As Donor/Pal Flies “Under the Radar,” Will Senator Menendez Mind His Words Or Eat Them?

February 22, 2013

A curious angle to the story about Senator Bob Menendez and his relationship to Dr. Salomon Melgen, his donor-benefactor-travel pal, has gotten obscured in the larger ethical churn.

Dr. Melgen is the ophthalmologist who donated tens of thousands of dollars in campaign contributions to Senator Menendez, and took Mr. Menendez on his private plane to the Dominican Republic (D.R.) for vacations in 2010 that the Senator did not disclose.

For his part, Menendez lobbied the U.S. government to get its support for a port security contract in the D.R. for the doctor’s company, and intervened on Melgen’s behalf by questioning a government audit that revealed overbilling in the doctor’s practice.

The Senator sent a reimbursement check for $58,500 to Melgen’s company after the unreported flights became public, which relieved Menendez of the responsibility to make a public disclosure about his trips with the eye doctor, and appears to have cost him an ‘arm and a leg’.

Now, Dr. Melgen, as was reported earlier this month, has asked the Federal Aviation Administration (FAA) to “block his plane’s flight activity from public view in air trafficking systems.”  He seems eager to cover the trail (or the contrail).

Stunningly, the FAA agreed and will allow Dr. Melgen to keep his flight records secret; this applies not only to future flights, but also to on-line access to historical records.

In “Doctor now flying under the radar,” Tracey Eaton, an investigative reporter with whom our organization is working, has posted a detailed piece about Dr. Melgen, the FAA’s powers of disclosure and authority to keep records secret, and why its decision to shield records Melgen’s flights raises issues around accountability and transparency, and possibly the Menendez investigation itself.

As Mr. Eaton writes:

“In January, before the flight activity was blocked, the Associated Press reported that Melgen’s plane had made more than 100 trips to the Dominican Republic and about a dozen flights included brief stopovers in the Washington area.”

Is there anyone in the Congress who might think Melgen’s request was a little fishy?  Or, that the FAA’s decision is antithetical to the idea of good and open government?

How about Senator Bob Menendez, a champion of disclosure?

  • In 2010, he took credit for writing provisions of the Dodd-Frank Act, which toughened regulation after the economic crisis, to increase transparency in the trading of the financial instrument called derivatives.
  • In 2011, he organized a letter cosigned by nine Senate colleagues to the Department of Transportation demanding that airlines disclose their fees.
  • That same year, he sponsored legislation with a section to require disclosure by companies for certain business activities with Iran.
  • In 2012, he sponsored legislation to require corporations to disclose their campaign donations to shareholders, following the Citizens United Supreme Court decision.
  • As a candidate for reelection in 2012, Menendez released five years of his tax returns, as a spokesman explained, in the full spirit of transparency.
  • Only a few weeks ago, when Senator Menendez traveled to Afghanistan, he told President Karzai that the U.S. expects elections in his country next year to be fair, free, and (you guessed it) transparent.

Senator Menendez even told a constituent a few years back that he’d consider supporting legislation to protect coastal New Jersey’s fish population, because he believed in transparency in the management of fisheries.

Isn’t the Senator’s next step, well, transparently obvious?

He could do nothing; eat his words on disclosure and transparency.  Or, he could write the FAA and demand that the shield concealing Dr. Melgen’s flight records be removed.  Nothing could be more consistent with what Senator Menendez has said – and wanted others to do – in the last three years alone.

Besides, what else could he have to hide?

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Consider this: Castro Government and U.S. Embargo Likely to Outlast Obama Presidency

February 15, 2013

The clock is ticking.  By February 24, as Leonardo Padura observed in a column this week, there will be 1,823 days remaining in Raúl Castro’s tenure as Cuba’s president, thanks to term limits he pushed through at the 2011 communist party conference.

All things being equal, just five years from now, Cuba will be led by someone whose name is neither Raúl nor Fidel Castro for the first time in 59 years.

By then, whoever is elected U.S. president in 2016 could inherit the same ossified and wildly ineffective structure of sanctions passed down – like the Cold War equivalent of a family bible – from Eisenhower to Kennedy to Johnson to Nixon to Ford to Carter to Reagan to Bush to Clinton to Bush and left on President Obama’s desk when he entered the Oval Office.

Even Senator Ted Cruz, a deeply conservative Cuban-American just elected from Texas, acknowledged in a question submitted for Chuck Hagel’s confirmation, that the existing policy has failed in its goal of dislodging the Castros.

What will Mr. Cruz say in 2018 about the embargo, which was designed to force from power two brothers who will have instead relinquished their posts voluntarily?  Give it more time to work?

President Obama said nothing about Cuba in his State of the Union Address last Tuesday and, as Bloggings by Boz pointed out, he used just seven words, “Ford is bringing jobs back from Mexico,” to refer to just one nation in the Americas, seemingly by accident.

On Cuba, however, the president doesn’t need to say something in order to do something. His administration often excuses its inaction by saying the policy is in the court of Congress, “our hands are tied” by Helms-Burton Act restrictions on normalizing relations with Cuba.

In fact, that’s not really the problem.  Policy makers should never harness the future of any foreign policy – not in Cuba or Venezuela or anyplace else –to the identity or mortality of any particular leader.  That’s called letting the tail wag the dog.

The national interest ought to be our guide.  That’s why Mr. Obama should use his executive authority to start making changes now, so when the presidency changes hands in Washington in 2016 and in Havana in 2018, there’s a plan already being implemented to normalize the relationship.

If he’s uncertain about where to begin, he needn’t look further than our roadmap for engagement with Cuba or to the editorial page of the Boston Globe, which this week offered simple and clear suggestions to “drag US policy into the 21st century” –

  • Remove Cuba from the State Sponsors of Terror List
  • Promote cultural exchanges
  • End the Travel Ban so all Americans can visit Cuba
  • Eventually allow trade in oil, gas, and other commodities

The Globe’s editorial ended with the suggestion that President Obama assign his Secretary of State John Kerry to make Cuba the focus of his first few months in office.  That sounds right to us.  After all, the clock is ticking and the president, like his counterpart in Havana, has a limited amount of time in office to get it done.

This week, in Cuba news…

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The Democracy Promotion Paradox – or why Americans hate politics

February 8, 2013

Sometimes our Cuba policy is so farcical, it’s impossible to keep a straight face.

Consider poor Pedro Adriano Borges, age 68 who, according to the Miami Herald is awaiting trial in federal court.  He is charged with ten violations of the Trading with the Enemy Act, money laundering, and other crimes for which he could spend 35 years in prison if convicted.  The underlying charge is this: he shipped $93,000 worth of goods – including light bulbs and diapers, spices and mayonnaise – to Cuba before Congress authorized food trade with the island.  Opening the market to mayonnaise might be considered a crime against Cuban cuisine, but he should hardly be facing jail time in 2013 for an activity that’s been legal for a decade.

Other times, however, the policy is not just farcical, but so internally inconsistent that it edges in the direction of tragedy.  Consider what we continue to learn about the USAID democracy promotion or regime change programs.

The Government Accountability Office issued a report on the programs this week.  Unlike prior studies, which disclosed that U.S. recipients of the funds were wasting them on Godiva chocolates, cashmere sweaters, and Nintendo Game Boys, GAO said the program was being operated with tighter internal controls.  This – along with headlines like “U.S. government report says America’s democracy programs have improved” –undoubtedly delighted USAID, which just last month read this story in the Washington Post:  “Interference with bid-rigging probe alleged at USAID.”

In fact, Marc Lopes, head of USAID’s Latin American and Caribbean section, told the Herald in a phone interview, “We have increased transparency and financial monitoring, and we are pleased that GAO has recognized that.”

But, remember, the GAO makes judgments about accounting, not about policy.  As the Miami Herald reported, U.S. taxpayers have spent more than $205 million dollars on democracy promotion activities since 1996.  There is no evidence that the programs are achieving their objective of hastening a democratic transition in Cuba.  Phil Peters says it well on his Cuban Triangle Blog:

“So the dollars are well accounted for, but as to whether they are being spent in ways that make a positive difference, well, that’s outside the scope of the report.

“Which is worth noting because in the case of USAID’s satellite Internet program run by Alan Gross and other grantees, the dollars may have been perfectly managed and 100 percent accounted for, but they were 100 percent wasted because these operations were rolled up by Cuban intelligence.”

Wasted and obscured from public view.  There is another version of the report, “sensitive but unclassified,” that GAO won’t allow U.S. taxpayers to see.  Even worse, Tracey Eaton, an investigative reporter with whom our organization is working, discovered that USAID hired an outside contractor to review the programs, which found “questionable charges and weaknesses in partners’ financial management, procurement standards, and internal controls.”   But when Mr. Eaton filed a Freedom of Information Act request to get a copy of the outside audit, USAID fought him and then provided only ten pages of material that “omit most findings, recommendations and other key information, including the identity of the aid recipients named in the audit.”

This is more than a little odd coming from USAID which recently gave a $25 million grant to researchers at the University of Texas…(wait for it)….to develop tools that will “Increase Global Aid Transparency.”

Not only that, Mr. Eaton requested an interview with Mr. Lopes a little more than a week ago, and he declined.

Can someone stop the pain?

Not if what President Eisenhower might have called The Cuba-Industrial Complex has anything to say about it.  Although there was scant public mention of democracy promotion at John Kerry’s confirmation hearing, a new round of questions and answers about the program popped up in the Congressional Record, according to “Capitol Hill Cubans,” an eager supporter of regime change in Cuba.

In testimony apparently provided for the record –questions asked and answered in private – Senator Marco Rubio urged Mr. Kerry not to negotiate with Cuba to obtain Alan Gross’s release; not to shut down or rollback democracy programs; and to scrutinize the already legal people-to-people trips to Cuba.  You can read Kerry’s responses here.  We think he gave Senator Rubio no quarter.  To date, Mr. Kerry has made no public statements about whether he’d change the programs that he tried to reform as a member of the U.S. Senate.

But, the bodyguards surrounding USAID’s Cuba programs – the contractors, the pro-sanctions Senators, the array of publicists and polemicists aligned with them – will continue resisting the scrutiny and long-overdue public debate that ought to take place about these wasteful, ineffective, covert-but-not-classified programs that antagonize Cuba and which turn Latin America more broadly against us.

We are reminded of what E.J. Dionne wrote in “Why Americans Hate Politics” –

“With democracy on the march outside our borders, our first responsibility is to ensure that the United States becomes a model for what self-government should be and not an example of what happens to free nations when they lose interest in public life.”

Such is the democracy promotion paradox.

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Senator Menendez- Travel and Glass Houses

February 1, 2013

In public, Senator Bob Menendez is never a shy skeptic about certain kinds of travel.

He bitterly opposed reforms in 2009, to allow Cuban Americans unfettered travel rights to Cuba, and later teamed up with Senator Marco Rubio to oppose opening up people-to-people travel for most other Americans.  Early in the Obama presidency, Menendez, an environmentalist who believes in climate change, held up the nominations of John Holdren and Jane Lubchenco, world class scientists, to block a Senate bill with language to liberalize travel to Cuba (something his Hurricane Sandy-battered constituents probably never heard about).

When the Center for Democracy in the Americas was organizing a Cuba trip for Senate chiefs of staff, he and Senator Bill Nelson warned all of their colleagues not to allow their staffs to go (nobody listened).  At John Kerry’s confirmation hearing, he scolded Senator Jeff Flake, who joked about using “spring break” to disrupt the Cuban government’s hold on the island.

Like other hardliners, Senator Menendez even suggested that travel to Cuba was about little more than sexual tourism, as he did in this speech against Cuban American family travel four years ago.

Had Senator Menendez heeded his publicly expressed doubts about travel in private, he might not be in the hot water he finds himself today.  His story has moved swiftly from a lurid set of accusations – which the Senator denies, which some independent journalists and ethics watchdogs  doubt, and at least one late night comic has mocked – to issues involving a friend and donor, Dr. Salomon Melgen, that have ensnared him in investigations by the U.S. Department of Justice and the Senate Ethics Committee.

These developments are serious, as Paul Kane of the Washington Post wrote, because his chairmanship of the Senate Foreign Relations Committee “makes him the top diplomat on Capitol Hill, someone tasked with greeting heads of state visiting Washington, and affords him the kind of public profile that prompts regular appearances on the Sunday morning political talk shows.”

Questions about his relationship with Dr. Melgen –described as “a high-profile Palm Beach ophthalmologist with major tax problems” –captured media attention this week when the FBI conducted a surprise raid on the doctor’s offices.

According to NBC News, the raid ostensibly “concerned a separate criminal probe conducted by the FBI and the U.S. Department of Health and Human Services, which typically investigates Medicare fraud. However, agents were also looking for evidence in the other case concerning the alleged under-aged prostitutes” and two airplane rides Menendez and Melgen took to the Dominican Republic.

The trips were never paid for by Senator Menendez or accounted for as gifts, as required under the rules of the Senate, an oversight which his staff attributed to “sloppy paperwork.” But, it’s more than that.  “It’s technically a federal crime to not report gifts on a federal financial-disclosure form,” said Melanie Sloan, executive director of Citizens for Ethics and Responsibility, to the Miami Herald.

Mr. Menendez has dug deep into his pockets and sent a check to Dr. Melgen’s company for $58,500 to clean up the error.  This could not have been easy for Mr. Menendez, who was ranked 79th among his Senate colleagues in wealth by the Center for Responsive Politics after reporting net assets of under $500,000 in 2010, according to the Washington Post.  By taking this route, rather than invoking what is called a “friendship exemption” and amending his filings with the Senate Ethics Committee, to clean up the error, he has avoided any requirements to make a public disclosure of details about the trips.  Surely, commercial flights would have been cheaper.

The payment will not make the attention go away. On Thursday, The New York Times reported on how Senator Menendez used his office and position to fight for a contract to help a company in which Dr. Melgen was an investor.  That company “had a long-dormant contract with the Dominican Republic to provide port security and x-ray cargo. Mr. Menendez, who is chairman of the Senate subcommittee that holds sway over the Dominican Republic, subsequently urged officials in the State and Commerce Departments to intervene so the contract would be enforced, at an estimated value of $500 million.”

The Times reports that Menendez spoke to State Department officials about the contract, and used a hearing he chaired last July to question State and Commerce Department officials about why they weren’t being more aggressive in getting the DR to honor the contract, even though his friend lacked border security experience.

According to the Miami Herald, Menendez’s office said the senator did nothing improper, he was a long-time champion for U.S. business abroad, and that “Senator Menendez has over the last few years advocated for more attention to the spread of narco-trafficking throughout Central America and the Caribbean.”

In light of Dr. Melgen’s political contributions to Menendez and others –more than $426,000 in campaign donations since 1992 – news organizations and investigators are likely to examine whether he crossed the line from business advocacy into the land of the quid pro quo.

Beyond dealing with a federal investigation, Senator Menendez is also facing a Senate Ethics inquiry.  Sen. Johnny Isakson (Ga.), the ranking Republican on the committee, told the Washington Post yesterday, “The Senate Ethics Committee is aware of the article in the Miami Herald and other media outlets, and we are following established procedures.”

The Department of Justice will neither confirm nor deny the existence of an investigation.  As a long-time public servant told the Cuba Central News Blast, if the Senator was just an average Joe with a security clearance, that clearance would be suspended – and his access to classified information stopped –until the matters were satisfactorily resolved, one way or the other.  That’s not happening to Mr. Menendez, yet.

What is happening instead is quite telling.  At the White House, for example, Jay Carney, the press secretary, “declined to answer when asked whether the president still has full faith and confidence in Menendez. ‘I don’t have anything for you on that,’ Carney told reporters.”  Asked about the scandal, Harry Reid, the Senate Democratic Leader, praised his colleague as “an outstanding senator,” and then encouraged reporters to call his office.  “Any questions in this regard, direct to him. I don’t know anything about it.”  Allies like Rep. Ileana Ros-Lehtinen, who celebrated Menendez as “a proven leader and defender of human rights when he became chairman,” have said nothing at all.

Rather than dodging the press in New Jersey, as Mr. Menendez appears to be doing, perhaps he should be taking to heart in private what he said in public at John Kerry’s confirmation hearing:

“Yours is a big chair to fill, and I will do my best today to live up to your example. I have watched you lead the Committee with an equally deep and abiding commitment to getting to the heart of the matter — always probative, always open to debate, but always ready to mitigate disagreements, always looking for the truth — for answers – uncovering the facts, hearing all the evidence, and then publically speaking truth to power based solely on what was best for this nation.”

Unless he lives up to that standard, the Senator could put his power and new position at risk.

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