What the Menendez Case Tells Us About the State of U.S. Public Corruption Law
It’s not easy for prosecutors to win a bribery case against a politician these daysTweet
Over two years ago, a grand jury charged Democratic Senator Robert Menendez of New Jersey and Florida eye doctor Salomon Melgen with 22 counts of conspiracy to commit bribery, honest services fraud, and false statements. That case finally came to trial this year. Justice Department prosecutors presented a variety of evidence from witness testimony, including from a former Cabinet official, to emails to show that Menendez took actions to benefit Melgen, who was a major campaign donor. Menendez and Melgen’s attorneys argued that Menendez took actions because of policy concerns and friendship, not because he was receiving campaign assistance and gifts from Melgen.
After over a week of jury deliberations, the jury in New Jersey deadlocked with no verdict. The judge declared a mistrial today.
While the decision on whether Menendez and Melgen broke the law came down to the jury, most of the facts in the case are not in dispute.
The facts central to the case are that Senator Menendez benefitted personally from lavish gifts and electorally through hundreds of thousands of dollars in campaign contributions from Melgen who, according to the evidence in a separate criminal case that resulted in a Florida jury convicting Melgen this April on 67 counts of Medicare fraud, ripped off taxpayers to the tune of millions of dollars. Melgen became rich off of Medicare, becoming its highest paid doctor in 2012 with $20.8 million in Medicare payments that year alone—60 times what the average doctor was paid from the program that year. When Medicare began to get wise to Melgen’s fraud scheme in 2009, Menendez, at Melgen's urging, tried repeatedly over the course of four years to change Medicare’s policy to allow Melgen to keep millions of these taxpayer dollars.
The jury in the New Jersey public corruption case couldn’t unanimously decide whether Menendez’s actions broke the law or not. But legal doesn’t mean it’s not corrupt.
The Menendez case is a relatively rare case of a politician facing criminal prosecution even though there is a widespread perception that they work more for big campaign contributors than for their own constituents. The New Jersey jury didn't deadlock in a vacuum. In a series of decisions stretching back two decades, the Supreme Court has increased the burden for prosecutors fighting public corruption, making it more difficult for them to successfully bring cases. In recent years, Congress has introduced legislation to partially roll back the deleterious impacts these decisions have had on the Justice Department’s anti-corruption efforts. But so far, those bills have not become law.
The Public Believes Politicians Are Bought Off
In 2015, 75 percent of Americans believed corruption was widespread in the government, according to a Gallup poll. An in-depth 2015 study by the Pew Research Center found that 76 percent say “money has a greater influence on politics and elected officials today than in the past.” The same number said government is “run by a few big interests,” against 19 percentage who agreed that the government “is run for the benefit of all the people.” The influence of “special interest money” was listed as one of the biggest problems with elected officials, according to Pew.
At the beginning of Donald Trump’s campaign for president in 2015, he made a comment in line with these widely held views: “I gave to many people before this—before two months ago, I was a businessman. I give to everybody. When they call, I give. And do you know what? When I need something from them two years later, three years later, I call them, they are there for me. That’s a broken system.”
It’s Getting Harder to Prosecute Public Corruption
But despite these perceptions, public corruption prosecutions by the Justice Department are at the lowest level in two decades, according to a 2016 analysis of federal data by the Transactional Records Access Clearinghouse, a group based at Syracuse University (one of POGO’s board members is a co-director of the group).
While perception is not always reality, there is a major reason why fewer prosecutions against public officials for corruption are being brought: In a series of decisions, the United States Supreme Court has made it much harder to prosecute public officials for corruption when they take actions in line with the wishes of their big campaign donors and gift givers.
The most recent decision was last year’s ruling in the Bob McDonnell case. McDonnell, the former Republican governor of Virginia, took $175,000 in gifts from the Jonnie Williams, the owner of a nutrition supplement company. McDonnell, meanwhile, arranged a number of meetings for Williams with Virginia government officials. A jury convicted McDonnell. But the Supreme Court overturned that conviction by narrowing the definition of an “official act.”
Menendez & the Citizens United Decision
The Justice Department noted that Melgen’s large contributions through his company “to benefit Menendez’s reelection effort was made possible by the Supreme Court’s 2010 decision in Citizens United v. FEC… which invalidated federal prohibitions on corporate contributions to political action committees.”
Menendez himself had criticized the Citizens United decision.
On CNN, he said, “the last thing the average citizen needs who already feels that these big monied interests already have too much influence in Washington is to add more money.”
“Setting up a meeting, talking to another official, or organizing an event (or agreeing to do so)—without more—does not fit that definition of an ‘official act,’” Chief Justice John Roberts wrote. All nine justices agreed that an official act “must involve a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee,” and the public official must “intend to exert pressure on another official or provide advice.”
Former federal prosecutor Randall Eliason gave The Atlantic magazine an example of what is now legal for politicians to do thanks to the McDonnell decision:
Currently, I could set up a system where I’m a governor and I tell everybody who might want to meet with someone in my cabinet to make a pitch, or try to get a contract, or advocate for some program. I could say, “Okay, I’ll set up a meeting for you. The cost is $10,000.” And that just goes in my pocket. That’s not a campaign contribution; it’s not going to be reported to the public anywhere. That’s just going to be a gift for me, and I’ll set up the meeting. I’m not going to tell anybody what to do, I’m not going to tell them what to decide, I’ll just get you in the room. And if you don’t pay me, no meeting.
“I mean, access is valuable, right?” Eliason added. Because of the McDonnell decision, according to Eliason, “you can just pay for access as long as the official doesn’t actually agree to decide something for you, but can get you in the room with the other movers and shakers who are going to do it. Now that’s not considered corruption.”
A few convictions have already been thrown out over the last year because of the McDonnell decision, such as that of Sheldon Silver, who was once the speaker of the New York state assembly.
In coverage of the Menendez case, the McDonnell decision has received the greatest amount of commentary. But it’s not the only ruling by the nation’s highest court that has raised hurdles for prosecutors.
In its 2010 ruling in Skilling v. United States, the court “substantially narrowed the reach of the ‘honest services fraud’ statute“ by holding that it applies only to ”bribery and kickback schemes,“ not to ”undisclosed self-dealing by a public official or private employee,” according to an analysis published by the American Bar Association.
That decision had impacts too. One was that “a New Jersey district court dismissed charges against Joseph A. Ferriero, the former Democratic Party chairman of Newark’s Bergen County, for not disclosing his ownership in a firm that solicited contracts in towns where he had political influence,” according to the analysis.
“Because there had been so many prosecutions under honest-services fraud, officials were on warning that taking gifts could be used against them in an indictment,” Melanie Sloan, the then-executive director of the non-profit Citizens for Responsibility and Ethics in Washington, said in 2010 to the Washington, D.C. bar association’s magazine.
Sloan, a former federal prosecutor, said that public officials “now know how much harder it will be for the government to bring charges against them and will be less cautious in their behavior.”
Legislation was introduced to reverse the impact of Skilling. Senator Patrick Leahy (D-VT) said his bill, called the “Honest Services Restoration Act,” would “[target] cases in which officials failed to disclose the interests they benefited in violation of federal, state and local disclosure laws.”
The legislation attracted skepticism from some quarters and did not garner bipartisan support. During a Senate Judiciary Committee hearing in 2010, then-Senator Jeff Sessions (R-AL), who is now Attorney General, said “’Undisclosed self-dealing.’ … Give me a break.”
Leahy’s bill did not become law.
Another major blow to the Justice Department’s anti-corruption powers occurred in 1999, when the Supreme Court in U.S. v. Sun-Diamond Growers of California made it much more difficult for prosecutors to use federal bribery and gratuities laws. According to a law review article by Randall Eliason, this decision led federal prosecutors to rely more on the honest service fraud law in public corruption cases.
Another Leahy-sponsored bill, the “Public Corruption Prosecution Improvements Act,” attempted to undo the effects of the Sun-Diamond ruling. This bill had better luck attracting bi-partisan support, with Sen. John Cornyn (R-TX) and Sen. Jeff Sessions co-sponsoring a version of it. The Justice Department also threw its weight behind the bill. But that measure also failed to become law, despite multiple attempts made over several sessions of Congress.
One sticking point, according to critics of the bill, is it would go too far in rolling back Sun-Diamond, making it too easy to prosecute public officials for trivial violations of gift rules. Eliason proposed a middle-ground solution that “retains the core nature of the ban on gratuities while correcting the overly restrictive language of that statute as interpreted by the Court in Sun-Diamond.”
Naturally, the criminal defense bar has welcomed these changes wrought by the Supreme Court. The Justice Department can easily overreach when the laws are vague, and individuals—especially those without substantial means—can be overwhelmed by the power of prosecutors.
As then-Sen. Sessions said at that 2010 hearing, “I do not think they [the Supreme Court] were trying to benefit criminals and crooked politicians or crooked CEOs, but I do think that they correctly raise a concern that a Federal criminal statute should be clear; it should tell the court precisely what it is the prosecutor must prove; and the rights of defendant certainly depend on clarity in knowing what they are charged with and what the law is.”
“Most American business and public officials try to stay within the law, and you do not want to be in one of these situations where the perception is among the private sector and the public sector that anybody that wants to ‘get me’ can go out and find something and prosecute me for it. That is an overreach, too, and we do need to think through that. Otherwise, it can become—the prosecution can become a tool of political power and punishment of opponents,” added Sessions, who is now the nation’s top law enforcement official.
Sessions’ sentiments make sense.
But at the same time, there is a significant government interest in combating public corruption. Such corruption—or even the appearance of it being widespread—can poison the legitimacy of public institutions in the eyes of the public and lead to government actions and policies that only benefit the connected few. The cumulative effect of the Supreme Court’s decisions makes prosecutors’ jobs more difficult, even when there is seemingly hard evidence that an official took an action influenced by gifts or campaign donations, as is what the Justice Department asserted happened in the Menendez case.
Congress could restore a sensible balance in public corruption law. This happened in the late 1980s, after the Supreme Court narrowed the “honest services” law in the case of McNally v. United States. The next year, Congress amended the statute to undo the decision’s impact (which the Court undid in Skilling). But our lawmakers in Congress are heavily dependent on campaign funding from corporate and other powerful interests, many of whom prefer a system where political donations and gifts translate into access and influence. Too often, it takes a scandal and the searing heat of public opinion to move Congress to act.