Thursday, April 2, 2015
Is Senator Menendez Guilty of Bribery, Chicago Rules, or Both?
Senator Robert Menendez was indicted yesterday on 14 counts, including 8 of bribery for trading political favors for luxury gifts. The 68 page indictment is quite specific in the facts. The Senator is accused of receiving about $1,000,000 in gifts and campaign contributions in exchange for running favors for Dr. Salomon Melgen, who was indicted on 13 counts. Over $750,000 was in campaign contributions and $40,000 to the Senator’s legal defense fund. Senator Menendez did not list many of the “gifts” on the required disclosure statements. The line between quid pro quo bribery and friendly campaign contributions is a very fine one. Imagine that: a politician accepts gifts and campaign contributions for doing political favors. It’s often called constituent services. Unions support President Obama, who just vetoed a Republican anti-labor bill. Democrats cater to the green energy whims of Thomas Steyer in exchange for tens of millions in campaign contributions. The Koch Brothers tailor their contributions to friendly Republicans. Corruption is endemic in politics. Four state Assembly Speakers have been indicted in the past year: Sheldon Silver of New York, Gordon Fox of Rhode Island, Bobby Harrell of South Carolina, and Mike Hubbard of Alabama. Three of the last four Speakers in Massachusetts have been convicted of felonies and Rob McCord, Pennsylvania State Treasurer, resigned in January while under federal scrutiny. New Jersey, the home of fictional Tony Soprano, certainly has a reputation for public corruption. The four term Democratic Senator Harrison Williams was convicted on nine counts of bribery and conspiracy on May 1, 1981 in the Abscam scandal. He served two years in prison. Six Congressmen, one from New Jersey, and the Mayor of Camden, New Jersey were also convicted in Abscam. The fictional movie, American Hustle, was partially based on Abscam. Democratic New Jersey Senator Robert “The Torch” Torricelli resigned from the Senate during his 2002 reelection campaign for taking campaign gifts from David Chang, who spent 18 months in prison for illegal campaign gifts. The gifts included expensive Italian suits, a $8,100 Rolex watch, 52 inch television, grandfather clock, and cash. The Justice Department declined to prosecute Senator Torricelli. Senator Menendez holds the Senate seat previously occupied by Senators Williams and Torricelli. And yet, something is wrong with the prosecution of Senator Menendez. Richard Frankel, the lead FBI Agent in New Jersey, said we “have a right to demand, honest, unbiased service and representation from [our] elected officials at all levels of government.” If so, a more deserving indictment would be of Senate Minority Leader Harry Reid, who engaged in a series of questionable real estate transactions. The Senator became rich after entering Congress poor. The Senator bought land outside Vegas for $400,000 in 1988 while his friend Jay Brown bought an adjoining parcel. Senator Reid transferred the land in 2001 to a partnership with Brown, Patrick Lane LLC. The transfer was not disclosed on the Senate financial disclosure forms. The land was sold in 2004 to a shopping center developer after a favorable zoning reclassification from residential to commercial. The Senator made $700,000 in the deal. He paid $10,000 in 2002 to Clair Haycock, a lubricants dealer, for 160 acres in Bullhead City, Arizona. He paid about $166/acre for land assessed at $2,000/acre. Senator Reid sponsored legislation six months later to benefit lubricant dealers with Haycock as a major beneficiary. Congress enacted a $286 billion transportation bill in 2005. Senator Reid attached $300 in earmarks, including $18 million to build a bridge over the Colorado River connecting Bullhead City, Arizona and Laughlin, Nevada. The value of his Bullhead City land for residential development soared. Harvey Whittemore was a wheeler-dealer lawyer with mob connections in Nevada politics. He was convicted in 2013 on three felony counts for over $130,000 in illegal campaign contributions to Senator Reid’s 2007 reelection campaign. At one time Senator Reid’s four sons worked for Whittemore’s law firm. The Senator earlier introduced legislation and contacted the EPA to get a favorable resolution of Whittemore’s plans to develop the environmentally sensitive Coyote Springs. And then we have the Bureau of Land Management’s attempt to seize the cattle of Nevada rancher Cliven Bundy last year to “protect the desert tortoise.” The Bundy land adjoins a 9,000 acre tract owned by China’s ENN Energy Group, which proposed to build a $5 billion solar energy farm on the land. The Bundy tract was to be turned over to ENN. The ENN land was earlier sold to ENN by the County when Rory Reid, the Senator’s son, chaired the County Planning Commission. Rory subsequently represented ENN in 2014. The BLM raid was initiated by a phone call by the Senate Minority Leader. The head of the BLM is a former senior aide to the Senator. BLM was planning to euthanize the desert tortoises on the adjoining land while professing to protect them on the Bundy Tract. Then Senator Obama entered into a questionable purchase of his Chicago house at 5046 Greenwood in the Kenwood neighborhood of Chicago. The house was listed for sale at $1,950,000 attached to a vacant lot listed at $625,000. The sellers wished to sell both as a package. The price was unaffordable to the Obamas. Tony Rezko, a Chicago wheeler-dealer paid the $650,000 for the vacant lot, appraised at $500,000 at the same day the Obamas purchased the house for $1,650,000 at a $300,000 discount in June 2005. Rezko then sold resold 1/6 of the vacant lot to the Obamas for $104,000. Senator Obama, according to the Chicago Sun Times, wrote to city and state officials in 2007 supporting a low-income, senior citizen development project headed by Rezko who then received $14 million in state funds, Rezko was convicted in 2008 of federal corruption charges and sentenced to ten years in prison. Senator Menendez’s big crime in the eyes of the Obama Administration is disloyalty. He is the one prominent Democratic Senator who has consistently spoken out against the Administration’s appeasement (my term) of Iran and cavalier disdain for Israel. As the son of Cuban refugees, he is vehemently opposed to the Obama Administration rapprochement with Cuba. The Eric Holder politicized Justice Department has responded with Chicago rules: Anything goes in politics. Anyway possible, clear the field; silence the opposition. The Senator's second in the eyes of the Obama Administration is that he is (or was) the ranking Democrat on the Senate Foreign Relations Committee. The Administration can tolerate some apostasy, such as from Senator Joe Manchin of West Virginis on coal issues, but not on the President's signature, legacy issue of an agreement with Iran. Senators Menendez and Purl Kirk (R. Ill.) introduced in January the Nuclear Weapon Free Iran Act of 2015 along with 14 co-sponsors. The Bill would tighter sanctions on Iran. The President is strongly opposed to the Bill. Senator Menendez stepped down yesterday as the ranking Democrat, replaced by Senator Ben Cardin (D. Del.) who will toe the line with President Obama. The last Senator to be charged by the Public Integrity Section of the Justice Department was Ted Stevens of Alaska. His conviction cost him reelection in 2008 but was subsequently reversed due to gross prosecutorial misconduct by the prosecutors. Let us also consider the indictment of Standard and Poor’s. Three major rating firms, Moods, S&P, and Fitch egregiously applied their imprimaturs on the mortgage backed securities for subprime loans. They bear a large degree of fault in the 2007 financial collapse. S&P downgraded the rating of long-term United States government debt to AA+ from AAA after the Budget Control Act of 2011. The Justice Department charged S&P in 2013 with fraud in rating several of the mortgage backed bond issues, seeking $5 billion in damages. The Justice Department has not charged either Moody’s, controlled by President Obama’s favorite investor, Warren Buffett, or Fitch. In the financial collapse, leading S&P, as well as several commentators, to believe the selective Justice Department prosecution was an application of Chicago Rules. Nevertheless, S&P settled the suit earlier this year for $1.38 billion while Moody’s and Fitch still have not been prosecuted. Senator Menendez may have crossed over the line; his actions may not pass the sniff test, but the Justice Department is mighty selective in initiating the prosecution. It also declined yesterday to prosecute Lois Lerner in the IRS targeting of conservative groups. Chicago Rules also require loyalty to your supporters.