A Swift Climb Up the Ladder For an Ex-Aide To Menendez

A Swift Climb Up the Ladder For an Ex-Aide To Menendez

July 17, 2005, Sunday
By JEFFREY GETTLEMAN (NYT); Metropolitan Desk
The New York Times
Late Edition - Final, Section 1, Page 25, Column 5, 1951 words

In January 1998, Kay Elizabeth LiCausi, a 26-year-old graduate of Rutgers University and a former Congressional intern, walked into the second-story office of a New Jersey congressman to start a job as scheduler.

The work was not glamorous - sorting through invitations, checking Amtrak timetables and fetching breakfast. But Ms. LiCausi was working for Representative Robert Menendez, a rising star in Democratic Party politics and the de facto political leader of Hudson County, who was soon to become the highest-ranking Hispanic member of Congress. She quickly gained his trust, and less than three years later was promoted to director of his New Jersey headquarters.

But in 2002, after helping Mr. Menendez win re-election to a sixth term, Ms. LiCausi left his staff. Since then, her influence has far exceeded that of a midlevel Congressional assistant. She has amassed hundreds of thousands of dollars in contracts as a consultant, lobbyist and fund-raiser.

Some of the work was orchestrated by Mr. Menendez, who steered more than $200,000 worth of political consulting and fund-raising contracts her way. Several of her clients are businesses and organizations run by prominent supporters of Mr. Menendez. Other clients need the assistance of the powerful congressman, and Ms. LiCausi has lobbied her former boss on their behalf.

The revolving door between government and lobbying hangs on a well-oiled hinge, and tales of former lawmakers or high-ranking staff members cashing in on their relationships and inside knowledge are almost clichéés.

But what has struck many seasoned politicians and consultants in New Jersey is the speed of Ms. LiCausi's ascent and the scope of her work, even in the state's forgiving political culture. She had little experience on Capitol Hill or in Trenton. In her highest position, she supervised a half-dozen members of Mr. Menendez's Jersey City staff.

"This woman starts out as a midlevel staffer and then, all of a sudden, she's the greatest lobbyist on the East Coast?" said Bobby Jackson, the publisher of a small newspaper in Jersey City, who supported Glenn Cunningham, the former mayor of Jersey City, a political opponent of Mr. Menendez.

In an interview, Mr. Menendez praised Ms. LiCausi as an "incredibly talented individual" who was fluent in the nuances of politics, policy and process. He acknowledged that he recommended her for a $130,000 contract to raise money for the Democratic Congressional Campaign Caucus, an organization in which he wields enormous clout as the third-ranking Democrat in the House. He also said that he had recommended her, when asked, for lobbying and political work.

Ms. LiCausi declined repeated requests to be interviewed, though she provided a réésuméé and a statement, which said: "I am proud of my career and the quality of my work on behalf of all my clients. I have been successful for two reasons - I have worked hard and I'm good at what I do."

The tale of her swift success, however, is complicated by the widespread belief among elected officials and political consultants in Hudson County and former members of Mr. Menendez's staff that she and the congressman had a romantic relationship.

Both Ms. LiCausi, who is 33 and single, and Mr. Menendez, 51 and recently divorced, refused to address any aspect of their nonprofessional lives. "That's strictly personal," Mr. Menendez said.

Lobbying, of course, is an extremely lucrative, though loosely regulated field, where what is acceptable varies case to case and state to state. In New Jersey, the lines between business and politics, politicians and businessmen, are as blurry as in most other places. At the public's insistence, politicians have made attempts to limit and restrain the flow of influence, with little success.

Ms. LiCausi built her business with little attention until last August, when Mr. Menendez insisted that Gov. James E. McGreevey speed up his plans to resign amid a sex and patronage scandal. An unidentified McGreevey aide warned Mr. Menendez to back down, accusing him of also having an affair and setting up the woman in business and referring clients to her.

After a conversation with Mr. McGreevey, Mr. Menendez immediately dropped the issue, although Mr. McGreevey's early resignation could have set off a chain of events that could have led to a United States Senate seat for Mr. Menendez - something he said he has dreamed of since he was 19. In fact, many people view him as the front-runner to fill Senator Jon S. Corzine's seat should Mr. Corzine be elected governor this fall.

In 1993, as Mr. Menendez was beginning his career in Congress, Ms. LiCausi was beginning her political climb. She started off as an intern for Representative Robert E. Andrews of South Jersey, worked for the National Women's Political Caucus in Washington, then held a few short-

term campaign jobs before becoming an aide in New Jersey for Senator Robert G. Torricelli.

As Mr. Menendez's scheduler, she quickly established herself as his confidante.

"She'd pick him up in the morning, she'd get the right coffee, she'd get the special bread he liked, and the two of them would have breakfast alone," said Jose Manuel Alvarez, Mr. Menendez's former district director.

Ms. LiCausi was promoted several rungs, and by 2000 took Mr. Alvarez's place as district director, with her salary rising to more than $80,000, almost double her starting pay. The next year, when Mr. Menendez began an infamous feud with Jersey City's mayor, Mr. Cunningham, Ms. LiCausi was frequently deployed to enforce Mr. Menendez's agenda and stem the intraparty rift. She seemed to relish this role, including in her réésuméé a line from a political Web site describing her as a "tough, no-nonsense pol who has made her boss the Boss of Hudson County" - though Mr. Menendez chafes at the term boss.

In 2002, Ms. LiCausi helped Mr. Menendez win re-election in a typical landslide for him. Later that year, she left his staff to set up her consulting and lobbying shop. Her company, K. L. Strategies, is a modest operation: Ms. LiCausi and an associate. It is based in Hoboken, not far from where Mr. Menendez lives.

Her client list quickly blossomed. One client was Liberty HealthCare System, whose president, Jonathan M. Metsch, is a longtime fund-raiser for Mr. Menendez. At a ribbon cutting for the new Jersey City Medical Center in 2004, Dr. Metsch lavished the congressman with praise for his help in securing government-backed bonds. Dr. Metsch declined to be interviewed. A hospital spokesman issued a statement describing Ms. LiCausi as an "effective advocate." However, the chairman of the hospital's board, James McLaughlin, said in an interview that he had never heard of her.

By 2004, she listed 10 clients with the New Jersey Election Law Enforcement Commission and was paid $143,500 - though she reported doing lobbying work for only three of them. Several of her clients have ties to Mr. Menendez. She was paid $22,500 by Imperial Construction Group of Elizabeth, a construction management firm led by two executives who are Cuban-American, like Mr. Menendez, and have helped organize fund-raisers for him. Imperial executives declined to discuss why they hired Ms. LiCausi.

"Bob's a great guy; that's all I got to say," said Lou Fernandez, one of the three principals.

Ms. LiCausi was also paid $7,500 by Liberty National, an affiliate of Applied Development Company, a major waterfront developer founded by Joseph Barry, a longtime Menendez ally. Mr. Barry was convicted in 2004 on federal charges that he paid off a Hudson County official in connection with a Hoboken project; he is serving 25 months in prison. (Ms. LiCausi's office is in a building owned by an Applied company). Several of Ms. LiCausi's clients declined to discuss why they hired her or what she has done for them. But a spokesman for Goldman Sachs, the financial services firm, which hired her as a lobbyist in 2003, said that she was helpful in tracking legislation and arranging meetings.

George D. Warrington, the executive director of New Jersey Transit, said Ms. LiCausi was known to staff members from her work for Mr. Menendez and was hired last December for $3,000 a month to do community outreach.

"We needed somebody who knew Hudson County like the back of her hand," Mr. Warrington said.

Ms. LiCausi also has a contract for $7,500 a month from the Mills Corporation, one of the developers of Xanadu, a billion-dollar mall and entertainment complex being built in the Meadowlands. Plans call for the addition of a light-rail line, and developers are hoping that the House Transportation and Infrastructure Committee that Mr. Menendez serves on will provide financing.

In fact, several of Ms. LiCausi's clients are pushing for federal transportation money, including Union County. According to her own e-mail message in January, Ms. LiCausi informed a county official that she had lobbied Mr. Menendez on a road expansion project near a new mall in Elizabeth. "FYI, I had breakfast with Bob this morning and reiterated how important this project was to Union County/Winning Strategies/KL Strategies," she wrote. (Winning Strategies is a lobbying firm Ms. LiCausi sometimes works with.)

At the same time she was building her lobbying business, Ms. LiCausi was working as a paid political consultant and fund-raiser for Mr. Menendez. As soon as she left his staff, she began making $5,000 a month from his re-election campaign and another $5,000 a month from a political action committee he controls, according to federal campaign finance records.

She also received $10,000 a month from the Democratic Congressional Campaign Committee in 2003 and 2004. Mr. Menendez acknowledged that he encouraged the committee to hire Ms. LiCausi, one of a handful of fund-raisers nationwide.

"I said, here's someone who's very competent, who's a big part of my political operation and can help us do this, and they decided to hire her," he said. "So that is true, I was supportive for her in that case, but that's a political context."

Repeated requests were made to the Democratic Congressional Campaign Committee for details of Ms. LiCausi's fund-raising efforts, but officials said it was impossible to break out contributions she had raised.

Ms. LiCausi is also vice chairman of the Hudson County Democratic Party, an elected position that is closely controlled by party leaders. One of the politicians she lobbied, according to her own disclosure forms, was State Senator Bernard F. Kenny Jr., the Hudson County Democratic chairman and a confidante of Mr. Menendez - though Mr. Kenny rejected the notion of a conflict of interest, saying he separated her political and lobbying roles.

Mr. Menendez said there was no impropriety involved in his support for Ms. LiCausi.

"The bottom line is," Mr. Menendez said, "the people of my district and the people of New Jersey need to know: Do I do my job ethically? Do I work hard for them every day? Do I fight for them every day? Am I willing to make difficult decisions, even in the face of adversity? I think my whole life has been about that."

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