Menendez Same-Day Service Seen Upending Just Friends Defense

Sen. Robert Menendez arrives at a federal court to be indicted on corruption charges on April 2, 2015 in Newark, New Jersey.

Photo by Kena Betancur/Getty Images

For federal prosecutors, the timing of favors by U.S. Senator Robert Menendez will be the key to their bribery case against him.

No mentions of videotapes or explicit e-mails showing a quid pro quo between Menendez and Salomon Melgen, a Florida eye surgeon, appear in their indictment. Instead, the government will probably rely on witnesses and circumstantial evidence to prove a corrupt link between Menendez’s actions and Melgen’s gifts to him, said former prosecutors who reviewed the 68-page indictment.

Some of Menendez’s favors came the same day, or within days, of those gifts. In all, the New Jersey Democrat is accused of taking almost $1 million in campaign donations, luxury travel, opulent vacations and other gifts to further Melgen’s interests.

The senator intervened to help Melgen in a Medicare overbilling case, a contract dispute with the Dominican Republic and visa applications for three girlfriends, according to the Justice Department.

“The same-day service is perhaps the most damaging evidence against Menendez and Melgen,” said Scott Coffina, a former federal prosecutor now in private practice at Drinker, Biddle & Reath LLP. “The closer in time, the stronger the inference that it’s a quid pro quo.”

Summer 2012

The events of the spring and summer of 2012, as charged in the indictment, may illuminate Coffina’s point.

On May 16, 2012, Melgen gave $20,000 to a Menendez legal defense fund and $40,000 to a New Jersey Democratic committee backing his reelection, according to the indictment. That same day, Menendez also met with a State Department official to discuss Melgen’s contract dispute.

On June 1, Melgen gave $300,000 to a super-political action committee backing Menendez, prosecutors said. Six days later, the senator met a top administrator at the Centers for Medicare and Medicaid Services, which had ruled Melgen overbilled Medicare by $8.9 million, according to the government.

On Aug. 2, Menendez met with Kathleen Sebelius, then Health and Human Services secretary, the U.S. said. The senator focused “on Melgen’s specific case” and argued that “Melgen was being treated unfairly.”

Sebelius told him that “because Melgen’s case was in the administrative appeals process, she had no power to influence it,” according to the government.

Prosecuting Friendship

Menendez, 61, and Melgen, 60, were charged April 1 with conspiracy, bribery, honest services fraud, and violating the Travel Act. Menendez also is accused of making false statements. Both men pleaded not guilty and face a July 13 trial in federal court in Newark, New Jersey.

After his indictment, Menendez temporarily stepped down as the senior Democrat on the Senate Foreign Relations Committee.

The senator rejected the Justice Department case as an attempt to prosecute a friendship that has lasted 20 years. Any favors between the two men stemmed from that relationship, he said, not corruption.

His lawyer, Abbe Lowell, said earlier that the Justice Department’s Public Integrity Section has brought bad cases before, and has done so again.

“Because there was a real friendship and not a corrupt relationship, and because Senator Menendez’s actions were proper, this case too will become another of those mistaken cases,” Lowell said last week. He declined to comment on the case Monday.

Golf, Steak

The government sought to connect dots in its indictment that point toward a more transactional relationship.

Prosecutors alleged that Melgen’s $300,000 donation to Majority PAC was “in return for Menendez’s advocacy at the highest levels of CMS and HHS on behalf of Melgen in his Medicare billing dispute.”

In October 2012, Menendez gave another $300,000 to Majority PAC and $75,000 to Democratic county committees in New Jersey.

Prosecutors also detailed how Melgen paid for golf and a steak dinner for Menendez on Jan. 10, 2013. A day later, a Menendez staffer e-mailed an employee at U.S. Customs and Border Protection, seeking to stop the agency from donating equipment to the Dominican Republic to screen cargo in ports.

Ports

Melgen owns a company that claims to have a contract to provide X-ray inspection services of containers at those ports. Giving away such equipment “would hurt Melgen’s financial interests,” according to the indictment.

Peter Zeidenberg, another former federal prosecutor, said Menendez may counter that gifts from Melgen that were followed by action by the senator’s office are a coincidence, not sinister. The timing of events, however, may undermine such an argument as far as a jury is concerned, said Zeidenberg, now with Arent Fox LLP.

“The closer in time these events are, the harder it is for Menendez to say these are completely unrelated,” he said.

Business Relationship

“Prosecutors have to demonstrate that, irrespective of any friendship that may have existed, the acts taken by Senator Menendez grew more out of a business relationship than a real friendship,” said Robert Mintz, a former federal prosecutor now with McCarter & English LLP.

At trial, both government and defense lawyers will focus on the state of mind of Menendez and Melgen, said Michael Koenig, a former federal prosecutor at Hinckley, Allen & Snyder LLP.

“A significant portion of the defense would be to establish the longstanding friendship between Senator Menendez and Dr. Melgen,” Koenig said. “That would show that the senator’s actions were taken as a result of a friendship, not a corrupt agreement.”

If Lowell shows that friendship drove Menendez’s actions, “it will be much harder for the prosecution to prove a crime was committed,” he said. “The friendship could undermine the necessary quid pro quo element.”

Bruce Udolf, another ex-federal prosecutor, said vacations the two men took together are more easily defended as the activities of friends.

Menendez may have a harder time defending Melgen’s gift of a suite at a luxury Paris hotel. Prosecutors said Melgen paid with his American Express rewards points, and Menendez stayed with a woman.

Melgen wasn’t on that trip.

The Paris trip and a 2010 weekend at the Dominican resort Punta Cana were among the gifts prosecutors cited in charging Menendez with honest services fraud. The U.S. said the senator filed annual financial disclosure forms that omitted Melgen’s gifts, including those trips.

Bribery Counts

Menendez sought to exercise his influence for corrupt purposes on specific matters and “as opportunities arose,” the government alleged in several of the bribery counts.

The Menendez case bears similarities to the federal prosecution of former New Jersey state Senator Wayne Bryant, who was convicted in 2008 of honest services fraud.

An appeals court upheld that conviction, ruling prosecutors can show a “stream of benefits” and need not tie each official action to a corrupt payment.

Prosecutors can show “a course of conduct of favors and gifts flowing to a public official in exchange for a pattern of official actions favorable to the donor,” the appeals court ruled in 2011. Payments may be intended “to retain the official’s services on an ‘as needed’ basis, so that whenever the opportunity presents itself, the official will take specific action on the payor’s behalf.”

High Burden

For gifts, that evidence may be implicit, said former federal prosecutor Lee Vartan. For political contributions, prosecutors must meet the higher burden of showing an explicit quid pro quo agreement.

“For a big piece of the indictment, the government is going to face a high legal burden to show an explicit agreement between Menendez and Melgen,” said Vartan, now at the law firm Holland & Knight.

Former Miami U.S. Attorney Kendall Coffey agreed.

“It would be very difficult to bring charges simply because a public official receives campaign contributions and undertakes actions on behalf of the contributor,” he said. “That happens every day in the halls of Congress.”

Harder Road

Even if the defense succeeds in sowing doubt on the bribery counts, Menendez may face a harder road fighting charges that he failed to report the gifts.

Udolf said that, while proving guilt on bribery may be tough, proving Menendez lied about gifts may not be.

“You could debate all day long whether or not someone did something in exchange for some sort of benefit,” said Udolf. “But it’s pretty black and white where he doesn’t declare the benefit he got.”

Prosecutors would still be successful if Menendez is convicted only of failing to disclose gifts, said Udolf, a former chief of the Miami U.S. Attorney’s Office Public Integrity Unit.

“It’s one of those cases where it really doesn’t matter if he gets one year in jail or five years,” he said.

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