Menendez in the Dock

The government claims that Melgen bribed Menendez with private flights, vacations to the Caribbean, and hundreds of thousands of dollars in political contributions. In exchange, Menendez allegedly used his position as a United States senator to secure immigration visas for Melgen’s girlfriends; persuaded the State Department to lobby the Dominican Republic on behalf of one of Melgen’s companies; tried to sway Medicare officials to side with Melgen over a billing issue; and endeavored to stop the Department of Homeland Security from donating equipment to the Dominicans to scan shipments through their ports (a Melgen-owned company hoped to sell security services).

There is little doubt that Melgen is a shady character. In 2009, the Center for Medicare and Medicaid Services discovered that he had overbilled Medicare by nearly $9 million for use of the drug Lucentis, which treats blindness in the elderly. His office was raided in January 2013 after the FBI received info from an anonymous tipster, and in April 2015 he was indicted on fraud charges.

Menendez’s too-cozy relationship with Melgen is clearly unethical and sufficient grounds for the people of New Jersey to remove him from office. An average citizen could not call Senator Menendez’s office out of the blue to secure a visa for a Brazilian girlfriend. But if he were to contribute $700,000 to the senator’s reelection campaign, it would apparently be a different story.

However, proving a criminal case against Menendez is easier said than done. Last year, the Supreme Court issued relevant guidance in McDonnell v. United States, which overturned the conviction of former Virginia governor Robert McDonnell. The federal bribery law prohibits an official from “receiv[ing] or accept[ing] anything of value” in exchange for performing “any official act.” Chief Justice John Roberts, writing for a unanimous court, ruled that an official act implied a decision or action on a matter, not merely setting up meetings, organizing events, or talking to officials, which is all McDonnell was found to have done. Following the Supreme Court’s ruling, a federal appeals court in July tossed out the corruption conviction of former New York assembly speaker Sheldon Silver.

Prosecutors in the Menendez trial have to prove that the senator was proactive, using his position not merely to set up meetings and present grievances but actively pushing officials on Melgen’s behalf. This has led to some interesting moments in the trial, particularly in Menendez’s alleged effort to secure Melgen his Medicare payments.

To that end, prosecutors called former Iowa senator Tom Harkin, who testified that in 2011, when he was chairman of the Senate Health Education, Labor and Pensions Committee, he had a meeting with Menendez and Melgen at Menendez’s request. They also called Jonathan Blum, a former administrator at the Centers for Medicare and Medicaid Services, who testified about a “hostile” exchange with Menendez, who was “clearly not happy” about policies affecting Melgen.

In a day of high political drama, prosecutors summoned former Health and Human Services secretary Kathleen Sebelius, who testified that former Senate majority leader Harry Reid asked her to a meeting with Menendez to discuss Melgen’s issues. Sebelius recalled thinking that a request from the majority leader to discuss a “billing issue” was “unusual,” as the HHS secretary does not normally get involved in such issues (and neither, for that matter, does the Senate majority leader).

The prosecution wrapped up its case in early October, at which point the Menendez defense called for a dismissal, arguing that the government’s case did not meet the standard the Supreme Court established in McDonnell. While the district judge seemed open to the defense’s argument, he ultimately decided not to throw out the case. The defense is expected to be done with its case by Halloween, which means the jury could receive the case by Thanksgiving, after closing summations and legal arguments regarding the judge’s instructions to the jury.

The timing is critically important for the remainder of the current Congress. If Menendez were to resign before January 16, 2018, New Jersey governor Chris Christie would appoint his replacement. On the other hand, if Menendez is acquitted or elects not to resign before that date, Christie’s successor will name his replacement. Democrat Phil Murphy is the overwhelming favorite to win that contest; he leads by about 16 points in the Real Clear Politics average.

Given the very narrow split in the Senate, the party affiliation of a Menendez replacement would be quite important. Senate Democrats, unsurprisingly, have been mum on whether Menendez should resign if he is convicted. He will surely appeal the conviction, so Democrats will likely want to stand by him, at least until January 16. If they do, there is little the GOP could do, as the Constitution requires a supermajority of two-thirds for the Senate to expel a member.

But the implications of the Menendez trial are arguably bigger than the balance of power for the next couple months. Government oversight of Medicare reimbursement is scandalously lax. Melgen’s fraud was egregious, but he was taking advantage of a loophole in government regulations that many have used. Avastin works as well as Lucentis to treat vision problems like macular degeneration in the elderly. The main difference is that Lucentis costs $2,000 per injection while Avastin costs just $50. Many doctors naturally prefer Lucentis—Medicare reimburses doctors for in-office procedures by calculating the average drug price plus 6 percent. So a doctor’s profit from each dose of Lucentis is in the range of $120, as opposed to about $3 for Avastin. It’s not surprising that in 2013 Lucentis added a reported $1 billion extra to Medicare’s total annual costs. Considering that Medicare will soon become the largest federal program, and the main driver of the public debt, the government needs to dedicate more resources to developing sensible reimbursement rates.

Moreover, the difficulty of proving a corruption charge should give advocates of good government pause. Like McDonnell and Silver before him, Menendez might very well get off. The burden of proof in such cases is high, as it should be considering a man’s freedom is at stake. But public corruption is just as much a civic issue as it is a criminal matter. A voter need not have proof beyond a reasonable doubt to conclude that an official is too corrupt to be reelected. If we really want to root out corruption from the government, we cannot rely upon federal prosecutors and the courts. We have to do it ourselves, via the ballot box.

And what is the difference between Menendez and the average politician? It is really only one of degree. There are all sorts of ways that members of Congress can profit from their public service without breaking the law. If the prosecutors are right, then Menendez was just too greedy and too sloppy. After all, campaigns are explicitly funded on the basis of conflicts of interest. Special interest groups donate to members of Congress who have oversight of their businesses. Would they really be spending all that money if they did not think it worked?

In sum, the shady relationship between Menendez and Melgen is outrageous, but so is “business as usual” in Washington, where all sorts of bad behavior is not only legal but considered de rigueur. Our politics will be no less corrupt if the jury convicts Robert Menendez but voters continue to look the other way.

Jay Cost is a contributing editor to THE WEEKLY STANDARD.