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?