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Mystery source, high stakes as Menendez denies prostitutes allegations

By Alan Duke, CNN
February 1, 2013 -- Updated 1512 GMT (2312 HKT)
STORY HIGHLIGHTS
  • Sen. Robert Menendez denies allegation he hired prostitutes
  • Watchdog group that surfaced allegations now questions tipster's credibility
  • Tipster "Peter Williams" won't talk directly to investigators, watchdog head says
  • Senate Ethics Committee won't confirm whether it is investigating

(CNN) -- This story is about a U.S. senator's alleged trips on a private plane to the Caribbean for sex parties with prostitutes.

If it proves to be true, it would most likely topple a powerful politician and affect President Barack Obama's ability to pass legislation.

If it is false, it would raise questions about how government watchdog groups and the media handle anonymous tipsters and their information.

The senator is New Jersey's Robert Menendez, a 59-year-old divorced father of two who is set to become chairman of the Senate Foreign Relations Committee. His Senate website calls Menendez "a fighter for New Jersey families."

Menendez denied the story in a statement issued Wednesday by his Senate office: "Any allegations of engaging with prostitutes are manufactured by a politically-motivated right-wing blog and are false."

Menendez pays back $58K for trips
Sen. Menendez denies hiring prostitutes

The "right-wing blog" Menendez is accusing of manufacturing the allegations is The Daily Caller, an online publication founded by conservative commentator Tucker Carlson and Neil Patel, a former adviser to former Vice President Dick Cheney.

The Daily Caller published its first reports on the allegations in early November just before the election. The stories were based on interviews with two women and a Dominican Republic official -- all unidentified. That prompted a denial then by the Democratic senator. He was easily re-elected.

But the latest allegations are based on documents published by a "non-partisan" Washington watchdog group -- Citizens for Responsibility and Ethics in Washington, known as CREW.

It would be a stretch to call CREW "right-wing," considering Executive Director Melanie Sloan served as minority counsel for the House Judiciary Committee under Rep. John Conyers, D-Michigan, before being hired by the Clinton Justice Department to be an assistant U.S. attorney for the District of Columbia. In fact, a quick online search finds blogs accusing CREW of being a "left-wing" group.

CREW published an e-mail this week it received last April from a man who identified himself as Peter Williams.

"My duty as a U.S. citizen obligates me to report what I consider to be a grave violation of the most fundamental codes of conduct that a politician of my country must follow," the tipster wrote.

E-mails sent by Williams included statements from women detailing what they said were sex parties in a house and on a yacht in the Dominican Republic owned by Dr. Salomon Melgen, a south Florida ophthalmologist.

One e-mail purported to include a statement from a woman who said she was paid to have sex with the senator several times when she worked for "the Doll Palace" escort service in the spring of 2009. Prostitution is legal in the Dominican Republic, but only if the prostitute is 18 or older.

Williams suggested that he and the women "will be willing to testify" about the allegations if their safety was guaranteed.

His e-mail to CREW said he became aware of the alleged behavior while traveling in the Dominican Republic for "personal and business reasons" starting in 2008.

CREW said it passed the "numerous" Williams e-mail exchanges on to the Justice Department and the FBI in July 2012, after the group was "unable to independently verify the truth of the allegations."

But 10 months after the first contact with Williams, Sloan told CNN her group now has doubts about Williams' identity, motives and veracity.

"This unnamed source said he has had this information about Sen. Menendez as early as 2008, yet he didn't come forward until four years later, right before Sen. Menendez was up for re-election," Sloan said. "Further, this source refused to ever speak by phone to us, with other news organizations, or with the FBI, so, those two facts combined to seriously undermine his credibility."

CNN efforts to reach Williams through the e-mail address used to contact CREW have been unanswered.

It is not known whether the FBI succeeded in talking directly to Williams, but there was a very public indication this week that the agency is investigating Melgen. Agents were seen carrying boxes from his Palm Beach, Florida, office Wednesday.

An FBI spokesman in Florida confirmed there was "law enforcement activity" at the location where the search occurred but did not mention Melgen or anyone else and did not explain what agents were investigating. In 2011, the Internal Revenue Service hit Melgen with an $11 million tax lien.

"The government has not informed Dr. Melgen what concerns it may have, his lawyer Dean L. Willbur Jr. told CNN in an e-mail Thursday. "We are confident that Dr. Melgen has acted appropriately at all times. Additionally, any issues concerning Dr. Melgen and the IRS have been fully resolved and satisfied."

Menendez calls Melgen a friend and political supporter. He acknowledged flying on the eye doctor's plane three times to the Dominican Republic in 2010, trips that he said were "paid for and reported appropriately."

One of the trips involved official travel for the Democratic Senatorial Campaign Committee, which he chairs, while the other two were personal trips, Menendez's spokeswoman Patricia Enright said. The senator is not required to publicly disclose information concerning personal travel, she said.

The senator made a payment of $58,500 from his personal funds to Melgen's company on January 4 for the full operating costs of the two flights Menendez took in August and September 2010 to the Dominican Republic, Enright said. It was an "oversight" on the part of the senator not to have paid for the flights at the time he took them, she said.

New Jersey state Sen. Sam Thompson, a Republican, sent a complaint to the Senate Ethics Committee in November calling for an investigation, saying Menendez may have violated Senate ethics by "repeatedly flying on a private jet to the Dominican Republic and other locations ... and soliciting prostitutes." Thompson said he did not hear back from the Ethics Committee.

At an event in Washington on Thursday night, when asked by CNN whether be violated Senate finance rules, Menendez said, "These are nameless, faceless, anonymous allegations. You should find out from them."

The Senate Ethics Committee said it could not comment. Enright said the senator assumes the committee is reviewing the matter, but he has not been contacted.

CNN asked Senate Majority Leader Harry Reid on Thursday whether he thought Menendez was handling the controversy properly.

"First of all, Bob Menendez is my friend," Sen. Reid said. "He is an outstanding senator. He is now the new chair of the Foreign Relations Committee. Any questions in this regard direct to him. I don't know anything about it."

"I think the issue of the trips alone are probably not enough to suggest that he doesn't have the right to assume the chairmanship of the Foreign Relations Committee," Sloan said. "I think if all the allegations together prove to be true, that would certainly suggest questions about Sen. Menendez's fitness for the chairmanship and perhaps even his position in the Senate."

The executive director for CREW, which sent the Williams e-mails to the FBI, said people should "withhold judgment given the many questions about the source of these allegations and the timing of these allegations. I think the best thing is to wait for the FBI to investigate and figure out what really happened here, if Sen. Menendez did something wrong and if not, who's really behind this effort to smear him."

If this story evolves into a scandal and Menendez is forced to resign, the Democrats' majority in the Senate would likely get one vote thinner. New Jersey law allows Gov. Chris Christie, a Republican, to appoint an interim senator until a special election, which would be no sooner than November.

CNN's Jim Acosta, Ted Barrett, Adriana Hauser and Joe Johns contributed to this report.

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