0:00

Hey, Dream listeners. If you like this podcast,

0:02

you're going to love the book. Yeah.

0:04

I wrote a book. It's called Selling the Dream,

0:07

and it's coming out March twelfth, twenty twenty

0:09

four, on Atria. It's

0:11

about all of your favorite characters from

0:13

MLMs and some that you've never even

0:16

heard of. I hope check it

0:18

out. Previously

0:20

on the Dream turned

0:24

out that what I'd done was

0:26

to sign up to sell Herbalize. The

0:29

phone call we'd had was to explain to me

0:31

how I could go on to become a supervisor

0:34

without even selling a thing. All

0:36

I had to do was buy five thousand

0:38

dollars worth of product and then to bump

0:41

me up to the next level. Essentially,

0:43

when MLMs came to the attention of

0:46

the FTC, they went after him pretty

0:48

hard for about fifteen years, and

0:50

during that fifteen years they had some successes

0:53

and then ultimately had a case

0:56

that would define how

0:59

multi level market as an industry would

1:01

go forward, and they lost

1:03

that case. Is it possible

1:05

really that the FTC was going to

1:08

truly close down a company that had

1:10

such political influence with

1:12

the sitting president that they could

1:14

go in and meet with him privately

1:17

and discuss their issue. I don't

1:19

think so. I think anyone with

1:21

some willingness to look

1:23

at political realities would say that

1:26

was never going to happen. The

1:32

last time we heard from Dan, he was trying to figure

1:34

out why the MLM trial of the century,

1:37

the FTC versus Amway nineteen seventy

1:39

nine, ended the way it did. Why

1:44

did the administrative law judge and the FTC

1:46

Commission decide to ignore Joe Brownman's

1:49

evidence when that exact same evidence

1:51

had won him earlier MLM trials.

1:53

What was Joe truly up against? Dan

1:56

turned to our expert Robert Fitzpatrick for

1:58

an answer. What you're about to

2:00

hear reminded me of that old trope where someone

2:02

opens a closet door and a bowling ball rolls

2:05

out, knocking them unconscious, and then

2:07

they come to and stand up and the rest

2:09

of their junk falls on them. That's what

2:11

it felt like when Robert started talking Dan through

2:13

the forty years following that Amway decision,

2:16

detailing MLMs and their ties to Washington.

2:19

When Dan finally left the studio after his last

2:21

interview, I could have sworn I saw a

2:23

halo of birds and exclamation points floating

2:26

around his head. I'm

2:30

Jane Marie and this is the Dream episode

2:32

ten the American Way.

2:43

So last time we talked, where were we,

2:45

Well, the Amway trial had just ended. Joe

2:48

Brawman was confused

2:50

and a little bummed

2:52

because he had presented all this evidence that

2:55

in earlier trials had won him those

2:57

cases, but in the Amway trial

2:59

it didn't. Wow. Yeah,

3:02

So I spoke to Robert to

3:04

see if I could get filled in on any reason

3:06

as to why, and he was telling

3:08

me about some of the political connections

3:10

that the founders of Amway, javan Andandel

3:13

and Dick DeVos, had, like

3:15

running the biggest business lobby exactly

3:18

in the country, the Chamber of Commerce. YEP,

3:20

javan andandl was the head of

3:22

the Chamber of Commerce, and Dick

3:24

DeVos was the finance chair

3:26

of the Republican National Committee, which

3:29

meant he was getting a lot of money

3:31

for candidates, so insane.

3:34

Yeah, it's totally crazy. But actually

3:36

what I found out is that the Amway trial

3:38

was just the start of the story. Amway

3:41

and their cohorts in the industry started

3:43

inserting themselves more and more

3:46

international politics, until essentially

3:48

they were the politicians. Thankfully,

3:51

Robert Fitzpatrick has been piecing a

3:53

lot of this information together. Ronald

3:57

Reagan becomes president, reported

4:00

in the media, DeVos and Van Andel

4:02

became frequent visitors to Washington and

4:06

were welcomed in the White House. The

4:10

Amway dudes went to dinners with heads of

4:12

state, presidents, our own,

4:14

and others, And at one particular

4:17

dinner they got sat next to Alexander

4:19

Haig, who you might remember was Nixon's

4:21

White House chief of staff during Watergate.

4:24

Guess what he went on to do after that job Secretary

4:27

of State for Ronald Reagan. And

4:29

then what did he do after that job? Paid

4:32

consultant for Amway, Alexander

4:35

Haig. The Alexander Haig not

4:40

every diplomat at the time, loved these guys.

4:43

At the same time that they were hobnobbing with high level

4:45

cabinet members in the US, the Canadian

4:47

government was accusing them of defrauding the country,

4:50

yes, the entire country of Canada,

4:52

by evading taxes. They'd issued

4:54

arrest warrants for Dick and Jay. The

4:57

Mounties were on their tails. So

4:59

here you've got two dudes who just a couple of years

5:01

earlier were on trial for fraud and

5:03

who now in nineteen eighty four, were some of

5:05

Canada's most wanted Here they are popping

5:08

around with the president. They even asked

5:10

Reagan to come speak at an Amway rally in Atlanta.

5:14

Some of the representatives of the

5:16

Reagan administration works. They said queasy

5:19

about associating Reagan so closely

5:21

with Amway in public, But

5:24

they also knew that Amway had been perhaps

5:27

the most important fundraiser for

5:30

the Reagan administration, so

5:33

that sort of trump these other issues.

5:36

That event was held in January,

5:38

and it was held the day after the

5:41

State of the Union message was delivered to Congress.

5:44

I see America not in the setting

5:46

sun of a black knight of despair. I

5:49

see America in the crimson

5:51

light of a rising sun, fresh

5:54

from the burning creative hand of God. I

5:57

see great days ahead for men and women

5:59

of will and vision. Reagan

6:03

literally flew from addressing

6:05

Congress to the next day addressing

6:08

an Amway event. The way they

6:10

got around the queasiness of

6:12

some Reagan administration people

6:16

was they recast the event as sponsored

6:18

by the Chamber of Commerce. This

6:21

was an easy thing to do since the Van

6:23

Andel had been chairman of the Chamber

6:25

of Commerce earlier how were you able

6:27

to find out that that was an

6:30

actual Amway event. Well,

6:32

it was scheduled as an Amway event, That's

6:34

what it was. It was going to be

6:36

an Amway rally, a giant

6:38

one in Atlanta. This is all

6:41

in the news account. This is how

6:43

the invitation began. Come and speak at

6:45

an Amway event. Actually,

6:48

they renamed the rally to Spirit of America,

6:50

Salute to Free Enterprise. I

6:53

want to know how I found that out. There's

6:55

a video of it. Ladies

6:58

and gentlemen, the President of the

7:00

United States, to

7:07

much fanfare and applause. The President

7:09

of the United States of America walks on

7:11

stage and shakes hands with Dick DeVos

7:14

and Javanandel. In fact,

7:16

it's Javan andl who introduces him.

7:22

This great hall, this

7:26

great hall, large as it is, has

7:29

proven to be too small for the crowd that

7:31

has come here today.

7:35

So

7:37

you'll be pleased to know that we've been able to get another

7:39

auditorium nearby with

7:42

television screens to take care of

7:44

the rest of the folks who couldn't get in here. This

7:52

rally, this rally

7:55

is called the Spirit of America, and

7:57

there is no better exponent of this than President

8:00

Reagan, thank

8:06

you very much. Well,

8:12

if you'd have done this a few years ago when I

8:14

was making bedtime for bonds, and I'd still

8:16

be there. Well,

8:19

thank you very much, Jane, Governor

8:22

Harris, Congressman Gingrich,

8:24

and Levitas and ladies and gentlemen. It's

8:27

people like you who show us

8:29

the heart of America is good. Perhaps

8:35

you heard my speech to the nation last

8:37

night on the State of our Union. Oh,

8:48

Reagan is introducing a whole new

8:50

philosophy of deregulation, trickle

8:52

down economics, supply side

8:54

economics, and so on, and

8:57

this is spreading across the country.

9:00

Now, this whole new philosophy,

9:09

Reaganomics, that's one of those

9:11

things you know the name of and how to use it

9:13

in conversation at a party with someone

9:15

who hopefully knows less about it than you do.

9:18

Right, No, anyway, I

9:20

looked it up and here's the gist. Reaganomics

9:23

was all about cutting government spending, including

9:25

an awesome idea Reagan and his cohorts

9:27

cooked up to get rid of the FTC Bureau

9:29

of Consumer Protection. That's the

9:32

one that would go after companies like Amway.

9:34

And then they wanted to loosen regulations

9:36

and lower certain taxes that would free up

9:38

cash for super rich people and corporations,

9:41

and that was supposed to trickle down to US normals.

9:44

Guess who loves fewer regulations and

9:46

no consumer Protection Bureau and lower

9:48

taxes and all that jazz rich

9:51

guys who own MLMs. In

9:53

the end, the plan was a disaster. If

9:55

you ask my parents, maybe your parents

9:58

made out like bandits in the eighties. It

10:00

did help rich people stay or get richer,

10:02

while the rest of us went into debt along

10:04

with the country, which tripled its deficit

10:07

during Reagan's presidency. So

10:09

back to Amway. During this time,

10:11

Dick DeVos was the finance chair of the RNC

10:14

until he wasn't. There

10:20

have been a few things that I've either

10:22

read or seen that I find

10:24

really funny, And one of them

10:27

was a Post article and it was

10:29

talking about when Devas

10:32

was actually kicked off from

10:34

being the finance chairman

10:37

of the Republican National Committee,

10:39

and it was quoting people saying that he

10:41

was starting to run the finance

10:44

meetings almost and they started sounding

10:46

like Amway opportunity meetings DeVos,

10:49

which in Dutch means the Fox. He

10:52

was kicked off as finance chairman because

10:54

of the way he was running it like

10:56

an amway and meeting and sort

10:58

of extorting people. There's a way

11:00

to ask for money, you know, there is

11:03

a protocol for asking for money.

11:05

Okay, so he's out at the RNC. But

11:07

if you thought that was the end of Devas's

11:09

political ambitions, think again.

11:12

Far more frightening than a couple of old guys

11:14

at an RNC meeting getting freaked

11:16

out by some raw rah Amway bullshit.

11:19

In nineteen eighty seven, about six

11:21

years too late, and with fifty thousand people

11:24

that we knew of already infected

11:26

with the disease, President Reagan convened

11:28

the President's Commission on the HIV Epidemic.

11:31

And guess who got himself put on that board. Dick

11:34

DeVos, the federally indicted soappustler,

11:37

and in classic MLM fashion, he

11:40

put the blame for the AIDS crisis, where

11:42

his worldview dictated it belonged

11:44

on the victims.

11:47

You know, when HIV first came out,

11:50

President Reagan formed a commission. I was honored

11:52

to be on that commission. I

11:55

listened to three hundred

11:57

witnesses tell us that it

11:59

was everybody else's fault but their own. Nothing

12:02

new with their contact. It was just the government

12:04

and fixious disease. At

12:07

the end of that I put into the document

12:09

that was the conclusion document

12:11

from the commission that actions

12:13

have consequences and you are responsible

12:15

for yours. What

12:21

was that about. I mean again, he was a

12:23

puritanical Dutch reform religious

12:26

zealot himself, but he was also

12:28

a huge contributor to the Reagan

12:30

administration campaign. So even

12:33

people at the top ranks of the Republican Party say

12:35

something wrong with this way this

12:38

guy operates. And then the big

12:40

contribution he makes to the Reagan administration

12:43

is what has been described as a cruel

12:46

contribution to that AIDS

12:48

dialogue.

12:56

Amway's next significant contribution came

12:59

in helping Reagan's successor into office,

13:01

George HW. Bush. You

13:04

could have guessed that he was pals with these Amway guys,

13:06

right and helping him get elected

13:08

through enormous campaign contributions.

13:10

They earned yet another ally in the Oval

13:12

Office. Well, thank

13:15

you, Dick de Voss, Dick

13:17

Johnson, Dick

13:19

de Voss, thank you for that very warm

13:21

and generous welcome, and thank

13:24

all of you for that welcome. You sure know how

13:26

to make a fellow feel a part

13:28

of the Amway family. Amway,

13:31

an extraordinary company, has

13:33

brought us together here today, I'm

13:36

surrounded here by thirty five

13:38

or forty thousand examples of the

13:40

great system of free enterprise, where

13:43

anyone can grab hold of

13:45

their dream and work hard and believe

13:47

hard and make it come true.

13:51

And that's what you're doing, and that's

13:53

what Amway has inspired you

13:56

to do. Keep up the great

13:58

work and make God blas you

14:00

all. Thank you very much. And

14:07

then Bill Clinton is elected. During

14:12

the Bush years, it was business as usual.

14:14

Very few MLMs were looked into by the FTC,

14:17

and it seemed like Amway's effort to keep a friendly

14:20

in office was paying off. You

14:22

would think that since the founders of Amway had

14:24

been in such a great position of influence

14:26

and gave so much money to the Republican

14:29

Party over the years, that the Clintons might

14:31

have offered some sort of relief or hope

14:33

to people like Robert and the rest

14:36

of the ten people who were like Robert

14:38

and trying to protect our citizens from multi

14:40

level marketing. Think again.

14:57

When Clinton was elected, of course, the

14:59

threat to multi level marketing

15:01

re emerged. The fear

15:03

that a Democrat who

15:06

has not received the kind of political

15:08

support from multi level marketing

15:11

because the multi level marketing

15:13

lobby had been focused on the Republican

15:15

Party might resurrect

15:18

the old policies of investigating

15:21

multi level marketing as illegal pyramid

15:23

schemes. In many ways, Clinton

15:27

was not focused on protecting

15:30

the public from these kinds of

15:32

consumer frauds. He brought in

15:34

the same man who had

15:37

written the Amway decision

15:39

for the Federal Trade Commission, Robert

15:41

Potowski. Robert

15:44

Potowski, that's the same guy

15:47

who ignored all of Joe's evidence intended

15:49

to prove Amway was a pyramid scheme. That

15:52

guy. He made him the chairman

15:54

of the Federal Trade Commission, and

15:57

under Patofski, more

15:59

prosecut cusians occurred, but

16:01

they were always of small companies,

16:04

and in each case the FTC

16:07

would assert multi level

16:09

marketing as a model was

16:11

legal. Clinton

16:17

himself later became

16:19

a spokesman for and

16:22

publicized a video that was

16:24

done for the Direct Selling Association, promoting

16:27

direct selling as a great business

16:29

and promoting it internationally. So

16:33

what's the Direct Selling Association, Well,

16:35

it's the lobbying arm of the multi level marketing

16:37

industry, counting, among others,

16:40

Amway as a member in good standing to

16:42

this day. You would think that the

16:44

industry, since they're running the Chamber of Commerce

16:46

and everything, would have been all set with their lobbies.

16:49

But no. Bill Clinton gave a talk

16:51

on behalf of the DSA in a video with a

16:53

very presidential looking background. I'm

16:56

not saying it was filmed in the Oval Office, but

16:58

if you told me it was filmed in the Oval Office, I

17:00

would believe it was filmed in the Oval Office.

17:03

I am delighted to have this opportunity to talk

17:05

to so many of the salespeople who help our economy

17:08

grow and help keep the American

17:10

dream alive for millions of Americans

17:13

in America. If you work hard and play with the

17:15

rules, if you take responsibility

17:17

for yourself and your family, you

17:20

should have all the opportunity you need

17:22

for a better future. That's America's

17:24

basic bargain. It's what I work

17:27

to promote as president, and it's what

17:29

the work of direct selling helps to promote

17:31

each and every day. Thank you

17:33

for your work. God bless you, and

17:35

God bless America.

17:42

He himself also later made

17:44

a speech at an Amway conference

17:46

in Osaka, Japan, and received

17:49

a fee of seven hundred thousand dollars

17:51

one speech, more opportunities

17:54

to try to figure out how to bring women

17:56

into the workforce in

17:58

a way sometimes full of quality,

18:01

and that's the place that helps rich as well

18:03

as four countries. I am very grateful

18:05

for Amway's commitment on this. I

18:08

appreciate what this company

18:10

does for children in the United States

18:13

and how much I've preceived with now.

18:15

Later, we discovered that

18:18

several people in the Clinton

18:20

administration became avid, active

18:23

promoters of multi level marketing. Take

18:26

for example, Clinton's Secretary of State

18:28

Madeline Albright, who became a shill

18:30

for Herbal Life during her tenure in his cabinet.

18:33

She made ten million dollars

18:36

hyping up their nutritional supplements in

18:38

videos and at events. I

18:40

didn't really think there was an illuminati before,

18:42

but now I'm like, maybe there's an illuminati.

18:46

The part that I like about what

18:49

you do with Rbal Life is women are

18:51

very good at interpersonal relations

18:53

and really developing

18:56

a relationship with

18:58

the person that they're dealing with. And

19:01

I think that the kind

19:03

of sales operation the Herbal Life

19:05

has is the one that really

19:08

allows women to shine in terms

19:10

of explaining and good about family

19:13

health and nutrition. That's kind

19:15

of what women do on a daily basis,

19:17

and so I think they are a very natural

19:20

sales force for you. There

19:26

was a lot happening during the Clinton

19:28

years that were as important to

19:30

Amway and to multi level marketing

19:33

as preventing law enforcement, and

19:35

this was to get an opening into China.

19:38

China, of course became the motherload. It

19:40

was the most important of the markets

19:42

to get to. Eventually, the

19:47

multi level marketing model, if it doesn't

19:49

expand into other geographic

19:52

areas, it will eventually begin decline,

19:55

sometimes rapid decline. It's

19:57

not that other companies who were not

20:00

pyramids don't want to grow, but

20:02

they are not under a mandate by their business

20:04

model. The business model is sustainable.

20:07

There are repeat customers, there

20:09

are stable businesses that even if they

20:11

don't grow, the company is still in business

20:14

profitable any

20:17

rate. The Chinese government shut it

20:19

down in ninety eight, and immediately

20:23

Clinton's trade representative,

20:25

a woman named Charlene Barshevski, went

20:27

to bat for multi

20:29

level marketing and worked

20:32

with the government to allow the

20:34

larger multi level marketing companies,

20:36

and that translated almost

20:39

entirely to Amway. So

20:42

basically, Charlene Barszewski managed

20:44

to get the government to allow it to

20:46

operate under some restricted

20:49

conditions while it fashioned

20:51

this new law. Government quite

20:53

rightly needed to crack

20:56

down on these games

20:58

of pyramids, games, Ponzi scheme, whatever

21:00

you want to call them, term they use in China

21:02

as chain selling, and

21:05

cracking down on them. They

21:08

have also forced all

21:10

direct selling companies to shut down.

21:13

The fact that Karshevski is here

21:15

this week, that Metal and Albright is here next week,

21:17

that Bill Clinton will be here in June

21:20

gives us a unique opportunity

21:23

to gain an audience with the highest levels

21:26

of government of concerning the differences.

21:28

And we hope that were to take advantage

21:30

of that to do the education that we have

21:32

to do to make them

21:35

draw the distinctions between our form

21:37

of selling and that which is fronti. Okay,

21:44

So now is when we get to hear about how the

21:46

owners of Amway. Ever, the opportunists

21:48

start giving a lot of money to the Democratic Party

21:50

right wrong well,

21:53

accepting all the help they could get from the left,

21:55

they found their ideals matched much more

21:57

closely with folks on the right and kept their

21:59

eyes on the larger goal of getting a Republican

22:02

back into the White House. Between

22:04

ninety one and ninety seven, the

22:07

watchdog group Common Cause had found

22:09

that the Republican National

22:11

Committee had received over four million

22:13

dollars. And this again in dollars

22:16

that haven't suffered from the inflation we

22:18

have today from the Amway corporation.

22:20

Richard de Vas and his wife were writing checks

22:23

for a half a million each to

22:25

the Republican Party. Amily

22:27

didn't just help the first Bush get elected,

22:29

No, they helped his kid too. I've

22:33

got mosh Nihai.

22:45

I want to thank the leaders

22:47

of Amway China for

22:50

contributing to causes that

22:53

make the communities in which you live a better

22:55

place. So

23:00

Bush comes in

23:03

in two thousand and goes to two

23:05

thousand and eight, you won't see prosecutions

23:08

as opposed to even going after the smaller

23:10

ones. Correct, it just wasn't there, that's right.

23:14

In addition to campaign contributions, Amway

23:17

also did this weekly enormous conference

23:19

call thing where their distributors regularly

23:21

called in for encouragement and inspiration.

23:24

And then during this time they also got to hear

23:26

about the most Amway friendly presidential

23:28

candidate, George W. Bush.

23:34

And then Bush goes and appoints one of Amway's

23:36

former lawyers to chair the FTC

23:39

Timothy Mirras. Tim

23:41

then goes and appoints as the FTC's

23:43

chief economist his pal David

23:45

Schaffman, who was a consultant to the

23:48

MLM industry, specifically for

23:50

a company called Equinox that had

23:52

been under investigation by the FTC

23:54

during the Clinton years. So

23:57

here's the guy that had been testifying

23:59

AGAINSTC on behalf

24:02

of a multi level marketing company, and

24:05

a year later, not even a year later, he's

24:07

made the FTC's chief economist.

24:10

Not only did the commission get infiltrated

24:13

by former friendlies of the MLM industry.

24:15

As people left positions at the FTC around

24:17

this time, a lot of them ran directly

24:20

into the warm embrace of the corporate ranks

24:22

at Amway and other MLMs. Of

24:25

course, Bush had to leave eventually, and

24:27

at this point the country decided it was time for

24:29

someone different, someone seemingly

24:32

incorruptible, someone that offered

24:34

everyone a chance to feel something new, a

24:36

feeling that, in the case of MLMs, would

24:38

turn out to be dangerous. That feeling

24:41

was hope, Hello Chicago,

24:54

If there is anyone out

24:56

there was still

24:58

doubts that am Yeah's a

25:00

place where all things are possible,

25:04

We're still wonders if the

25:07

dream of our founders is alive

25:09

in our time. We're

25:11

still questioned the power of

25:13

our democracy tonight

25:16

is your answer? When

25:23

Obama came in, there was tremendous

25:25

hope among consumer

25:28

activists who were paying attention to this that

25:30

surely the Obama administration

25:33

would take the handcuffs

25:35

off the FTC. The hope

25:38

was truly raised. Of course, that was Obama's

25:41

theme, wasn't it. But strangely,

25:43

nothing happened. First four

25:46

years. Nothing happened. We

25:51

already saw during the Clinton years that

25:54

the multi level marketing industry had strongly

25:56

infiltrated Congress, had

25:58

bipartisan support, was pouring

26:00

money in from various avenues,

26:03

to individuals, to political parties,

26:06

and I think Obama, much like

26:08

Clinton, decided this was not an issue he

26:11

was going to take on. As

26:13

you might remember, Obama had a lot on his

26:15

plate, a couple of wars, a major financial

26:18

crisis when he came into office. MLMs

26:20

weren't going to be at the top of his list. But

26:23

if the administration thought that they could ignore the

26:25

industry forever, by the start of the second

26:27

term, that idea was gone. All

26:31

of a sudden an explosion occurred during

26:33

the Obama administration. A

26:36

hedge fund came out and announced

26:39

that it was betting a

26:41

billion dollars against

26:43

the stock of a major multi level

26:45

marketing company on the basis

26:48

that it believed the company was an illegal

26:51

pyramid scheme a fraud. So

26:53

this brought public attention to multi

26:56

level marketing on a scale as never before.

26:58

Life is a company that sells new tree supplements

27:00

and weight loss products through a network of three

27:03

point one million salespeople. Thanks

27:05

to hedge fund manager Bill Ackman, Erballife

27:08

is currently fighting for its life. Bill

27:10

Ackman recently raised questions about the company's

27:12

accounting practices, and the stock quickly

27:15

lost more than thirty percent of its value.

27:17

Thanks for coming in today, Bill, sure. First

27:19

of all, what are you accusing Herbalife

27:22

of being a pyramid skin We

27:24

believe erbal Life experimid SCA.

27:30

When the FTC finally

27:32

did come to a conclusion about

27:34

Erballife, it announced the

27:37

settlement with Herbalife. It

27:39

announced also that the

27:42

person who had been negotiating for

27:44

Herballife against the FTC

27:48

was John Leebowitz, who

27:50

had just left the FTC as

27:52

chairman and had gone straight

27:54

to work for Erbalife,

27:57

and he was negotiating

27:59

with the TC on behalf of herbal

28:01

Life, and that settlement

28:04

most famously named

28:06

all the wrongdoings of herbal Life,

28:08

but refused to call erbal Life a pyramid

28:11

scheme. Again, the core

28:13

facts that that we've

28:15

alleged and that we consider to be problematic with

28:17

their compensation structure are set forth

28:20

in detail in our complaint, and

28:23

again I will leave to readers

28:25

to draw their own conclusions. But they were

28:27

not determined not to have been a pyramid that

28:29

would be inaccurate. This was

28:32

a sweetheart deal and it

28:34

resulted in herbal Life escaping

28:37

the wrath of Wall Street. Its

28:39

stock value went up, wiping

28:41

out the short cellar, wiping out Bill

28:44

Ackman, causing him to abandon

28:46

his position eventually. And

28:49

this is after two years of investigation

28:52

and four years of publicized

28:54

exposures by the Wall

28:56

Street Hedge Fund. And then

28:58

we see really what was behind it. The

29:01

FTC itself, that is, its former

29:03

chairman was representing Herbalife

29:05

during all this time. And when the settlement was

29:07

made, Erbalife announced that he would then

29:09

be given a formal position as

29:12

an advisor to the board. In other words, he had

29:14

an official position, which prior to

29:16

that, none of us knew that Leebuwitz

29:19

was working for Erbal Life.

29:29

The multi level marketing industry

29:32

has one single need

29:35

from government. They don't really

29:37

need lifting of regulations,

29:40

they don't need environmental rules

29:43

relaxed, and they don't even need favorable

29:46

tax breaks anymore than

29:48

other companies. So there's nothing particular

29:51

there. But they have one existential

29:54

need, and that is to

29:56

prevent fraud prosecution or

30:00

criminal They

30:06

have largely prevented criminal

30:08

prosecutions. You haven't really

30:11

seen a significant threat.

30:13

It's always there because

30:16

fraud laws are on the books

30:19

and would never be taken

30:21

away. Then there's the potential

30:24

for civil actions as a pyramid

30:26

scheme. This doesn't threaten

30:28

anyone with jail time, but it

30:30

could potentially shut down a company,

30:33

and it can also lead

30:35

to court precedents, that is, judgments

30:38

from the court that could encourage

30:40

future lawsuits. They have a great

30:42

need to prevent the government

30:46

from establishing any kind of precedent

30:49

or policy, or generating

30:51

any kind of judicial decisions

30:54

that would expose them to charges

30:56

that they are operating pyramid schemes.

31:00

The Erbal Life case didn't cause the industry to

31:02

come crashing down as much as people hoped

31:04

it would, in similar fashion to big

31:06

banks on Wall Street after the markets crashed,

31:08

Rbalife used its sizeable resources

31:11

to maneuver around many of the settlement terms

31:13

and stay in business. But there was

31:15

one significant victory of sorts. Edith

31:18

Ramirez, the chairman of the FTC at

31:20

the time, argued that for an MLM

31:22

to be considered legal, its profits

31:24

must be reaped from sales to end users

31:26

who are not already involved in the scheme.

31:29

In other words, supply and demand would

31:32

decide who made money, not advancing

31:34

up the rungs through recruitment or quotas.

31:37

Of course, the industry was not pleased with this

31:39

notion and has been working tirelessly

31:41

ever since to get legislation passed

31:43

that would protect them from law enforcement on the issue.

31:46

Every few years, it goes by a different name, but HR

31:49

thirty four oh nine is the current iteration of

31:51

the anti pyramid scheme bill. No,

31:54

it's not a bill that shuts down pyramid schemes,

31:56

but one that is being pushed by the Direct Selling Association

31:59

and MLMA friendly politicians to essentially

32:01

protect MLMs from being called

32:03

pyramid schemes. More on that

32:05

next week, and they're lobbying

32:08

for the passage of that bill. With the industry's

32:10

most MLM friendly president yet in

32:12

office, the Trump name

32:15

and success have really become one

32:17

and the same. I've worked hard at that

32:19

for a long time. The two

32:21

things I've mastered over the years is

32:23

understanding the importance of timing

32:26

and business and the ability to

32:28

recognize great opportunities and

32:30

also great people. So I'm

32:33

here to tell you about a company that provides

32:36

these two essential components

32:38

for success. That's

32:42

the Donald and a promotional video for ACN,

32:45

an MLM that sold landline video

32:47

phones this century after everyone

32:49

had like laptops and Skype and everything. ACN

32:52

is one of two MLMs the Trump family has

32:54

very close ties with, including one

32:57

called the Trump Network. Their

32:59

ties are so close that he and his family are currently

33:01

being sued in the Southern District of New York

33:03

by some former distributors for allegedly

33:06

defrauding them and others out of millions

33:08

of dollars. Trump and his family,

33:10

they say, encouraged thousands of people

33:12

through these videos and personal appearances

33:14

and endorsements on his TV show The Apprentice,

33:17

to invest bigley in these amazing, tremendous

33:20

business opportunities to

33:22

my writer Greg and Tony from ACN,

33:24

who will tell you what to do. We're very excited

33:27

to be here to have you help us introduce

33:29

to the world the new ACN

33:32

video phone. Your task is to launch

33:34

this product to hundreds of ACN representatives.

33:37

Five hundred salespeople from ACN

33:39

are going to be judging you. Wasn't

33:41

even close. The men absolutely

33:44

easily defeated the women. Clodia.

33:47

I believe you have an amazing future. I think

33:49

you're totally beautiful. You're going to be a big

33:51

star. But I'm sorry, Clodia,

33:54

you fired. Oh

34:00

and one more thing. That seat of

34:02

us. The daughter in law of the founder of Amway,

34:05

is a high ranking member of his cabinet, which

34:07

gives her a seat at the table that would make her father

34:09

in law pretty jealous if he weren't

34:11

dead. Missus

34:16

Devas, there is a growing fear

34:18

I think in this country that we are moving toward

34:21

what some would call an oligarchic form of

34:24

society, where a small

34:26

number of very very wealthy billionaires

34:29

control to a significant degree our

34:31

economic and political life.

34:34

Would you be so kind as to tell us

34:37

how much money your family has contributed

34:39

to the Republican Party over the years. Senator.

34:44

First of all, thank you for that question. I'm

34:46

again was pleased to meet you in your office

34:49

last week. I wish I could

34:51

give you that number. I don't know. I have heard

34:54

the number was two hundred million. Does that sound

34:56

in the ballpark? Collectively?

34:59

Be talk family? That's

35:01

possible. Okay. My question is, and

35:03

I don't need to be rude, but do

35:06

you think if you were not a multi billionaire,

35:09

if you a family has not made hundreds

35:12

of millions of dollars of contributions to the Republican

35:14

Party, that you would be sitting here today, Senator?

35:18

As a matter of fact, I do think that there would

35:20

be that possibility. I don't

35:25

next time on the season finale of The Dream,

35:28

how did you feel when you read that? I'm

35:31

surprised. Honestly, I'm not surprised that

35:33

she didn't answer specific

35:36

questions that we sent, because that's been the

35:39

response we've been getting from everyone. So

35:41

I wasn't surprised that she was ignoring the factual

35:43

questions. I was surprised,

35:45

though, that her suggestion was that

35:48

we should have collaborated with her from the beginning

35:51

before we started production on the show,

35:53

so that we would have had her perspective going

35:56

into our research, which is obviously

35:58

an ethical Well,

36:01

yeah, you don't want the person you're investigating to be holding

36:03

your hand through the investigation. Exactly, exactly.

36:06

Well, I'm glad you're here. I'm incredibly

36:10

nervous to talk to you. Well,

36:12

somehow I don't believe that I am. No, I

36:15

really am. I'm worried. I'm

36:17

worried that you're gonna lie

36:20

to me. The

36:22

Dream is a production of Little Everywhere in Stitcher,

36:25

written and reported by Me Jane Marie, Dan

36:27

Galucci, Mackenzie cassab Lyra Smith,

36:29

and help from Claire Rowlinson. We

36:31

are edited by Peter Clowney. Our fact checker is

36:33

Michelle Harris, and we're mixed by Mike Richter. The

36:36

Dream is executive produced by Laura Mayor, Chris

36:38

Bannon, Dan Galucci and me. Special thanks

36:40

to Robert Fitzpatrick, who's currently working

36:42

on a new book, Ponzi Nomics, The

36:44

Untold History of Multi Level Marketing.

36:47

Order it as soon as it comes out. We appreciate

36:49

you subscribing, rating, and reviewing the show wherever

36:52

you listen. The