Controversies
Menendez testified against Musto in a court case that resulted in a prison sentence for Musto. The trial was very controversial; Menendez told reporters that he had to wear a "bullet-proof vest to the trial."
Although he had sometimes been portrayed as the political boss of Hudson County, he strongly dislikes this appellation, particularly because, according to an anonymous close source quoted in the December 11, 2005 Union City Reporter, "there is no boss of Hudson County". In 2005 a New York Times Op-Ed characterized Menendez by stating, "Since entering politics as a corruption-fighting mayor of Union City, N.J., Mr. Menendez has become a proponent of business as usual. He has long been an entrenched de facto leader of the Hudson County Democratic machine."
Menendez is perceived as "sort of dirty in the way that pretty much all Jersey politicians are." A poll released by CBS and the New York Times in 2006 asked participants to name the first thing that came to their minds when hearing Menendez's name: the top answer given was "corruption" or "crooked."
On August 27, 2006, two Republican state lawmakers filed an ethics complaint against Menendez, alleging he broke conflict-of-interest rules when he rented property out to a nonprofit agency that receives federal funds. Menendez helped the organization win designation as a Federally Qualified Health Center in 1998. That designation allowed the agency to receive additional federal grants. Menendez allies note that the organization in question, the North Hudson Community Action Corp., which provides social services and health care to the poor and was founded in 1960, had received federal funding for years before Menendez was in Congress, and receives its funding based on mathematical formulas. Menendez maintains that he rented the property out below market-value because "he was supportive of its work". The total rent collected over nine years was over $300,000.
In September, 2006, just a few weeks before the 2006 senate elections, the Republican US District Attorney began investigating the rental deal with NHCAC, subpoenaing records from them. Democrats criticized the investigation, particularly the timing of the investigation and news leaks as being politically motivated. To date, no charges have been brought and the accusations remain unsubstantiated, one of many in the so-called US Attorneys scandal.
An effort to recall Senator Menendez was launched in early 2010 by a group of New Jersey citizens. Although Article 1, Paragraph 2(b) of the New Jersey Constitution expressly authorizes such a recall, state officials fought the effort in court. On March 16, 2010, a State Appeals court ruled that the recall petition could go forward. Menendez said he was surprised that a group claiming to be true to the Constitution is trying now, in his words, "to undermine it". Menendez appealed the ruling. Legal experts have debated the constitutionality of a state recall of a federal officeholder. On November 18, 2010, the New Jersey Supreme Court found that the New Jersey provision violated the U.S. Constitution.
In 2010, The Wall Street Journal reported that Menendez had written to Federal Reserve Chairman Ben Bernanke, asking him to approve an acquisition that would rescue from the prospect of receivership a New Jersey bank, First Bank Americano, operated by Menendez contributors. It was discovered that "eight of 15 directors, including the bank’s chairman and vice-chairman, have been contributors to Menendez or his political action committee." Former federal bank regulator, William Black, called the letter "grotesquely inappropriate" and said that "the letter crossed an unofficial line by asking regulators to approve an application instead of simply asking that it be given consideration." An aide to the senator said that his decision to write the letter was not influenced by political contributions.A highly critical report by the Federal Deposit Insurance Corp. also found the institution had engaged in unsafe or unsound banking practices, including operating without adequate supervision by its board of directors, an excessive level of delinquent or bad loans, inadequate earnings and insufficient coverage of its assets.
On January 5, 2012 Menendez blocked Judge Patty Shwartz, an Obama administration nominee to a federal judgeship, drawing speculation that the block was placed because of Shwartz's relationship with the head of the public corruption unit for New Jersey’s federal prosecutor who had investigated the senator during his 2006 election fight. Menendez denied personal motivation for the block. He has long contended that the corruption investigation was politically motivated. The investigation was closed in the late 2011, with no charges filed.
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