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Political Contributions Conflict: Frauds or Friends?

Political Contributions Conflict: Frauds or Friends?The Department of Justice’s 2015 indictment of Senator Bob Menendez on 14 counts of corruption and “honest services” fraud highlights some difficulties with the 2010 Citizens United and Speechnow.org decisions.

In “Citizens United vs Federal Election Commission” the U. S. Supreme Court ruled 5 – 4 that “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption” and that a person or corporation making independent expenditures “may have influence over or access to elected officials” but that “does not mean those officials are corrupt.” Technically, bribery is the direct and explicit exchange of money for favors, so if you give me money without explicitly exchanging it for a favor and I thereafter happen to perform that favor for you, we’re home free!

In “Speechnow.org vs Federal Election Commission” the Federal Court of Appeals ruled that Political Action Committees (PACs) that did not make contributions to candidates, parties, or other PACs could accept unlimited contributions from individuals, unions, and profit/non-profit corporations to make independent expenditures.

Before and after those decisions, PACs took that principle to heart, as there are currently more than 4,500 U. S. PACs. The court decisions gave birth to a number of “Super PACs” or “independent expenditure only” committees that cannot make direct contributions to candidates or parties but can independently spend unlimited amounts. The Democratic “Senate Majority PAC” is the Super PAC involved in Menendez’s scandal.

As I understand the indictment’s gist:
– Dr. Salomon Melgen’s Vitreo-Retinal Consultants made two $300,000 donations to the Senate Majority PAC but earmarked for New Jersey during Menendez’s 2012 re-election campaign for his New Jersey seat;
– Menendez supported visa applications for Melgen’s girlfriends;
– Menendez urged the State Department not to undermine a port-security contract with the Dominican Republic signed by a company that Melgen acquired;
– Menendez interceded for Melgen with Kathleen Sebelius, then-secretary of the Department of Health and Human Services, to overrule a decision by Centers for Medicare and Medicaid Services that Melgen overbilled Medicare. (Sibelius said there was nothing she could do to overrule the agency’s decision; Melgen was later indicted on 46 counts of Medicare fraud).

Menendez argues that Melgen was simply doing favors for Menendez and Menendez was simply doing favors for Melgen.

It will be interesting to see how the Justice Department will prove that the Melgen-Menendez situation is quid pro quo bribery, especially in light of the Citizens United and Speechnow.org decisions.