Sen. Bob Menendez (D., N.J.) was a “principal supporter” of a bill that would increase tax credits and grants to “heavy vehicle fleets that converted to alternative fuels.” The bill could benefit Gaseous Fuel Systems Corp. (GFS), a company in which controversial Democratic donor Dr. Salomon Melgen has invested.
The Associated Press reports:
Dr. Salomon Melgen invested in Gaseous Fuel Systems Corp. of Weston, Fla., and joined its board of directors in early 2010, according to the company’s chief executive and a former company consultant. GFS, as the company is known, designs, manufactures, and sells products to convert diesel-fuel fleets to natural gas. The amount of Melgen’s investment is confidential under rules of the Securities and Exchange Commission, but a 2009 document filed with the SEC showed the company required a minimum individual investment at that time of $51,500.
At the same time, Menendez emerged as a principal supporter of a natural gas bill that would boost tax credits and grants to truck and heavy vehicle fleets that converted to alternative fuels. The bill stalled in the Senate Finance Committee, and after it was revived in 2012, the NAT GAS Act failed to win the needed 60 votes to pass.
While the bill was under consideration between 2009 and 2011, the former consultant for GFS spent $220,000 lobbying Menendez’s staff and other congressional and federal officials on the act’s provisions as well as other regulatory issues, according to interviews and Senate records.
Aides to Menendez claim that neither Melgen nor the company discussed the legislation with their office or the senator, noting the senator supported the bill “to help improve the environment.”
Melgen’s attorney similarly told the Associated Press that Melgen had not discussed the company or the bill with Menendez or his staff.
Ken Green, an executive with Gaseous Fuel Systems Corp., downplayed Melgen’s involvement in the organization, calling him “a passive investor.”
Melgen joined the board of directors in 2010; the bill first appeared in 2009 and another version came in 2012. The AP noted that GFS is Melgen’s only natural gas-related investment.
He also said that the Senate bill would provide “only limited help” to the company and ultimately noted, “This bill won’t do much of anything for us.”
Green said the bill would not be beneficial because “most of its provisions are aimed at heavy on-road vehicles” and the conversion system designed by GFS is “marketed exclusively for off-road equipment.” As a result Green says the bill would “do little to offset the cost to buyers of the off-road trucks.”
However, Green’s explanation omits key information. According to the Associated Press, the company once considered marketing their product for on-road vehicles. The 2009 and 2012 versions of the bill would change IRS rules giving tax credits for on-road, natural gas-supplied trucks and vehicles.
As the article notes, it is not clear that the New Jersey senator “offered direct help or intervened on behalf of the company or Melgen.” However, the instance raises eyebrows as it “illustrates the way Menendez’s political clout has at times overlapped with Melgen’s financial investments.”