February 5, 2018

Menendez Shocker? Not Exactly: Analysis of DOJ's Decision to Drop Charges in NJ Senator's Corruption Case

5 min

On January 31, 2018, the Justice Department dropped the remaining charges in its corruption case against U.S. Senator Robert Menendez (D-NJ) one week after U.S. District Court Judge William Walls dismissed the counts that were based on political contributions. This left only the more elusive "stream of benefits" theory for the government to pursue.

The DOJ's decision raises the question: Is Menendez another example of a major corruption prosecution swept aside by the Supreme Court's 2016 McDonnell decision?

The answer is "not really." What happened in Menendez was principally due to factors other than McDonnell. The Menendez prosecution's demise was more a result of the weakness of the government's proof under the stream of benefits theory of bribery, which existed long before McDonnell and continues to exist today. The stream of benefits theory is particularly vulnerable to a defense that was strenuously raised by the Menendez defense team at trial—that the bribe payer, Melgen, and Senator Menendez had been friends for close to 20 years and that any benefits paid by Melgen to Menendez were unrelated to the official acts at issue.

Analysis of any federal political corruption case today would be incomplete without consideration of the Supreme Court's watershed 2016 decision to reverse the conviction of former Virginia Governor Bob McDonnell. Writing for a unanimous Court, Chief Justice John Roberts narrowed the definition of the "official act" or the "quo,"—required to establish a quid pro quo, excluding what the Court believed to be more routine constituent services, such as setting up meetings between constituents and government agencies. The decision upended several prominent political corruption cases, leading to the reversal of the convictions of New York State Senate Majority Leader Dean Skelos and Speaker of the State Assembly Sheldon Silver. Those cases will be retried later this year.

Like the defense teams in Silver, Skelos, and every other recent public corruption case, the Menendez defense team argued for dismissal in its recent Rule 29 motion based on McDonnell. Notably, however, while Judge Walls agreed to dismiss the political contributions counts of the charges against Menendez (on non-McDonnell bases), he refused to find that the Senator's actions could not be considered official acts by any rational juror. In other words, the court found that the acts alleged to have been committed by Senator Menendez, the "quo" in the "quid pro quo," could constitute "official acts" under McDonnell.

Moreover, the Menendez court explicitly rejected the defense argument that McDonnell invalidated the stream of benefits theory in corruption cases. Under that theory, a quid pro quo can be established by a course of conduct of gifts and favors flowing from the bribe payer to a public official in exchange for official acts on an "as needed" basis or as such opportunities arise. Under this theory, which can also be understood as a theory of keeping a public official on retainer, there need not be a specific quo identified in exchange for the quid at the time the illegal agreement is entered. Ultimately, Judge Walls' rejection of the defense's McDonnell-based argument to invalidate this theory of liability is unsurprising. For one, as Judge Walls noted, Justice Sonia Sotomayor authored the stream of benefits doctrine when she sat on the Second Circuit, and she joined the majority's decision in McDonnell, which did not overrule the stream of benefits theory. Furthermore, other courts that have addressed the issue have held that McDonnell left the stream of benefits theory of liability intact. See, e.g., United States v. Skelos, Nos. 16–1618, 16–1697, 2017 WL 4250021 (2d Cir. Sept. 26, 2017); United States v. Repak, 852 F.3d 230 (3d Cir. 2017).

So if McDonnell was not outcome-determinative, why then did DOJ drop the case? For one thing, the government likely concluded that proving the stream of benefits counts alone would be difficult in light of the 20-year friendship between Menendez and Melgen, especially considering the dismissal of the political contribution counts. Indeed, the dollar value of the political contributions from Melgen (approximately $660,000) eclipsed the value of the benefits alleged to have been conveyed on the stream of benefits counts—those benefits were flights on private jets, first-class commercial flights, a charter jet flight, and a three-night hotel stay in Paris. Juxtaposing the low value of the benefits conveyed on the remaining counts against the 20-year friendship, it is plain that the government's proof on the stream of benefits counts standing alone was threadbare to begin with and was therefore susceptible to the defense that the benefits had nothing to do with obtaining an official action and everything to do with the two defendants' friendship. In short, it was only with the proof of the political contributions and the context that those contributions established that the government's narrative on these counts could have traction. The defense would likely have succeeded in excluding any reference by the government to the political contributions made by Melgen in a retrial in light of the dismissal of those counts. The foregoing may explain DOJ's statement that the reason for the dismissal "was the impact of the court's Jan. 24 order on the charges and the evidence admissible in a retrial." Bill Weichert, Menendez Corruption Case Nixed After DOJ Drops Retrial Bid, Law360.com (Jan. 31, 2018) (emphasis added).

And perhaps what is most telling about the strength of the government's case is the jury count after the first trial. Press accounts following the November mistrial reported that the jury stood at 10–2 in favor of acquittal at the time the mistrial was declared.

In sum, while McDonnell made an appearance in Menendez, its role in the case's demise was at best a minor one.