Sen. Robert Menendez must have been high fiving his legal team last week following the Supreme Court’s decision to overturn a corruption conviction against former Virginia Gov. Bob McDonnell.
No, I wasn’t with him, so this is all conjecture. But when you read the high court’s reasoning, it’s hard to imagine there wasn’t some degree of private jubilation in Menendez's office with the knowledge that the government’s case against the New Jersey Democrat just went from “difficult” to “monumental.”
The Supreme Court’s earlier decision to uphold the implied certification theory in “certain circumstances” has received far more attention in the anti-fraud world, and with good reason--it’s likely to capture a significantly wider breadth of upcoming fraud cases. McDonnell’s case, which mentioned the word “healthcare” no more than a handful of times, impacts just one, but in a big way.
Last week’s decision nullified a jury’s conviction of McDonnell, who was accused of accepting $175,000 in loans and gifts from Jonnie Williams, the owner of a nutritional supplement company who wanted Virginia universities to study one of the company’s products called Anatabloc.
It’s worth noting that Anatabloc is made from--stay with me here--microwaved tobacco leaves, according to the Washington Post. After stumbling upon this miraculous discovery, Williams lent McDonnell and his wife, Maureen, more than $50,000 (plus a $15,000 gift) to cover the cost of their daughter’s wedding, along with several other gifts like designer clothes for McDonnell’s wife and a Rolex for the governor himself.
Subsequently, McDonnell set up meetings with state researchers. At one point, during a meeting with the Virginia secretary of administration and the director of the Department of Human Resource Management to talk about state employee health plans, McDonnell popped a lozenge in his mouth and casually announced the supplement was “working well for him” and suggested they meet with Williams.
If you’re sitting here thinking, “Hey, that seems a little sketchy,” you can probably understand what the jury was thinking when they convicted McDonnell and his wife, a verdict that was later upheld by an appellate court.
But all eight Supreme Court justices saw it differently. They decided the instructions to the jury were misguided, and therefore the conviction was vacated. In delivering the opinion of the Court, Chief Justice John Roberts opted for “a more bounded interpretation of ‘official act’” than the one set forth by the government. Specifically, he argued, the mere act of setting up a meeting does not constitute an “official act” even if the person you’re setting up that meeting for has given you a couple hundred thousand dollars.
“Conscientious public officials arrange meetings for constituents, contact other officials on their behalf and include them in events all the time,” Roberts wrote. “The basic compact underlying representative government assumes that public officials will hear from their constituents and act appropriately on their concerns--whether it is the union official worried about a plant closing or the homeowners who wonder why it took five days to restore power to their neighborhood after a storm.”
That logic is easier to swallow when you’re talking about a concerned homeowner. A person peddling a laughable nutritional supplement? Tastes kind of like a tobacco-flavored lozenge.
In the meantime, Menendez is awaiting trial for corruption charges that are strikingly similar to McDonnell’s. In this case, Menendez is accused of accepting gifts from Florida ophthalmologist Salomon Melgen, the highest paid physician in the Medicare program. Government prosecutors say Menendez tried to use his power to influence an investigation into $8.9 million improper claims from Melgen’s practice after the physician showered him with gifts and vacations. Apparently that $8.9 million was just the tip of the iceberg. Melgen now faces charges that he bilked the government out of $105 million.
At least part of the prosecution’s case against Menendez rests on a private meeting that former Health and Human Services Secretary Kathleen Sebelius said she had with the senator, during which he brought up an audit of Melgen’s billing habits that initially caught the ire of federal investigators.
Menendez has previously said that he and Melgen are merely friends, a defense strategy that is likely to draw a less nefarious link between $700,000 in campaign donations and the favors Menendez allegedly did in return. But the Supreme Court’s narrow definition of what constitutes an “official” meeting will toss another roadblock in front of the prosecution. If McDonnell’s meeting with state officials (along with numerous emails and luncheons) didn’t qualify as an “official act,” it’s hard to see how a meeting with the HHS director would.
Legal experts seem to agree. Jessica Tillipman, an assistant dean at the Georg Washington University Law School, told the Washington Post the decision would “make it a lot easier for politicians to accept gifts and hospitality and payments in return for taking action.”
The McDonnell decision won’t alter the healthcare fraud landscape. But it will chip away at the government’s corruption cases, including the one against Menendez. And those little chips start to add up, eventually transforming what we view as fraud and corruption.