FBI seeks source of prostitution, corruption allegations against Sen. Robert Menendez

Correction: An earlier version of this article incorrectly described a Senate vote on sugar subsidies. Menendez voted with a majority of senators to revamp the Agriculture Department program and end some parts of it, not to end the subsidies entirely. This version has been corrected.

A pair of FBI agents met on a recent weekday morning with brothers Alfonso “Alfy” and Jose “Pepe” Fanjul in the Palm Beach headquarters of their sugar and real estate empire.

The investigators’ questions struck a discordant note in the Fanjuls’ sunlit offices overlooking a yacht-filled waterway, according to three people familiar with the meeting: Were the brothers or any of their associates familiar with a plot to bring down a United States senator?

Months after the FBI began probing allegations against Sen. Robert Menendez (D-N.J.), investigators are looking at whether someone set out to smear him while he was running for reelection last year and then ascending to his new post as chairman of the Senate Foreign Relations Committee, according to four people briefed on the inquiry.

The scene of federal agents interviewing two of the world’s wealthiest sugar barons, whose business holdings include Domino Sugar, underscores the unusual twists of the saga centered on Menendez, who has been battling allegations that he did special favors for a major campaign donor.

As part of a wider public corruption investigation of the senator, the FBI has been examining whether Menendez patronized prostitutes in the Dominican Republic, according to people familiar with the inquiry. They said agents have been trying to determine whether a longtime political supporter and friend, eye doctor Salomon Melgen, provided the women, free flights on his private plane and any other services as illegal gifts.

But the inquiry into the prostitution allegations has come up dry, producing no corroborative evidence, say four people briefed on the probe. They, among others, spoke on the condition of anonymity to discuss an open investigation and private discussions.

The original source of the allegations is a mystery. It is a whodunit that has so roiled politics that Alfy Fanjul, for instance, has called Menendez to assure the senator that he was not involved. The Fanjul brothers declined to comment for this article, and their attorney said they respect Menendez and had nothing to do with the allegations.

The broadening inquiry is drawing in a cast of characters whose travels have intersected with Melgen and Menendez in South Florida and the Dominican Republic.

In addition to interviewing the Fanjul brothers late last month, the FBI has asked to interview a former CIA operative who is a Florida businessman with interests in the Dominican Republic.

Investigators have also recently sought to trace the cyber-trail of an anonymous tipster who first made the prostitution claims in spring 2012 to a government watchdog.

Agents have asked Dominican police to share their work tracking the tipster to a Santo Domingo cybercafe, two people familiar with the case said. From a video surveillance camera, Dominican police in early March obtained an image of a man leaving the cybercafe at the same time that the tipster e-mailed a CNN journalist from there in mid-January. A copy of the image, reviewed by The Washington Post, shows a man in his 30s or 40s, wearing a linen button-down shirt and khaki pants.

Meanwhile, Menendez continues to face a federal grand jury investigation into whether he improperly used his public office to help Melgen’s business interests while taking gifts, people familiar with the probe said.

Menendez has sought to apply pressure on the Dominican government to honor a contract with Melgen’s port-security company, documents and interviews show. Also, Menendez’s office has acknowledged that he interceded with federal health-care officials after they cited Melgen for overbilling the U.S. government for care at his South Florida clinic.

A spokesman for the FBI’s Miami field office declined to comment.

Menendez and Melgen have repeatedly said they engaged in no wrongdoing. They have called the allegations involving prostitutes a baseless and nefarious attack designed to hurt the senator’s reelection effort and undermine his clout.

“Whoever organized and carried out the false smear campaign against Senator Menendez appears to have broken the law, and as we have said from the beginning, we believe this matter should be investigated fully,” said Menendez spokeswoman Tricia Enright.

The FBI began examining the allegations against Menendez after a Washington watchdog passed them along to the Justice Department. An agent in the FBI’s Miami field office who specializes in sex trafficking began corresponding with a tipster who gave his name as “Pete Williams” in late summer 2012. But the FBI could not get the tipster to meet with investigators, according to copies of the agent’s correspondence.

Since then, some of the prostitution allegations have been thrown into some doubt. Three Dominican women said in court documents in March that they had been paid by a Dominican lawyer to make up stories about Menendez paying them for sex. Late last year, two Dominican women making claims of paid sex with Menendez had appeared in a videotaped interview posted on the Daily Caller, a conservative Web site.

Many of Menendez’s allies initially suspected that Republican dirty-trick artists in New Jersey were behind the prostitution allegations. Some others in the Menendez camp suspected a drug syndicate in the Dominican Republic because the port-
security deal Menendez backed might hamper the flow of contraband.

The FBI’s expanding quest for answers recently brought agents to the Fanjul brothers’ offices. The Fanjuls, who like Menendez are of Cuban heritage, are major political donors. Alfy supports Democrats, and Pepe supports Republicans. They are also the largest landowners and employers in the Dominican Republic.

For years, they agreed with Menendez on issues of particular interest to the brothers, such as support for U.S. trade sanctions on Cuba. But last June, the Fanjuls were disappointed by Menendez after he voted with the majority of his Senate colleagues to revamp the Agriculture Department program and end some parts of it. Not long after the vote, Alfy Fanjul called Menendez to register his unhappiness, according to two people familiar with their conversation.

Joseph Klock, a Fanjul Corp. lawyer, said he was not aware of Alfy Fanjul contacting the senator about the sugar vote and could not comment on it.

Klock also declined to discuss whether the Fanjuls were interviewed by the FBI. He said the brothers know nothing about the allegations against Menendez or how they were spread. The brothers do not believe them to be true, Klock said.

“There is no way that anyone involved in our company — or any senior executive — would have anything to do with that kind of thing,” Klock said. “It’s a tragedy . . . that he [Menendez] has to defend himself from this thing. He’s held in the highest regard by them.”

In April, according to two people familiar with the inquiry, the FBI also sought to interview a former CIA operative, Marty Martin, who had worked for a company competing in the Dominican Republic against the port-security firm backed by Menendez. The FBI wanted to talk to Martin about the port deal and who might have a beef with Menendez or his friend Melgen, the two people said.

It is unclear whether agents have been able to question Martin. Martin did not return calls left at his home.

With speculation mounting over who was behind the allegations, several prominent figures have sought to assure Menendez that they were not responsible for the prostitution allegations.

Longtime Republican operative Roger Stone called a mutual acquaintance, who then relayed a message to Menendez, according to people familiar with the call: Stone had not been the source of the accusations.

In an interview, Stone acknowledged that he didn’t like Menendez and said he has been working on a report for his Web site, the Stone Zone, calling into question whether the Dominican women had actually recanted the prostitution allegations.

“As far as I’m concerned, whether those allegations are true or false is still an open question,” he said.

But Stone stressed, “I don’t know who the originator is.”

Alfy Fanjul tried repeatedly to reassure Menendez and Melgen, even requesting a personal meeting with the senator, according to people familiar with the efforts. Fanjul did reach Melgen to make his case.

When Fanjul got his call put through to Menendez’s Washington office in February, the sugar executive spoke in a rush, according to an account of the call provided by two people. He told Menendez that he thought the anonymous claims about the senator were terrible. Moreover, Fanjul said, he had nothing to do with them.

Menendez responded that they would eventually find out who was responsible for trying to smear him.

The senator ended the call abruptly: “Thanks, Alfy. We’ll see.”

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