Now THIS is a guy who knows how to earn points!

Discussion in 'General Discussion | Miles/Points' started by tarheelblue, Dec 11, 2011.  |  Print Topic

  1. tarheelblue
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    tarheelblue Silver Member

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    From the December 10, 2011 L.A. Times: The Finance Director of the LA Coliseum allegedly bought a $270,000 sound system for the stadium and put it on his personal Visa card, as well as charging other expenditures for the stadium totalling over $114,000 in the last 3 years.

    "Coliseum finance director earned Visa points on stadium upgrade:
    Ronald Lederkramer could have bought new sound equipment for the Coliseum by issuing a check from the taxpayer-owned stadium. Instead, he put the package of high-powered loudspeakers on his personal Chase Visa card, according to records and interviews....
    In the process, depending on which Visa he used, Lederkramer earned roughly enough redeemable reward points for a week at the downtown Ritz-Carlton, two Bulova watches or even a pair of first-class round-trip United Airlines tickets to London or Tokyo worth as much as $24,000, award schedules show."

    http://www.latimes.com/news/local/la-me-coliseum-20111211,0,2612102.story
     
  2. Jimgotkp
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    Jimgotkp Gold Member

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    Who needs the US Mint when you can do large purchases like this guy and possibly put your job on the line..:p
     
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  3. DAS02135
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    DAS02135 Gold Member

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    "Lederkramer said he has used his points to travel to conferences on Coliseum business. Asked if he had documentation of those trips, he said no. 'Why would I have kept that?' he asked."

    An easy follow-up question and investigation step would simply be to ask to look at his point redemption history. The points were earned in the last 18 months, so documentation on how the points were redeemed should be easily accessible. This would allow all parties to quickly reconcile how the points were used.
     
  4. NYBanker
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    NYBanker Gold Member

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    Is that a reward or a punishment? ;)
     
  5. Toula
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    Toula Gold Member

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    Must admit I have a bit of points envy on reading this story.
     
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  6. kyunbit
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    kyunbit Silver Member

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    Unless he could have got a lower price by paying in cash, I am not seeing what is wrong in putting the charges on a credit card. He has done other things that are unethical though
     
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  7. Flyer1976
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    Flyer1976 Gold Member

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    Nothing wrong with charging it to a card however using the points accrued for personal usage is unethical and compromises the duty of care in his position...had the points been used towards the organization's needs then that might have been more ethically acceptable.
     
  8. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I don't see why he wouldn't have been able to negotiate a discount for having the government agency pay by check. I can't see how the seller would be excited to eat the 3% credit card fee on this purchase.

    Personal enrichment and conflict of interest. My employer explicitly prohibits the use of personal credit cards for business purposes. Exception: when Amex isn't accepted. But that's for a dinner, not a masssive purchase. Purchases of this order of magnitude have to go via the procurement route, not via expense report. If I were to order a $200,000 server and put it on my personal credit card, I'd probably end up not getting reimbursed and/or fired (if it became clear I did it with a mileage-earning card).
     
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  9. Mike Reed

    Mike Reed Gold Member

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    Whereas mine requires it - no corporate credit cards.
     
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  10. MLW20
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    MLW20 Gold Member

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    That is really amazing.
     
  11. modernhaus

    modernhaus Active Member

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    How the heck did this guy get a $270,000 credit line on one personal Visa is what I'd like to know!
     
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  12. Mike Reed

    Mike Reed Gold Member

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    He didn't. If you read the story, the vendor agreed to charge him over several monthly payments.
     
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  13. karung99
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    karung99 Gold Member

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    They both win on this transaction...
     
  14. Mike Reed

    Mike Reed Gold Member

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    Depends on the fees involved. The vendor pays more transaction fees, but if the amount is less, the percentage may be lower (from what I understand, the more the transaction, the more % is fees since there's a larger risk to the credit card issuer in terms of fraud).
     
  15. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I am sure the vendor was fully aware of the fees. Go see if you can buy a car with your credit card. Negotiate the best deal first, then pull out the credit card and ask for the full amount to be charged. Most dealers (if any) won't do that as it will cost them significant dollars. But if you mention upfront that you'll pay by credit card, you find get them to make you a deal that just happens to be 3% higher than they otherwise would have offered you.
     
  16. Jimgotkp
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    Jimgotkp Gold Member

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    I thought dealerships don't let customers buy cars with a credit card due to the protection that consumers get if the car/item they purchased has problems?
     
  17. tarheelblue
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    tarheelblue Silver Member

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    And therein could be at least one of the potential problems with Mr. Lederkramer's alleged actions. If he earned points by using his personal credit card, and that increased the cost of the purchase over what it would have been if he had paid the vendor directly with a check, that would be personal gain at the expense of his employer and the taxpayers.
     
  18. Mike Reed

    Mike Reed Gold Member

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    Which may or may not be the case, especially if the vendor recognized that they're selling to a government agency and likely have a set bid/price/cost structure in place. Reading the article, however, it appears this went COMPLETELY outside the approved governmental procurement system, which could open them up to grievance from other vendors also registered to sell the same or similar product via bid who weren't contacted. If one of those happens to be minority owned, veteran owned or "historically under-utilized," there may be even more problems.

    The points on the credit card are the SMALLEST of the concerns here to the actual governmental procurement officer for the city/county.

    The *interesting* play would be if they did in fact charge 3% more (or 1% more), and he knew and paid by credit card anyway, and the vendor knew he was getting points "as in 'he told me he was putting this on his card to get reward miles,' there's the possibility of some sort of financial crime (though NOT a kickback since it didn't come from the vendor).
     
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  19. karung99
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    karung99 Gold Member

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    I put a down payment on a car several year ago using my CC, it was accepted at that time.
     
  20. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Yes, sure, a down payment. No problem, I did the same. But full price?
     
  21. icurhere2
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    icurhere2 Gold Member

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    Agreed, even if the cost were identical and the agency received marginally more interest on the deposits before disbursement.
     
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