New Jersey Senator’s Criminal Trial Hinges On How He Earned and Burned Amex Points

Two years ago word broke that Senator Robert Menendez (D-NJ) had been indicted on corruption charges In other words, he was charged with being a politician from New Jersey.

Allegedly Senator Menendez accepted gifts of travel and other items of value from a donor in exchange for official acts such as helping 3 girlfriends of the donor to get US visas and intervening with the Department of Health and Human Services to overturn an $8.9 million fine for the donor’s overbilling of Medicare.

Senator Menendez claimed that because the donor used American Express Membership Rewards points to pay for his suite at the Park Hyatt Vendome those charges should be dismissed — after all Membership Rewards points aren’t deemed to have value and don’t belong to the member. So the ‘value’ of those points isn’t over the required reporting threshold. As a result he didn’t actually file false documents when he failed to report the gift.

That’s a little like Stuart Markowitz, in LA Law, defending a mohel whose hand slipped by arguing that since the orthodox child would marry an orthodox woman who had never had sex, she wouldn’t have anything to compare the disfigured penis to — and thus there were no damages. And a judge didn’t buy it, he received something of value worth more than the reporting threshold regardless of how it was paid for.

Neither the Senator nor the donor are being prosecuted for redeeming American Express Membership Rewards at such a low value getting just 3 nights at the Park Hyatt Vendome at a cost of about $5000 for 650,000 points. Getting just 3/4ths of a cent a point is a crime.

And indeed the donor was also paying for premium cabin flights for the Senator so he clearly could have used the Amex points at a higher value redeeming for the flights, and used cash to pay for the hotel instead. Dumb.

Now we’re in the midst of Senator Menendez’s trial and we’re learning the gory details of his mileage malfeasance.

  • Senator Menendez promised to reimburse the donor for the 650,000 points used to pay for 3 nights at the Park Hyatt Vendome

  • He was going to use his own Amex points once he accrued them. However American Express Vice President Andrew Thomas testified that “[i]t would have taken the New Jersey senator 30 years to acquire that many points based on the rate he was accumulating them”

  • He had only 58,000 points in his Membership Rewards account at the time.

  • Menendez redeemed 135,000 points “to purchase a high-end grill in 2013.” It’s unclear whether the grill was for himself or given to the donor. But three years later that means he had accumulated at least 25,000 points per year.

Not covering his own travel, or worrying about the value or opportunity cost of his points, it becomes cleaer why Senator Menendez is so unconcerned with the cost of travel that he’ll sponsor legislation that would outlaw competition from low cost carriers and raise airfares.

When South Carolina Governor Mark Sanford engaged in an affair with a woman from Argentina and resigned his office in 2009, it was revealed that he visited her using Delta SkyMiles for business class award tickets. But they were his miles.

This trial is expected to last for six weeks, who knows what other mileage secrets of the Senate might be revealed?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Just 3 nights for getting 3 girl friends visas and overturning 9 million fine.

    Hopefully 3 nights came with other fringe benefits. Maybe his friend threw in a girl friend for each night as well, else the senator doesn’t know how to sell his services.

    His daughter is hot though.

  2. Mark Sanford found business class award space on Delta? He sounds pretty competent, maybe he should run in 2020

  3. So which, ultimately, is going to be worse:

    A.) Convicting Senator Menendez’ of sloppiness for grifting Amex points to help out a big donor to his campaign (something every politician is guilty of doing — providing favors for big donors, that is) and forcing him to resign?

    B.) Having the scandal-plagued (as in “Bridgegate” for shutting down the George Washington Bridge as payback to the Mayor of Ft. Lee, NJ for refusing to endorse him AND the person who appointed his longtime friend, David Samson, Chairman of the Port Authority of New York & New Jersey aka the person who demanded the money losing, twice weekly, Newark-Columbia, SC “Chairman’s flight” as a quid pro quo to get United’s wish list for projects at Newark Airport approved) Governor of New Jersey, Chris Christie, appoint a replacement Senator in the waning days of his deeply unpopular, lame duck governorship to help curry favor with Trump and other Republican party leaders by being able to offer on a silver platter an additional Republican vote in the Senate to fulfill Trump’s and the Republican party’s wish list of Wealthcare, continued destruction of the environment with climate change deniers, appointments of retrograde judges to the federal judiciary, just to name a few of the most repulsive things that become even more possible with just a single additional vote?

    C.) Hold our noses at the revelations that Senator Menendez, allegedy, traded favors using a form of monopoly money “currency” that he and his alleged patron hoped would mask the equivalent market value in hard dollars, and hope he’s found not guilty to avoid giving the equally, or even more, ethically challenged Chris Christie, and the morally and ethically bankrupt Republican party an even greater opportunity to loot the federal treasury, lay waste to the environment, and burden our children and grandchildren with the debts to pay for the sins of a President, and a party, who have long been bought and paid for by the likes of the Koch Brothers, coal companies seeking to continue reliance on a primitive energy source, and fanatical, religious extremists seeking to make our country more like what ISIS seeks in its hoped for Caliphate than what our Founding Fathers and other leading Western democracies are supposed to be?

    I wish there was a “D” for none of the above.

    But, alas, there isn’t.

    Welcome to…New Jersey…fictional home of Tony Soprano…legendary cesspool for its never ending corruption that brings us one bad governor after another from both parties with passing election.

    Pick your poison, but choose wisely…options “A” & “B” or “C” are all bad…so now it’s simply a question of which is worse?

    The sleazy attempt to skirt financial disclosures using fake currency by a Senator?

    Or wannabe dictator who’s seeking to subvert our democracy and our freedoms by spreading faleshoods and claiming it’s “fake news” when award winning journalists and award winning newspapers widely acclaimed for their history and dedication of protecting our country from corruption and abuses at the highest levels of our government (think Richard Nixon and Watergate; the Pentagon Papers, and much, much more) gaining an extra vote handed to him and his corrupt majority party on a silver platter by the deeply flawed Chris Christie?

    There’s a reason these “points” offered by the various companies to win our business is called by one company on the other side of the pond, “Miles & More”…in the Melendez case, it’s the “more” that truly looms large now…

  4. He was going to use his own Amex points once he accrued them. However American Express Vice President Andrew Thomas testified that “[i]t would have taken the New Jersey senator 30 years to acquire that many points based on the rate he was accumulating them”

    How does he know that Menendez hadn’t just found a store that accepts CC for Vanilla prepaid?

  5. Shorter @Howard Miller:

    It doesn’t matter how corrupt someone is, all that matters is the Party that person claims to belong to.

    That, is really sad.

    Personally: I think my politics are good enough that I don’t have to give in to moral blackmail by politicians, so I won’t trash my personal decency or credibility to save a scumbag just because he or she claims to be “on my side”.

    Senator Robert Menendez (D-NJ) sold out the American people for, IIRC, hundreds of millions of dollars of Medicare fraud in exchange for payoffs. I’m sorry, but helping crooks straight up rob the American people is not “ordinary business.” If it is in your state. perhaps your state should go a decade or two with no Senators or Representatives.

    The fact that he wasn’t even competent about his payoffs should make you even more embarrassed.

  6. @Greg D: I’m actually a lifelong New Yorker, who just as Sarah Palin could see Russia from her house, can see the skylines of Hoboken and Jersey City facing the western end of Manhattan of our crosstown streets!!!

    So Senator Menendez is NOT my elected representative.

    In principle and in a more perfect world, I agree 100% with what you said.

    Unfortunately, most of the elected representatives currently in the Executive and Legislative branches of our government seem to lack any sense of decency and principles, and while we may disagree on this opinion, I’m confident we’d both agree that we do NOT live in a perfect world.

    As noted earlier, I hate that this is choice we’re stuck with. But in the end, if this is our country’s only choice at the moment, based on the events over the past year or so, I’ll sleep much better with a garden variety corrupt Senator who’s incompetence is betrayed by an (allegedly) excruciatingly lame “pay to play” scheme executed exceptionally poorly, than anything that further enables someone who admires Vladimir Putin or Rodrigo Duterte (self-appointed and avowed Vigilante [some allege murderer] President of the Phillippines); who relies on “gaslighting” Americans to evade responsibility for their lifetime of malfeasance and grifting to amass wealth; and who at a minimum encouraged an hostile foreign country to undermine our democracy in a speech urging them to hack his opponent’s computers, and who may yet turn out to have committed treason by knowingly encouraged, or even participated in the orchestration, of Russian interference in last year’s presidential election.

    Toss in Senators Mitch McConnell, Ted Cruz, Rand Paul and their stated goal of turning back the clock economically, socially, and politically to some mythological past of “greatness” that was only “great” for a fortunate few born into privilege, who are male, practice a “preferred” religion, and regardless of their actual sexual behaviors and proclivities, maintain a veneer of a “wholesome” family life, plus all of the other ill-advised “plans” and destructive impulses from a “leader” who believes there are fine people marching alongside neo-Nazi’s and White Supremacists as they chanted slogans that celebrated the “accomplishments” and “goals” of Adolf Hitler, and well, if the choice is between keeping a third-rate, and allegedly corrupt Senator (Menendez) over an Amateur “President” whose policies and objectives in any way, shape or form emboldens an hostile foreign power to further harm our already great nation, and even in the slightest way legitimizes neo-Nazis and White Supremacists, then that alone is more than enough for me to differentiate between which is worse — keeping Menendez, or strengthening the hand of someone who’s corruption and malfeasance renders him unfit to lead our nation.

    Yes, I disagree with Trump’s, and the country club Republicans who still support/defend him out their (misplaced, and short-sighted) hopes for implementation of the Republicans’ well known agenda to implement their Wealthcare policies…er massive, budget busting, treasury looting, tax cuts that disproportionately benefits the already exceptionally well off. And yes, I’d still disagree with the economic policies and the decidedly right tilting social policies of Ronald Reagan and the judges he appointed to the Federal district courts, and the Supreme Court.

    But not for one second would I worry that Reagan was busy cozying up with former KGB spymasters to give them any chance of undermining our country, or that he would openly state that there are fine people marching alongside Swastika flag waving Neo-Nazi’s or seeking the support of David Duke and other White Supremacists.

    Call me crazy, a “snowflake”, or any of the other ugly pejorative words/expressions favored by the Breitbart crowd…as far as I’m concerned, I’ll gladly accept and proudly wear many of the horrible things anyone calls me since firstly, NONE of it is likely to be a reflection of who I am, and I’ll happily embrace being called “crazy”, a “snowflake”, or even a “crazy snowflake” since just about ANYTHING is better than neo-Nazi and White Supremacist sympathizer as a general principle.

    And seeing “fine people” marching alongside neo-Nazis and White Supremacists and hearing their ugly words that are directed at your very own flesh and blood to me is the very definition of someone who actually is crazy.

    I know it hurts to hear this, but if you-know-who had no money, and you heard the words he says come out of the mouth, and witnessed with your very own eyes and ears that person defending neo-Nazis and those that march with them despite the fact their very own flesh and blood would suffer terribly if those people had their way, you’d shake your head, and walk away horrified at the staggering display of crazy taking place right before your eyes.

    His policies and the Republican agenda are not of mine…but neither were the Bushes or Reagan’s…this is different, very different. There’s something deeply disturbing about this administration, and a shameful party of enablers willing to look the other way hoping to achieve a deeply flawed agenda that has been rejected by the American public since the FDR was president.

    And that’s why the thought of equally, and perhaps even more corrupt, scandal plagued Chris Christie having an opportunity to appoint a replacement for Menendez is by far, much worse than keeping a third rate Democratic Senator in place.

    Look at these past nine months — is THIS really the future we want to bequeath to our children and grandchildren? Do suburban voters and country club Republicans who held their noses and voted for Trump because they hated Hillary or want a largely unnecessary tax cut really want THIS for their daughters, sons and grandchildren?

    Is their continued support for Trump really worth further nurturing the types of “values” he says fine people were seeking while marching in Charlottesville?

    I know this is an airline and frequent flier board, and I deeply apologize for straying into a political discussion instead of airlines (which are my first love!).

    However, any discussion of the Menedez trial that is now underway, however tawdry, must necessarily include a “beware of what you wish for” caveat emptor that if Menendez goes down, his replacement will be APPOINTED (as in NOT elected) by the deeply unpopular, and multiple-scandal plagued Governor Chris Christie, and as such will be a Republican at a time when one-vote by one person who could turn out to be a person who was NOT even elected, changes the course for an entire nation immediately, that also alters the future our children and our children’s children inherit.

    For those who live outside the NY-NJ region, and who may not have an opportunity to keep up with local political news here, that’s what is at stake if these Amex points/miles turn out to be what brings Menendez down.

    Yes, my “choice”, C in the original post is far from ideal…but given the choices, it’s one I can live with since the other choice is hardly ideal under normal circumstances, and truly horrifying when considering who benefits if his pal, Chris Christie, is doing his bidding…

    And again, my deepest apologies for a political discussion on these boards. It’s NOT something I plan to do again. But, as noted, some may not be aware of the impact this trial could have far beyond the courtroom, and the hopelessly corrupt politicians New Jersey (and my own state, New York) seems to bread like the unwanted, but indestructible, cockroaches they are.

  7. Several comments:

    Interesting article about Melendez. However, usually politicians get away with this stuff. I wonder who had it in for him?

    Mark Sanford is my hero. He threw it all away for a woman during a mid life crisis. It is a pity that he and the Argentine woman did not last.

    @Howard Miller. Last time I heard a rant like that, was on the subway. I think the guy was on Meth.

  8. The fact that 650,000 Amex points were used to convey the free hotel room to Senator Menendez (D-NJ) — and these other gifts which would have been illegal if paid in cash — to me is clear proof of the illegal intent. There was no economic reason to spend 650,000 miles for a room that probably cost no more than a total of $3000 or so — when they could have been used to purchase perhaps $30K worth of airline tickets, or even turned into $6500 in Amex credit. Instead, the clear reason to use those points was to avoid reporting the gift, and for attempting to hide the bribery. Guilty.

  9. Howard Miller says:
    “In principle and in a more perfect world, I agree 100% with what you said.

    Unfortunately, most of the elected representatives currently in the Executive and Legislative branches of our government seem to lack any sense of decency and principles,”

    Well, of course they do! you’re wiling to let them do whatever they want, as long as they vote the way you want. Why would they waste their time being decent human beings when you dont’ require that?

    “As noted earlier, I hate that this is choice we’re stuck with.”

    Of course you do. You know what’s the right thing to do, and you know what’s the politically expedient thing to do, and you’ve decided to prostitute your soul / dignity / sense of decency for political power.

    News flash: “the other side” will always be “the fount of all human evil”. The only question is whether or not YOU are going to participate in your own fount of evil.

    Your answer is “hell yes, pour it on!” Own it.

    The point of a principle is you follow it even when it tells you to do something you don’t want to do.

    You’ve already agreed what’s the principled thing to do. You can either follow it, or be a person without principles.

    Your choice

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