In Menendez's troubles, echoes of past scandals

By Henry C. Jackson

Associated Press

Published: Saturday, May 4 2013 9:28 a.m. MDT

In January, Menendez reimbursed the doctor $58,000 for flights to the Dominican Republic aboard his private plane. Painter said Menendez's flights with Melgen were a red flag that elevated his case.

"It becomes a question of what other stuff is there," he said.

Menendez has acknowledged at least three areas where his official work appeared to serve the interests of Melgen, though he has steadfastly denied wrongdoing.

A staffer in Menendez's office sent emails to the Homeland Security Department in January questioning potential U.S. donations of cargo-screening equipment to the government of the Dominican Republic.

At the time, donated screening equipment could have jeopardized a lucrative port security contract for a company owned by Melgen. The government told Menendez's office that it had no plans to donate equipment. That came six months after Menendez himself raised concerns about the Dominican government's port security in a Senate hearing with senior officials from the State and Commerce departments.

Menendez sponsored legislation with incentives for natural gas vehicle conversions that could have benefited a company that Melgen was invested in called Gaseous Fuel Systems Corp. of Weston, Fla.

In another instance, Menendez has acknowledged that his office contacted U.S. health agencies in a way that would help Melgen. Menendez said he contacted the U.S. Centers for Medicare & Medicaid Services to ask about billing practices and policies. The contacts came during a dispute between CMS and Melgen over millions of dollars in Medicare payments.

It's Menendez's interactions with health officials that draw the most direct comparisons to the Keating Five case, Sloan said.

"I think we're always going to see stuff like this," Sloan said. "But it also opens a window into the way Congress operates. There may not be a quid pro quo in every case, but they're very often taking actions for top donors and that's why people are cynical."

The Senate Ethics Committee also investigated the Keating Five case, wrapping up its work in 1991. It centered on five senators — four Democrats and one Republican, McCain. All took contributions from Keating, a real estate investor and savings and loan owner who became the face of the savings and loan crisis that cost many investors their life savings. Keating's Lincoln Savings and Loan was among many institutions that failed.

McCain took $112,000 in donations from Keating, his family and associates for early political campaigns. Like Menendez, McCain also flew on a plane owned by his donor, traveling to the Bahamas among other places.

McCain eventually repaid all of the donations tied to Keating to the U.S. Treasury and reimbursed Keating for his travel. Again like Menendez, McCain said at the time he believed that Keating had previously been repaid for his travel, but he had not been.

An ethics probe was triggered after McCain and the other senators advocated for Keating with financial regulators in 1987, as they investigated Keating and considered referring criminal charges to the Justice Department. Keating eventually went to prison.

The Senate Ethics Committee found three senators had interfered significantly and inappropriately with federal regulators. McCain was cleared of acting improperly, but the committee said he had "exercised poor judgment in intervening with the regulators." None of the five senators involved resigned, and two — John Glenn, D-Ohio, and McCain — ran successful re-election campaigns.

Writing about the case in his 2002 book "Worth the Fighting For," McCain said he vowed to never again intervene in regulatory decisions if "such interventions could be construed, rightly or wrongly, as done solely or primarily for the benefit of a major financial supporter of my campaigns."

In interviews about Melgen, Menendez has sought to distinguish between questioning policies he said he finds questionable and taking actions to benefit his top contributor.

"The fact that someone is a donor does not do away with the right or the opportunity to consider whether something is correct or incorrect, to ask questions, raise concerns," Menendez has said.

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