Menendez drained a third of his bank account in private-jet reimbursement; Update: Senate Ethics Committee “reviewing” Menendez scandal

posted at 11:01 am on February 1, 2013 by Ed Morrissey

It didn’t occur to me yesterday that the sudden rush to reimburse a donor $58,500 for private-jet flights to the Dominican Republic might have left Senator Robert Menendez a little short on funds.  Most Senators have significant personal wealth, and while no one wants to have to write a $60,000 check, most of them could do so without breaking a financial sweat  The Daily Caller’s David Martosko did some digging into financial disclosure records and found that the payoff may have wiped out 30% of Menendez’ liquid assets — or as much as 90%:

A check that Democratic New Jersey Sen. Bob Menendez wrote to his longtime campaign donor Dr. Salomon Melgen on Jan. 4 to cover private jet travel to the Dominican Republic represented more than one-third of his cash-on-hand — and perhaps as much as 90 percent — according to an analysis of his most recent U.S. Senate financial disclosure report.

Dan O’Brien, Menendez’s chief of staff, told WNBC-TV4 in New York on Tuesday that the senator reimbursed Melgen $58,500 for two trips they took together to the island nation in 2010. (RELATED: Menendez admits frequent Dominican travel, reimburses FBI-raided donor)

Menendez signed a disclosure statement on May 9, 2012 indicating that he had between $66,003 and $165,000 in three different bank and credit union accounts. His only other asset is a rental property worth between $250,001 and $500,000.

Matthew Boyle, who first began reporting on Menendez’ escapades with Melgen in the Dominican Republic and is now at Breitbart News, calculates that Menendez just spent 18% of his total net worth:

According to the Center for Responsive Politics, Menendez’s net worth is between $317,005 and $680,000. Menendez ranks 79th in the Senate in that category, fairly low among his 99 colleagues.

Since the reimbursement he made to his donor Dr. Salomon Melgen’s company totaled $58,500, Menendez spent a massive portion of his financial livelihood on the reimbursement for those two flights. If his net worth is at the lowest end of the estimate—$316,005—he would have paid about 18.5 percent of his entire net worth. …

Looking at Menendez’s annual salary—U.S. Senators make $174,000 per year before taxes—the $58,500 reimbursement would be almost 34 percent of Menendez’s annual salary before taxes.

That’s why it’s difficult to put much credit in the claim from Menendez’ office that this was just “sloppy” bookkeeping, or an oversight.  One could believe that for a man with a few million dollars in liquid assets, but not for someone of moderate means.  When a man worth a total of $680,000, with a maximum of $166,000 liquid, a two-year-old debt of $58,500 doesn’t just slip his mind.

It’s not as if Melgen was only an occasional correspondent, either.  The New York Times has taken a belated interest in the Senator from New Jersey and his relationship to the target of an FBI investigation, and notes something very interesting about Melgen’s business dealings and Menendez, emphasis mine:

Also in 2010, Dr. Melgen moved to buy the ownership interest in ICSSI, a company based in the Caribbean that had been awarded a contract to provide extensive screening of cargo from ports in the Dominican Republic. The Dominican government was refusing to honor that contract, after Miguel Cocco, then the Dominican customs director, had long said the deal was an exorbitant giveaway to the company.

In a letter to the president’s legal adviser, Mr. Cocco said that the deal was “against the interests of the Dominican government, due to its one-sided nature, exorbitant clauses, that it violates Dominican laws,” and that there had been a “lack of transparency, commercial ethics in the granting of the contract.”

Dr. Melgen brought the matter to the attention of Mr. Menendez. Estimates vary on the contract’s value, but critics say it could cost as much as $50 million annually; the original terms of the contract, approved in 2003, called for 20 years of payments. …

Aides acknowledged on Wednesday that Mr. Menendez had spoken to State Department officials about the contract. And at a hearing of the Senate Foreign Relations Subcommittee on the Western Hemisphere last July, he questioned two administration officials — Francisco J. Sánchez, the undersecretary for international trade at the Commerce Department, and Matthew Rooney, the deputy assistant secretary in the Bureau of Western Hemisphere Affairs for the State Department — about why the United States government had not been more aggressive on the issue. The senator said more security was needed given the drug trade on the island.

And toward the end of the article, long past the jump, the NYT suggests that Menendez might be allowing Melgen to broker federal hiring:

In Florida political circles, one Miami Democrat explained, it is understood that anyone seeking a federal appointment that requires Mr. Menendez’s blessing should first get Dr. Melgen’s backing.

“If you needed Bob, you had to see Melgen,” said the Democrat, who insisted on anonymity for fear of upsetting party leaders. “Everybody in Miami knew that.”

In addition to the security company, in 2011 Dr. Melgen founded a Latino-oriented news Web site, Voxxi, which has also emphasized the need for the port security deal and glowingly depicted Mr. Menendez as a giant among Latinos. A former employee, who spoke on the condition of anonymity out of fear of career damage, said Dr. Melgen would often intervene in the coverage, requiring editors to play down achievements by Republicans like Senator Marco Rubio of Florida and replace it with praise for Mr. Menendez.

Small wonder that Menendez wiped out his bank account trying to distance himself from the stench.

Update: Looks like the Senate Ethics Committee has seen enough to get interested:

The Senate Ethics Committee is reviewing whether Sen. Robert Menendez, D-N.J., inappropriately accepted gifts from a political donor who is under investigation by federal investigators.

“We are aware of the news reports regarding the FBI raid on Dr. Melgen’s office,” Sen. Johnny Isakson, R-Ga., the top Republican on the ethics committee, said to CBS News in a statement. “The Ethics Committee will follow its established procedures in this matter.”

Late Tuesday night, the FBI and the Health and Human Services Department raided the West Palm Beach, Fla., offices belonging to Dr. Salomon Melgen, an eye doctor who has made large donations to Menendez, the New Jersey State Democratic Committee and other politicians. The FBI has not said why it was raiding Melgen’s office Tuesday night, but according to the Miami Herald, records show that Melgen has an outstanding IRS lien of $11.1 million for taxes owed from 2006 to 2009. The HHS Office of the Inspector General, meanwhile, is responsible for health care fraud cases (involving Medicare and Medicaid). HHS would not comment on the FBI’s involvement, though it is not unheard of for the FBI to participate in these types of investigations.

Menendez investigations — they’re not just for “right-wing blogs” any more.


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