Report: Menendez donor could see 250,000-percent return on recent Dominican port security investment

David Martosko Executive Editor
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Salomon Melgen, the Florida eye doctor linked to NewJersey Democratic Sen. Bob Menendez by $1 million in political contributions and — allegedly — scores of prostitutes, could see a 250,000-percent return on his most recent investment in a Dominican port security company.

TIME magazine reported Monday that Melgen paid just $100,000 in August 2011 for 50 percent of ICSSI, a company that holds an exclusive contract to provide cargo x-ray equipment for ports in the Dominican Republic. Melgen already owned the other 50 percent of the company, making him its sole shareholder.

That lucrative contract, which lay dormant since 2002 when Melgen bought the company, could be worth $500 million over its scheduled 20-year lifespan — meaning that his $100,000 investment could multiply in value by a factor of 2,500.

But that can only happen if the Dominican Republic enforces ICSSI’s contract.

Reporting from Boca Chica, a major Dominican port city, TIME cited a January 16 article in La Lupa Sin Trabas, a Dominican magazine, for numbers related to Melgen’s investment.

The promise of a Bill Gates-like windfall brings into sharp relief Melgen’s extensive political engagement with Menendez, who now chairs the powerful Senate Foreign Relations Committee.

Together, Melgen and members of his family have contributed more than $1 million to political coffers benefiting Menendez and other Democrats. That largesse, it is thought, targeted the U.S. legislators who could most easily help Melgen by pressuring Dominican authorities to honor their post security deal with Melgen’s company.

Island roadblocks, however, show no sign of lifting.

In a 2008 letter, Dominican Republic customs director Miguel Cocco called the monopoly deal a “quasi-legal way to scam the Dominican State.” He died months later after a long illness, but not before announcing that he planned to take legal action to nullify the contract.

His successors argue that because the contract was signed by a military official, and not the customs authority, it’s already null and void.

Meanwhile, with no quthority to contract elsewhere for the giant x-ray machines that scan cargo containers for drugs, weapons and smuggled human cargo, the Dominican government concedes that it can only inspect 5 percent of what comes in and out of the country’s busiest ports.

That’s a situation that favors illicit traffickers of all kinds.

Vinicito Castillo Seman is a Dominican politician who, along with Menendez and Melgen, was accused in January of participating in alcohol-fueled sex parties with prostitutes. He contends that the accusations, which few news outlets have taken seriously, are the work of drug and arms smugglers who are eager to scuttle Melgen’s plan to become wealthy by beefing up port security.

“There are powerful interests at play here who do not want to see the contract for X-ray machines go forward,” Castillo told TIME.

The Daily Caller first surfaced the allegations against Menendez in November, speaking with two Dominican women who said they were paid to have sex with the New Jersey Democrat. A Dominican official later supported those reports, placing Melgen at his resort home for regular parties with Menendez and an assortment of prostitutes.

In late January new allegations emerged in the form of written statements and interview transcripts with self-described prostitutes who said they were 16 years old when their sexual contact with the men began.

Castillo was named, for the first time, in one of those statements.

Complicating matters for Melgen is a federal investigation into allegations that he defrauded the Medicare system by overbilling the government for ocular injections.

TheDC has independently confirmed that the FBI’s investigation of Menendez’s alleged wrongdoing is based in Newark, N.J. Menendez has already conceded that he intervened with the Centers for Medicare and Medicaid Services on behalf of Melgen, his political donor.

Mennedez also reimbursed Melgen $58,500 in January for two 2010 private-jet trips to the Dominican Republic aboard the doctor’s Challenger 600 aircraft. A Menendez spokesman has insisted that he only took three trips on that plane, all in 2010, including a third round-trip that the Democratic Senatorial Campaign Committee paid for.

Menendez has not, however, addressed whether he took trips on another plane Melgen owned previously. The Senate Ethics Committee is investigating.

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