Sen. Robert Menendez sponsored legislation with incentives for natural gas vehicle conversions that would benefit the biggest political donor to his re-election, the same eye doctor whose private jet Menendez used for two personal trips to the Dominican Republic, an Associated Press investigation found.
The disclosure reflects the latest intersection between the New Jersey Democrat who is the subject of an ethics inquiry on Capitol Hill and the Florida doctor involved in a federal criminal investigation.
Dr. Salomon Melgen invested in Gaseous Fuel Systems Corp. of Weston, Fla., and joined its board of directors in early 2010, according to the company’s chief executive and a former company consultant. GFS, as the company is known, designs, manufactures and sells products to convert diesel-fuel fleets to natural gas. The amount of Melgen’s investment is confidential under rules of the Securities and Exchange Commission, but a 2009 document filed with the SEC showed the company required a minimum individual investment at that time of $51,500.
At the same time, Menendez emerged as a principal supporter of a natural gas bill that would boost tax credits and grants to truck and heavy vehicle fleets that converted to alternative fuels. The bill stalled in the Senate Finance Committee, and after it was revived in 2012, the NAT GAS Act failed to win the needed 60 votes to pass.
While the bill was under consideration between 2009 and 2011, the former consultant for GFS spent $220,000 lobbying Menendez’s staff and other congressional and federal officials on the act’s provisions as well as other regulatory issues, according to interviews and Senate records.
There is no evidence that Menendez offered direct help or intervened on behalf of the company or Melgen. Instead, the connection between the two men’s interests in natural gas is the latest example of the close symmetry between the senator — who recently rose to become chairman of the Senate Foreign Relations Committee — and his millionaire backer. It illustrates the way Menendez’s political clout has at times overlapped with Melgen’s financial investments.
In recent weeks, Menendez has acknowledged other dealings with Melgen. Menendez was compelled to reimburse $58,000 for two flights aboard Melgen’s private jet that he had previously failed to report, prompting scrutiny by the Senate Ethics Committee. Menendez also acknowledged that his office had contacted U.S. health agencies in 2009 and 2012 to question their billing practices and policies amid a dispute between Melgen, an eye specialist, and federal health authorities. FBI agents in January searched Melgen’s offices in Florida and seized files as part of a criminal investigation.
Menendez also raised concerns last year with State and Commerce Department officials about the Dominican Republic’s reluctance to enforce a port security contract with a company that Melgen partly owns.
A spokeswoman for Menendez, Patricia Enright, told the AP that the senator supported the natural gas bill to help improve the environment. She said Menendez personally had no known discussions with either Melgen or others associated with GFS concerning the legislation or its impact on the company. She said it was unclear whether the senator will continue to support the bill he had sponsored.
An SEC document filed last week by GFS showed that Melgen remains on the company’s board of directors. An earlier document filed by the firm in May 2011 was the first to show Melgen as a director. That SEC record showed a $6 million investment in the firm from two unnamed individuals.
The company’s top executive, Ken Green, said Melgen is a key investor but has had no influence on the company’s decision-making and has not attended any director’s meetings since he joined the firm.
“Dr. Melgen hasn’t ever been to our offices, not once,” Green told the AP. “He’s a passive investor.”
Green said the Senate bill that Menendez supported would provide only limited help to his company because most of its provisions are aimed at heavy on-road vehicles like truck rigs and bus fleets. GFS has pioneered an engine conversion system that can be installed on diesel-fueled vehicles, but Green said it is marketed exclusively for off-road equipment, such as massive mining trucks. The tax credits proposed by the bill would do little to offset the cost to buyers of the off-road trucks, which can cost as much as $8 million, Green said.
“This bill won’t do much of anything for us,” he said.