How Rewards Points Ended up in a New Jersey Corruption Trial
When a politician goes on trial for corruption, the alleged behavior is often the same: someone is accused of having accepted something of value in exchange for access or favorable treatment. Often, the alleged corruption involves money. Other times, it's services or favors. But rewards points? Not something you hear about every day.
Yet that's precisely what Senator Robert Menendez is accused of having done: his alleged bribing involved American Express Membership Rewards points. His federal corruption trial kicked off in Newark, New Jersey, last week. According to The New York Times, it's the first time in 36 years that a sitting US senator goes on trial for bribery. The Democratic New Jersey senator is facing 12 counts related to corruption.
One of those episodes of alleged bribery is where the points come in.
Menendez is accused of accepting a three-night stay at a Paris hotel in 2010, at the Park Hyatt Paris-Vendôme, paid for by a Florida eye doctor, Solomon Melgen, with 650,000 Membership Rewards points.
Miles and points enthusiasts might note immediately that 650,000 points for three nights at a hotel, however swanky, is not a good deal — it equates about 0.7 cents per point, as TPG noted previously.
Menendez also allegedly told Melgen that he would reimburse the Amex points as soon as he accumulated enough himself. At the time, Menendez had just more than 58,000 points in his account. An Amex executive testified at the trial that based on the rate he was spending at that time, it would have taken Menendez about 30 years to accumulate those 650,000 points.
During the trial on Monday, Menendez' attorney said that in an email sent from Melgen's son-in-law to Menendez, the senator was told that the suite was "the only room type available for points redemption." In addition, the Amex executive said that there was no way for one Amex customer to reimburse another with points, though they could purchase things for each other with their points.
But, the senator allegedly didn't even try. Three years after the hotel stay, Menendez redeemed his own Amex points for the first time. And, instead of paying back Melgen in some form, Menendez used more than 135,000 points to buy a Weber Genesis grill, which was shipped to New Jersey.
On Amazon, the grill Menendez purchased with his Amex points ranges in price from $700 to $1,500, meaning Menendez got terrible value out of his points. Based on TPG's most recent valuations, which pegs Amex points at 1.9 cents apiece, those 135,000 points were worth $2,565. At the lower end of the price spectrum for the grill, Menendez got just 0.5 cents per point in value. And even if the grill cost $1,500, he still got a pretty measly value of 1.1 cents per point.
Ultimately, no matter how poor of a value Menendez got on his suite or his grill, this is an interesting trial — and one that points and miles enthusiasts are surely to keep an eye on.