Democrats Have a Corruption Problem

Phil Kerpen
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Posted: Mar 13, 2015 11:00 AM
Democrats Have a Corruption Problem
Senator Bob Menendez will soon be indicted on corruption and obstruction of justice charges stemming from his relationship with Salomon Melgen, a West Palm Beach eye doctor. Melgen thought he could get away with Medicare fraud because he gave Senate Democratic Leader Harry Reid's Super PAC $700,000 and lavished Menendez with private jet flights to his luxury resort. Given the known public facts, Harry Reid should return Melgen's money to the taxpayers he stole it from and should ask Menendez to resign.

In 2012, Melgen billed Medicare $20.8 million, ranking him number one out of the 825,000 doctors who participate in the program. That eye-popping figure caught the attention of anti-fraud investigators, who found he overbilled taxpayers by at least $8.9 million. Melgen called on Menendez to intercede on his behalf.

According to prosecutors, Menendez and his staff met with Medicare administrator Marilyn Tavenner on June 7, 2012, and Menendez followed up with a phone call to Tavenner. On August 2, 2012, Menendez escalated to a higher level, bringing then-HHS Secretary Kathleen Sebelius to the Capitol to meet with him and then-Senate Majority Leader Harry Reid in Reid's office-for the express purpose of trying to get Melgen off the hook.

On January 29, 2013, Melgen's West Palm Beach facility was raided by the FBI.

Days later Menendez admitted he traveled gratis on Melgen's private jet to his luxury resort in the Dominican Republican, violating Senate ethics rules. Menendez confessed to two private jet trips and personally reimbursed Melgen $58,500. He denied there were any other flights, but a year later he admitted and reimbursed another $11,250 for a third flight.


In addition to his intervention to get Melgen off the hook for Medicare fraud, Menendez also aggressively advocated for a Dominican port security contract worth approximately $500 million to Melgen and to a former top Menendez Senate staffer, Pedro Permuy.

Despite having no background in security, Melgen bought the largely worthless contract, which was not being honored, on the hopes that Menendez could bring diplomatic pressure to bear on the Dominican government to reinstate it, earning him and Permuy windfall profits.

Permuy's "ties to the senator go back at least 20 years," according to the New York Times, but Menendez denied any knowledge of his involvement in the port deal, despite the fact Melgen had hired him to "run the operations," according to Melgen's cousin Vinicio Castillo Seman.

Menendez staffers attempted to assert the Speech and Debate clause to avoid testifying before a grand jury in late February. According to New Jersey Law Journal coverage of the grand jury, Menendez staffer Michael Bernard refused to answer 50 questions about Menendez's efforts to stop the investigation into Melgen's Medicare fraud.

As far back as February 8, 2013, the New York Times editorialized: "Menendez needs to relinquish his leadership role."

Menendez refused, continuing to serve as chairman and, since Republicans took control of the Senate, ranking member of the Senate Committee on Foreign Relations.

Asked about the incident when it first broke, Reid said: "Bob Menendez is my friend. He's an outstanding senator. Any questions in this regard, direct to him. I don't know anything about it."

We now know that isn't true, because Reid hosted the meeting with Sebelius in his own office. More recently it was reported that the FBI has questioned Reid in relation to the case.

It appears Reid is protecting Menendez's leadership position because of his own involvement in the scandal, despite the national security implications of keeping a man under criminal investigation as the top Democrat on the Foreign Relations committee. The perception that leaks about the investigation may be related to Menendez's criticisms of the president's Iran policy only underscore how inappropriate it is for him to remain in that role.

Menendez is entitled to his day in court, which he will have. But even if his actions are not quite criminal, they are clearly and blatantly unethical, and an ongoing criminal prosecution is not compatible with being an effective U.S. senator. Menendez should therefore resign from the Senate and Reid, at a minimum, should return the $700,000 his Super PAC received from Melgen to the taxpayers it was stolen from.