Grand jury probing deal linked to Menendez
12/8/2006  AP

NEWARK — Sen. Robert Menendez's office today continued to defend his real estate transaction with a nonprofit organization as a published report said a federal grand jury was hearing testimony regarding the deal.

The Record of Bergen County reported in today's newspapers that two witnesses were questioned by a panel the day before.

Michael Drewniak, spokesman for the U.S. attorney's office, would not comment today.

The newspaper said one of the people questioned was Lourdes Lopez, who bought a Union City building from Menendez in 2003. Lopez then became landlord to the North Hudson Community Action Corp. Menendez had rented to the nonprofit group for nine years and had helped it obtain federal funds.

Menendez has said he obtained clearance from the House Ethics Committee before entering the transaction and has maintained the deal was conducted properly.

"We're confident that after any review, the U.S. attorney will reach the same conclusion reached by House Ethics Committee, which is that this transaction was without a doubt appropriate and legal,'' Menendez spokesman Allyn Brooks-LaSure said today.

Lopez's attorney, Adolfo Lopez, did not return a telephone call seeking comment today. He told the newspaper his client "did testify pursuant to a subpoena.''

The other person who testified Thursday was Lorraine Johnson, director of the North Hudson group's Head Start program, the newspaper reported. Her attorney, Lawrence Lustberg, did not return a call seeking comment.

Menendez has repeatedly said he has not been subpoenaed in any federal investigation. During the Senate campaign, GOP challenger Tom Kean Jr. continually slammed the lease deal as unethical. Menendez defeated Kean by 8 percentage points.