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Senate Foreign Relations Chair Implicated in Corruption Investigation

By Arthur Phillips | CEPR Americas Blog | February 7, 2013

A front-page article in the print edition of today’s Washington Post details how New Jersey Democratic Senator Robert Menendez twice approached federal health-care officials about Dr. Solomon Melgen’s outstanding $8.9 million debt to the Centers for Medicare and Medicaid, which the doctor claims was the result of being over billed. Melgen, personally and through his ophthalmology company, has made major contributions to Menendez’s political campaigns.

This is the latest news to follow reports that on Wednesday, January 30, the FBI raided Melgen’s offices, soon after which the senator’s office described the doctor as “a friend and political supporter of Senator Menendez for many years.” Two days later, following John Kerry’s resignation from his seat as chairman of the Senate Foreign Relations Committee to become Secretary of State, Menendez took over the position, one of the most powerful and prestigious in Congress.

Menendez, who is Cuban American, has taken a hard line against easing travel restrictions to Cuba and has been described as “fiercely pro-embargo.” The New Jersey Democrat has also worked closely with lawmakers across the aisle on policy towards Iran, including his co-authorship of sanctions legislation with Republican Senator Mark Kirk last year.

Early reports of the FBI’s search focused on allegations that in 2010 Senator Menendez accepted free flights to the Dominican Republic from Dr. Solomon Melgen and had sex with prostitutes during these trips, a claim he has vehemently denied. It was also noted that Menendez is not married, and that prostitution is legal in the Caribbean nation. The Senate Ethics Committee is investigating the senator, who in January of this year wrote a $58,000 personal check to reimburse Melgen for two trips.

But the FBI’s raid appeared to be linked to two parallel investigations of Melgen, one regarding Medicare fraud, the other political corruption. Both investigations may involve the doctor’s relationship with Senator Menendez.

The Associated Press noted that Dr. Melgen, a registered Democrat, has made political contributions to the tune of $193,350 since 1998, $14,200 of which has gone to Menendez. More significantly, the New York Times also reported that Melgen’s medical practice gave $700,000 to a super-PAC that spent more than $528,000 in support of Menendez’s re-election campaign in 2012.

This support has recently been scrutinized in light of a July 2012 Senate hearing, in which Menendez reportedly questioned two officials about why the Obama administration had not been more aggressive in promoting U.S. business interests abroad. During this questioning, the senator specifically highlighted a contract between the Dominican government and a company that would provide x-ray equipment for the country’s ports, namely for the purpose of detecting narcotics trafficking. The contract has been held up due to its enormous cost, which is estimated to be as much as $1 billion over 20 years. In the Senate hearings, Menendez did not refer to the company, ICSSI, by name. He also did not mention that Melgen has an ownership interest in the company.

Furthermore, the New York Times reports that Pedro Pablo Permuy, a long-time former aide to Menendez, was slated to be a top executive at ICSSI. Permuy was a senior legislative aide to the senator from 1993 to 1995 and his national security advisor from 2001 to 2003. Permuy denied being either a board member or an employee of the firm. But Dr. Melgen’s cousin, a lawyer based in Santo Domingo who on Monday publicly defended the doctor and senator and called for the contract’s enforcement, said that Mr. Permuy “will run the operations.” According to a spokesperson for Menendez, the senator knew nothing of his long-time former aide’s involvement with the company.

Over the weekend Senate Majority Leader Harry Reid, whose former aides founded the super-PAC that contributed heavily to Menendez’s most recent re-election campaign, expressed his “utmost confidence” in the New Jersey senator and said he has no problem with his colleague’s continued chairmanship of the Foreign Relations Committee. And Menendez’s aides have said he regularly advocates for U.S. business abroad, and that doing so is appropriate for members of that committee.

In March 2010, New York Democratic Representative Charles Rangel stepped down as chairman of the Ways and Means Committee after being admonished by the House Ethics Committee and losing the support of his party. Given the news from today’s Washington Post and the ongoing Senate Ethics Committee and FBI investigations, it remains to be seen whether leaders of either party will call for Menendez to step down as chairman of the Foreign Relations Committee.

Related article

• Timeline of Melgen-Menendez Involvement in Dominican Port Deal (breitbart.com)

February 7, 2013 - Posted by aletho | Corruption | Bob Menendez, Cuba, Dominican Republic, Melgen, Menendez, Sanctions against Iran, United States, United States Senate Committee on Foreign Relations, US embargo on Cuba