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Reading through the indictment of Sen. Bob Menendez (D-NJ), I found myself struck by two key things. First off, the sheer extent to which Menendez used his office to help out his friend Dr. Salomon Melgen — a man who doesn't even live in the state he represents — is really something, regardless of the outcome of his case.
Second, much of Menendez's help for Melgen occurred before Citizens United v. FEC and other cases ushered in our age of unlimited campaign contributions. But in more recent years, Melgen's alleged help for Menendez found another outlet — one of those newly legal super PACs, into which he poured $600,000, earmarked for his good friend Bob.
So the case is not only an important corruption case, but also the first big Super PAC corruption case in the post–Citizens United era. And it makes quite clear that these new campaign finance vehicles are convenient tools for politicians who are already close to wealthy donors.
Before Super PACs, Melgen's gifts to Menendez focused on travel
From 2006 to 2010, prosecutors say Menendez benefited mainly from Melgen footing the bill for his travel. Menendez took several flights to and from the Dominican Republic on Melgen's jet, used Melgen's Caribbean villa, and took his own hotel trip to Paris paid for with Melgen's credit card points. Menendez included none of this on his financial disclosure forms.
Meanwhile, the Menendez Senate staff at times looked like the Melgen staff. Thirteen different Menendez staffers come up in the indictment as doing various work related to Melgen's business and personal interests. Allegedly, they helped get visas for Melgen's girlfriends, and pressed State Department and Customs officials to support policies that would help a Melgen business.
And when Melgen got into a billing dispute with the Centers for Medicare and Medicaid Services in June 2009, Menendez quickly enlisted his staff, writing in an email, "Please call him asap at [number redacted] re a Medicare problem we need to help him with." A staffer later responded saying that she had called Melgen twice that day and that staff were "looking into how [they could] be helpful." The following month, that staffer emailed Menendez again and said: "As you know we've been working on the Melgen case everyday." [sic]
Think about that. This is the summer of 2009, as all of Washington was rapt with the debate over Obamacare. Menendez had a seat on the powerful Senate Finance Committee that would draft the Senate bill. And yet he was having his staff work every single day to help an out-of-state personal friend try to get some money back from Medicare. Out of the many issues that a US senator could be working on, somehow whatever was going on with his friend's businesses shot to the top of the list.
None of this can be blamed on lax campaign finance laws. If DOJ's allegations are true, Menendez's willingness to accept off-books travel shows that he was willing to play footsie with a rich donor regardless.
Soon, though, the courts would make it easier for him to do so.
Once Super PACs were legalized, Melgen had a more legitimate way to show his appreciation
However, in the DOJ indictment, there's an interesting shift in what Menendez is said to have received from Melgen over time.
A series of court rulings in 2010, starting with Citizens United v. FEC, enabled the rise of Super PACs that could accept unlimited contributions and spend unlimited amounts on behalf of candidates.
So by 2012, with Menendez now up for reelection, Melgen was allowed to show his appreciation for the senator in a much clearer way. The trips seem to have stopped as the Super PAC donations — $600,000 worth — began.
Though Super PACs are theoretically supposed to be independent from candidates and campaigns, in practice they're often run in close coordination with the candidates' trusted allies. Indeed, Melgen gave his first $300,000 Super PAC check to "a close personal friend of Menendez," the indictment says. Then, that friend sent off the check to Majority PAC, where it was "earmarked" with the instructions to be used for Menendez's Senate race. Another $300,000 check from Melgen followed a few months later.
Menendez's efforts on Melgen's behalf, the DOJ says, ramped up accordingly. Just days after Melgen wrote that first big check, Menendez argued on his behalf to the head of CMS. Within days of the second check, Melgen sent Menendez a memo outlining the latest developments in the billing dispute, and recommending intervention by the Secretary of Health and Human Services.
In Citizens United, the Supreme Court's majority opinion concluded that independent expenditures "do not give rise to corruption or the appearance of corruption" — so shortly afterward, Super PACs became legal.
Now, in Menendez's case, DOJ is arguing that Melgen's six-figure Super PAC checks in fact cross the legal line for bribery. We'll see soon whether a jury agrees. But it's already clear that in this shady-looking relationship, the rise of Super PACs further enabled the flow of money.
