Kay LiCausi, who served as chief of staff for then-Rep. Bob Menendez from 1998 to 2002, is apparently the subject of an ongoing federal probe into her lobbying efforts.
A federal grand jury in Newark recently subpoenaed financial documents from the Jersey City Medical Center regarding LiCausi’s lobbying efforts on behalf of the hospital, possibly seeking to determine if she was lobbying while she still worked for Menendez.
After leaving the employ of Menendez in 2002, LiCausi went on to head a successful lobbying firm that earned an estimated $1.3 million in 2006. She earned $280,000 for her work at the hospital between 2003-2006, according to JCMC spokesman Tom O’Neil.
The documents
LiCausi could not be reached for comment last week. But officials at JCMC confirmed that documents had been requested and supplied. O’Neil said the hospital had received two subpoenas for records, and that these would be supplied.
“We’re trying to cooperate to the fullest extent we can with the requests for information,” O’Neil said.
O’Neil would not comment on the content of the requests.
Donald Scarinci, a close associate of Menendez who has also at times represented some of the same clients at LiCausi, agreed with published reports that quote Marc E. Elias, an attorney representing Menendez, as saying the matter is likely routine.
“I heard the rumor about this during [Menendez’s] campaign [for U.S. Senate last year],” Scarinci said. “It’s probably where it comes from, and the U.S. attorney has an obligation to check things out if people bring allegations to him.”
Michael Drewniak, spokesperson for U.S. Attorney Christopher Christie, said his office could not comment on the reports.
Last investigation didn’t pan out
The LiCausi inquiry may have come as a result of an investigation into Menendez last year when federal officials looked into the fact that Menendez rented office space to the North Hudson Community Action Corporation – a successful non-profit low-income health care agency for which he also helped get government funding. In other words, he could have personally benefited, as their landlord, by getting government funds for them. Although the situation became fodder in a heated campaign against him by Republican Tom Kean Jr., federal authorities eventually determined that Menendez had not violated any laws.
The resolution of the investigation came long after the campaign for U.S. Senate was over. The Menendez campaign still claims that the investigation was politically motivated to aid the effort of Kean to win the Senate seat.
Although Menendez has declined to comment on reports claiming he and LiCausi had a romantic liaison, he has acknowledged several times that he had helped LiCausi build up her base of clients after his leaving his employment.
Brad Lawrence, an attorney with Message & Media, a public relations firm representing Menendez, disputed published accounts that said that Menendez “steered” LiCausi to clients. Lawrence said last week that he has asked for retractions from the Record of Hackensack, The New York Times, and the Associated Press.
Lawrence said the word “steering” implies a less than savory transaction.
“Menendez has never steered any lobbying contracts to her in any way,” Lawrence said Wednesday. “There are three contracts after she left his staff that he has openly reported and admitted to helping her getting, which are political contracts with his re-election campaign, the PAC that he has, and the Democratic Congressional Campaign Committee. Those he in fact assisted her on, none of the others. The private sector ones he did not ever steer, push, whatever phrase you want to use, into lobbying contracts.”
He added, “The fact is that, when asked, Senator Menendez gave Ms. LiCausi a positive recommendation – as he has for numerous other former staff people. I believe that recommending someone is fundamentally different from ‘steering contracts.’ In two of the political/fundraising – not lobbying – contracts Senator Menendez had control over, he simply retained Ms. LiCausi to work for him. In the case of the DCCC, Menendez, as Democratic Caucus Chair, certainly was someone whose recommendation would be heeded, but again, Ms. LiCausi was primarily doing political consulting and fundraising – not lobbying – work directly for Mr. Menendez.”
High-profile lobbying
LiCausi has represented several high-profile clients including Mills Corporation – which is currently constructing Xanadu Mall in East Rutherford; various clients at the former Military Ocean Terminal in Bayonne (including the designated developer Fidelco, Royal Caribbean cruise line, and other tenants), and the Democratic Congressional Campaign Committee.
While O’Neil could not discuss the case, published reports claim that the investigation is seeking to determine if Menendez helped LiCausi get the contract with JCMC, which was receiving federal funds.
LiCausi also represented Royal Caribbean Cruise Lines at a time when Menendez was securing federal funds to help reconstruct some of bulkhead for Port Liberty in Bayonne. While Royal Caribbean officials say they received no subpoenas, the Bayonne Local Redevelopment Authority, which is overseeing the reconstruction of the Military Ocean Terminal area was uncertain as to whether or not it had received any.
“I don’t know,” said Jay Coffey, who serves as the Law Director for the City of Bayonne and Counsel for the BLRA.
Due largely to Menendez’ efforts, the BLRA received almost $10 million for the project. Former Jersey City Mayor Gerry McCann, who commented in several articles in The New York Times, said LiCausi was also instrumental in brokering part of the deal for Roseland Properties/Fidelco, helping broker the deal for the developer for part of the terminal area, who is also represented by Scarinci’s law firm
One of the principals of Roseland Properties is developer Carl Goldberg, who also sits as the executive director of the New Jersey Sports and Exposition Authority, which also oversees Mills Corp’s massive ongoing Xanadu mall and entertainment project. In this regard, LiCausi appears to have lobbied on behalf of Goldberg in Bayonne, while at the same time lobbied him on the behalf of Mills Corp. in East Rutherford.
Sources say the subpoenas may have been prompted by testimony from former JCMC President and CEO Jonathan Metsch, who had hired LiCausi at the time.