Sen. Bob Menendez's ties to a former Miami aide who could benefit from a controversial overseas port contract, which the Democrat pushed for, extend to an international business group that last year feted Spain’s king and the U.S. secretary of state.
Menendez and Pedro Pablo Permuy hold high-level posts on the United States-Spain Council, funded by major special interests -- from ATT to Bacardi to Wal-Mart-- as well as a little-known investment company of the senator’s top South Florida donor, Dr. Salomon Melgen, who is under FBI investigation.
Federal agents raided Melgen’s West Palm Beach business office last week, putting a national spotlight on his relationship with Menendez and his business dealings.
One of Melgen’s companies, ICSSI, is fighting with the Dominican Republic government for a mammoth port-security contract. Menendez advocated for it privately and publicly when he spoke in July about the issue at a subcommittee of the Senate Foreign Relations Committee.
At the same time, Permuy was involved in the ICCSI deal and was supposed to help run the company in the Dominican Republic, according to a defender and relative of Melgen’s.
Permuy, a Belen Jesuit Preparatory school graduate who attended the University of Miami, gave a brief and passing denial to the New York Times and has since stopped answering his phone or emails.
Menendez's spokeswoman said the senator had no idea Permuy was involved with ICSSI, which wants to X-ray port cargo as part of a contract worth as much as $500 million or more.
But ethics watchdogs have their doubts.
"That's the howler of the day. I don't see how the senator couldn't have known about it," said Ken Boehm, chairman of the ethics watchdog group called the National Legal and Policy Center.
Boehm points out that Melgen’s cousin, Vinicio Castillo Seman, told reporters publicly, privately and in writing that Permuy was involved with the ICSSI deal. Castillo mentioned Permuy, a former assistant U.S. defense secretary, to rebut critics of ICSSI who noted that the eye-doctor Melgen had no security background.
“Why would Castillo go out of his way to say we're going to hire this guy to run the thing?” Boehm asked.
Permuy appears to be on a first-name basis with former Secretary of State Hillary Clinton, who has received campaign money from Melgen as well. Permuy worked for Menendez in the mid 1990s and then again in the early 2000s.
In June of 2012, during the council’s forum in Menendez’s home state of New Jersey, Clinton thanked “Pedro” for his role as president of the council and for his involvement in the forum attended by Spain’s king. Menendez is the honorary chair of the group.
“Senator Bob Menendez is truly one of the most effective, determined, dedicated public servants in our country,” Clinton said, according to a transcript of her remarks on June 23.
Clinton also name-dropped Francisco J. Sánchez, the Commerce Department’s undersecretary for international trade.
A month later, Sanchez was giving testimony at the Senate Foreign Relations Subcommittee on the Western Hemisphere when Menendez brought up contracting issues in the Dominican Republic.
“You have another company that has American investors that ... has a contract actually given to it by the — ratified by the Dominican Congress — to do X-ray of all of the cargo that goes through the ports,” Menendez said. “And they don’t want to live by that contract either.”
Menendez didn’t mention ICSSI by name.
Meanwhile, Melgen’s Hispanic-centric news website, VOXXI, was publicly advocating for the X-ray deal as a way to stop drugs from flowing into the Dominican Republic. Menendez’s office said he advocated for the deal, too, to stop drugs.
A month before the hearing, around the time off the council’s forum, Melgen’s Vitreo-Retinal Consultants company contributed $400,000 to a Democratic political committee, Majority PAC, that supported Menendez. In October, Vitreo-Retinal contributed another $300,000.
Majority PAC then contributed $582,500 to boost Menendez’s re-election.
Vitreo-Retinal was raided Tuesday and Wednesday by federal agents. The West Palm Beach office is the nerve center of Melgen’s businesses, including a company tied to ICSSI.
During the raid FBI agents were joined by inspectors with the U.S. Department of Health and Human Services, which typically investigates Medicare fraud.
That probe is parallel to the FBI investigation examining Melgen and Menendez’s ties.
The FBI began examining the two after a shadowy tipster began emailing claims that Menendez and Melgen consorted with Dominican Republic prostitutes, some of whom were underage.
Both men denied the charges, with Menendez telling reporters this week that it was a “smear.”
The year before, Melgen and his wife contributed $40,000 to a group called the Fund to Uphold the Constitution, which successfully fended off a Republican recall effort. Prior to that, the Melgen’s contributed $60,400 to the Democratic Senatorial Campaign Committee when Menendez chaired it in 2009 and 2010.
During that time, Menendez flew to the Dominican Republic on Melgen’s private jet. The trip was paid for by the DSCC. But Menendez around that time took two other private jet trips and never reported it or paid for it.
Republicans then filed an ethics complaint, prompting Menendez’s staffers to review his travel schedule. They said that three of the trips in the complaint were bogus and one was true. They also found the additional trip.
Menendez then paid Melgen $58,500 to reimburse for the trips. It announced the payment after the FBI raid. His office wouldn’t supply a copy of the cancelled check, which it said
The money, as previously reported by The Miami Herald, constitutes a large chunk of Menendez’s ready cash, ranging between 86 percent to 34 percent of Menendez’s reported savings and checking accounts in his most-recent financial disclosure in 2011.
Menendez has flown other times to the Dominican Republic, but on his own dime and for private matters, according to his office, which didn’t disclose the dates, the number of trips or his schedule.
Menendez's office isn't the only one that's tight-lipped.
The United States-Spain Council's executive director won't return calls or emails requesting information about the group, including its tax forms and contributions.