Sen. Robert Menendez faces new questions on ties to big donor

A new report that Senator Menendez sponsored a bill that could have helped a major Florida donor's investment in natural gas vehicle conversion rekindles rumors of ethics violations.

By , Correspondent

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    Sen. Robert Menendez (D) of New Jersey, a member of the Senate Banking, Housing and Urban Affairs Committee, asks questions during testimony at a congressional hearing in Washington on Feb. 14 on how federal regulators dealt with the 2007-'09 financial crisis.
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More trouble is looming for Sen. Robert Menendez (D) of New Jersey: According to an Associated Press investigation, the embattled New Jersey Democrat sponsored legislation that, if passed, would have aided one of his biggest donor's investment in a natural gas vehicle conversion company.

The report, published Monday, stated that Senator Menendez sponsored a bill to give tax credits and grants to truck and heavy vehicle fleets that converted to natural gas. The bill could have benefited Salomon Melgen, the Florida eye doctor whose close relationship with Menendez has spurred a Senate ethics investigation. Dr. Melgen is an investor and member of the board of directors of Gaseous Fuel Systems Corp., which designs, manufactures, and sells products to convert diesel- and gas-fuel vehicles to natural gas.

Menendez’s backing of the natural-gas bill marks another convergence of interest between the politician and a major donor and is a thorn for the senator. But political watchers in New Jersey say the bill sponsorship is one part of a larger clean-energy agenda from the senator, who has a history of supporting environmental causes. As such, it is unlikely this latest allegation represents a conflict of interest, says Brigid Harrison, a political scientist at Montclair State University, who predicts that Menendez will survive the latest storm.

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“I’m still not convinced ... that this kind of behavior reaches to the status where it becomes enormously problematic in voters’ minds,” says Professor Harrison. “I’m not seeing any illegality or conflict of interest here.”

The bill-sponsorship revelation revives the larger issue of the senator’s relationship with Melgen, with recent reports suggesting that Menendez was providing political favors for Melgen in exchange for campaign support.

Menendez used Melgen’s private jet for two personal trips to the Dominican Republic in 2010, flights that were not reimbursed until three years later, when news reports called the senator’s conduct into question.

Menendez also intervened in a Medicare billing dispute between Melgen and federal authorities, as well as a port security contract, allegedly in order to protect the interests of his friend and donor, according to news reports. The allegations are compounded by a $700,000 donation Melgen made to Majority PAC, a "super political-action committee" created to elect Senate Democrats that ultimately made a $582,500 contribution to Menendez’s 2012 reelection campaign, according to the Center for Responsive Politics.

Menendez has vehemently denied all allegations of impropriety, including any allegations of conflict-of-interest stemming from this latest report. His office did not respond to calls regarding his sponsorship of the natural gas bill.

According to the AP report, Menendez joined Senate majority leader Harry Reid (D) and Utah Sen. Orrin Hatch (R) as a key backer of the natural gas bill. Soon after, Melgen joined the board of directors of Gaseous Fuel Systems Corp., which makes technology to perform such conversions. Though his investment in the company is confidential under US Securities and Exchange Commission rules, the company required a minimum investment of $51,500, according to the AP.

Ultimately, the bill didn’t get enough votes to make it out of the Senate. However, while it was under consideration, a consultant for Gaseous Fuel Systems spent $220,000 lobbying Menendez and other congressional officials, according to interviews and Senate records as reported by the AP. 

“There is no evidence that Menendez offered direct help or intervened on behalf of the company or Melgen,” the AP said in its report. “Instead, the connection between the two men’s interests in natural gas is the latest example of the close symmetry between the senator … and his millionaire backer.”

Evidence of “close symmetry” in this latest development, say analysts, is not enough to topple Menendez.

“Menendez has been involved in clean-energy technology for a long time,” says Ross Baker, a political scientist at Rutgers University in New Brunswick, N.J. “In light of Melgen's apparently limited and distant role in GFS, I think it is more of a coincidence than anything more sinister. I think it is as likely that Menendez got Melgen interested in converting truck fleets to natural gas as it was the other way around.”

Other clean-energy initiatives the senator has supported include co-sponsoring legislation aimed at jump-starting offshore wind energy, extending solar energy tax credits, and creating block grants to spur green-energy projects.

Menendez recently reintroduced the Repeal Big Oil Tax Subsidies Act and Close Big Oil Tax Loopholes Act, legislation he originally introduced in the 112th Congress to end tax subsidies for the “Big 5” oil companies.

“It isn’t that this came out of the blue, it’s part of a larger cohesive agenda ... to deal with energy issues the country is facing,” says Harrison of Montclair State University. “His record is an accurate reflection of his policy concerns, and this is one part of that.”

And though the AP report singled out Menendez, the senator isn’t alone in supporting the natural gas bill – or in sharing a passion with supporters for similar causes. In fact, the House version of the natural gas legislation had 181 co-sponsors.

The natural gas industry spends hundreds of thousands of dollars lobbying members of Congress, including Menendez and his staff. “They are not alone in being lobbied,” says Harrison.

Menendez’s ethics controversy has had an impact on his poll numbers, and this latest development may further damage the senator’s image.

A Quinnipiac University poll found Menendez’s approval ratings plummeted 15 percentage points between January and February, as news reports emerged about his relationship with Melgen. His approval rating dropped form 51 percent in mid-January to 36 percent in mid-February. The same poll found only 28 percent of New Jersey voters said the senator was “honest and trustworthy.” 

But Menendez does not face voters again until 2018.

“I don’t think these microbial issues that deal with campaign finance and sponsorship of legislation are enough to make a difference in most voter's minds in this state,” says Harrison.

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