Pair accuse Menendez of conflict

Two Republicans cite rent he took from nonprofit in ethics complaint

Tuesday, August 29, 2006 - Star-Ledger

Two Republican state lawmakers filed an ethics complaint against U.S. Sen. Robert Menendez yesterday, alleging he broke conflict-of-interest rules by collecting more than $300,000 in rent from a nonprofit agency he helped win millions of dollars in federal funding.

Assemblymen Guy Gregg and Richard Merkt wrote a letter to the Senate Select Committee on Ethics seeking a ruling regarding Menendez, a Hudson County Democrat running against Republican state Sen. Tom Kean in this fall's U.S. Senate race.

The lawmakers allege that Menendez's actions, while he served in the U.S. House of Representatives, violated House ethics rules and would have violated Senate rules as well. Menendez took office in the Senate in January. They said the committee has jurisdiction over the matter because it is authorized to address "improper conduct which may reflect upon the Senate."

"Senator Menendez used his position as a member of the House of Representatives to benefit an entity from which he derived a direct financial benefit," the lawmakers, both Morris County Republicans, wrote. They added that the committee must ensure that Menendez's "improper actions ... are not repeated during his tenure in the United States Senate."

Matt Miller, spokesman for the Menendez campaign, called the complaint a "meritless stunt" and said that, "like Kean's campaign, it will go nowhere."

Robert Walker, chief counsel for the committee, declined to comment yesterday.

The complaint comes after The Star-Ledger reported last week that over a nine-year period while Menendez was in the House, he collected more than $300,000 in rent from the North Hudson Community Action Corp., a nonprofit agency that leased a three-story brick house he owned in Union City.

During that period, Menendez helped the agency win status as a federally qualified health care center in 1998, a move that made it eligible for certain federal health care grants. The agency has collected $9.6 million in federal grants through the designation. In all, 64 percent of the agency's $38 million annual budget comes from the federal government, according to Joseph Lauro, the organization's spokesman.

The nonprofit honored Menendez as its "man of the year" in 2001 and also named a pavilion in its headquarters after him. The agency's employees also have contributed more than $30,000 to Menendez's campaigns over the years.

Independent ethics watchdogs have said it was a conflict of interest for Menendez to help a tenant win federal funding.

Menendez said he gave the tenant no special treatment, and had helped other nonprofits in his district obtain status as federally qualified health centers.

Menendez said that before renting out the house in 1994, he obtained clearance from the House Ethics Committee, but did not obtain a written opinion. He said there was nothing improper about his actions because he never negotiated directly with agency officials and the organization paid slightly below-market rent.