In November, responding to a question from a Dominican reporter about the port contract, Yzaguirre seemed to publicly endorse the deal. “We are going to step up efforts and resources to face the issue of drugs. It is a serious problem,” he said in Spanish.
Those remarks were trumpeted online by Voxxi, a news Web site run by Melgen.
The New Jersey Democrat stepped in when federal officials found that a friend and major campaign donor had overbilled for health care.
The N.J. Democrat is accused of accepting inappropriate gifts from a Florida doctor.
Still, the contract’s opponents continued to object, saying that it had been improperly awarded to the Beauchamps family as a sweetheart deal and that Melgen’s more-recent investment in the firm did not change that.
Jean and Juan Beauchamps, the general’s sons, who have acted as representatives for the company in the past, did not respond to requests for interviews.
Critics of the contract said they considered it unusual that the embassy would back the arrangement over the objections of the customs agency, business leaders and the American chamber. But Terry Heinsen, president of the Dominican Shippers Association, who has strongly opposed the deal, said in an interview, “We all knew Melgen had a team of heavy-hitters behind him.”
The U.S. government has had a keen interest in port security in the Caribbean since the Sept. 11, 2001, attacks. The Dominican Republic is among the countries that participates in a program called the Container Security Initiative, which gives American personnel the ability to screen certain cargo bound for the United States abroad. The United States donated $7.4 million in September to the Dominican government for a range of security initiatives, including enhancing port security. The U.S. government had not expressed a public opinion about the private port security contract before Melgen became involved.
Responding to a reporter’s questions about the embassy’s policy on the port matter, an embassy representative released a statement saying the State Department routinely helps U.S. businesses abroad. The spokeswoman and the State Department declined to answer questions about Yzaguirre’s role in the port deal.
Just as the fortunes of the port deal were looking up, the contract ran into trouble again in the past few months as questions about Menendez and Melgen surfaced in public.
Last month, Menendez reimbursed Melgen $58,500 with a personal check for two flights the senator had taken in 2010 to the Dominican Republic on the doctor’s private plane.
Menendez had not previously reported the trips as gifts or reimbursed Melgen, as required by Senate rules. The senator said the error was the result of sloppy paperwork.
Melgen, meanwhile, is under federal investigation, according to two law enforcement officials. FBI agents and federal health-care fraud investigators raided his Palm Beach medical offices last month as part of what law enforcement sources say is a probe into allegations of fraudulent Medicare billing.
As the international spotlight has turned on Menendez and Melgen, momentum for the port security deal has again slowed.
Alice Crites contributed to this report.
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