Bribery case against Sen. Menendez shines light on powerful New Jersey developer accused of corruption

In late 2020, Sen. Robert Menendez (D-N.J.) met with Philip Sellinger, a private practice lawyer and former fundraiser for the senator, to assess Sellinger’s potential fit as the next U.S. attorney for the state of New Jersey — and to discuss one case in particular.

If appointed, Sellinger would assume control of one of the largest prosecutor’s offices in the country — a post that comes with the power to bust mob bosses and go after corrupt public officials.

But Menendez, federal prosecutors say, was fixated on a less consequential matter: ensuring the future prosecutor would act sympathetically toward a friend of his, real estate developer Fred Daibes, who was facing bank fraud charges.

Daibes is now among those indicted in the sweeping bribery case brought against Menendez, the senator’s wife and other associates.

Prosecutors accuse the Menendezes of accepting hundreds of thousands of dollars worth of cash, gold bars and a luxury car in exchange for favors from the senator, including secretly aiding the government of Egypt on U.S. policy matters and interfering in three criminal investigations, including the one involving Daibes.

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An indictment unsealed Friday by the U.S. attorney in Manhattan said Daibes had paid the senator bribes, including envelopes stuffed with thousands of dollars in cash and gold bars worth more than $120,000.

Menendez has denied wrongdoing, blaming the prosecution on “forces behind the scenes” who “cannot accept that a first-generation Latino American from humble beginnings could rise to be a U.S. Senator.”

An attorney for Daibes, Tim Donohue, said he was confident his client would be “completely exonerated of all charges.”

Daibes and Menendez both rose to prominence as power players in the same stretch of urban communities across the Hudson River from Manhattan, where local politics and real estate have long involved trading favors.

In Daibes’ home base of Edgewater, N.J., just up the river from Union City, where Menendez was once mayor, the developer is widely credited with building out a “gold coast” of luxury high-rises along the formerly industrial waterfront.

That achievement may have been helped by Daibes’ cozy relationship with a number of Edgewater officials, who turned away rival developers from the community to approve his lucrative deals, according to lawsuits and a recent report by the New Jersey State Commission of Investigation.

That report said Daibes had rented a discounted apartment to Edgewater’s mayor and had provided several million dollars in revenue to a local councilman’s business, all while accruing development rights and reneging on promises to build affordable housing.

People who opposed Daibes faced reprisals, the report said. Edgewater’s previous mayor, James Delaney, testified that his political support evaporated when he complained about what he believed was a corrupt agreement between local officials and Daibes. He ultimately didn’t run for reelection.

“This report is a cautionary tale concerning the inherent dangers of enabling an influential, politically-connected and unelected private citizen to hold outsized power in government concerns,” the commission wrote.

The mayor’s former wife, Bridget Delaney, who had spent 15 years working for Daibes at his restaurant, said the couple were effectively run out of Edgewater, their lives ruined.

“There’s fraud all over that town,” she told the Associated Press on Friday. “When he’s in jail, maybe that will provide some relief.”

In 2018, Daibes was charged by federal prosecutors in Newark with obtaining loans under false pretenses from a bank that he owned. The charges were serious, carrying the potential for years in prison.

Daibes was still awaiting trial in 2021 when Menendez, as New Jersey’s senior U.S. senator, played a key role in advising the new administration of President Biden on potential candidates to be the top federal prosecutor in the state.

According to the indictment, Menendez initially rejected Sellinger as a candidate after the December 2020 job interview because the lawyer had said he would likely have to recuse himself from any case involving Daibes because he’d represented the developer in a previous matter.

But after another candidate fell through, Menendez recommended him for the job.

After Sellinger was sworn in, the Justice Department had him step aside from the Daibes case and hand it to another senior prosecutor. Menendez, according to Friday’s indictment, then badgered Sellinger and the prosecutor on the case, calling them several times.

Menendez also asked one of his political advisors to let Sellinger know he was upset with the way the Daibes case was being handled, according to the indictment.

During the months in 2022 when Menendez was allegedly trying to influence the handling of the case, Daibes arranged for Menendez’s wife, Nadine Arslanian, to be given two gold bars, each worth around $60,000, along with an envelope containing thousands of dollars in cash, the indictment said.

At one point, Menendez reportedly performed a web search for “how much is one kilo of gold worth?”

David Schertler, a lawyer for Arslanian, said she “denies any criminal conduct and will vigorously contest these charges in court.”

Sellinger and his senior prosecutor told investigators they kept Menendez’s attempts to influence the case from the team of lawyers handling the prosecution and took no steps to intervene, the indictment said.

In an emailed statement, a spokesperson for the U.S. Attorney’s Office in New Jersey noted Sellinger’s recusal, and said that all activity related to the case was handled appropriately under federal prosecution principles.

Last year, after a delayed trial, Daibes agreed to plead guilty in his bank fraud case. Under the plea deal, he is to serve only probation, according to his attorney. The developer’s sentencing was repeatedly delayed, and is now scheduled to take place next month.