Unpacking the Menendez Indictment

When the sequel is better than the original

New Jersey Senator Robert Menendez was indicted on federal corruption charges last week, along with his wife and three other defendants. He is scheduled to be arraigned in New York today.

Menendez has been here before. In 2015 he was indicted by federal prosecutors in New Jersey on multiple counts of bribery and related offenses. His 2017 trial ended with the jury hung 10-2 for acquittal. The government ultimately decided not to retry the case after a judge dismissed a number of charges.

Now federal prosecutors are back for round two. The cast of characters and facts are different, but the essential allegation is the same: that Menendez corruptly sold the power of his office in exchange for significant undisclosed gifts.

On the face of the indictment this case looks much more ominous for Menendez than the case he beat in 2017. But these federal corruption cases are never a slam-dunk. If Menendez decides to fight this all the way to trial again, he will still have a few cards to play.

Robert and Nadine Menendez (credit: Reuters)

The Defendants

• Robert Menendez, a Democrat, is the senior U.S. Senator from New Jersey. He was elected to the U.S. House of Representatives in 1993, appointed to the Senate in 2006, and then elected to the Senate in 2006, 2012, and 2018. He held a leadership position on the Senate Foreign Relations Committee, first as Ranking Member and then as the Chairman.

• Nadine Menendez began dating Robert Menendez in 2018 and they were married in 2020.

• Weal Hana, a/k/a Will Hana, is a New Jersey businessman who is originally from Egypt and who maintains close ties with Egyptian government officials. Hana and Nadine Menendez were friends for years before she started dating Robert Menendez.

• Jose Uribe is a New Jersey businessman who works in the trucking and insurance industries and is a business associate and friend of Hana.

• Fred Daibes is a New Jersey real estate developer, founder of a New Jersey bank, and a business associate of Hana’s. He is also a long-time fundraiser for Menendez. In 2018 he was indicted by the U.S. Attorney’s Office in New Jersey for defrauding the bank that he founded.

The Allegations

The 39-page indictment alleges that from 2018 through 2022 the defendants had a corrupt relationship in which the Senator and his wife accepted hundreds of thousands of dollars in bribes from the other three defendants. In exchange, Menendez allegedly used the power of his Senate office to protect and enrich those defendants and benefit the country of Egypt.

This corrupt relationship involved three different areas where Menendez allegedly took actions in exchange for bribes:

Acts to benefit Hana and Egypt – Due to his position on the Senate Foreign Relations Committee, Menendez had substantial influence over U.S. military aid to Egypt. The indictment alleges that Hana and Nadine Menendez introduced the Senator to Egyptian government officials and established a corrupt relationship where, in exchange for hundreds of thousands of dollars in bribes, Menendez would provide information to those officials related to U.S. military aid and take actions that would benefit Egypt. The indictment describes a number of meetings between the Menendezs, Hana, and Egyptian officials, and actions Menendez took or information he provided related to Egyptian military aid and other issues of interest to Egypt.

Hana owns a company, IS EG Halal Certified, Inc. In the spring of 2019, the government of Egypt granted IS EG Halal an exclusive monopoly over the certification of U.S. food exports to Egypt as compliant with halal standards, even though neither Hana nor his company had any experience with halal certification. Income from this contract allegedly allowed Hana to pay Nadine Menendez for what the indictment describes as a “low-or-no-show job.” The monopoly contract was controversial because it resulted in increased prices for U.S. meat producers and Egyptian consumers. When the U.S. Department of Agriculture moved to ask the government of Egypt to reconsider the contract, Senator Menendez, allegedly at Hana’s request, called a senior USDA official to insist that the USDA stop opposing Hana’s contract.

There’s no allegation that Egyptian officials bribed Menendez directly. There’s also no direct allegation that Egypt awarded Hana the Halal contract as a result of his useful relationship with Menendez, but that’s implied.

Acts to benefit Uribe’s associates – The indictment alleges that Menendez contacted a senior state prosecutor in New Jersey on two occasions and improperly tried to influence the resolution of the criminal prosecution of one of Uribe’s business associates and the criminal investigation of another. In return for this assistance, Uribe and Hana allegedly purchased a $60,000 Mercedes-Benz convertible for Nadine Menendez. Uribe gave her $15,000 in cash for the down payment and then arranged to make the monthly car payments through businesses he controlled. Those payments only stopped when federal agents executed a search warrant at the Menendez home in 2022.

Acts to benefit Daibes – Fred Daibes was being prosecuted by the New Jersey U.S. Attorney’s Office. The indictment alleges that Menendez improperly tried to influence that prosecution. In 2020 he allegedly conditioned his support for candidates for the U.S. Attorney position on whether they would be sympathetic to Daibes’ case. Menendez also allegedly contacted a senior Assistant U.S. Attorney in that office, attempting to influence how the case was handled. In exchange for these efforts, Daibes allegedly provided the Menendezs with cash, furniture, and gold bars.

The Search – In June of 2022 federal agents executed search warrants at the home and safe deposit box of Robert and Nadine Menendez. Agents recovered more than $480,000 in cash from the house and $70,000 from a safe deposit box owned by Nadine. Much of the cash was stuffed in envelopes and hidden in a safe, closets, or clothing, including a jacket bearing Menendez’s name. Some of the envelopes contained DNA or fingerprints of Daibes, his driver, or Senator Menendez. Agents also recovered home furnishings and the Mercedes, along with gold bars worth more than $100,000 that were traceable by serial number to Hana or Daibes.

The Criminal Statutes

This is a three-count indictment. All three counts essentially charge a bribery conspiracy, using different legal theories. All three counts rely on the same facts: the entire pattern of conduct alleged from 2018 through 2022.

Count One charges all five defendants with conspiracy to commit bribery under 18 U.S.C. § 371, the general conspiracy statute. Federal bribery law prohibits a public official from agreeing to accept anything of value in return for being influenced in the performance of an official act or agreeing to do or omit to do an act in violation of his official duty. It also applies to the person who pays the bribes. The conspiracy charge alleges that all five defendants agreed to work together to violate the bribery statute: Senator Menendez by accepting bribes; Hana, Uribe, and Daibes by paying bribes; and Nadine Menendez by acting as a go-between, facilitator, and co-beneficiary of the bribe payments. The maximum penalty on this charge is 5 years in prison.

Count Two charges all five defendants with conspiracy to commit honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 1349. After the Supreme Court’s 2010 decision in Skilling v. United States, honest services fraud applies only to bribery and kickback schemes. Effectively this is another allegation of a bribery conspiracy, just using a different legal theory to frame the charge. Maximum penalty: 20 years.

Count Three charges only Robert and Nadine Menendez with conspiracy to commit extortion under color of official right, in violation of the Hobbs Act, 18 U.S.C. § 1951. The Supreme Court has held that extortion under color of official right is the equivalent of taking a bribe, so once again this is essentially another bribery conspiracy allegation based on the same facts. After the Supreme Court’s decision in Ocasio v. United States, prosecutors could have charged the other three defendants with this conspiracy as well. It’s not clear to me why they didn’t do so. Maximum penalty: 20 years.

Update: On October 12, 2023, prosecutors returned a superseding indictment adding a fourth count: a charge that the Senator, his wife, and co-defendant Wael Hana conspired to have Senator Menendez act as an agent for the country of Egypt, in violation of the Foreign Agents Registration Act.

Potential Defenses

Lack of a Quid pro Quo

This case will come down to proving corrupt intent. As we saw from the first Menendez case, simply proving that Menendez and his wife received undisclosed gifts is not enough to establish bribery. It wouldn’t be a crime for one of the businessmen to hire Nadine Menendez as a consultant, or even to buy her a car, merely in the hope that it would help him cozy up to the Senator or make the Senator happy. Prosecutors are going to have to prove to a jury beyond a reasonable doubt that the gifts were received in exchange for a specific agreement by Menendez to be influenced in the performance of his official duties.

On its face the indictment alleges such a quid pro quo, of course, but doesn’t say a lot about how prosecutors intend to prove it. The evidence of a quid pro quo may lie in text messages, emails, or other evidence prosecutors have that they have not yet revealed. Or it may come from testimony of a cooperating witness we haven’t heard about yet.

A related defense would be that there was no corrupt deal because the things recovered at the Menendez home were not received from the businessmen. For example, Menendez claimed at a press conference this week that the nearly $500,000 in cash was explained by his “old-fashioned” habit of periodically withdrawing cash from his savings account to keep at home.

(Of course, this wouldn’t explain the gold bars, or the Mercedes, or why DNA and fingerprints from Daibes and his driver were found on some of the cash envelopes. It should also be easy to prove or disprove with bank records, and with currency transaction reports if he was withdrawing more than $10,000 at a time. And I mean, come on — that’s a lot of cash.)

The best way for prosecutors to prove a quid pro quo would be to have someone involved in the corrupt deal testify. Will one or more of the three businessmen agree to cut a deal and cooperate against the Senator and his wife? If that happens, it will really be game over for Menendez.

These Were Not “Official Acts”

In 2014 former Virginia Governor Robert McDonnell and his wife Maureen were indicted on corruption charges. They were convicted at trial, but in 2016 the U.S. Supreme Court unanimously reversed their convictions. There was no dispute that the McDonnells had accepted about $170,000 in undisclosed gifts from a businessman named Jonnie Williams. But the Court held that the things McDonnell did in return, such as introducing Williams to other state officials and making phone calls or arranging meetings on Williams’ behalf, did not constitute “official acts” under federal bribery law.

Ever since McDonnell, the issue of “official acts” figures prominently in most federal corruption cases. The bribery statute prohibits a public official from accepting a thing of value in exchange for an agreement to be influenced in the performance of an official act. It defines an “official act” as “any decision or action on any question, matter, cause, suit, proceeding or controversy” that may be brought before the public official in their official capacity. The Court held in McDonnell that this means the official is taking some action to resolve a question, decide an issue, or exercise some kind of government authority in a matter that is or will be before him.

Expect the defendants to argue that at least some of these bribery allegations must fail because Menendez was not performing “official acts.” This claim may be stronger for some of the allegations than for others. Actions taken as a Senator such as approving military aid for Egypt or approving a new United States Attorney, for example, should qualify as official acts.

On the other hand, efforts to influence a New Jersey state investigation do not involve questions or matters that are properly before Menendez. He may have been throwing his weight around as a U.S. Senator, but the issues had nothing to do with his official duties. Those do not sound like “official acts” under McDonnell.

But prosecutors have a backup here. Although many have lost sight of this in the aftermath of McDonnell, not every bribery allegation requires proof of an “official act.” The bribery statute also prohibits a public official from accepting a bribe in exchange for agreeing to do or omit to do any act – not just an “official act” -- in violation of his official duty.

To the extent actions Menendez allegedly took in exchange for bribes don’t fit the definition of an “official act,” prosecutors may argue that those actions were in violation of his official duty. But that would be relatively untested, and it’s not clear exactly how or where the “official duties” of a U.S. Senator are defined.

In the end this may not really matter. The charge is an ongoing conspiracy to commit bribery, based on the entire series of events set out in the indictment. As long as there are some official acts alleged, that should be enough to sustain the conspiracy charge, even if other actions by Menendez, standing alone, would not meet the McDonnell standard.

The Speech or Debate Clause

The Constitution’s Speech or Debate clause provides that for any speech or debate in Congress, Senators and Representatives “shall not be questioned in any other place.” The Speech or Debate clause ends up being an issue in almost any prosecution of a member of Congress. It figured prominently in the last Menendez prosecution, and it will figure prominently in this one. (If you want a deeper dive on the issue, I wrote this post back during the first Menendez prosecution.)

Senator Menendez and the Speech or Debate Clause

Expect Menendez to argue that prosecutors are improperly trying to convict him for his actions as a Senator and that the charges are barred by the Speech or Debate clause.

In bribery cases the Speech or Debate clause usually doesn’t defeat the charge entirely. The crime of bribery is completed when the corrupt deal is made, and that usually happens outside of Congress. For example, if a Senator takes a bribe in exchange for a promise to vote a certain way on a bill, the crime of bribery is complete. The government isn’t required to prove whether the Senator followed through or how he actually voted, which might implicate the Speech or Debate clause.

Menendez will probably succeed in having certain evidence excluded based on Speech or Debate – for example, prosecutors likely cannot introduce into evidence how he actually voted on any particular aid bills for Egypt or on the New Jersey U.S. Attorney nomination. But such evidence is not essential to the prosecution and shouldn’t derail the case.

Menendez will also face an interesting potential Catch-22, as he did in his earlier prosecution. He may want to defend against the bribery charges by claiming the things he did were not “official acts.” But if something is not an official act, that suggests it is not part of his Senatorial duties and thus should not protected by the Speech or Debate clause. And if something is protected by Speech or Debate, that suggests it is an official act that would support a bribery charge. Making one argument undercuts the other.

My Wife Did It!

The actions of Nadine Menendez figure very prominently in this alleged corruption scheme. She is the one with the long-standing friendship with co-defendant Hana and who introduced Hana to the Senator. She and Hana were the ones who first introduced Menendez to Egyptian government officials. She is the one sending thousands of text messages to the alleged bribe payers, in some cases asking about their payments. She is the one who got a car. She is the one who allegedly visited a jeweler to sell some of the gold bars received as bribes. By contrast, the indictment says almost nothing about anything received directly by Menendez.

This may leave an opening for Menendez to argue that he wasn’t aware of everything his wife was doing. He might suggest she was improperly cashing in on his status and power but he had no idea of the extent of her actions. And if she seemed to have a lot of money, well, he just thought her consulting business must be doing well.

Here we have another parallel to the Bob McDonnell case. McDonnell testified at his own trial and rather infamously tried to blame everything on his wife. He suggested she was lonely and troubled and craved the attention from the businessman paying the bribes, but claimed he was not fully aware of everything she did. This became known in some legal circles as the “Lady Macbeth” defense, or more colloquially, the “throw your wife under the bus” defense.

I’m not saying this defense would necessarily be persuasive. After all, it didn’t work for McDonnell -- he was still found guilty by the jury. But depending on how the facts shake out, there could be an opening on at least some of the allegations for Menendez to blame it on his wife.

Perhaps as he struts and frets his hour upon the stage, Menendez will be more gallant than McDonnell – we shall see.

Why Is This Case in New York?

The Constitution requires that a federal criminal case be brought in a proper venue – meaning a district where at least part of the crime took place. One interesting question is why this case is being prosecuted in the Southern District of New York, not in New Jersey. Almost all the alleged acts took place in New Jersey. Ordinarily you would expect the case to be indicted and prosecuted there, as the 2015 Menendez case was.

There are a couple possible explanations. The first is the involvement of the New Jersey U.S. Attorney’s office in the underlying facts. Menendez is accused of accepting bribes in exchange for trying to interfere with a prosecution by that office. That means top personnel from that office will be key prosecution witnesses at trial. That wouldn’t necessarily raise a conflict of interest that would require disqualification of the entire office. But the Justice Department may have felt it would be cleaner to have a different U.S. Attorney’s office handle the case.

Another possibility is that the SDNY had an earlier, smaller New York investigation that ultimately morphed into this case. For example, if they had an ongoing investigation into Hana for some other matters centered in New York, that may have led them to discover the Menendez allegations and begin investigating those. In such a situation the prosecutors who began the investigation typically would keep it, as long as they have a legal basis for jurisdiction.

As a legal matter, the nature of conspiracy charges is what makes venue possible in New York. In a conspiracy case, venue is proper in any district where at least one overt act in furtherance of the conspiracy was committed by at least one co-conspirator. As a result, it’s not uncommon for venue for a conspiracy to be proper in more than one jurisdiction. (If you’d like a refresher on conspiracy charges, see this post.)

Conspiracy 101

Although almost all the alleged acts took place in New Jersey, the indictment alleges a total of five overt acts by co-conspirators in New York: two dinner meetings in Manhattan, one payment from a New York bank, one text message that bounced off a cell tower in New York, and Nadine Menendez attempting to sell two gold bars received from Daibes to a jeweler in Manhattan.

This is pretty thin gruel, as conspiracy charges go. These overt acts may be legally sufficient. But it does look strained, as though prosecutors really had to struggle to justify venue. I expect Menendez will challenge venue in New York and argue the case must be prosecuted in New Jersey, where almost all the alleged criminal acts took place. There is, after all, something to be said for home field advantage.

The somewhat unusual choice of New York as the venue may have had other consequences. For example, the indictment notes that Menendez failed to declare the gifts he received from his co-defendants on his financial disclosure forms. That’s potentially a separate crime – False Statements, 18 U.S.C. § 1001.

Prosecutors will often include a false statements charge in a case like this to help prove guilty knowledge – “If he did nothing wrong, ladies and gentlemen, then why didn’t he report the gifts as required?” In Menendez’s first case prosecutors did exactly that: the indictment included a charge of false statements for failing to disclose the gifts from his co-defendant. But here they have not charged 1001, even though they make the allegation. The reason may be that they had no proper venue in the Southern District of New York when the form was probably completed in New Jersey and filed in Washington, D.C.

This Time It’s Different?

In the 2015 indictment prosecutors alleged that Menendez received bribes from his co-defendant, Dr. Salomon Melgen, in exchange for taking official acts on Melgen’s behalf in several different matters before the federal government. (If you want more information on that first case, you can read my post from 2015 here.) But several aspects of that case made it much easier for Menendez to defend.

First was the nature of the gifts from Melgen. The largest alleged bribes in that case were contributions to the Senator’s PACs or campaign funds that were within legal limits and properly disclosed. A bribery case built on otherwise lawful political contributions is particularly difficult. Politicians have a right to accept such contributions and to act in ways that benefit their donors. It requires very clear evidence of an explicit deal – “If you give me that donation I will do X” – to establish that a campaign contribution was really a bribe.

The other helpful fact for Menendez in the last trial was that he and Melgen had been friends for decades. Many of the alleged bribes took the form of trips on Melgen’s private jet or stays at his Caribbean villa. But their families had vacationed together for years and celebrated family milestones together. Menendez was able to argue that the free trips, although expensive, were based on friendship, not on any corrupt deal.

Finally, the actions Menendez took in the last case, such as speaking with (and allegedly pressuring) officials at Health and Human Services and the State Department, were easier to portray as part of his Senate job. He was able to argue that anything he did that ended up benefiting Melgen was simply in the pursuit of his regular Senatorial duties, not the result of a corrupt deal.

The facts of this case seem much more difficult to explain. Instead of travel and lawful campaign contributions, you have piles of cash stuffed into envelopes, gold bars, and a free Mercedes. (I’m reminded of Congressman William Jefferson, who was prosecuted for corruption after being caught in 2005 with $90,000 in illicit cash in his freezer. I think even with inflation, Menendez has him beat.) Instead of longtime friends, the other defendants appear to be more recent business acquaintances. And the acts Menendez allegedly took – including passing along sensitive information to Egypt and trying to derail criminal prosecutions – are much more difficult to portray as Senate “business as usual.”

Overall, this looks like a much tougher case for Menendez.

Déjà Vu All Over Again

Menendez is facing increasing calls to resign from those within his own party. As of now, he is vowing to fight the charges and remain in Congress. Last time it took more than two years to get from indictment to trial. If Menendez does continue to fight, expect a long road ahead.