For years, New Jersey Senator Bob Menendez has been under scrutiny for his questionable ties to a wealthy Florida ophthalmologist and major campaign donor. Yesterday, the two men were finally slapped with federal charges, including corruption, bribery, and fraud. These are major charges (as in, "way more serious than a blowjob"), coming from a Justice Department led by members of Menendez's own political party. So it's safe to expect this case will stir things up. Today, Menendez appeared before a grand jury to plead not guilty.
Menendez's co-defendent, Dr. Salomon Melgen, has been a friend of the Democratic Senator for more than 20 years, and they've been under the investigative microscope for quite a while. But after surviving what appears to have been an attempt to frame them for soliciting underage prostitutes, they've now been indicted for some serious scheming, and judging by yesterday's indictment, it looks like they were doing a lousy job of hiding it.
According to the charges, beginning in 2006, Melgen showered the Senator with about a million dollars in flights, hotels, and campaign donations; in exchange, Menendez and his staff intervened with government officials on behalf of the doctor's business interests.
According to the indictment, that included trying to get the feds to back off after Melgen was accused of bilking Medicare out of millions of dollars, pressuring the US agencies to prop up Melgen's business in the Dominican Republic, and greasing the wheels of the immigration machine to obtain visas for Melgen's foreign girlfriends.
Major scrutiny into the pair's relationship began with some very sexy—and ultimately untrue—accusations. In the fall of 2012, when Menendez was up for reelection to his second term, The Daily Callerpublished a "scoop" that Menendez and Melgen had solicited underage prostitutes in the Dominican Republic, during one of their frequent trips to Melgen's estate there. It was a sensational story, complete with videos of Dominican women willing to testify that they'd had sex with the two men in exchange for money.
Upon scrutiny, it also turned out to have been a total crock, likely cooked up as part of a political smear campaign against Menendez, who was about to take over the Senate Foreign Relations Committee. Menendez, who is Cuban-American and a staunch opponent of reconciliation with the Castro regime, claimed it was all an elaborate plot by Cuban intelligence agents, and asked the government to investigate. It's not clear if anything ever came of his request, and the indictment doesn't mention the rumors, and it's not clear if Menendez ever got a probe.
Regardless of the source, the prostitution rumors appear to have turned the feds on to the Senator's real shady business, spurring a two-year corruption investigation by the FBI. The allegations in the indictment describe, in great detail, how Menendez helped Melgen pull some old-fashionedTammany Hall shit, including pocketing lots of money that wasn't his.
And thanks to some juicy allegations about Melgen's extramarital girlfriends, this political scandal still includes the obligatory intrusion into a stranger's sex life, and the text of the indictment really becomes a page turner when you get to the following:
Melgen partially funded Girlfriend 1's tuition through the Sal Melgen Foundation, a non-profit organization with the self-described purpose of "help[ing] with the educational needs of disadvantaged persons" and "assist[ing] with the economic educational needs of children in develeoping [sic] countires [sic] and the U.S."
But perhaps the most damning accusation involves Melgen's alleged overbilling of Medicare, a remarkably simple scam that the feds claim went down the following way:
- Using one third the recommended dose of an expensive eye medication called Lusentis on patients
- Giving the leftover medication to two additional patients, thumbing his nose at regulations requiring doctors to administer one vial of Lucentis per patient
- Filing Medicare reimbursements for all three doses, despite actually using only one
- Repeating the scheme over the course long enough to collect $20 million, at about $2,000 per dose.
When the authorities in finally noticed what Melgen had overcharged the government for $8.9 million, Menendez allegedly sprang into action on behalf of his donor friend, spending years pushing for meetings with staffers at the Department of Health and Human Services, including Secretary Kathleen Sebelius. In the meantime, Melgen kept making money—in 2012, Medicare paid him $20.3 million, making him the top-paid doctor in the country.
In another weird instance of political graft, Melgen allegedly called upon the US government to strong-arm the Dominican government over a contract dispute with a business he owned there. The company had an exclusive contract to provide X-ray screening services at Dominican ports, which Melgen felt the US needed to help him enforce, calling on his friend in the Senate for assistance.
On May 16, 2012, Menendez met with State Department officials, hoping that they would resolve the arcane business dispute. May 16 was also, according to the indictment...
...the same day that Melgen and his family gave $40,000 to the New Jersey Democratic State Committee Victory Federal Account and $20,000 to Menendez's legal defense fund.
The challenge for the feds is to prove that this kind of thing wasn't just a coincidence, but a quid pro quo, with Melgen's donations contingent on Menendez taking official action on his behalf. While the indictment doesn't contain any smoking gun on this front, it does claim that on at least two other occasions Melgen made big donations to help Menendez's campaign, just days before the Senator intervened on his behalf.
To the cynical, the idea that political donations would be used to pull the strings of a corrupt system may sound like business as usual. But as Menendez allegedly used his political clout to push for his pal's interests, government bureaucrats seem to have been refreshingly annoyed, even uncooperative.
Here's an email from an annoyed State Department employee, after Menendez threatened to make the official testify at a Senate hearing if he didn't get an adequate response to his inquiries about Melgen's port business:
This is the case about which Sen. Menendez threatened to call me to testify at an open hearing. I suspect that was a bluff, but he is very much interested in its resolution. A reminder that I owe the Senator an answer to the question "What can we do to resolve this matter?"
And here's some communication between staffers with the Department of Health and Human Services about Menendez's attempts to get the agency to lay off Melgen's alleged Medicare scam:
Just tried to call you but understand you are in Baltimore today. We have a bit of a situation with Senator Menendez, who is advocating on behalf of a physician friend of his in Florida. The bottom line is that he wants to talk to someone today—I talked his office out of the Secretary, but therefore through [sic] you under the bus. Would you be able to speak with Senator Menendez sometime today? Can I give you a call this a.m. to give you some background on discussions thus far?...
Many thanks and sorry!
When Menendez finally did talk with the HHS Secretary about Melgen's Medicare dispute, she apparently shut him down, in a meeting that is later described as "lively":
The Secretary of HHS disagreed with MENENDEZ's position, explaining that CMS was not going to pay for the same vial of medicine twice, and emphasizing that CDC guidelines expressly advised against multiple applications from the same vial to prevent contamination. The Secretary of HHS also informed MENENDEZ that because MELGEN's case was in the administrative appeals process, she had no power to influence it.
It's as though corruption still bothers the bureaucrats who get roped into it, which is almost encouraging.
The full text of the indictment is embedded below.
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