Multi-Level Mkt

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</div><div>Regarding the prosperity gospel, Fea cites the work of historian Kate Bowler, writing, “Prosperity preachers teach that faith in God combined with positive thinking and an optimistic attitude will ultimately lead to monetary wealth, good health, and victory over the difficult circumstances of life.” His broader background descriptions are adequate, but his focus on one figure, Paula White, who has a long history with Trump, is not fleshed out much.</div><div>
</div><div>Fea mentions but does not elaborate on Trump’s youthful experience hearing sermons from Norman Vincent Peale, author of “The Power of Positive Thinking,” and never delves into how Trump’s own business practices have reflected the influence of such figures, such as <a href="https://nymag.com/nymag/features/70831/" target="blank" rel="noopener" times="Times" new="New" roman="Roman" font-size="font-size" large="large" box-sizing="box-sizing" border-box="border-box" outline="outline" none="none" margin="margin" px="px" padding="padding" text-decoration-line="text-decoration-line" transition="transition" color="color" s="s" ease="ease" cursor="cursor" pointer="pointer">this 2011 New York magazine story</a> about Trump’s multi-level vitamin marketing scheme. The prosperity gospel is the utmost in individualism, while at the same time relying on a powerful and persuasive social environment, which Fea’s analysis does not include.</div><div>
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</div><div>=</div></div><div>=</div><div>AN</div><div>the he same expensive, dubiously beneficial “wellness supplements” are available for sale at Oscar-winning actress Gwyneth Paltrow’s tony Goop lifestyle blog and at Texas-based conspiracy-monger Alex Jones’ InfoWars.com, <a href="https://qz.com/1010684/all-the-wellness-products-american-love-to-buy-are-sold-on-both-infowars-and-goop/" rel="noopener noreferrer" target="blank" style="text-decoration-line: none;">said Quartz on Thursday</a>.</div>While the conventional wisdom says red and blue America will never see eye-to-eye and that the cultural gulf that between “coastal elites” and “white working class America” is all but uncrossable, it seems Lululemon-wearing Manhattanites and angry rural Trump supporters can agree that adding “eleuthero root, cordyceps mushrooms, and ‘nascent iodine'” to your diet can somehow boost your life essence.“Near the end of <a href="https://www.nytimes.com/2017/05/25/magazine/how-amanda-chantal-bacon-perfected-the-celebrity-wellness-business.html" style="text-decoration-line: none;">a profile</a> of Amanda Chantal Bacon, founder of the ‘wellness’ brand Moon Juice, the New York Times Magazine noted that many of the alternative-medicine ingredients in her products are sold — with very different branding — on the Infowars store,” wrote Quartz’ Nikhil Sonnad.Sonnad continued, “Moon Juice is<a href="https://shop.goop.com/shop/collection/brands/moon-juice" style="text-decoration-line: none;"> frequently recommended</a> by Gwyneth Paltrow’s wellness blog, Goop; it’s a favorite of Hollywood celebrities and others who can afford things like $25 ‘<a href="https://www.moonjuiceshop.com/products/cashews" style="text-decoration-line: none;">activated cashews</a>.’ Infowars, on the other hand, is a dark corner of the American right, heavy on guns, light on government intervention, and still very mad at Obama.”Quartz assembled a compendium of ingredients sold at both Moon Juice and InfoWars, the names they fly under at each site — “Super Male Vitality” at InfoWars is sold as “Sex Dust” Moon Juice — and their respective costs.<a href="https://www.slate.com/articles/business/the_bills/2015/10/trump_carson_bush_all_benefited_from_multilevel_marketing_schemes.html" style="text-decoration-line: none;">Multilevel marketing schemes</a> are a staple in the right-wing methods of generating revenue. Glenn Beck, Jones, Rush Limbaugh, President Donald Trump and Ben Carson have all lent their names to dubious “supplements” and shilled for pyramid schemes.All of this is an outgrowth of the tangled network of mailing lists, mail order scams, PACs and other money-making endeavors that prey off of gullible conservative voters, many of whom are elderly and on fixed incomes.<a href="https://www.rawstory.com/2015/02/new-report-says-conservative-chumps-sent-50-million-to-right-wing-scam-groups-like-sarahpac/" style="text-decoration-line: none;">A 2015 report said</a> that Republican voters donated more than $50 million in 2014 to scam political outfits like SarahPAC, only to have that money “siphoned off to vendors, wasted, and just plain old pocketed by people in these PACs.”<interaction data-token="5b96855f8198b4e625350260" data-context="true" data-tags="" data-fallback="true" style="background-color: rgb(255, 255, 255);" /><div><div style="background-color: rgb(255, 255, 255);"></div></div><div style="background-color: rgb(255, 255, 255);">ref</div><div style="background-color: rgb(255, 255, 255);">
</div><div style="background-color: rgb(255, 255, 255);"><a href="https://slate.com/business/2015/10/trump-carson-bush-all-benefited-from-multilevel-marketing-schemes.html">https://slate.com/business/2015/10/trump-carson-bush-all-benefited-from-multilevel-marketing-schemes.html</a></div><div style="background-color: rgb(255, 255, 255);">
</div><div style=""><p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-1@published" data-word-count="71" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Much has been made of the fact that the two leading contenders in the Republican presidential primary, Donald Trump and Ben Carson, lack any experience in elected office. Much less attention has gone to something else the two men share: a history of entanglements with companies that have been rightly criticized for hawking get-rich-quick schemes to the broke and desperate. The business model, which is perfectly legal, is called multilevel marketing.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-2@published" data-word-count="74" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">In his classic tome of the prosperity gospel movement, <a href="http://www.amazon.com/dp/149617545X/?tag=slatmaga-20" data-amzn-asin="149617545X" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">Think and Grow Rich</a>, Napoleon Hill told his readers that making money was simply a matter of the right attitude. If you think hard on it, if you want it bad enough, wealth will happen to you. Hill more or less left it at that. Multilevel marketing, or MLM, gives those believers a seemingly concrete plan. Sell our goods and untold wealth will be yours!<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-3@published" data-word-count="52" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Check the <a href="http://acninc.com/" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">website of ACN</a>, the multilevel marketing company that Donald Trump featured not <a href="https://www.youtube.com/watch?v=8KHdtYKXGw" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">once but twice on Celebrity Apprentice</a>. “ACN has enabled countless people of all ages, cultures and backgrounds to experience financial and personal freedom, allowing them to live the life they’ve always imagined—a life without boundaries,” the site claims.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-4@published" data-word-count="42" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Then there was Trump Network, Trump’s own multilevel marketing concern, which the Donald bought and renamed after himself in 2009 and sold off for an undisclosed sum in 2012. He described the company as a “rescue and recovery program” for recession-wary Americans.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-5@published" data-word-count="53" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">And let’s not forget Mannatech, the vitamin company Carson’s been saying kind words about since 2004, as the Wall Street Journal <a href="http://blogs.wsj.com/washwire/2015/10/08/a-mystery-in-ben-carsons-ties-with-supplement-maker-mannatech/" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">reminded us last week</a>. He credits the company’s products with helping him in his battle against prostate cancer. Mannaech offers recruits “unlimited earning potential,” as it terms it in a come-on pitch.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-6@published" data-word-count="15" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Sounds great. What could go wrong? As the Donald might put, <a href="https://twitter.com/realDonaldTrump/status/603870999805833216" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">“Watch, listen and learn.”</a><p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-7@published" data-word-count="64" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Products sold through the multilevel marketing model aren’t sold in stores. Instead individuals purchase a startup kit (always encouraged, but not always required) and then contract with the company for the right to sell the merchandise to other individuals. They receive a commission on each sale but are not actually employed by the company. So far, so familiar. That’s the classic Avon Lady model.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-8@published" data-word-count="63" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">But selling goods one by one to your neighbors and friends isn’t the way to riches, no matter how much you hound them or otherwise guilt-trip them into making purchases. So multilevel marketing companies incentivize their salespeople to recruit other salespeople, promising them a cut of all that person’s sales, as long as both the original seller and the new recruit remain active.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-9@published" data-word-count="3" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Still following me?<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-10@published" data-word-count="53" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Next, the newly recruited salesperson is supposed to go on to bring even more people on board, with money from everyone’s sales flowing upward. Eventually, the pitch goes, a successful salesperson will have dozens or hundreds or even thousands of people working under him or her, while collecting a percentage from their sales.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-11@published" data-word-count="18" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">There’s an oft-told joke about MLMs in Utah, where they’re quite popular: It stands for Mormons Losing Money.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-12@published" data-word-count="84" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">You can think of multilevel marketing as an exaggerated microcosm of the age of  inequality. There are a handful of people on top actually making the promised six-figure (and possibly larger) incomes. Mannatech, for example, issued a press release this summer lauding the 200th sales associate over the life of the company to earn $1 million from sales of the company’s products. On the other hand, the Wall Street Journal reported that the average active Mannatech sales associate was earning less than $1,000 annually.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-13@published" data-word-count="80" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">It’s likely not much better at other companies. The Direct Selling Association, the lobbying arm of the multilevel marketing industry, claims 18.2 million Americans—about 5 percent of the population—were “involved” in direct selling last year, generating $34.5 billion in sales. That number sounds terrifically impressive until you realize it equals less than $2,000 per person. Even for work that isn’t necessarily full time, this isn’t exactly raking it in. And the typical seller likely took home even less than that.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-14@published" data-word-count="172" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Much in the same way that Uber downplays everything from the cost of vehicle wear and tear to the cost of gas when promoting the benefits of signing on as a driver, MLM recruiters eager to sign up fresh sales troops often downplay or explain away fees associated with the business model. While buying the product isn’t required, it’s not exactly discouraged—Mannatech, for example, tells its sellers they can buy the product at a wholesale price and then sell it for the retail markup to their customers. And there are startup costs. ACN, for example, charges a $499 initiation fee and then encourages its newly minted salespeople to purchase such things as a $39.99-a-month program offering office support services. Recruiters frequently seek to rationalize those charges. “The $499 is a small price to pay for a business,” <a href="http://pure-facts.blogspot.com/2007/04/acn-comments.html" style="background-color: rgb(255, 255, 255); box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">one wrote on an online board</a>. But it’s also about a year’s earnings for a typical recruit: In 2010, <a href="http://www.theglobeandmail.com/report-on-business/industry-news/marketing/guess-whos-coming-to-dinner-stottlemyre-has-a-pitch-for-you/article4388469/" style="background-color: rgb(255, 255, 255); box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">the Globe and Mail</a> reported that the average ACN salesperson earned $41 a month in commissions.  <p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-14@published" data-word-count="172" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">On top of all of this, the multilevel marketing industry is a political powerhouse, beating back attempts by the Federal Trade Commission to require it to provide proof of earnings claims to potential recruits. One result? According to a paper published by long-time industry critics <a href="http://www.nasdaq.com/article/the-pyramid-scheme-industry-examining-some-legal-and-economic-aspects-of-multi-level-marketing-cm340786" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">Douglas Brooks</a>, Robert Fitzpatrick, and Bruce Craig, who <a href="http://pyramidschemealert.org/wordpress/wp-content/uploads/2014/03/The-Pyramid-Scheme-Industry-FINAL.pdf" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">parsed</a> publicly available data from multilevel marketing giants Herbalife, Nu Skin, and Amway, more than 90 percent of those who seek to supplement their income by participating in such businesses actually lose money. They found the average distributor spent more money buying goods from the company he signed up with than he earned in income. (In turn, the multilevel marketing industry says, without actually referring to this study, that some of their recruits simply sign up to get discounts on their own purchases.)<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-17@published" data-word-count="110" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">It’s not exactly hard to find people who claim to have had less-than-savory experiences. The Internet  <a href="https://www.youtube.com/results?search_query=acn+scam" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">abounds</a> with critics accusing it of being a legal “scam.” And on consumer forums, purported former ACN sellers like <a href="http://mythreecents.com/reviews/acn" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">this anonymous one allege</a> they were convinced to join up by a trusted family member, only to discover they were expected to attempt to convince all their friends to sign up too: “The first thing a recruiter will tell you is to make a list of all the people you know and start inviting them (obviously if you know people with money, much better) and if they refuse, to keep bugging them till they come.”<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-18@published" data-word-count="71" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">There’s most certainly one person who has earned a life of financial freedom from ACN, though he didn’t need the money: Donald Trump. He told the Wall Street Journal he received $2.5 million for one speech at an ACN event in 2008; the Journal also reported he’s made numerous other appearances at company sales conventions over the years, including receiving more than $1.3 million in total for three recent company-sponsored talks.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-19@published" data-word-count="99" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Carson’s behavior has been less egregious. Most of the money he would have received for speaking at Mannatech events went to charity, save for a $42,000 fee in 2013. In addition, he appears to have refrained from actually extolling Mannatech as a business opportunity. Then again, he is talking up the products of a firm that paid millions of dollars to Texas in <a href="https://www.texasattorneygeneral.gov/oagnews/release.php?id=2858" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">one of those settlements</a> where no one admits fault, the result of a state lawsuit in which authorities asserted the company was “encouraging” salespeople to claim its products and potions could do things like cure AIDS.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-20@published" data-word-count="6" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">And he’s a doctor. Words fail.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-21@published" data-word-count="57" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">There’s one other thing that needs to be pointed out: Even a legal multilevel marketing company can cross into pyramid-scheme territory if its business is ultimately not selling products to consumers, but primarily selling people on the opportunity to sell products. Unfortunately, this not-so-sweet spot is often all but impossible for laypeople—not to mention government regulators—to locate.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-22@published" data-word-count="137" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">This is the crux of the almost three-year battle hedge funder Bill Ackman has been waging against Herbalife. The well-known short-seller is alleging the company is an illegal pyramid scheme because, as <a href="http://www.reuters.com/article/2012/12/20/us-ackman-herbalife-idUSBRE8BJ0W120121220" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">he puts it</a>, “I don’t think very many retail sales are happening at all”—something, needless to say, the company denies. ACN—which Trump once called a <a href="https://www.youtube.com/watch?v=2h1aPzmhDBA" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">“a very big part of the American dream”</a>—has also been accused of pyramid scheme–like practices by authorities in Australia, Canada, and Montana, though in all cases the charges were either ultimately dismissed or settled. In Montana, for example, the state initially claimed the company was making unrealistic earnings promises to convince people to join its sales force, but <a href="http://missoulian.com/news/state-and-regional/acn-settles-with-state-over-pyramid-scheme-allegations/article_53e28722-d681-11df-b960-001cc4c03286.html" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">concluded</a> the recruiters, who were independent contractors and not employed by ACN, were not instructed by the company to make the claims.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-23@published" data-word-count="40" style="box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">As for Trump Network, New York magazine <a href="http://nymag.com/nymag/features/70831/index2.html" style="box-sizing: inherit; transition: all 0.12s ease 0s; text-decoration-line: none; border-bottom-width: 2px; border-bottom-style: solid; border-color: var(--theme-color,#ff0e50);">reported</a> in 2011 that recruits practiced how they should respond if someone asked if it was a pyramid scheme. One suggested comeback: “You think Donald Trump would involve himself in a pyramid scheme?”<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-24@published" data-word-count="114" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">Of course, common sense would say people realize their chances of achieving millions of dollars in sales via these companies aren’t exactly high. There can’t be that many people who want to buy and sell large amount of vitamins, weight-loss supplements, cellphones, cleaning supplies, energy drinks, and other staples of the MLM business, right? But common sense, never in abundant supply in the best circumstances, all too often flies out the window when people are broke, desperate to get ahead, or simply unhappy with their current work or life situation. And the promises that companies like ACN peddle, sometimes with an extra push from someone like the Donald, can begin to sound pretty good.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-25@published" data-word-count="98" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">So why haven’t the other Republican presidential candidates called Trump and Carson on this stuff? Well, bashing the multilevel marketing business model isn’t good for another business—raising money running for political office. Supporters of Mitt Romney’s presidential runs have included honchos from companies like Amway, Nu Skin, and Xango, yet another health care supplement company. Before Scott Walker withdrew from the 2016 race, Richard DeVos, the co-founder of Amway, along with two other family members, gave $25,000 apiece to Walker’s political organization Our American Revival. They’ve also provided financial support to Jeb Bush’s super PAC, Right to Rise.<p class="slate-paragraph" data-editable="text" data-uri="slate.com/components/slate-paragraph/instances/cq-article-722b9c82dea9a28397e690cb6b06eeea-component-26@published" data-word-count="30" style="background-color: rgb(255, 255, 255); box-sizing: inherit; line-height: 1.5; margin: 0px 0px 1.2em;">And maybe the other candidates see nothing to criticize here. It’s not like economic magical thinking isn’t rewarded in Republican politics. Remember that thing about raising revenue by cutting taxes?</div>==
<a href="http://motherjones.com/politics/2010/10/tea-party-mark-meckler-herbalife">http://motherjones.com/politics/2010/10/tea-party-mark-meckler-herbalife</a>

<h1 style=" margin-bottom: 0.2em;" class="print-title">Is the Tea Party Movement Like a Pyramid Scheme?</h1>

<div style="margin-bottom: 0.5em;" class="dek">One of the movement’s leaders, Mark Meckler, was once a top operator in a company accused of conning consumers. Is he applying the same tactics to the tea party?</div>

By <a href="http://motherjones.com/authors/stephanie-mencimer">Stephanie Mencimer</a> | Tue Oct. 19, 2010 3:00 AM PDT

There's a book <a href="https://motherjones.com/politics/2010/07/cashing-in-on-tea-party" target="blank">Mark Meckler</a> [1] likes to recommend to reporters and others seeking insight into the tea party juggernaut. Called <a href="http://www.starfishandspider.com/" target="blank">The Starfish and the Spider</a> [2], it explores the "unstoppable power" of decentralized and leaderless organizations. "We're like the starfish," Meckler, a national coordinator for the Tea Party Patriots, <a href="http://www.p2012.org/photos10/cpac2010/cpac0210tea.html" target="_blank">said earlier this year</a> [3]. "There is no head, there is no leader of the organization. There are thousands of starfish out there and they are self-replicating in that way."

It's certainly an inspiring metaphor. If one tentacle is chopped off, the starfish grows a new one, making it a model of resilience. Yet there's another type of organization that's resilient, decentralized, and reminiscent of the <a href="http://motherjones.com/politics/2010/07/tea-partys-march-madness" target="blank">Tea Party Patriots</a> [4], a national umbrella organization that claims to represent 15 million activists and 2800 local affiliates. You can find it in companies like <a href="http://motherjones.com/politics/1996/09/she-did-it-amway" target="blank">Amway</a> [5], <a href="http://motherjones.com/politics/2010/09/biggest-political-donors-of-all-time" target="blank">Herbalife</a> [6], and others that rely on what's known as <a href="http://en.wikipedia.org/wiki/Multi-level_marketing" target="blank">multilevel marketing</a> [7] (MLM), a business model some consider to be nothing but a pyramid scheme.

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Like the tea party movement, these companies also operate as "leaderless," grassroots organizations. Organized by "networks," they espouse a bottom-up approach and depend on a neverending supply of people willing to work long hours with no assurance of pay. Meckler, it turns out, is intimately familiar with these types of outfits, having spent years at the highest ranks of one accused of preying on consumers with promises of easy money.

<div class="pullquote-right">Meckler was a top distributor for Herbalife, a controversial company that peddles dubious nutritional supplements and weight loss programs by way of "direct selling" or "network marketing."</div>

Few tea party activists—or journalists, for that matter—seem to know much about Meckler's life before he became one of the best-known faces of the movement. A regular TV presence and a veritable quote machine for the mainstream media, he's often <a href="http://www.theunion.com/article/20100227/NEWS/100229809" target="blank">identified in the media as an Internet lawyer</a> [8], and the National Journal's Jonathan Rauch <a href="http://www.nationaljournal.com/njmagazine/cs_20100911_8855.php" target="blank">dubbed him</a> [9] "the closest thing the movement has to an organizational visionary." But before he became a go-to guy for the press and old-line conservative groups seeking a tutorial on the tea party movement, Meckler was a top distributor for Herbalife, a controversial company that peddles<a href="http://www.ikp.unibe.ch/lab2/herbalife2007.pdf" target="_blank"> dubious nutritional supplements</a> [10] and weight loss programs by way of "direct selling" or "network marketing."<img brain="false" height="300" width="200" alt=" Photo of Mark Meckler by Hector Amezcua/Sacramento Bee/ZUMA Press" src="http://motherjones.com/files/images/markmeckler_0.jpg" title=" Photo of Mark Meckler by Hector Amezcua/Sacramento Bee/ZUMA Press" class="image image-preview" /> Photo of Mark Meckler by Hector Amezcua/Sacramento Bee/ZUMA Press

The company has<a href="http://www.mlmwatch.org/04C/Herbalife/herbalife01.html" target="blank"> a long history of run-ins</a> [11] with state and federal regulators, as well as congressional investigators, for its business practices and products. As early as 1982, the Food and Drug Administration sent Herbalife a notice of adverse findings for falsely claiming that its nutritional products could cure pretty much any disease. As a result, the company ended up removing questionable ingredients from some products and promised to modify the claims that it made in sales materials. The FDA also received a host of complaints from consumers about noxious side effects from Herbalife's products as well. A few years later, in 1985, the state of California sued the company for making false claims about its products and for running a pyramid-style marketing scheme. <a href="http://www.mlmwatch.org/04C/Herbalife/1986order.html" target="blank">Herbalife settled the case</a> [12] for $850,000 without admitting wrongdoing.

Becoming successful in Herbalife requires a certain ability to both persuade and suspend disbelief, given the need to recruit ever more distributors rather than simply sell weight-loss shakes. Herbalife distributors sell "opportunity," relying on a prospecting pitch that emphasizes the financial and personal freedom available to anyone who joins the business. Meckler was fluent in the pitch. In July 1999, he and his wife, Patty, wrote an <a href="http://www.internetnextstep.com/upline/1999/july-august/upline_magazine_feature_fear_of_prospecting.htm" target="blank">article</a> [13] for Upline Magazine, a trade publication for "network marketers," that came right off the Herbalife script. They claimed that MLM work can provide a "lifestyle offering total time freedom" and an opportunity to build an "unlimited residual income stream." Meckler, who lists the Dale Carnegie-inspired motivational book <a href="http://en.wikipedia.org/wiki/Think_and_Grow_Rich" target="blank">Think and Grow Rich </a>[14]as a favorite on Facebook, advised readers looking for new prospects to get out there and hit up some lawyers like himself. "Don't be timid!" he coached.

His pitch was apparently convincing. By 2002, according to an Herbalife spokesperson, Meckler had qualified for the "president's team," a group that constitutes less than 1 percent of the company's distributors. To attain this elite status, distributors need to bring in at least $200,000 a month for several months running. One study of Herbalife's business model concluded that president's team members earned about $600,000 a year. Herbalife's in-house magazine <a href="http://www.herbalifeww.com/us/pdf/Today_Magazine/2002-06/june02.pdf" target="_blank">profiled Meckler and his family</a> [15] when he qualified for the president's team. According to the story, as soon as the Mecklers started taking Herbalife products, Patty lost "a substantial amount of weight, while Mark gained weight after years of trying and experienced relief from his allergies and asthma. And the business took off too!"

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While the Mecklers might have found great health benefits in the Herbalife products they were selling, dozens of people sued Herbalife alleging that its supplements had caused deaths, strokes, and heart attacks. That's because Herbalife was one of the biggest sellers of "natural" products made with ephedra. The herb is similar to the chemical ephedrine, an appetite suppressant and drug often used as an asthma treatment. It’s not too different from amphetamines. The dangers associated with ephedra, and the ensuing lawsuits, prompted many insurance companies to jack up the rates or drop companies like Herbalife that sold it.

<div class="pullquote-right">The Mecklers claimed to be averaging more than $20,000 a month from their Herbalife business, which they said was giving them "newfound freedom" to be better parents and to spend more time with friends.</div>

In mid-2002, the company reported that because of the <a href="http://articles.latimes.com/2002/apr/12/business/fi-herbalife12" target="blank">wrongful death suits</a> [16] pending against it and the problems with ephedra, the company’s liability insurance premiums had jumped from $400,000 a year to $2.5 million a year, a move that ultimately prompted Herbalife to quit selling <a href="http://www.nydailynews.com/archives/sports/2002/06/30/2002-06-30_leagues__lawyers_join_ephedr.html" target="blank">ephedra</a> [17] products soon after. In 2004, the FDA banned ephedra's use in supplements because of the reports of adverse affects.

Still, Meckler's business didn't seem to suffer from the bad publicity. In the 2002 magazine profile, the Mecklers claimed to be averaging more than $20,000 a month from their Herbalife business, which they said was giving them "newfound freedom" to be better parents and to spend more time with friends. "In this business, if you focus on taking care of people and helping them, the check will come and so will everything else you are trying to accomplish," Mark said.

Not everyone drawn in by the Herbalife pitch was quite as successful. In 2004, the company paid $6 million to settle a <a href="http://www.google.com/url?sa=t&source=web&cd=1&sqi=2&ved=0CB0QFjAA&url=http%3A%2F%2Fwww.mlmwatch.org%2F04C%2FHerbalife%2Fclassaction%2Fsuit.pdf&rct=j&q=herbalife%20nancy%20jacobs&ei=VlezTLfXMYv2swPUt9DHBQ&usg=AFQjCNE1_g2vtN-p_SFRJhVXw2rqLspPPw&cad=rja" target="_blank">class action suit</a> [18] filed by 8,700 Herbalife distributors who alleged the company was a pyramid scheme. (Meckler was not named in the suit.) According to the lawsuit, many of the people induced to join up lost between $10,000 and $50,000; some were even forced into bankruptcy.

"Herbalife has virtually no customers and is not really in the direct selling business," explains Robert FitzPatrick, an expert in pyramid schemes who was a witness in the case. "It gets the great majority of its revenue directly from its salespeople who pay fees and buy marketing materials and products from Herbalife as part of the income scheme. Herbalife's real product is the income scheme, and its real customers are its salespeople."

He says the company annually churns through as many as 90 percent of the lowest level distributors, a figure Herbalife has disclosed in its SEC filings. The people who end up making money at Herbalife, says FitzPatrick, do it by "unscrupulously and aggressively telling people: 'You can make money.' If you're willing to say all that, do the script, you can build a network."

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Meckler hasn't been an Herbalife distributor since 2004, according to the company, but he didn't stray far. Since at least 2007, he has worked as the general counsel and chief operating officer of <a href="http://uniqueleads.com/" target="blank">UniqueLeads</a> [19], a Florida-based company owned by Shai Pritz, <a href="http://www.google.com/url?sa=t&source=web&cd=3&ved=0CCkQFjAC&url=http%3A%2F%2Fherbalifemail.com%2FFlyers%2F2010_FuturePTRetreat_Qualifiers_usen.pdf&rct=j&q=shai%20pritz%20herbalife&ei=7KS9TKLSI4WisQONyYyGDQ&usg=AFQjCNEQhuJ31kZoiNk0RKOwn0mIM9ZX4A&cad=rja" target="blank">another member of Herbalife's president's team</a> [20]. The company provides marketing and "lead generation" services to companies like Herbalife. Through a network of "affiliates"—usually web publishers, bloggers, or anyone who can put up a website—the company helps place ads across the Internet as a way of generating contact information lists for sales and other pitches. The firm has <a href="http://twitter.com/uniqueleads_com" target="blank">offered its affiliates</a> [21] the chance to place ads for organic hair growth products, colon cleansers, acai berry weight loss products, various "credit repair" sites, a teeth whitener, work-from-home offers, and even one for a dietary supplement that promises "slow down the aging process" and help you lose weight, too. Pritz also owns <a href="http://www.uniquelists.com/" target="blank">UniqueLists</a> [22], a data management company that sells the contact information harvested through the online ads.

The companies are part of the Internet advertising industry known as <a href="http://en.wikipedia.org/wiki/Affiliate_marketing" target="blank">affiliate marketing</a> [23], which, like MLM, has a <a href="http://econsultancy.com/us/blog/2908-ben-edelman-on-affiliate-marketing-fraud" target="blank">reputation for relying on unscrupulous practices</a> [24]. In 2009, the Federal Trade Commission <a href="http://www.ftc.gov/opa/2009/08/grantconnect.shtm" target="_blank">sued several affiliate marketers</a> [25] for hosting web sites designed to appear like they belonged to official federal entities, which offered "government grants" after last year's stimulus bill passage. Visitors who signed up to receive grant information for a few dollars allege that they later found their credit cards charged monthly for memberships and services they didn't ask for. (A federal judge shut down several of the sites, and more charges were added in April. The case is ongoing.) The industry is plagued with allegations that affiliate marketers are infecting consumers' computers with spyware and adware to surreptitiously boost click revenues. In June, a federal grand jury indicted two of eBay's highest-producing affiliates, two men who raked in about $20 million from the company between 2006 and 2007 allegedly through an illicit scheme that generated thousands of ad clicks in the computers of unknowing users. (The case is still pending.)

Meckler's job, apparently, has been to keep UniqueLeads out of trouble with regulators through an in-house "compliance" program. Before he made his first public speech at a tea party event in 2009, Meckler was writing online advice columns and speaking at affiliate marketing conferences on how to avoid run-ins with law. In one <a href="http://www.dmconfidential.com/blogs/column/iLegal/1298/" target="_blank">column</a> [26] Meckler wrote in a trade publication, he warned affiliate marketers that the FTC was poised to crack down on companies that tricked people into giving up contact information and credit card numbers online with offers of "free" stuff that wasn't free at all. "After the FTC contacts you, it's too late, and the FTC is going to extract their pint of blood, in addition to forcing you to comply," he wrote.

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Few of the tea party activists I spoke with for this story seemed to know what Meckler does for a living or about his work for Herbalife. (UniqueLeads.com owner Shai Pritz wouldn't comment on Meckler's work for his company, but Meckler still maintains a voicemail box there, and when I called his UniqueLeads office number in mid-October, a woman answered: "Mark Meckler's office.") Many have assumed that he was devoting all of his time to the tea party, largely because earlier this year he sent out an <a href="http://jeffpelline.wordpress.com/2010/02/10/scoop-tea-party-patriot-mark-mecklers-personal-plea-for/" target="_blank">appeal</a> [27] to local tea partiers pleading poverty and asking for money.

<div class="pullquote-right">Meckler's professional experience in the world of multilevel marketing seems to have translated quite well into the tea party movement.</div>

The solicitation apparently raised some cash for the Mecklers, even while <a href="http://rebaneruminations.typepad.com/rebanes_ruminations/2010/08/stan-meckler-responds.html" target="_blank">raising some eyebrows</a> [28] among local activists who, even without knowing about his MLM background, have begun raising red flags about what they see as Meckler's keen interest in the tea party movement's one real asset: its contact database. It's loaded with the names of highly politically engaged people who might be inclined to donate money to candidates—or, more cynically, people susceptible to conspiracy theories who might be interested in buying some overpriced gold, or perhaps a too-good-to-be-true weight-loss pill.

Meckler came under fire earlier this year when <a href="http://tpmmuckraker.talkingpointsmemo.com/2010/03/tea_party_leader_was_involved_with_political_firm.php" target="blank">news broke</a> [29] that, in 2007, UniqueLeads had spun off another company called Opt-In Movement, in conjunction with a DC-based GOP consultant David All, to create a list-generation firm that catered to political campaigns. (All declined to comment, and the company appears to be inactive.) Tea party activists seized on the story as a sign that, far from being the grassroots activist Meckler claimed to be, he was actually an aspiring GOP consultant. Concerns over Meckler's intentions have also surrounded a <a href="http://motherjones.com/mojo/2010/10/tea-party-patriots-tim-lahaye-evangelicals" target="blank">$1 million anonymous donation</a> [30] recently received by the Patriots, which the group is divvying up via grants to its local affiliates. The grant criteria placed a high value on applications from groups that got a lot of members to register on the national TPP site, which meant turning over significant personal information.

Tensions over email harvesting and the lack of transparency in TPP's finances have been brewing under the surface of the movement for some time. But after the announcement of the grant criteria, Laura Boatright, a California tea party activist who has had a falling out with Meckler and TPP <a href="http://www.teapartyie.com/news/re-tea-party-patriots-and-your-confidential-contact-information" target="_blank">warned on her blog</a> [31] against providing contact info to the group: "The 'power/gravitas' of Tea Party Patriots is their ability to say that they 'represent' or 'have access to' 20 million 'contacts.' When it comes to campaigns, political parties, or issue causes (like California's initiative process, and/or petition drives) that large number gets them notice and access to people who would not otherwise pay Mark Meckler, [national coordinator] Jenny Beth Martin, or any other Board Members the time of day."

There's no evidence that TPP is selling its contact lists. But the Tea Party Patriots' own <a href="http://teapartypatriots.org/TermsandConditions-PrivacyPolicy.htm" target="_blank">privacy policy</a> [32] indicates that it has the option. It says, "TPP may use Individual Information to advertise, directly or indirectly, to individuals using direct mail marketing or telemarketing using telephones and cell phones and such contact shall be deemed to be with the permission of individuals covered by this Privacy Policy." (Neither Meckler nor Martin returned repeated phone and email requests to explain the policy.)

Meanwhile, Meckler's professional experience in the world of multilevel marketing seems to have translated quite well into the tea party movement. The organizational structure of TPP, in fact, looks a lot like Herbalife's, with its heavy reliance on motivational rallies, weekly conference calls to keep people engaged, its widespread use of promotional lawn signs, and dependence on cheap, unpaid labor. And most importantly, its failure to produce measurable results other than the creation of the network itself. (See <a href="http://motherjones.com/mojo/2010/10/tea-party-pyramid-scheme" target="_blank">here</a> [33] for a list of comparisons between the tea party and Herbalife.)

While distinctly non-starfish-like organizations like Tea Party Express, which is<a href="http://motherjones.com/politics/2009/12/tempest-tea-party" target="blank"> run by a California GOP consulting firm</a> [34] and <a href="http://www.ksl.com/index.php?nid=615&sid=12515124" target="blank">much maligned by Meckler</a> [35] for not being grassroots enough, have made a significant impact on elections in Delaware, Massachusetts, and Alaska, TPP has remained above the electoral fray. Though it formed a political action committee, and the midterm elections are quickly approaching, federal election records show that the PAC has never raised any money, nor has it endorsed any candidates. TPP is urging supporters to <a href="http://motherjones.com/mojo/2010/10/tea-party-patriots-rand-paul" target="_blank">erect yard signs across the country</a> [36] to "brand" itself and will hold some get-out-the-vote rallies in the run up to the midterms. But its main claim to fame is really the size of its network, not anything the network has actually accomplished.

The parallels between the Tea Party Patriots and a multilevel marketing company don't surprise FitzPatrick, the pyramid scheme expert, who says that tea party rhetoric is similar to that of MLM companies. MLM operations and pyramid schemes, he says, "aren't just about money. They are about how you are part of an elite group of people who are enlightened." He says that in their recruiting, the top leaders of these types of companies often give a false narrative about eminent economic collapse, how Social Security won't be there to save you in old age, and how the government keeps the average guy from getting ahead. And when the companies draw scrutiny from regulators, they often invoke the same kind of language as the tea party about "jack-booted thugs" and oppressive regulation. The tea party and multilevel marketers, he says, are a perfect fit in many ways: "MLMs claim to represent freedom-lovers. They are an economic match to the Tea Party's political message."

Nonetheless, the Tea Party Patriots is "moving to the next level," as they say at Herbalife. In late September, <a href="http://motherjones.com/mojo/2010/10/tea-party-patriots-tim-lahaye-evangelicals" target="_blank">its top organizers met with</a> [30] a secretive group of far-right movers and shakers to make a fundraising pitch for the group's multi-million-dollar "40-year-plan" to change the country. The group, the Council for National Policy, is funded heavily by the DeVos family, the owners of Amway, one of the largest MLM companies in the country. According to the TPP fundraising memo, the money would fund more rallies, to recruit more activists, to fund more rallies, to recruit more activists, to fund more rallies.

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