Robert Menendez indictment points to corrupting potential of super PACs

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 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 is also the first significant campaign corruption case evolving out of the Supreme Court’s Citizens United decision, which opened up new channels for the wealthy to pour money into campaigns even as it narrowed the constitutional definition of political corruption and made it harder for prosecutors to prove bribery.

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

Of the $751,000 in campaign contributions that 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 official Democratic Party organizations.

Instead, in 2012, Dr. Melgen gave two checks from his consulting company totaling $600,000 to a super PAC now called Senate Majority PAC, founded by current and former advisers to Senator Harry Reid of Nevada with the goal of preserving the Democrats’ hold on the Senate. (One co-founder is a former Reid aide who now works at the lobbying firm Cassidy & Associates, clients of which have poured hundreds of thousands of dollars into the group.) Unlike federal candidates and parties, super PACs and other legally independent entities can accept unlimited contributions from any source.

The constitutional reason, as Justice Anthony Kennedy wrote in the Supreme Court’s opinion in Citizens United, is that independent expenditures “do not give rise to corruption or the appearance of corruption.” But federal lawyers do not seem to agree.

Dr. Melgen earmarked his contribution to be spent in New Jersey helping on the senator’s re-election. Mr. Menendez, the indictment suggests, was fully aware that the contributions were intended as a favor to him: Within days of the first check, 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, 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.”

Mr. Menendez and his staff helped arrange meetings with two Democratic senators, who stood to benefit from the roughly $38 million the Senate Majority PAC would eventually spend in 2012. Senior aides to Mr. Reid, and former aides working for the super PAC, also pitched in. (Dr. Melgen, meanwhile, used his plane to fly Mr. Reid to a June 2012 fund-raiser for the super PAC, which reimbursed the doctor’s company for the flight.)

About one week after his company sent its second check to Senate Majority PAC, Dr. Melgen emailed Mr. Menendez about his Medicare case. Two minutes later, Dr. Melgen sent the same memo to a fund-raiser for the super PAC, a former aide to Mr. Reid, who 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?”

While the fund-raiser is not named, details of the indictment suggest it 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, campaign records show.

After the election, in which Democrats successfully held on to their majority, Mr. Perry, who did not respond to messages seeking comment, started a lobbying practice in Washington. Mr. Reid called him “a close friend and adviser.”

In a statement, the executive director of Senate Majority PAC, Stephanie Potter, said the fund-raiser no longer worked for the group. “Senate Majority PAC carefully adheres to the letter and the spirit of the law, and we take pride in that,” Ms. Potter wrote. “We take our separation from official government action very seriously and do not advocate legislation before the Senate.”

The aggressive campaign by Senator Menendez and his staff to intercede with federal officials on behalf of Dr. Melgen 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 independent groups.

During the 2012 case, McCutcheon v. Federal Election Commission, the Justice Department argued to the Supreme Court 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 department wrote.

But the court rejected the argument. Relying in part on the logic of the Citizens United decision, the justices held that the government could limit donations only as a way to prevent explicit bribery, not to restrict donors who seek 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.

Such decisions suggest a growing gulf between the workaday definition of corruption and the far more narrow and limited legal definition being crafted by the Supreme Court. And those who favor less regulation of political money argue that the Menendez case, however tawdry, does not disturb the court’s logic.

“The court’s position is pretty simple, and it is not that independent expenditures can never create gratitude in an officeholder,” said Bradley A. Smith, a professor of law at Capital University Law School. “Rather it is that as a constitutional matter, they do not pose a threat of corruption sufficient to justify the invasions of First Amendment rights that the ‘reformers’ crave.”

Mr. Menendez’s lawyers are expected to argue that, in part due to the Citizens United and McCutcheon decisions, the Justice Department cannot prove wrongdoing. To convict Mr. Menendez, prosecutors will need to show that he took official actions directly because of the donations. Investigators have said they believe they have a strong case, both because of the timing of the gifts and the favors and because of their recurring nature. Mr. Menendez’s former chief of staff, Danny O’Brien — described as “Staffer 1” in the indictment — could be a key witness. Prosecutors say he was the go-between for many dealings with Dr. Melgen, including asking for campaign checks. Court documents show he testified at the grand jury. A lawyer for Mr. O’Brien did not respond to requests for comment.

Edward Loya, a 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 convict Mr. Menendez.

Just as important, he said, is that the case is easy 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.”

The Indictment of Senator Robert Menendez

(From The New York Times)