Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 1 of 21 PageID: 3622 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

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1 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 1 of 21 PageID: 3622 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA, ROBERT MENENDEZ and v. Crim. No. 2:15-cr Hon. William H. Walls SALOMON MELGEN, Defendants. DEFENDANTS REPLY BRIEF IN SUPPORT OF THEIR MOTION TO DISMISS PURSUANT TO MCDONNELL v. UNITED STATES Abbe David Lowell Kirk Ogrosky Jenny R. Kramer Murad Hussain Christopher D. Man ARNOLD & PORTER NORTON ROSE FULBRIGHT US LLP KAYE SCHOLER LLP 1200 New Hampshire Avenue, N.W. 601 Massachusetts Avenue, N.W. Washington, D.C Washington, D.C (202) (202) Raymond M. Brown Matthew I. Menchel GREENBAUM ROWE SMITH & DAVIS LLP Samuel A. Stern Metro Corporate Campus One KOBRE & KIM LLP P.O. Box South Biscayne Boulevard, 35th Fl. Woodbridge, N.J Miami, FL (732) (305) Stephen M. Ryan MCDERMOTT WILL & EMERY LLP 500 North Capitol Street, N.W. Washington, D.C (202) Counsel for Defendant Senator Robert Menendez Counsel for Defendant Dr. Salomon Melgen

2 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 2 of 21 PageID: 3623 TABLE OF CONTENTS INTRODUCTION...1 ARGUMENT...1 I. THE STREAM OF BENEFITS THEORY CANNOT BE SQUARED WITH MCDONNELL...1 II. THE SUPERSEDING INDICTMENT FAILS TO PROPERLY CHARGE OFFICIAL ACTS UNDER MCDONNELL...7 A. Senator Menendez Did Not Take Official Acts of the Executive Branch...8 B. The Superseding Indictment Does Not Charge That Senator Menendez Took Official Acts Defendants Positions Are Not Inconsistent An Official Act Does Not Include Steps Toward That Act...14 CONCLUSION...15 i

3 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 3 of 21 PageID: 3624 TABLE OF AUTHORITIES CASES E.I. DuPont de Nemours and Co. v. United States, 508 F.3d 126 (3d Cir. 2007)...2 Evans v. United States, 504 U.S. 255 (1992)...4, 7, 12 Fernandez v. Johnson, No. 12 Civ. 2774(LBS), 2013 WL (S.D.N.Y. Mar. 5, 2013)...2 Hassen v. Gov t of V.I., 861 F.3d 108 (3d Cir. 2017)...2 Hinkle ex rel. Estate of Hinkle v. Assurant, Inc., 390 F. App x 105 (3d Cir. 2010)...6 McDonnell v. United States, 136 S. Ct (2016)... passim Patterson v. McLean Credit Union, 491 U.S. 164 (1989)...2 Siding and Insulation Co. v. Beachwood Hair Clinic, Inc., No. 1:11 CV 01074, 2011 WL (N.D. Ohio Sept. 8, 2011)...2 Skilling v. United States, 561 U.S. 358 (2010)...5, 6 United States v. Boyland, No , 2017 WL (2d Cir. July 10, 2017)...1, 10 United States v. Emmenegger, 329 F. Supp. 2d 416 (S.D.N.Y. 2004)...2 United States v. Menendez, 831 F.3d 155 (3d Cir. 2016)...13 United States v. Repak, 852 F.3d 230 (3d Cir. 2017)...5 United States v. Silver, No cr, 2017 WL (2d Cir. July 13, 2017)...14 United States v. Sun-Diamond Growers of Cal., 526 U.S. 398 (1999)...3 Villasenor v. Indus. Wire & Cable, Inc., 929 F. Supp. 310 (N.D. Ill. 1996)...2 STATUTES 18 U.S.C , 6, U.S.C. 666(a)(2) U.S.C. 52(2)...6 ii

4 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 4 of 21 PageID: 3625 OTHER AUTHORITIES Harvey A. Silvergate & Emma Quinn-Judge, Tawdry or Corrupt? McDonnell Fails To Draw A Clear Line For Federal Prosecution Of State Officials, 2016 Cato Sup. Ct. Rev. 189, 208 (2016)...7 iii

5 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 5 of 21 PageID: 3626 INTRODUCTION The government s opposition (Dkt. 185) suffers from a misreading of McDonnell v. United States, 136 S. Ct (2016), and a misstatement of Defendants legal positions. The government's argument that McDonnell is an inconsequential decision which has no application to its pre-mcdonnell Superseding Indictment ignores that its Superseding Indictment was returned utilizing the precise legal arguments that were unanimously rejected by the Supreme Court in McDonnell. The current Superseding Indictment does not set forth allegations that can survive analysis under the Supreme Court s McDonnell decision. To permit flawed allegations to go to trial knowing of the Supreme Court s precedent is unjust, and the issues must be remedied prior to trial. Unlike the prosecutors in this matter, the government already confessed error in a similar case before the Second Circuit, conceding that charges or instructions treating a public official lobbying other governmental agencies, and advocating for his constituents as an official act are erroneous under McDonnell. United States v. Boyland, No , 2017 WL , at *6 (2d Cir. July 10, 2017). The government fails to even attempt to explain how this Superseding Indictment can withstand its own reading of McDonnell in Boyland. This is not an error that can be addressed in jury instructions, because in this case, that flaw is the essence of the Superseding Indictment. ARGUMENT I. THE STREAM OF BENEFITS THEORY CANNOT BE SQUARED WITH MCDONNELL The government maintains that its stream of benefits theory in the Superseding Indictment was not impacted by McDonnell because McDonnell does not contain any reference 1

6 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 6 of 21 PageID: 3627 to stream of benefits ; it also does not contain any reference to retainer theory. (Dkt. 185 at 5.) Use of those precise words simply is not necessary to invalidate the fatally flawed allegations in the Superseding Indictment. In binding precedent, the Third Circuit appropriately recognizes that a Supreme Court decision may invalidate circuit precedent when it weakens the conceptual underpinnings of those decisions. E.I. DuPont de Nemours and Co. v. United States, 508 F.3d 126, 132 (3d Cir. 2007); see, e.g., Hassen v. Gov t of V.I., 861 F.3d 108, 114 n.5 (3d Cir. 2017) (ignoring circuit precedent that deviated from more recent Supreme Court analysis, even though the Supreme Court case arose in a different context). A common reason for shifting away from prior precedent is that there has been an: intervening development of the law, through either the growth of judicial doctrine or further action taken by Congress. Where such changes have removed or weakened the conceptual underpinnings from the prior decision, or where the later law has rendered the decision irreconcilable with competing legal doctrines or policies, the Court has not hesitated to overrule an earlier decision. E.I. DuPont, 508 F.3d at 132 (quoting Patterson v. McLean Credit Union, 491 U.S. 164, 173 (1989)). That is the situation here, as the Third Circuit s stream of benefits theory cannot be squared with McDonnell s analysis. When Supreme Court precedent undermines prior circuit precedent, district courts of course must follow the higher authority of the Supreme Court. See, e.g., Fernandez v. Johnson, No. 12 Civ. 2774(LBS), 2013 WL , at *3 (S.D.N.Y. Mar. 5, 2013) (quoting United States v. Emmenegger, 329 F. Supp. 2d 416, 429 (S.D.N.Y. 2004)) (district court can disregard circuit precedent where a subsequent decision of the Supreme Court so undermines it that it will almost inevitably be overruled ); Siding and Insulation Co. v. Beachwood Hair Clinic, Inc., No. 1:11 CV 01074, 2011 WL , at *2 (N.D. Ohio Sept. 8, 2011) (district court bound by circuit precedent unless the Supreme Court reverses or undermines it ); Villasenor v. Indus. Wire & Cable, Inc., 929 F. Supp. 310, 313 2

7 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 7 of 21 PageID: 3628 (N.D. Ill. 1996) (district court bound by circuit precedent unless and until a subsequent decision by that court or the Supreme Court undermines its holding ). Defendants explained the origins of the stream of benefits theory and how McDonnell stripped the doctrine of its underpinnings at length in their Motion (Dkt at 1-10), but the government makes no effort to address that analysis. The government just continues to miscite the stream of benefits cases as if McDonnell did not exist. (Dkt. 185 at 6-9.) First, the Supreme Court never endorsed the stream or benefits theory; its underpinnings rest entirely among lower court opinions. 1 In fact, the Supreme Court seemingly rejected the stream of benefits theory in United States v. Sun-Diamond Growers of Cal., 526 U.S. 398 (1999), when it looked to the definition of official act and held [t]he insistence upon an official act, carefully defined, seems pregnant with the requirement that some particular official act be identified and proved. 526 U.S. at 406. Under 18 U.S.C. 201, the official act definition applies to both bribery and gratuity cases, so logically whatever limitation exists on the phrase official act applies to both kinds of cases. Nevertheless, lower courts viewed Sun- Diamond s limiting principle that some particular official act be identified and proved as limited to gratuity cases, based on a difference in intent between bribery and gratuity cases, so that the stream of benefits theory could survive in the bribery context. (Dkt at 4 (quoting 526 U.S. at 406).). That is the exact same position the government previously took in this case, explaining that Sun-Diamond has no relevance to bribery cases because that decision turned on the different scienter requirement in the gratuity statute, which is not present in the bribery statute... Sun-Diamond did not impose a requirement that the Government prove a link between 1 Because the Supreme Court never endorsed the stream of benefits theory, the government s claim that the Court would not silently overturn its prior authority in support of such a theory is legally incorrect. (Dkt. 185 at 5.) 3

8 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 8 of 21 PageID: 3629 a thing of value and a specific official act in bribery cases. (Dkt. 87 at 18 (government s emphasis).) McDonnell unequivocally rejects the government s reading of Sun-Diamond as limited to gratuities cases. McDonnell is a bribery case, and when framing the issue of whether the charged official acts in that bribery case were actually official acts, the Supreme Court said that our opinion in United States v. Sun-Diamond Growers of Cal.,... rejects that interpretation. McDonnell, 136 S. Ct. at That makes clear that the Supreme Court in McDonnell reads Sun-Diamond s limiting principle as based on the definition of official act, applicable to both bribery and gratuity allegations. Eliminating any doubt that the exchange could follow stream of benefits logic, where the quo could be some unspecified future action as opportunities arise (as is charged in the Superseding Indictment), the Supreme Court said the focus is whether the public official agreed to perform an official act at the time of the alleged quid pro quo. McDonnell, 136 S. Ct. at 2371 (emphasis added). And to qualify as an official act that is agreed upon at the time of the alleged quid pro quo, the act: must also be something specific and focused that is pending or may by law be brought before a public official. To qualify as an official act, the public official must make a decision or take an action on that question, matter, cause, suit, proceeding or controversy, or agree to do so. Id. at 2372 (emphasis added); see id. at 2365 (quoting Evans v. United States, 504 U.S. 255, 268 (1992)) ( [T]he offense is completed at the time when the public official receives a payment in return for his agreement to perform specific official acts.... ). The Supreme Court made clear that an official act must be more specific and focused than a broad policy objective, and that the jury instructions were flawed for including acts in furtherance of longer-term goals or in a series of steps to exercise influence or achieve an end. Id. at

9 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 9 of 21 PageID: 3630 It is obvious from the words drafted by the government in the Superseding Indictment that they contend the quo was for Senator Menendez to perform official acts as needed or as opportunities arose. (Dkt , 227). As such, the Superseding Indictment simply cannot be reconciled with the Supreme Court s standard that the alleged official act must be something specific and focused at the time of the alleged quid pro quo. The government ought to be pursuing a correct charge to ensure justice, rather than going forward with an overruled theory that might make it easier for them to win. Sticking with its indefensible claim that there is nothing new in the McDonnell decision, the government dismisses the specific and focused language and that an official act be part of the initial offer, solicitation or agreement as irrelevant because this has always been the case. (Dkt. 185 at 9.) That is in sharp contrast with the Third Circuit, which described this specific and focused language as one of the key clarifications made by McDonnell. United States v. Repak, 852 F.3d 230, 252 (3d Cir. 2017). It also defies the government s pre-mcdonnell briefing that extensively quotes Third Circuit cases stating that under the stream of benefits theory it does not need to prove a specific quo or specific official act, and the government makes the point that it does not need to identify a specific official act ad nauseam. (Dkt. 87 at 6, 16-19, 30.) Having argued repeatedly that it does not need to charge any specific act under the stream of benefits theory, it is obviously inconsistent for the government to now claim that the specific and focused requirement has existed all along and somehow was consistent with the stream of benefits theory. Unable to square the stream of benefits theory with the language of the Supreme Court s unanimous McDonnell opinion, the government stretches to claim the Supreme Court endorsed the theory years earlier in Skilling v. United States, 561 U.S. 358 (2010). (See Dkt. 185 at 7.) 5

10 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 10 of 21 PageID: 3631 But Skilling does not address the stream of benefits theory either explicitly or implicitly. Skilling held that limiting the honest services fraud statute to bribes and kickbacks would cure a vagueness problem with that statute because those prohibitions draw content not only from the pre-mcnally case law, but also from federal statutes proscribing and defining similar crimes. 561 U.S. at 412. Skilling then cited three statutes, 18 U.S.C. 201(b), 18 U.S.C. 666(a)(2), and 41 U.S.C. 52(2), and provided a see also, e.g., cite to three court of appeals decisions involving honest services fraud cases based on bribery. Id. While those appellate decisions also addressed the stream of benefits theory, the Supreme Court in Skilling did not address the validity of that theory; it merely illustrated honest services fraud cases that were based on bribery. While some courts have looked to Skilling to conclude that the stream of benefits theory survived (see Dkt at 6), there is no plausible reading of the Supreme Court s more recent McDonnell decision in which that theory now can be charged. McDonnell s more recent and explicit language is flatly inconsistent with the stream of benefits theory and that language is controlling. See, e.g., Hinkle ex rel. Estate of Hinkle v. Assurant, Inc., 390 F. App x 105, 107 (3d Cir. 2010) (explaining that the Supreme Court s subsequent clarification of prior precedent is controlling). Based on a single sentence in McDonnell, the government makes two more arguments about McDonnell that conflate and confuse different principles. The Supreme Court stated: [t]he agreement need not be explicit, and the public official need not specify the means that he will use to perform his end of the bargain. 136 S. Ct. at From this, the government first argues that the stream of benefits theory survives because the public official does not have to specify the means he will use to uphold his end of the bargain. (Dkt. 185 at 9 (quoting 136 S. Ct. at 2371).) But what the Supreme Court held must be specific and focused is the 6

11 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 11 of 21 PageID: 3632 official act, not the means by which it is accomplished. See, e.g., Harvey A. Silvergate & Emma Quinn-Judge, Tawdry or Corrupt? McDonnell Fails To Draw A Clear Line For Federal Prosecution Of State Officials, 2016 Cato Sup. Ct. Rev. 189, 208 (2016) (McDonnell clarifies that although the means need not be specified, it appears that an official act must be specified. ). For example, if a city councilman promises an outcome, like the issuance of a permit, that outcome is the official act. Whether the city councilman gets the necessary votes through legitimate persuasion of his fellow council members, or by horse trading votes, or even by bribing them, the means are irrelevant to the quid pro quo where the quo is an outcome. Second, the government is confused that Defendants would cite Evans v. United States, 504 U.S. 255, 258 (1992), which held that bribery based on campaign contributions requires an explicit quid pro quo (Dkt. 185 at 9), when McDonnell says the agreement generally need not be explicit. 136 S. Ct. at Yet, Defendants cited Evans for an entirely different proposition: the offense is completed at the time when the public official receives a payment in return for his agreement to perform specific official acts.... (Dkt at 2 (quoting McDonnell, 136 S. Ct. at 2365 (quoting Evans, 504 U.S. at 268)).). This is the portion quoted by the Supreme Court in McDonnell that cites to the specific official acts language from Evans, 136 S. Ct. at 2365, and like the Sun-Diamond language laid out above, was used in McDonnell to close the door on the viability of the stream of benefits theory that the government pushes forward notwithstanding McDonnell. II. THE SUPERSEDING INDICTMENT FAILS TO PROPERLY CHARGE OFFICIAL ACTS UNDER MCDONNELL The government s opposition does not address or clarify how the existing Superseding Indictment survives the new meaning of official acts post-mcdonnell. Defendants complained that the Superseding Indictment contains an Official Acts Section that contains 153 paragraphs 7

12 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 12 of 21 PageID: 3633 spanning 33 pages, but the government now tells us that its heading is misleading because of course not every paragraph in this section is an official act.... (Dkt. 185 at 21.) Without identifying which paragraphs in the Official Acts section it claims really are official acts, the government just says it alleges so many official acts because there were so many official acts. (Id. at 16.) Alright then how and when will the Court, jury, and defendants learn which acts are the alleged official acts? At one point, the government suggests a more reasonable number of four official acts, looking to the relief Dr. Melgen allegedly sought from the Executive Branch (id. at 4), but then the government suggests that Senator Menendez personally took various additional official acts, which include threatening a hearing and meeting with Executive Branch officials (id. at 16-18). At this point, just weeks before jury selection, it remains entirely unclear what paragraphs in the Superseding Indictment are charged as official acts, and which paragraphs are not. Surely, post-mcdonnell, the government is not allowed to return a Superseding Indictment which fails to put the Court and defendants on notice of what the alleged official acts are that it alleges were the quo in a quid pro quo case. A. Senator Menendez Did Not Take Official Acts of the Executive Branch Defendants indeed have acknowledged that Executive Branch officials may engage in official acts such as approving visa applications, clarifying Medicare reimbursement policy, and promoting port security measures. (Dkt. 185 at 14 (quoting Dkt. 103 at 1).) But this acknowledgment concerning Executive Branch officials does nothing to support this Superseding Indictment, which claims to be charging Senator Menendez took official acts. 2 That Executive 2 The Superseding Indictment contends the alleged bribes were to influence Menendez s official acts (Dkt (b) (emphasis added)), and that Menendez violated his obligation to perform the duties and responsibilities of his office free from corrupt influences (id. 2 (emphasis added)). The alleged bribes were for requested exercises of Menendez s official 8

13 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 13 of 21 PageID: 3634 Branch officials may have taken official acts is not the same as alleging that Senator Menendez took official acts. The government claims the definition of official act describes acts that can be brought before any public official, claiming that the matter need not be pending before the public official who is performing the act; that interpretation, however, ignores the remainder of the statute and how this Superseding Indictment was charged. (Dkt. 185 at 3.) The elements of the crime itself (not the definition of official act ) require that Senator Menendez accepted a gift in return for being influenced in the performance of any official act. 18 U.S.C. 201(b)(2)(A) (emphasis added). Plainly, Senator Menendez would not be the public official being influenced in the performance of an official act if it were some other public official who was being influenced to take that act. Under this type of scenario, Senator Menendez would be the influencer, not the one influenced. Additionally, the Superseding Indictment charges that the official acts were those of Senator Menendez, so even if the government s theory was correct, that is not what has been charged in the pending case. (See supra, n.2.) The government then acknowledges that expressing support to others is not an official act, but claims that more overt advocacy can be. (Dkt. 185 at 3.) This is too thin a reed of difference that would convert something public officials do every day, expressing support, into something that could be criminal conduct. Id. Thereafter, the government notes that the McDonnell decision leaves open the possibility that it could be an official act if a public official were to exert pressure on another official to perform an official act, or to advise another authority (id. 16 (emphasis added)), requests for official action from Menendez and Menendez s Senate staff as needed (id. 19 (emphasis added)), and updating Dr. Melgen on the status and progress of Menendez s official action on Melgen s behalf (id. 20 (emphasis added)). 9

14 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 14 of 21 PageID: 3635 official, knowing or intending that such advice will form the basis for an official act. (Dkt. 185 at 3 (quoting 136 S. Ct. at 2372).) This is the exact same language cited by Defendants in their motion for the position that McDonnell was addressing an intra-branch exertion of pressure from a Governor to his subordinate, and that the Supreme Court s decision must be read in that context. (Dkt at ) McDonnell only makes sense in this context, where the direction from a boss to his subordinate would form the basis for the decision. It does not apply to mere lobbying, and the analysis cannot hold in an inter-branch situation such as the one alleged in the Superseding Indictment where Senator Menendez can do no more than advocate to officials in a different branch of government and hope to be persuasive. The government itself undermines its own argument because it already conceded before the Second Circuit that the distinction it now asks this Court to make is not supportable under McDonnell. The government confessed error before the Second Circuit, acknowledging jury instructions that treat a public official lobbying other governmental agencies, and advocating for his constituents as an official act, are erroneous under McDonnell. Boyland, 2017 WL , at *6-7. Yet, all the government alleges that Senator Menendez did in this case was engage in that very type of advocacy. The language of McDonnell has not changed since the government s concession in Boyland. Here, the government chose not to address its concession in Boyland, but not addressing it does not make it disappear. The concession to the appellate court in Boyland reflects an honest understanding of how McDonnell should be understood. 3 3 Not content to stick to the charges in the Superseding Indictment, the government complains that it is Senator Menendez who is being disingenuous to claim that he had policy issues with Medicare paying for wasted medicine and inefficiency because Dr. Melgen recently was convicted of Medicare fraud in Florida, and that Senator Menendez s claim that Dr. Melgen s case in Florida has nothing to do with this case is false. (Dkt. 185 at 19 (quoting Dkt. No at 25).) First, Dr. Melgen s conduct that was alleged in the Florida case was not what 10

15 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 15 of 21 PageID: 3636 B. The Superseding Indictment Does Not Charge That Senator Menendez Took Official Acts 1. Defendants Positions Are Not Inconsistent The government s last ditch effort is to suggest that Defendants have taken positions that are irreconcilable, claiming that Defendants cannot claw back [their] concessions now, and that Defendants seek to create a blueprint for immunizing criminal activity on Capitol Hill, which the government claims is akin to [Defendants ] previously asserted position that a Member of Congress can never be prosecuted for bribery. (Dkt. 185 at 1, 12, 13, 22.) While the government s language is colorful, and even jarring, it grossly distorts Defendants litigation positions. The government acknowledges that its hyperbole is empty by recounting the numerous times that Defendants consistently argued before, just as they argue now, that a Senator s advocacy to Executive Branch officials could not transform the Executive Branch s official acts Senator Menendez was addressing in the meetings alleged in this matter. Indeed, the government misunderstands Dr. Melgen s recent Florida trial when it suggests that the case was about multi-dosing. None of the counts in that matter charged that the underlying claims were false because multi-dosing Lucentis was a crime; rather, they charged that the specific services billed (including the injections of Lucentis) were medically unnecessary and/or based on false diagnoses. Multi-dosing Lucentis was relevant only because the profits to be gained from such practice were allegedly a motive to improperly diagnose diseases for which Lucentis was a covered treatment. The Florida district court never issued any legal ruling or jury instruction on multi-dosing s legality whatsoever and only courts decide what the law is. Second, Dr. Melgen maintains his innocence and will appeal, so the Florida proceedings have not yet concluded. Third, the Superseding Indictment itself makes clear that a lawyer told Senator Menendez there was no legal basis for the claim that Dr. Melgen had overbilled Medicare, (Dkt ), so there was no reason for Senator Menendez to believe the billing dispute involved fraud; moreover, the Florida criminal charges were not filed until years later. Finally, the government s claim that Dr. Melgen s recent conviction of Medicare fraud somehow made Senator Menendez s prior policy advocacy disingenuous is illogical. There is no debate over the fact that the policy does waste medicine, is inefficient, and enriches pharmaceutical manufacturers by forcing doctors to purchase more expensive medication, and Senator Reid made that same point at the same meeting with HHS without the government publicly accusing him of advocacy for the purpose or protecting [Dr. Melgen s] criminal activity. (Dkt. 185 at 21.) 11

16 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 16 of 21 PageID: 3637 into his own. (Dkt. 185 at 11.) Defendants position is consistent and, as explained above, is not rejected in McDonnell. Further, Defendants did not argue that a Member of Congress can never be prosecuted for bribery. (Dkt. 185 at 12.) 4 There is nothing problematic, in Defendants view, with the government prosecuting the typical bribery case where it comes forward with evidence of a corrupt agreement in which a Member of Congress has agreed to sell his own official acts, for example selling a vote on a bill, in exchange for cash. While the vote on the bill is an official act and would be immunized by the Speech or Debate Clause, the law is clear that the government can prosecute the Member based on the agreement. See, e.g., McDonnell, 136 S. Ct. at 2365 (quoting Evans, 504 U.S. at 268) ( [T]he offense is completed at the time when the public official receives a payment in return for his agreement to perform specific official acts.... ). Defendants have not suggested any blueprint for evading the typical corruption case. The government s claim that Defendants are seeking to claw back some concession made previously misinterprets or just plainly misstates what Defendants previously argued. Defendants prior argument speaks for itself and is clearly different from what the government claims: 4 The government previously made the same wild claim they do now, claiming Defendants arguments that the acts charged in the Indictment are either immunized by the Speech or Debate Clause or are not official acts would immunize Members of Congress from prosecution for bribery. (Dkt. 87 at 21.) But Defendants made clear that was not the case at the outset of their initial official act motion to dismiss: While the government may prosecute bribery where a Senator agrees to take official acts that are subject to the Speech or Debate Clause, it can only do so by prosecuting the agreement. The prosecution cannot do what it has done here, and apparently seeks to do at trial, and that is charge or try to prove bribery by reference to those official acts having taken place. (Dkt at 1 n.1.) 12

17 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 17 of 21 PageID: 3638 The general term advocacy, as used in the Indictment, is not altogether clear. To the extent the Indictment is alleging the Senator merely sought to influence Executive Branch decisions, for example through casework on visas, it is not alleging an official act of the Senator. But if the advocacy was in the context of legislative oversight, as much of the so-called advocacy appears to be, then it would be an official legislative activity immunized by the Speech or Debate Clause. (Dkt at 1 n.1.) In other words, Defendants viewed Senator Menendez s alleged advocacy as fitting into one of two boxes, either seeking to influence Executive Branch decisions, which would not be an official act of the Senator, or as legislative oversight designed to change policy, which Defendants claimed would be an official act that is protected under the Speech or Debate Clause. That remains Defendants position. Defendants are before this Court now because the Third Circuit rejected their argument that Senator Menendez s alleged conduct, as charged, qualified as legislative oversight as Defendants had defined it with respect to seeking to change policy. 5 Looking at what was charged as opposed to deciding what really happened the Third Circuit found that what was alleged was mere lobbying, and not genuine legislative oversight: Senator Menendez does not prevail, however, because the acts alleged in this case were essentially lobbying on behalf of a particular party to another branch of government. United States v. Menendez, 831 F.3d 155, 169 (3d Cir. 2016). Thus, the Third Circuit s ruling put all of the charged acts into Defendants first box of merely lobbying or advocating to Executive Branch officials, that Defendants argued before and argue now is not an official act of the Senator. Many things a public official may do, such as lobbying, are not official acts under McDonnell, and are also not protected by the Speech or Debate Clause. There is no inconsistency. 5 Appellant s Br. at 28, United States v. Menendez, 831 F.3d 155 (3d Cir. 2016) (No ), ( Efforts to influence the Executive Branch on policy are protected oversight; efforts to influence the Executive Branch to benefit an individual alone (pure case work) are not. ). 13

18 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 18 of 21 PageID: An Official Act Does Not Include Steps Toward That Act The government claims that Defendants advance an argument that is the opposite of McDonnell s clear holding when they claim McDonnell clarifies that official act does not include the various steps that lead to a formal exercise of governmental power. (Dkt. 185 at 3 (quoting Dkt at 20).) But it is the government that is mistaken. McDonnell clarified that the list of terms in the definition of official act connote a formal exercise of governmental power, such as a lawsuit, hearing, or administrative determination, and explained that it seems clear that a typical meeting, telephone call, or event arranged by a public official does not qualify as a cause, suit, proceeding or controversy. 136 S. Ct at McDonnell explained the requirement that the official act be [p]ending and may by law be brought suggests something relatively circumscribed the kind of thing that can be put on an agenda, tracked for progress, and then checked off as complete. Id. at 2369; see United States v. Silver, No cr, 2017 WL , at *12 (2d Cir. July 13, 2017) (holding erroneous under McDonnell a jury instruction that an official act includes any action taken or to be taken under color of official authority, was overbroad. ) (emphasis in original). That is why the Supreme Court reversed the conviction of Governor McDonnell the various acts that Governor McDonnell took were not official acts. Against that backdrop, where an official act must be a formal exercise of governmental power and the kind of thing that can be checked off as complete, the government makes too much of McDonnell s observation that a decision or action to initiate a research study or a decision or action on a qualifying step, such as narrowing down the list of potential research topics would qualify as an official act. (Dkt. 185 at 3 (quoting McDonnell, 136 S. Ct. at 2370).) Those actions involve tasks where the official has the power to complete the task, unlike this case where the Senator merely seeks a meeting, or even lobbies or 14

19 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 19 of 21 PageID: 3640 advocates at such a meeting. The allegations in the Superseding Indictment are not steps toward a formal exercise of power because the Senator simply had no power to take an official action in a hearing-like context which could have benefitted Dr. Melgen. In any event, the government does not suggest that Senator Menendez completed any task that would constitute a formal exercise of government power. Simply meeting with Executive Branch officials to inquire about an issue or advocate that they do something, or working with his staff to prepare for such meetings, would not qualify as an official act even under the language the government quotes. The closest the government comes is to note that a legislative hearing would be an example of a legislative act, and to claim that is something Menendez threatened here. (Dkt. 185 at 16.) But threatening an official act is not the same as taking an official act, any more than a meeting to discuss whether to take an official act or to express[] support for an official act would be, and the Supreme Court has made clear those things are not sufficient. McDonnell, 136 S. Ct. at CONCLUSION The government failed to anticipate the Supreme Court s decision in McDonnell when drafting its pre-mcdonnell Superseding Indictment in this case. But that does not change the fact that this pre-mcdonnell Superseding Indictment is fatally flawed, just as so many courts are now reversing so many convictions in cases that were tried pre-mcdonnell. It is not clear that a valid and properly written indictment in this case is possible given the allegations of what the Senator did (set up meetings) and did not do (submitted a bill). However, as it stands today, this Superseding indictment does not meet those standards and this case should be dismissed. 15

20 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 20 of 21 PageID: 3641 DATED: August 2, 2017 Respectfully submitted, /s/ Abbe David Lowell /s/ Kirk Ogrosky Abbe David Lowell Kirk Ogrosky Jenny R. Kramer Murad Hussain Christopher D. Man ARNOLD & PORTER NORTON ROSE FULBRIGHT US LLP KAYE SCHOLER LLP 1200 New Hampshire Avenue, N.W. 601 Massachusetts Avenue, N.W. Washington, D.C Washington, D.C (202) (202) Raymond M. Brown Matthew I. Menchel GREENBAUM ROWE SMITH & DAVIS LLP Samuel A. Stern Metro Corporate Campus One KOBRE & KIM LLP P.O. Box South Biscayne Boulevard, 35th Fl. Woodbridge, N.J Miami, FL (732) (305) Stephen M. Ryan MCDERMOTT WILL & EMERY LLP 500 North Capitol Street, N.W. Washington, D.C (202) Counsel for Defendant Senator Robert Menendez Counsel for Defendant Dr. Salomon Melgen 16

21 Case 2:15-cr WHW Document 186 Filed 08/02/17 Page 21 of 21 PageID: 3642 CERTIFICATE OF SERVICE I hereby certify that on August 2, 2017, a true and correct copy of the foregoing reply brief was filed with the CM/ECF system for the United States District Court for the District of New Jersey, which will send electronic notification of the filing to all counsel of record. /s/ Abbe David Lowell 17