Thursday, April 2, 2015

Robert Menendez Indictment Points to Corrupting Potential of Super PACs - New York Times




Senator Robert Menendez, second from right, arrived at federal court on Thursday in Newark. John Minchillo/Associated Press

WASHINGTON — It seemed like a typical corruption case: A Florida doctor, seeking official favors with a United States senator, plies him with gifts while raising all the money he can for the senator’s campaign, and for his fellow senators and his party.


But the searing 68-page indictment of Senator Robert Menendez, a New Jersey Democrat, filed this week by the Justice Department, does more than pull back the curtain on a politically and personally lucrative relationship between the senator and the doctor, Salomon E. Melgen. It also marks the first significant criminal case stemming from the Supreme Court’s Citizens United decision, which opened up new channels for the wealthy to pour money into campaigns, and vastly amplified the corrupting potential of otherwise legal campaign contributions.



Central to the Menendez case is the elaborate infrastructure of technically independent “super PACs” and outside groups that — for practical if not legal purposes — are closely bound to each party’s congressional leadership and are nurtured by lobbyists, wealthy donors, and other special interests seeking to influence the government.



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Mr. Menendez was charged with eight counts of bribery, which carry up to 15 years in prison on each charge.




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Of the $751,000 in campaign contributions that federal prosecutors say Dr. Melgen made in exchange for Mr. Menendez’s help pressuring government officials, a relatively small amount went directly to the senator or to the Democratic Party in New Jersey. Federal candidates and parties are bound by laws that, in the interest of preventing corruption, limit how much money they can accept from a donor.


Instead, in 2012, Dr. Melgen poured nearly all of the cash — two checks from his consulting company totaling $600,000 — into a super PAC now called Senate Majority PAC, founded by current and former aides to Senator Harry Reid of Nevada with the avowed goal of preserving the Democrats’ hold on the Senate. Unlike federal candidates and parties, super PACs and other legally independent entities can accept unlimited contributions from any source.


Independent expenditures, Justice Anthony Kennedy wrote in the Supreme Court’s opinion in Citizens United, “do not give rise to corruption or the appearance of corruption.” But Justice Department lawyers do not seem to agree.


Mr. Menendez’s indictment describes, in painstaking detail, a kind of “independence” that, even if legal, seems more like a convenient fiction.


The contribution was earmarked by Dr. Melgen for Mr. Menendez’s race and was spent in New Jersey on the senator’s behalf by the super PAC. And Mr. Menendez, the indictment suggests, was fully aware that the contributions were intended as a favor to him: Within days of the first check to the super PAC, the senator began pressing federal officials to intervene in a Medicare billing dispute worth almost $9 million to Dr. Melgen.


“The indictment of Senator Robert Menendez illustrates in stark terms the corrupting role that super PACs now play in our political system,” said Fred Wertheimer, the president of Democracy 21, which advocates stricter limits on campaign money. “The super PAC was used as the vehicle to buy corrupting influence with Senator Menendez.”


Dr. Melgen was not shy about throwing his weight around. Mr. Menendez not only helped arrange meetings with other Democratic senators, all of whom stood to benefit from the roughly $38 million the Senate Majority PAC would eventually spend on the 2012 election. He also saw to it that aides to Mr. Reid, and former aides working for the super PAC, also pitched in.


About one week after Dr. Melgen’s company sent its second check to Senate Majority PAC, he emailed Mr. Menendez a memorandum titled “Status of Medicare Audit and Appeal.” Two minutes later, Dr. Melgen sent the same attachment to a fund-raiser for the super PAC, a former aide to Mr. Reid. The fund-raiser pledged to take up the matter with Mr. Reid.


“Dear Sal,” the fund-raiser wrote to the doctor. “I’m going to see him on Tuesday. I will give this to him directly. Is that okay?”



The indictment does not name the fund-raiser, but the description in the indictment suggests that the individual is Jake Perry, a former Reid aide who was paid more than $200,000 to raise money for the super PAC during the 2012 election, according to campaign records.


Mr. Perry did not respond to a phone call and text message seeking comment. But he appears to remain a member of Mr. Reid’s inner circle. After the 2012 election, in which Democrats successfully held on to their majority, Mr. Perry started a lobbying firm in Washington. Mr. Reid provided a glowing endorsement in a news release announcing the move, calling Mr. Perry “a close friend and adviser.”


In a statement, the executive director of Senate Majority PAC, Stephanie Potter, said it “carefully adheres to the letter and the spirit of the law, and we take pride in that.” She added, “We take our separation from official government action very seriously and do not advocate legislation before the Senate.”


The fund-raiser, Ms. Potter said, no longer worked for Senate Majority PAC.


What happened after the contributions — an aggressive campaign by Senator Menendez and his staff to intercede with federal officials on behalf of Dr. Melgen’s various businesses — will be the basis for the senator’s prosecution. Yet the contributions themselves were legal, blessed by federal court decisions that allow wealthy individuals and corporations to make unlimited contributions to outside groups.


The Justice Department argued unsuccessfully to the Supreme Court in 2012 that allowing wealthy people to write huge checks would make politicians beholden to their biggest donors. “Such a regime would have a disastrous effect on the public’s confidence in our system of representative government,” the Justice Department wrote.


Last year, the Supreme Court, relying in part on the logic of the Citizens United decision, held in McCutcheon v. Federal Election Commission that the government could limit campaign donations only as a way to prevent explicit bribery, not to restrict donors who made campaign donations to gain political influence.


“Spending large sums of money in connection with elections, but not in connection with an effort to control the exercise of an officeholder’s official duties, does not give rise to such quid pro quo corruption,” the court ruled.


The ruling, critics argue, suggests a vast and growing intellectual gulf between the common understanding of political corruption and the far more narrow and limited legal definition being crafted by the Supreme Court.


In Mr. Menendez’s case, prosecutors will need to show that Mr. Menendez took official actions directly because of the campaign donations. Edward Loya, a defense lawyer who worked in the Justice Department’s public corruption unit until 2013, said the pattern of gifts and donations, followed by political favors, could be enough to prove that explicit connection.


Just as important, he said, is that the case is easy for jurors to understand. “A wealthy person is able to make donations and then get things done for himself,” Mr. Loya said. “Most people don’t have that kind of access and power.”





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