Speaker 1: Hey, Dream listeners. If you like this podcast, you're going
Speaker 1: to love the book. Yeah. I wrote a book. It's
Speaker 1: called Selling the Dream, and it's coming out March twelfth,
Speaker 1: twenty twenty four, on Atria. It's about all of your
Speaker 1: favorite characters from MLMs and some that you've never even
Speaker 1: heard of. I hope check it out. Previously on the
Speaker 1: Dream turned out that what I'd done was to sign
Speaker 1: up to sell Herbalize. The phone call we'd had was
Speaker 1: to explain to me how I could go on to
Speaker 1: become a supervisor without even selling a thing. All I
Speaker 1: had to do was buy five thousand dollars worth of
Speaker 1: product and then to bump me up to the next level. Essentially,
Speaker 1: when MLMs came to the attention of the FTC, they
Speaker 1: went after him pretty hard for about fifteen years, and
Speaker 1: during that fifteen years they had some successes and then
Speaker 1: ultimately had a case that would define how multi level
Speaker 1: market as an industry would go forward, and they lost
Speaker 1: that case. Is it possible really that the FTC was
Speaker 1: going to truly close down a company that had such
Speaker 1: political influence with the sitting president that they could go
Speaker 1: in and meet with him privately and discuss their issue.
Speaker 1: I don't think so. I think anyone with some willingness
Speaker 1: to look at political realities would say that was never
Speaker 1: going to happen. The last time we heard from Dan,
Speaker 1: he was trying to figure out why the MLM trial
Speaker 1: of the century, the FTC versus Amway nineteen seventy nine,
Speaker 1: ended the way it did. Why did the administrative law
Speaker 1: judge and the FTC Commission decide to ignore Joe Brownman's
Speaker 1: evidence when that exact same evidence had won him earlier
Speaker 1: MLM trials. What was Joe truly up against? Dan turned
Speaker 1: to our expert Robert Fitzpatrick for an answer. What you're
Speaker 1: about to hear reminded me of that old trope where
Speaker 1: someone opens a closet door and a bowling ball rolls out,
Speaker 1: knocking them unconscious, and then they come to and stand
Speaker 1: up and the rest of their junk falls on them.
Speaker 1: That's what it felt like when Robert started talking Dan
Speaker 1: through the forty years following that Amway decision, detailing MLMs
Speaker 1: and their ties to Washington. When Dan finally left the
Speaker 1: studio after his last interview, I could have sworn I
Speaker 1: saw a halo of birds and exclamation points floating around
Speaker 1: his head. I'm Jane Marie and this is the Dream
Speaker 1: episode ten the American Way. So last time we talked,
Speaker 1: where were we, Well, the Amway trial had just ended.
Speaker 1: Joe Brawman was confused and a little bummed because he
Speaker 1: had presented all this evidence that in earlier trials had
Speaker 1: won him those cases, but in the Amway trial it didn't. Wow. Yeah,
Speaker 1: So I spoke to Robert to see if I could
Speaker 1: get filled in on any reason as to why, and
Speaker 1: he was telling me about some of the political connections
Speaker 1: that the founders of Amway, javan Andandel and Dick DeVos, had,
Speaker 1: like running the biggest business lobby exactly in the country,
Speaker 1: the Chamber of Commerce. YEP, javan andandl was the head
Speaker 1: of the Chamber of Commerce, and Dick DeVos was the
Speaker 1: finance chair of the Republican National Committee, which meant he
Speaker 1: was getting a lot of money for candidates, so insane. Yeah,
Speaker 1: it's totally crazy. But actually what I found out is
Speaker 1: that the Amway trial was just the start of the story.
Speaker 1: Amway and their cohorts in the industry started inserting themselves
Speaker 1: more and more international politics, until essentially they were the politicians. Thankfully,
Speaker 1: Robert Fitzpatrick has been piecing a lot of this information together.
Speaker 1: Ronald Reagan becomes president, reported in the media, DeVos and
Speaker 1: Van Andel became frequent visitors to Washington and were welcomed
Speaker 1: in the White House. The Amway dudes went to dinners
Speaker 1: with heads of state, presidents, our own, and others, And
Speaker 1: at one particular dinner they got sat next to Alexander Haig,
Speaker 1: who you might remember was Nixon's White House chief of
Speaker 1: staff during Watergate. Guess what he went on to do
Speaker 1: after that job Secretary of State for Ronald Reagan. And
Speaker 1: then what did he do after that job? Paid consultant
Speaker 1: for Amway, Alexander Haig. The Alexander Haig not every diplomat
Speaker 1: at the time, loved these guys. At the same time
Speaker 1: that they were hobnobbing with high level cabinet members in
Speaker 1: the US, the Canadian government was accusing them of defrauding
Speaker 1: the country, yes, the entire country of Canada, by evading taxes.
Speaker 1: They'd issued arrest warrants for Dick and Jay. The Mounties
Speaker 1: were on their tails. So here you've got two dudes
Speaker 1: who just a couple of years earlier were on trial
Speaker 1: for fraud and who now in nineteen eighty four, were
Speaker 1: some of Canada's most wanted Here they are popping around
Speaker 1: with the president. They even asked Reagan to come speak
Speaker 1: at an Amway rally in Atlanta. Some of the representatives
Speaker 1: of the Reagan administration works. They said queasy about associating
Speaker 1: Reagan so closely with Amway in public, But they also
Speaker 1: knew that Amway had been perhaps the most important fundraiser
Speaker 1: for the Reagan administration, so that sort of trump these
Speaker 1: other issues. That event was held in January, and it
Speaker 1: was held the day after the State of the Union
Speaker 1: message was delivered to Congress. I see America not in
Speaker 1: the setting sun of a black knight of despair. I
Speaker 1: see America in the crimson light of a rising sun,
Speaker 1: fresh from the burning creative hand of God. I see
Speaker 1: great days ahead for men and women of will and vision.
Speaker 1: Reagan literally flew from addressing Congress to the next day
Speaker 1: addressing an Amway event. The way they got around the
Speaker 1: queasiness of some Reagan administration people was they recast the
Speaker 1: event as sponsored by the Chamber of Commerce. This was
Speaker 1: an easy thing to do since the Van Andel had
Speaker 1: been chairman of the Chamber of Commerce earlier how were
Speaker 1: you able to find out that that was an actual
Speaker 1: Amway event. Well, it was scheduled as an Amway event,
Speaker 1: That's what it was. It was going to be an
Speaker 1: Amway rally, a giant one in Atlanta. This is all
Speaker 1: in the news account. This is how the invitation began.
Speaker 1: Come and speak at an Amway event. Actually, they renamed
Speaker 1: the rally to Spirit of America, Salute to Free Enterprise.
Speaker 1: I want to know how I found that out. There's
Speaker 1: a video of it. Ladies and gentlemen, the President of
Speaker 1: the United States, to much fanfare and applause. The President
Speaker 1: of the United States of America walks on stage and
Speaker 1: shakes hands with Dick DeVos and Javanandel. In fact, it's
Speaker 1: Javan andl who introduces him. This great hall, this great hall,
Speaker 1: large as it is, has proven to be too small
Speaker 1: for the crowd that has come here today. So you'll
Speaker 1: be pleased to know that we've been able to get
Speaker 1: another auditorium nearby with television screens to take care of
Speaker 1: the rest of the folks who couldn't get in here.
Speaker 1: This rally, this rally is called the Spirit of America,
Speaker 1: and there is no better exponent of this than President Reagan,
Speaker 1: thank you very much. Well, if you'd have done this
Speaker 1: a few years ago when I was making bedtime for bonds,
Speaker 1: and I'd still be there. Well, thank you very much, Jane,
Speaker 1: Governor Harris, Congressman Gingrich, and Levitas and ladies and gentlemen.
Speaker 1: It's people like you who show us the heart of
Speaker 1: America is good. Perhaps you heard my speech to the
Speaker 1: nation last night on the State of our Union. Oh,
Speaker 1: Reagan is introducing a whole new philosophy of deregulation, trickle
Speaker 1: down economics, supply side economics, and so on, and this
Speaker 1: is spreading across the country. Now, this whole new philosophy, Reaganomics,
Speaker 1: that's one of those things you know the name of
Speaker 1: and how to use it in conversation at a party
Speaker 1: with someone who hopefully knows less about it than you do. Right, No, anyway,
Speaker 1: I looked it up and here's the gist. Reaganomics was
Speaker 1: all about cutting government spending, including an awesome idea Reagan
Speaker 1: and his cohorts cooked up to get rid of the
Speaker 1: FTC Bureau of Consumer Protection. That's the one that would
Speaker 1: go after companies like Amway. And then they wanted to
Speaker 1: loosen regulations and lower certain taxes that would free up
Speaker 1: cash for super rich people and corporations, and that was
Speaker 1: supposed to trickle down to US normals. Guess who loves
Speaker 1: fewer regulations and no consumer Protection Bureau and lower taxes
Speaker 1: and all that jazz rich guys who own MLMs. In
Speaker 1: the end, the plan was a disaster. If you ask
Speaker 1: my parents, maybe your parents made out like bandits in
Speaker 1: the eighties. It did help rich people stay or get richer,
Speaker 1: while the rest of us went into debt along with
Speaker 1: the country, which tripled its deficit during Reagan's presidency. So
Speaker 1: back to Amway. During this time, Dick DeVos was the
Speaker 1: finance chair of the RNC until he wasn't. There have
Speaker 1: been a few things that I've either read or seen
Speaker 1: that I find really funny, And one of them was
Speaker 1: a Post article and it was talking about when Devas
Speaker 1: was actually kicked off from being the finance chairman of
Speaker 1: the Republican National Committee, and it was quoting people saying
Speaker 1: that he was starting to run the finance meetings almost
Speaker 1: and they started sounding like Amway opportunity meetings DeVos, which
Speaker 1: in Dutch means the Fox. He was kicked off as
Speaker 1: finance chairman because of the way he was running it
Speaker 1: like an amway and meeting and sort of extorting people.
Speaker 1: There's a way to ask for money, you know, there
Speaker 1: is a protocol for asking for money. Okay, so he's
Speaker 1: out at the RNC. But if you thought that was
Speaker 1: the end of Devas's political ambitions, think again. Far more
Speaker 1: frightening than a couple of old guys at an RNC
Speaker 1: meeting getting freaked out by some raw rah Amway bullshit.
Speaker 1: In nineteen eighty seven, about six years too late, and
Speaker 1: with fifty thousand people that we knew of already infected
Speaker 1: with the disease, President Reagan convened the President's Commission on
Speaker 1: the HIV Epidemic. And guess who got himself put on
Speaker 1: that board. Dick DeVos, the federally indicted soappustler, and in
Speaker 1: classic MLM fashion, he put the blame for the AIDS crisis,
Speaker 1: where his worldview dictated it belonged on the victims. You know,
Speaker 1: when HIV first came out, President Reagan formed a commission.
Speaker 1: I was honored to be on that commission. I listened
Speaker 1: to three hundred witnesses tell us that it was everybody
Speaker 1: else's fault but their own. Nothing new with their contact.
Speaker 1: It was just the government and fixious disease. At the
Speaker 1: end of that I put into the document that was
Speaker 1: the conclusion document from the commission that actions have consequences
Speaker 1: and you are responsible for yours. What was that about.
Speaker 1: I mean again, he was a puritanical Dutch reform religious
Speaker 1: zealot himself, but he was also a huge contributor to
Speaker 1: the Reagan administration campaign. So even people at the top
Speaker 1: ranks of the Republican Party say something wrong with this
Speaker 1: way this guy operates. And then the big contribution he
Speaker 1: makes to the Reagan administration is what has been described
Speaker 1: as a cruel contribution to that AIDS dialogue. Amway's next
Speaker 1: significant contribution came in helping Reagan's successor into office, George HW. Bush.
Speaker 1: You could have guessed that he was pals with these
Speaker 1: Amway guys, right and helping him get elected through enormous
Speaker 1: campaign contributions. They earned yet another ally in the Oval Office. Well,
Speaker 1: thank you, Dick de Voss, Dick Johnson, Dick de Voss,
Speaker 1: thank you for that very warm and generous welcome, and
Speaker 1: thank all of you for that welcome. You sure know
Speaker 1: how to make a fellow feel a part of the
Speaker 1: Amway family. Amway, an extraordinary company, has brought us together
Speaker 1: here today, I'm surrounded here by thirty five or forty
Speaker 1: thousand examples of the great system of free enterprise, where
Speaker 1: anyone can grab hold of their dream and work hard
Speaker 1: and believe hard and make it come true. And that's
Speaker 1: what you're doing, and that's what Amway has inspired you
Speaker 1: to do. Keep up the great work and make God
Speaker 1: blas you all. Thank you very much. And then Bill
Speaker 1: Clinton is elected. During the Bush years, it was business
Speaker 1: as usual. Very few MLMs were looked into by the FTC,
Speaker 1: and it seemed like Amway's effort to keep a friendly
Speaker 1: in office was paying off. You would think that since
Speaker 1: the founders of Amway had been in such a great
Speaker 1: position of influence and gave so much money to the
Speaker 1: Republican Party over the years, that the Clintons might have
Speaker 1: offered some sort of relief or hope to people like
Speaker 1: Robert and the rest of the ten people who were
Speaker 1: like Robert and trying to protect our citizens from multi
Speaker 1: level marketing. Think again. When Clinton was elected, of course,
Speaker 1: the threat to multi level marketing re emerged. The fear
Speaker 1: that a Democrat who has not received the kind of
Speaker 1: political support from multi level marketing because the multi level
Speaker 1: marketing lobby had been focused on the Republican Party might
Speaker 1: resurrect the old policies of investigating multi level marketing as
Speaker 1: illegal pyramid schemes. In many ways, Clinton was not focused
Speaker 1: on protecting the public from these kinds of consumer frauds.
Speaker 1: He brought in the same man who had written the
Speaker 1: Amway decision for the Federal Trade Commission, Robert Potowski. Robert Potowski,
Speaker 1: that's the same guy who ignored all of Joe's evidence
Speaker 1: intended to prove Amway was a pyramid scheme. That guy.
Speaker 1: He made him the chairman of the Federal Trade Commission,
Speaker 1: and under Patofski, more prosecut cusians occurred, but they were
Speaker 1: always of small companies, and in each case the FTC
Speaker 1: would assert multi level marketing as a model was legal.
Speaker 1: Clinton himself later became a spokesman for and publicized a
Speaker 1: video that was done for the Direct Selling Association, promoting
Speaker 1: direct selling as a great business and promoting it internationally.
Speaker 1: So what's the Direct Selling Association, Well, it's the lobbying
Speaker 1: arm of the multi level marketing industry, counting, among others,
Speaker 1: Amway as a member in good standing to this day.
Speaker 1: You would think that the industry, since they're running the
Speaker 1: Chamber of Commerce and everything, would have been all set
Speaker 1: with their lobbies. But no. Bill Clinton gave a talk
Speaker 1: on behalf of the DSA in a video with a
Speaker 1: very presidential looking background. I'm not saying it was filmed
Speaker 1: in the Oval Office, but if you told me it
Speaker 1: was filmed in the Oval Office, I would believe it
Speaker 1: was filmed in the Oval Office. I am delighted to
Speaker 1: have this opportunity to talk to so many of the
Speaker 1: salespeople who help our economy grow and help keep the
Speaker 1: American dream alive for millions of Americans in America. If
Speaker 1: you work hard and play with the rules, if you
Speaker 1: take responsibility for yourself and your family, you should have
Speaker 1: all the opportunity you need for a better future. That's
Speaker 1: America's basic bargain. It's what I work to promote as president,
Speaker 1: and it's what the work of direct selling helps to
Speaker 1: promote each and every day. Thank you for your work.
Speaker 1: God bless you, and God bless America. He himself also
Speaker 1: later made a speech at an Amway conference in Osaka, Japan,
Speaker 1: and received a fee of seven hundred thousand dollars one speech,
Speaker 1: more opportunities to try to figure out how to bring
Speaker 1: women into the workforce in a way sometimes full of quality,
Speaker 1: and that's the place that helps rich as well as
Speaker 1: four countries. I am very grateful for Amway's commitment on this.
Speaker 1: I appreciate what this company does for children in the
Speaker 1: United States and how much I've preceived with now. Later,
Speaker 1: we discovered that several people in the Clinton administration became avid,
Speaker 1: active promoters of multi level marketing. Take for example, Clinton's
Speaker 1: Secretary of State Madeline Albright, who became a shill for
Speaker 1: Herbal Life during her tenure in his cabinet. She made
Speaker 1: ten million dollars hyping up their nutritional supplements in videos
Speaker 1: and at events. I didn't really think there was an
Speaker 1: illuminati before, but now I'm like, maybe there's an illuminati.
Speaker 1: The part that I like about what you do with
Speaker 1: Rbal Life is women are very good at interpersonal relations
Speaker 1: and really developing a relationship with the person that they're
Speaker 1: dealing with. And I think that the kind of sales
Speaker 1: operation the Herbal Life has is the one that really
Speaker 1: allows women to shine in terms of explaining and good
Speaker 1: about family health and nutrition. That's kind of what women
Speaker 1: do on a daily basis, and so I think they
Speaker 1: are a very natural sales force for you. There was
Speaker 1: a lot happening during the Clinton years that were as
Speaker 1: important to Amway and to multi level marketing as preventing
Speaker 1: law enforcement, and this was to get an opening into China. China,
Speaker 1: of course became the motherload. It was the most important
Speaker 1: of the markets to get to. Eventually, the multi level
Speaker 1: marketing model, if it doesn't expand into other geographic areas,
Speaker 1: it will eventually begin decline, sometimes rapid decline. It's not
Speaker 1: that other companies who were not pyramids don't want to grow,
Speaker 1: but they are not under a mandate by their business model.
Speaker 1: The business model is sustainable. There are repeat customers, there
Speaker 1: are stable businesses that even if they don't grow, the
Speaker 1: company is still in business profitable any rate. The Chinese
Speaker 1: government shut it down in ninety eight, and immediately Clinton's
Speaker 1: trade representative, a woman named Charlene Barshevski, went to bat
Speaker 1: for multi level marketing and worked with the government to
Speaker 1: allow the larger multi level marketing companies, and that translated
Speaker 1: almost entirely to Amway. So basically, Charlene Barszewski managed to
Speaker 1: get the government to allow it to operate under some
Speaker 1: restricted conditions while it fashioned this new law. Government quite
Speaker 1: rightly needed to crack down on these games of pyramids, games,
Speaker 1: Ponzi scheme, whatever you want to call them, term they
Speaker 1: use in China as chain selling, and cracking down on them.
Speaker 1: They have also forced all direct selling companies to shut down.
Speaker 1: The fact that Karshevski is here this week, that Metal
Speaker 1: and Albright is here next week, that Bill Clinton will
Speaker 1: be here in June gives us a unique opportunity to
Speaker 1: gain an audience with the highest levels of government of
Speaker 1: concerning the differences. And we hope that were to take
Speaker 1: advantage of that to do the education that we have
Speaker 1: to do to make them draw the distinctions between our
Speaker 1: form of selling and that which is fronti. Okay, So
Speaker 1: now is when we get to hear about how the
Speaker 1: owners of Amway. Ever, the opportunists start giving a lot
Speaker 1: of money to the Democratic Party right wrong well, accepting
Speaker 1: all the help they could get from the left, they
Speaker 1: found their ideals matched much more closely with folks on
Speaker 1: the right and kept their eyes on the larger goal
Speaker 1: of getting a Republican back into the White House. Between
Speaker 1: ninety one and ninety seven, the watchdog group Common Cause
Speaker 1: had found that the Republican National Committee had received over
Speaker 1: four million dollars. And this again in dollars that haven't
Speaker 1: suffered from the inflation we have today from the Amway corporation.
Speaker 1: Richard de Vas and his wife were writing checks for
Speaker 1: a half a million each to the Republican Party. Amily
Speaker 1: didn't just help the first Bush get elected, No, they
Speaker 1: helped his kid too. I've got mosh Nihai. I want
Speaker 1: to thank the leaders of Amway China for contributing to
Speaker 1: causes that make the communities in which you live a
Speaker 1: better place. So Bush comes in in two thousand and
Speaker 1: goes to two thousand and eight, you won't see prosecutions
Speaker 1: as opposed to even going after the smaller ones. Correct,
Speaker 1: it just wasn't there, that's right. In addition to campaign contributions,
Speaker 1: Amway also did this weekly enormous conference call thing where
Speaker 1: their distributors regularly called in for encouragement and inspiration. And
Speaker 1: then during this time they also got to hear about
Speaker 1: the most Amway friendly presidential candidate, George W. Bush. And
Speaker 1: then Bush goes and appoints one of Amway's former lawyers
Speaker 1: to chair the FTC Timothy Mirras. Tim then goes and
Speaker 1: appoints as the FTC's chief economist his pal David Schaffman,
Speaker 1: who was a consultant to the MLM industry, specifically for
Speaker 1: a company called Equinox that had been under investigation by
Speaker 1: the FTC during the Clinton years. So here's the guy
Speaker 1: that had been testifying AGAINSTC on behalf of a multi
Speaker 1: level marketing company, and a year later, not even a
Speaker 1: year later, he's made the FTC's chief economist. Not only
Speaker 1: did the commission get infiltrated by former friendlies of the
Speaker 1: MLM industry. As people left positions at the FTC around
Speaker 1: this time, a lot of them ran directly into the
Speaker 1: warm embrace of the corporate ranks at Amway and other MLMs.
Speaker 1: Of course, Bush had to leave eventually, and at this
Speaker 1: point the country decided it was time for someone different,
Speaker 1: someone seemingly incorruptible, someone that offered everyone a chance to
Speaker 1: feel something new, a feeling that, in the case of MLMs,
Speaker 1: would turn out to be dangerous. That feeling was hope,
Speaker 1: Hello Chicago, If there is anyone out there was still
Speaker 1: doubts that am Yeah's a place where all things are possible,
Speaker 1: We're still wonders if the dream of our founders is
Speaker 1: alive in our time. We're still questioned the power of
Speaker 1: our democracy tonight is your answer? When Obama came in,
Speaker 1: there was tremendous hope among consumer activists who were paying
Speaker 1: attention to this that surely the Obama administration would take
Speaker 1: the handcuffs off the FTC. The hope was truly raised.
Speaker 1: Of course, that was Obama's theme, wasn't it. But strangely,
Speaker 1: nothing happened. First four years. Nothing happened. We already saw
Speaker 1: during the Clinton years that the multi level marketing industry
Speaker 1: had strongly infiltrated Congress, had bipartisan support, was pouring money
Speaker 1: in from various avenues, to individuals, to political parties, and
Speaker 1: I think Obama, much like Clinton, decided this was not
Speaker 1: an issue he was going to take on. As you
Speaker 1: might remember, Obama had a lot on his plate, a
Speaker 1: couple of wars, a major financial crisis when he came
Speaker 1: into office. MLMs weren't going to be at the top
Speaker 1: of his list. But if the administration thought that they
Speaker 1: could ignore the industry forever, by the start of the
Speaker 1: second term, that idea was gone. All of a sudden
Speaker 1: an explosion occurred during the Obama administration. A hedge fund
Speaker 1: came out and announced that it was betting a billion
Speaker 1: dollars against the stock of a major multi level marketing
Speaker 1: company on the basis that it believed the company was
Speaker 1: an illegal pyramid scheme a fraud. So this brought public
Speaker 1: attention to multi level marketing on a scale as never before.
Speaker 1: Life is a company that sells new tree supplements and
Speaker 1: weight loss products through a network of three point one
Speaker 1: million salespeople. Thanks to hedge fund manager Bill Ackman, Erballife
Speaker 1: is currently fighting for its life. Bill Ackman recently raised
Speaker 1: questions about the company's accounting practices, and the stock quickly
Speaker 1: lost more than thirty percent of its value. Thanks for
Speaker 1: coming in today, Bill, sure. First of all, what are
Speaker 1: you accusing Herbalife of being a pyramid skin We believe
Speaker 1: erbal Life experimid SCA. When the FTC finally did come
Speaker 1: to a conclusion about Erballife, it announced the settlement with Herbalife.
Speaker 1: It announced also that the person who had been negotiating
Speaker 1: for Herballife against the FTC was John Leebowitz, who had
Speaker 1: just left the FTC as chairman and had gone straight
Speaker 1: to work for Erbalife, and he was negotiating with the
Speaker 1: TC on behalf of herbal Life, and that settlement most
Speaker 1: famously named all the wrongdoings of herbal Life, but refused
Speaker 1: to call erbal Life a pyramid scheme. Again, the core
Speaker 1: facts that that we've alleged and that we consider to
Speaker 1: be problematic with their compensation structure are set forth in
Speaker 1: detail in our complaint, and again I will leave to
Speaker 1: readers to draw their own conclusions. But they were not
Speaker 1: determined not to have been a pyramid that would be inaccurate.
Speaker 1: This was a sweetheart deal and it resulted in herbal
Speaker 1: Life escaping the wrath of Wall Street. Its stock value
Speaker 1: went up, wiping out the short cellar, wiping out Bill Ackman,
Speaker 1: causing him to abandon his position eventually. And this is
Speaker 1: after two years of investigation and four years of publicized
Speaker 1: exposures by the Wall Street Hedge Fund. And then we
Speaker 1: see really what was behind it. The FTC itself, that is,
Speaker 1: its former chairman was representing Herbalife during all this time.
Speaker 1: And when the settlement was made, Erbalife announced that he
Speaker 1: would then be given a formal position as an advisor
Speaker 1: to the board. In other words, he had an official position,
Speaker 1: which prior to that, none of us knew that Leebuwitz
Speaker 1: was working for Erbal Life. The multi level marketing industry
Speaker 1: has one single need from government. They don't really need
Speaker 1: lifting of regulations, they don't need environmental rules relaxed, and
Speaker 1: they don't even need favorable tax breaks anymore than other companies.
Speaker 1: So there's nothing particular there. But they have one existential need,
Speaker 1: and that is to prevent fraud prosecution or criminal They
Speaker 1: have largely prevented criminal prosecutions. You haven't really seen a
Speaker 1: significant threat. It's always there because fraud laws are on
Speaker 1: the books and would never be taken away. Then there's
Speaker 1: the potential for civil actions as a pyramid scheme. This
Speaker 1: doesn't threaten anyone with jail time, but it could potentially
Speaker 1: shut down a company, and it can also lead to
Speaker 1: court precedents, that is, judgments from the court that could
Speaker 1: encourage future lawsuits. They have a great need to prevent
Speaker 1: the government from establishing any kind of precedent or policy,
Speaker 1: or generating any kind of judicial decisions that would expose
Speaker 1: them to charges that they are operating pyramid schemes. The
Speaker 1: Erbal Life case didn't cause the industry to come crashing
Speaker 1: down as much as people hoped it would, in similar
Speaker 1: fashion to big banks on Wall Street after the markets crashed,
Speaker 1: Rbalife used its sizeable resources to maneuver around many of
Speaker 1: the settlement terms and stay in business. But there was
Speaker 1: one significant victory of sorts. Edith Ramirez, the chairman of
Speaker 1: the FTC at the time, argued that for an MLM
Speaker 1: to be considered legal, its profits must be reaped from
Speaker 1: sales to end users who are not already involved in
Speaker 1: the scheme. In other words, supply and demand would decide
Speaker 1: who made money, not advancing up the rungs through recruitment
Speaker 1: or quotas. Of course, the industry was not pleased with
Speaker 1: this notion and has been working tirelessly ever since to
Speaker 1: get legislation passed that would protect them from law enforcement
Speaker 1: on the issue. Every few years, it goes by a
Speaker 1: different name, but HR thirty four oh nine is the
Speaker 1: current iteration of the anti pyramid scheme bill. No, it's
Speaker 1: not a bill that shuts down pyramid schemes, but one
Speaker 1: that is being pushed by the Direct Selling Association and
Speaker 1: MLMA friendly politicians to essentially protect MLMs from being called
Speaker 1: pyramid schemes. More on that next week, and they're lobbying
Speaker 1: for the passage of that bill. With the industry's most
Speaker 1: MLM friendly president yet in office, the Trump name and
Speaker 1: success have really become one and the same. I've worked
Speaker 1: hard at that for a long time. The two things
Speaker 1: I've mastered over the years is understanding the importance of
Speaker 1: timing and business and the ability to recognize great opportunities
Speaker 1: and also great people. So I'm here to tell you
Speaker 1: about a company that provides these two essential components for success.
Speaker 1: That's the Donald and a promotional video for ACN, an
Speaker 1: MLM that sold landline video phones this century after everyone
Speaker 1: had like laptops and Skype and everything. ACN is one
Speaker 1: of two MLMs the Trump family has very close ties with,
Speaker 1: including one called the Trump Network. Their ties are so
Speaker 1: close that he and his family are currently being sued
Speaker 1: in the Southern District of New York by some former
Speaker 1: distributors for allegedly defrauding them and others out of millions
Speaker 1: of dollars. Trump and his family, they say, encouraged thousands
Speaker 1: of people through these videos and personal appearances and endorsements
Speaker 1: on his TV show The Apprentice, to invest bigley in
Speaker 1: these amazing, tremendous business opportunities to my writer Greg and
Speaker 1: Tony from ACN, who will tell you what to do.
Speaker 1: We're very excited to be here to have you help
Speaker 1: us introduce to the world the new ACN video phone.
Speaker 1: Your task is to launch this product to hundreds of
Speaker 1: ACN representatives. Five hundred salespeople from ACN are going to
Speaker 1: be judging you. Wasn't even close. The men absolutely easily
Speaker 1: defeated the women. Clodia. I believe you have an amazing future.
Speaker 1: I think you're totally beautiful. You're going to be a
Speaker 1: big star. But I'm sorry, Clodia, you fired. Oh and
Speaker 1: one more thing. That seat of us. The daughter in
Speaker 1: law of the founder of Amway, is a high ranking
Speaker 1: member of his cabinet, which gives her a seat at
Speaker 1: the table that would make her father in law pretty
Speaker 1: jealous if he weren't dead. Missus Devas, there is a
Speaker 1: growing fear I think in this country that we are
Speaker 1: moving toward what some would call an oligarchic form of society,
Speaker 1: where a small number of very very wealthy billionaires control
Speaker 1: to a significant degree our economic and political life. Would
Speaker 1: you be so kind as to tell us how much
Speaker 1: money your family has contributed to the Republican Party over
Speaker 1: the years. Senator. First of all, thank you for that question.
Speaker 1: I'm again was pleased to meet you in your office
Speaker 1: last week. I wish I could give you that number.
Speaker 1: I don't know. I have heard the number was two
Speaker 1: hundred million. Does that sound in the ballpark? Collectively? Be
Speaker 1: talk family? That's possible. Okay. My question is, and I
Speaker 1: don't need to be rude, but do you think if
Speaker 1: you were not a multi billionaire, if you a family
Speaker 1: has not made hundreds of millions of dollars of contributions
Speaker 1: to the Republican Party, that you would be sitting here today, Senator?
Speaker 1: As a matter of fact, I do think that there
Speaker 1: would be that possibility. I don't next time on the
Speaker 1: season finale of The Dream, how did you feel when
Speaker 1: you read that? I'm surprised. Honestly, I'm not surprised that
Speaker 1: she didn't answer specific questions that we sent, because that's
Speaker 1: been the response we've been getting from everyone. So I
Speaker 1: wasn't surprised that she was ignoring the factual questions. I
Speaker 1: was surprised, though, that her suggestion was that we should
Speaker 1: have collaborated with her from the beginning before we started
Speaker 1: production on the show, so that we would have had
Speaker 1: her perspective going into our research, which is obviously an
Speaker 1: ethical Well, yeah, you don't want the person you're investigating
Speaker 1: to be holding your hand through the investigation. Exactly, exactly. Well,
Speaker 1: I'm glad you're here. I'm incredibly nervous to talk to you. Well,
Speaker 1: somehow I don't believe that I am. No, I really am.
Speaker 1: I'm worried. I'm worried that you're gonna lie to me.
Speaker 1: The Dream is a production of Little Everywhere in Stitcher,
Speaker 1: written and reported by Me Jane Marie, Dan Galucci, Mackenzie
Speaker 1: cassab Lyra Smith, and help from Claire Rowlinson. We are
Speaker 1: edited by Peter Clowney. Our fact checker is Michelle Harris,
Speaker 1: and we're mixed by Mike Richter. The Dream is executive
Speaker 1: produced by Laura Mayor, Chris Bannon, Dan Galucci and me.
Speaker 1: Special thanks to Robert Fitzpatrick, who's currently working on a
Speaker 1: new book, Ponzi Nomics, The Untold History of Multi Level Marketing.
Speaker 1: Order it as soon as it comes out. We appreciate
Speaker 1: you subscribing, rating, and reviewing the show wherever you listen.
Speaker 1: The