ICSSI in 2010 that had a long dormant contract with the Dominican Republic to provide port security. The Dominican government was refusing to honor the contract after terming it an “exorbitant giveaway” and alleging that it had been corruptly negotiated in secret. The contract to X-ray port cargo could be worth as much as $50 million annually for 20 years.
Melgen then enlisted the help of Menendez to get the United States government to pressure the Dominican government to honor the contract. In July 2012, Menendez convened a hearing of the Western Hemisphere Subcommittee of the Foreign Relations Committee. Menendez, the only Senator who attended, grilled State and Commerce Department officials on why the contract was not being honored, citing the participation of “American investors” in ICSSI.
Menendez also successfully pressed the U.S. Ambassador to the Dominican Republic, Raul Yzaguirre, to lobby for the post deal. In a meeting with Dominican officials, Yzaguirre stressed the need to scan container ships entering Dominican ports for terrorist threats and drugs. According to the Washington Post, “Dominican merchants were fuming at the cost…and questioning how an eye doctor had branched out into port security.”
One of Melgen’s companies contributed $700,000 to Senate Majority PAC, a “super PAC” associated with now-Senate Minority Leader Harry Reid (D-NV). Most of the money was spent in New Jersey to re-elect Menendez in 2012.
In January 2014, Menendez disclosed that he accepted a third flight on a private jet owned by Melgen, in violation of Senate rules. In 2013, Menendez was forced to admit to that he accepted two flights from Melgen, valued at a total of $58,500. Those were round trips to the Dominican Republic, from Florida and New Jersey.
Menendez disclosed the first two flights only after they were reported in the media. At the time, his office asserted that there were no more flights. Menendez' failure to reimburse Melgen for the third flight was characterized as an "oversight," the same term his office used in reference to the first two flights. This was a more than dubious claim because the $58,500 represented a substantial portion of Menendez’ net worth. The indictment describes even more previously undisclosed flights.
Melgen’s medical practice has been raided twice by the FBI in an apparent investigation into Medicare fraud. In April 2014, the list of doctors receiving the most reimbursements from the government for treating Medicare patients was released for the first time ever. Topping the list for 2012 was Melgen, who received more than $20 million.
Here's the indictment: