A key underpinning of the defense presented by lawyers for U.S. Sen. Robert Menendez, D-New Jersey, to corruption charges may be undermined thanks to the trial judge’s ruling that federal prosecutors could proceed under the “stream of benefits” bribery theory, a number of legal observers are saying.
Defense lawyers have maintained that Menendez, New Jersey’s senior senator, received nearly $1 million in travel, accommodations and campaign contributions from co-defendant Salomon Melgen because the two are close friends, not because Melgen sought to benefit from the power of the senator’s office. But U.S. District Judge William Walls’ Oct. 16 ruling allowing the prosecution to present the stream of benefits theory invites jurors to see the relationship as transactional, some lawyers said.
That ruling could have been a turning point in the corruption trial of Menendez and Melgen, which is now in its eighth week.
“What that stream of benefits theory does is turn that friendship defense on its head. The idea of having access and being able to buy someone over time has appeal. It’s a hard one to fight,” said Mark Lee, a former federal prosecutor and now a white-collar defense lawyer at Blank Rome in Philadelphia.
“Unless you can really explain the relationship in a way that’s meaningful and credible to the jury, [the friendship defense] is a hard case to present,” said Lee.
The prosecution’s reliance on the stream of benefits theory allows the entire indictment to be put to the jury, said Michael Weinstein, a former trial attorney for the Department of Justice who is now chairman of the white-collar defense and investigations department at Cole Schotz in Hackensack. And that theory conflicts with the defendants’ friendship defense, Weinstein said.
“The difficulty [of relying on the friendship defense] is if you’re a friend of someone, why is that friendship so dependent on huge political contributions? The optics of the political contributions is very bad for the defense. If Melgen gave $5,000 or $10,000, it would be more plausible but Melgen went far beyond that,” Weinstein said.
Menendez is accused of intervening in a Medicare billing dispute on behalf of Melgen’s ophthalmology practice, contacting executive branch officials to discuss regulation of Melgen’s port security business, and seeking to expedite visa applications for three of the doctor’s women friends. Prosecutors say that between 2006 and 2013, Melgen donated $700,000 to Democratic political action committees, provided Menendez luxury hotel accommodations in Paris and the Dominican Republic, and gave the senator free flights on his private jet and on commercial airlines. Under the stream of benefits theory, a public official receives periodic benefits or gifts rather than a gift that is directly linked to a particular favor.
Defense lawyers in the case have taken pains to demonstrate to the jury the closeness of the friendship between Menendez and Melgen. On Oct. 16, the defense called the senator’s son, Robert Menendez Jr., to the stand and questioned him about the relationship between his father and Melgen.
“They are like brothers to each other. There’s no person that my dad has that type of relationship with. It’s different than all the other friendships. It’s definitely his closest friendship. And it’s someone that he treats and feels like he is a brother to him. I believe it runs both ways,” the younger Menendez said.
Earlier this month, U.S. District Judge William Walls made comments suggesting that the stream of benefits theory might have been invalidated by the U.S. Supreme Court’s June 2016 ruling in McDonnell v. United States, in which the bribery conviction of former Virginia Gov. Bob McDonnell was overturned. Lawyers for Melgen and Menendez moved under Rule 29 of the Federal Rules of Criminal Procedure to dismiss the indictment, citing the McDonnell ruling.
But on Oct. 16, Walls said McDonnell “is not antagonistic to the stream of benefits theory. A reading of the Supreme Court decision reveals an absence of definite conflict between the now- limited definitions of official acts of a public official, and the stream of benefit theory, a governmental tool long used to prosecute bribery charges against public officials.”
Rule 29 motions for dismissal are often made but rarely granted, lawyers said. Now that the court has found enough evidence to sustain the prosecution’s burden to show Menendez was bribed under the stream of benefits theory, the next major hurdle for the prosecution is to have a jury instruction with a broad definition of official acts, said Weinstein. The defense would like a narrow definition, Weinstein said.
The judge’s ruling finding the stream of benefits theory survives after McDonnell removes a major obstacle for the government and improves the chances of obtaining a conviction, said Kevin Marino, a white-collar criminal defense lawyer at Marino, Tortorella & Boyle in Chatham, New Jersey. However, Marino said he respectfully disagrees with the District Court’s finding that McDonnell did not disrupt the stream of benefits theory. Marino said that if Menendez is convicted on that theory, there is good chance that the U.S. Court of Appeals for the Third Circuit would take up that issue and reverse the conviction.
Lee, of Blank Rome, represented U.S. Rep. Chaka Fattah, D-Pennsylvania, in his 2016 corruption trial, which ended in a conviction on federal racketeering and influence-peddling charges. Lee says he does not agree that the Third Circuit is likely to reverse Walls’ holding on the validity of the stream of benefits theory after McDonnell.
“I’d be hard-pressed to see the Third Circuit forge any new ground there. It would be difficult for me to see the Third Circuit go the way the defense wants them to go. That said, there could be fact issues that could come out that make the evidence sufficient to sustain the conviction,” he said.