Saturday, 25 March 2017

How 'MLM' cults helped Donald Trump to become US President.


More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles a.k.a. pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).


Image result for david cay johnston

Professor David Cay Johnston has studied Donald Trump in depth. From only what has so far been entered in the public record, Johnston has concluded that, because he has managed to get himself elected as US President, Donald Trump has become the most successful con-artist of all time. Despite Trump's history of filing lawsuits against his detractors (in which he always poses as an innocent victim of lies), David Cay Johnston has had the guts to broadcast his analysis quite openly. Personally, I'm inclined to agree with the Professor's opinion, except I would say that Donald Trump has a lot of stiff competition for the title of history's most successful con artist. Not surprisingly, some of the other candidates are linked to the President. 

During the best part of a decade, in return for promoting a fake 'direct selling income opportunity,' Donald Trump is known to have openly-received millions of stolen dollars from at least one gang of blame-the-victim 'MLM' cultic racketeers.

Image result for donald trump network marketing bookImage result for donald trump network marketing book

Image result for donald trump network marketing CD

Via the peddling of effectively-valueless materials bearing his name, Donald Trump has also been lining his pockets at the expense of countless victims (internationally) of many other kitsch variations of the American-spawned Utopian lie entitled, 'MLM.' As far as I'm aware, neither Donald Trump nor anyone in his entourage, has made any statement to explain the President's conflict interest regarding this particularly dodgy channel of income. Furthermore, to date, no journalist has bothered to ask Donald Trump about his ongoing revenues from book-sales to vulnerable 'MLM' adherents. Personally, I'd like to know if Trump is still getting this 'MLM' windfall, exactly how much is he getting and how much has he already had?

In the past, when Donald Trump's titanic casino business was sinking in the Atlantic (City), he managed to abandon ship (his pockets stuffed with other people's cash) leaving everyone else to drown. Although Carl Icahn's name features prominently in media reports as one of Trump's major casino business investors, I suspect that his actual role in this earlier chapter of the ongoing Trump tragicomedy, will never be fully-explained.

 Image result for carl icahn herbalife

For a while following the 2016 election, it was rumoured that Carl Icahn would be appointed to President Trump's Cabinet, but in the end, it was announced that the 81 year old tycoon is 'the President's unofficial advisor on regulatory reform.' Yet, in this democratically-unaccountable made-up role, Icahn's conflict of interests almost beggars belief, because his current (potentially-catastrophic) investment in the effectively-valueless 'MLM' cultic racket known as 'Herbalife,' tops more than one billion dollars. 

Since Donald Trump can now appoint new senior federal regulators whom he knows will turn a blind eye to 'MLM' rackets, you would have to be pretty stupid, and/or deluded, not to foresee that the President will heed the 'advice' of his greedy buddy, Carl Icahn, and continue to betray his fellow citizens (and those of America's allies) by doing everything in his power to protect his fellow peddlers of the absurd, but nonetheless pernicious, 'MLM' fairy story. 

Currently, and not just in respect of the 'MLM' phenomenon, government of the people, by the people, for the people has perished from the USA, to be replaced by government of racketeers, by racketeers, for racketeers.

One month ago, I re-published a 'Slate Magazine' article, 'Trump's Great Pyramid,'  by Michelle Celarier. Yet even this encouraging piece didn't tell us anything which we didn't already know. It quoted Robert FitzPatrick extensively and acknowledged that, for the overwhelming majority of transient core-adherents, 'MLM' participation has been a confusing and costly nightmare. However, although this article also acknowledged that all 'MLMs' prey on the vulnerable and hide behind the same thought-stopping 'Direct Selling' jargon and Amercian Dream imagery (copied from the 'Amway' original), Michelle Celarier still was not at liberty to publish the full truth and she inadvertently repeated some familiar 'MLM' bullshit. 

Michelle Celarier pointed her readers in the direction of mainstream commentators who have been allowed to get closer to the full-truth about 'MLM'. The 'Slate Magazine' article contained a link to last year's episode of John Oliver's satirical show which tore the 'Herbalife/MLM' lie to shreds and, at one point, compared 'MLM' rackets to the 'Scientology' racket. 

Although serious in tone, Michelle Celarier's article was in line with the many satirists who have long-since realised that the outrageous, 'America is broke and only I can fix it,' quackery which Donald Trump peddled to get himself elected, is neither original nor unique and, consequently, it cannot be fully-understood in isolation.

So, apart from all the stolen cash that 'MLM' racketeers have invested buying influence in Washington, how did 'MLM' cults help Donald Trump to become US President?

First of all, it should be clearly understood that 'MLM' cults are also 'Prosperity Gospel' cults and that the bosses of these organisations have been employing co-ordinated devious techniques of social, psychological and physical persuasion in order to shut down their victims' critical and evaluative faculties and prevent them from facing reality and complaining. In this way, for decades, 'MLM' cult bosses have been hiding the evidence of their crimes in order to continue to perpetrate them

Donald Trump's connections with the so-called 'Prosperity Gospel' go all the way back to his youth. 

Family ties: Donald Trump, left, with his brother,
Donald Trump (left) with brothers and sisters.
Image result for marble collegiate church

Little Donald, and his siblings, were taken along by their father to Pastor Norman Vincent Peale's 'Reformed Dutch Protestant Marble Collegiate Church' in Manhattan. Donald Trump has never hidden his life-long adherence to Pastor Peale's philosophy.

There has been a lot written about Pastor Peale (1898-1993), but essentially all he did was syphon an existing deep well of credulity to make himself rich. It has to be said that Peale was a highly convincing, word-perfect, performer. He re-wrote, updated and peddled (as his own philosophy) long-established religious concepts (blind faith, power of prayer, paradise, etc.) in a non-religious format ('positive thinking, visualisation, success,' etc.). Cleverly, Peale used the exemplary wealth and success of a few of his followers (like Donald Trump's father) as the proof that his philosophy worked, but he also employed co-ordinated devious techniques of social, psychological and physical persuasion in order to convert other followers to the guilt-inducing belief that a person can only achieve wealth and success by excluding all doubt and totally believing that he/she will achieve wealth and success. In other words, when any of Peale's unquestioning adherents failed to achieve wealth and success, it was child's play to convince them that their failure must have been entirely their own fault for not believing totally.

This, in a nutshell, is the destructive, closed-logic, controlling scenario which has been lying at the heart of all 'MLM' rackets since they first appeared in the late 1940s. Countless millions of victims of dissimulated closed-market swindles (a.k.a. pyramid schemes) have been silenced simply by convincing them that they made a free choice to participate and that they could have made money, if only they had duplicated their leaders' perfect example and not quit. It's little wonder that Peale's  books and recordings have been, and still are, widely-peddled by 'MLM' racketeers to their victims.

Pastor Peale was only one of several copy-cat 'Positive Thinking/ Prosperity Gospel' quacks who all found hordes of desperate takers for their rebranded cocktail of psychological + religious + economic snake oil, during the Great Depression. Many politicians (including Presidents) were also bedazzled by their optimistic message and they didn't want to recognise its inherent danger. Again, for obvious reasons, the works of persons like Napoleon Hill have also been, and still are, widely-peddled by 'MLM' racketeers to their victims.

There have been countless, unoriginal, parasitic 'Positive Thinking/ Prosperity Gospel' quacks who have attached themselves to 'MLM' rackets down the decades.  All of them have employed co-ordinated devious techniques of social, psychological and physical persuasion. 

Donald Trump cut his political teeth performing live to deluded 'MLM' cult adherents. Trump witnessed first hand how (just like Norman Vincent Peale) 'MLM' shills recite a ritual script - pretending affinity with vulnerable people by acting the roles of ordinary men and woman turned super men and women via their access to a secret step-by-step 'positive' plan which can enable anyone to achieve the American Dream of freedom, wealth and success. In 'MLM,' cultic rackets the shills are always prepared to share their knowledge with anyone (for a price - part of the price being the surrender of the adherents' critical and evaluative faculties).  

At times of mass-alienation (following: wars, natural disasters, economic crises, etc.), history proves that would-be demagogues steadfastly pretending moral and intellectual authority whilst pursuing hidden criminal objectives, who at other times would have been almost universally-recognised as absurd charlatans, have found it much easier to become widely-accepted as authentic Messiahs. 

David Brear (copyright 2017)

Sunday, 19 March 2017

Donald Trump's 'conspiracy theories' mirror those of the LaRouche cult.

See original image

Recently, after posting an article about Donald Trump's movement exhibiting cult characteristics, I was sent these two links below and asked what I thought of their content?

I replied that the author of the first of these documents demonstrated that he had extensive knowledge of the paranoid fiction controlling the cultic racket known as the 'LaRouche Movement,' but that although he also knew plenty about Donald Trump, he seemed to have no knowledge of the President's deep-involvement with 'MLM' cultic racketeering. That said, the author would appear to understand that, currently, the White House is occupied by a life-long mythomaniac/charlatan who has exhibited similar personality traits to Lyndon LaRouche, and who will go to almost any lengths rather than be investigated and held to account.

Image result for alex jones

As far as I'm aware, Donald Trump has no direct connection with Lyndon LaRouche, but the two of them are notorious 'conspiracy theorists' who have been indirectly linked via other notorious 'conspiracy theorists,' like Alex Jones. Thus it has come as no surprise to me that Donald Trump's 'conspiracy theories' are increasingly mirroring those of Lyndon LaRouche and vice versa. 

Image result for chris steele mi6
Christopher Steele

Perhaps the most extraordinary indirect connection between Messrs Trump and LaRouche, is the fact that the latter is mentioned (albeit briefly) in the dossier compiled about the former by ex MI6 officer, Christopher Steele, and which contains a catalogue of claims regarding Trump's links to the Putin regime. The name 'Lyndon LaRouche' appears at the bottom of page 15 of the controversial dossier along with the claim that (according to a 'Kremlin official involved in US relations') Putin's regime has been 'supporting' him.

Not surprisingly, when Steele's dossier became public in January, it was immediately attacked, and ridiculed, in 'LaRouche Movement' propaganda, as an 'Anti-Trump/Putin Hoax.' Indeed, at first glance, LaRouche's explanation of Steele's dossier is essentially identical to that of Trump himself. Furthermore, although LaRouche's presence in the dossier was acknowledged, suspiciously,  'LaRouche Movement' propaganda didn't fully-explain what was said about him or offer a link to the document.

It's not a secret that Donald Trump avidly watches Fox News and that a lot of what he tweets is directly influenced by what he finds there. Last week, a relatively-unknown media pundit/federal judge/legal academic, Andrew Napolitano, broadcast an unsubstantiated story on Fox News. Initially this event went virtually unnoticed, but it set off a chain reaction which quickly hit world headlines and led to a tragicomic diplomatic incident between the UK and USA, and also to Mr. Napolitano apparently being given the push by Fox News and going into temporary hiding.

Incidentally, Andrew Napolitano is yet another 'conspiracy theorist' friend of Alex Jones.

Image result for gchq logo

In brief - in all seriousness, Mr. Napolitano claimed to a wide-eyed Fox News interviewer (who asked for no supporting evidence) that 'three intelligence sources' had informed Fox News that the main British intelligence gathering agency, GCHQ, had secretly (and illegally) spied on Donald Trump during the 2016 presidential campaign at the request of President Obama. 

Image result for trump international hotel and tower new york

Perhaps it's just an unfortunate coincidence?, but Andrew Napolitano knows Donald Trump personally. He even has an apartment at the Trump International Hotel and Tower in New York City.

GCHQ director Robert Hannigan

Napolitano went on to imply that the reason why the head of GCHQ, Richard Hannington, has recently resigned is directly linked to these Trump-spying activities.

The same unsubstantiated fiction was later officially put forward as fact by President Trump's mouthpiece, Sean Spicer, who cited Fox News, Andrew Napolitano and 'three intelligence sources.'  As a result, GCHQ took the unprecedented step of publicly responding to President Trump's apparent acceptance of this story, by stating that these claims were 'nonsense, utterly ridiculous and should be ignored.'

The UK Prime Minister issued  a similar statement, whilst the White House promised that the
story would not be repeated. 

Fox News also publicly disowned Napolitano's statement.

Former CIA analyst, Larry C. Johnson (yet another guest of Alex Jones with a reputation for peddling pro-right-wing political hoaxes), has recently been identified as one of Napolitano's 'three intelligence sources.'  However, Johnson has also claimed that he got his own information from 'very good friends,' whilst during his recent appearance on 'Russia Today,' he seemed strangely-muddled (for a former CIA man) as to the actual name of the UK's famous GCHQ intelligence gathering agency, which he has kept referring to as 'GHCQ.'

Image result for philip giraldi

Another one of these 'three intelligence sources' (who is also probably one of Larry C. Johnson's 'very good friends') is apparently yet another former CIA agent, Philip Giraldi. February 28th, he posted an elaborate article in defence of Donald Trump's disgraced former National Security Advisor, Gen. Michael Flynn, but which was also a subtle introduction to the GCHQ spied on Trump for Obama fiction subsequently broadcast as fact by Larry C. Johnson, Andrew Napolitano and Sean Spicer (on behalf of Donald Trump).

Lyndon LaRouche (b. 1922) is perhaps the most severe and inflexible narcissistic charlatan ever to have run for the US presidency. In 1992, he achieved the dubious distinction of becoming only the second person to run for US President from prison (where he was serving part of a 15 year sentence for conspiracy to commit fraud).

Donald Trump might not have been the nuttiest US presidential candidate, but he is the first sitting US President openly to subscribe to what are popularly known as 'crackpot conspiracy theories.' Donald Trump has even appeared with (and endorsed) the USA's most-notorious professional 'crackpot conspiracy theorist,' Alex Jones.

For decades, Lyndon LaRouche (the instigator, and self-appointed sovereign leader, of the criminogenic cult known as the 'LaRouche Movement') has been the origin of numerous 'crackpot conspiracy theories.' Not surprisingly, LaRouche has also made regular appearances with Alex Jones.

Typically of a criminogenic cult, the elaborate paranoid fiction ritualised as fact which has controlled the thinking, and behaviour, of LaRouche's deluded core-adherents, has been peddled to them in a never-ending series of expensive, but essentially valueless, publications and recordings. In these, LaRouche has steadfastly pretended moral and intellectual authority, but his hidden criminal objective has always been fraudulent.

For many years, Lyndon LaRouche has pretended that he acted as a key-adviser to President Ronald Reagan. Thus, with an irony that is close to exquisite, the LaRouche Movement is a third source which has recently been broadcasting the fiction that GCHQ was used by President Obama to spy on Donald Trump.

However, a significant quantity of 'LaRouche Movement' propaganda has fixated on Britain's intelligence agencies in general, and on GCHQ in particular. 

That said, this is only one small chapter in Lyndon LaRouche's overall, paranoid controlling-narrative.

Laughably, prior to his election, LaRouche was dead against Donald Trump, but now he's President, he's all for him.

All this begs the not unreasonable questions:

Where exactly did Larry Johnson, Phillip Giraldi get the idea that Barack Obama used British government agents at GCHQ to spy on Donald Trump?


In whose interests was it for Larry Johnson, Phillip Giraldi, Andrew Napolitano and Sean Spicer all to repeat this unsubstantiated fiction as fact publicly?

NB. The so-called 'LaRouche Movement' is neither original nor unique and, consequently, it cannot be fully-understood in isolation. Behind a typically mystifying labyrinth of corporate structures (designed to prevent and/or divert investigation and isolate its bosses from liability), the so-called 'LaRouche Movement' has exhibited the universal identifying characteristics of a cult.

Jacques Cheminade (Solidarité et progrès), en mars 2012.

Now if any Blog reader should still prefer to believe that Lyndon LaRouche is too elderly and absurd to pose a serious threat to democracy and the rule of law, currently, he is again fielding his own tame candidate, Jaques Cheminade, in the forthcoming French Presidential election. This means that M. Cheminade has somehow managed to obtain the required endorsement of 500 French Mayors.

That said, this is evidently just another thought-stopping publicity stunt rather than a genuine attempt to take power. In the last French presidential election (2012), Jaques Cheminade (who has never hidden his adherence to Lyndon LaRouche) scored just 89 000 votes (0.28%) nationally. With a few notable exceptions, the French media has tended to ignore him or dismiss him as a 'crackpot conspiracy theorist.'

David Brear (copyright 2017)

Wednesday, 8 March 2017

'MLM' rackets and the UK Enterprise Allowance scheme

Image result for new enterprise allowance

Since 2011, a UK government Ministry, the Dept for Work and Pensions (DWP), has offered unemployed people a means of financing their own business start ups.This initiative is known as the New Enterprise Allowance (NEA) scheme. Although the DWP proclaims that tens of thousands of businesses have been set up under NEA, the actual nature and profitability/sustainability rate of these new businesses has not been fully-disclosed.

The DWP has set out a list of general rules for applicants and explains that certain jobs offered on a self-employed basis are excluded from the NEA scheme. Business plans which might bring the DWP into 'disrepute' have also been excluded.

Unemployed people can apply for NEA at one of a national chain of offices known as 'Job Centres.' Although it is not obligatory, the applicants' idea is then assessed by a 'business mentor' who can help decide its viability based on a classic plan of projected income and expenditure.

NEA 'business mentors' have been supplied by a number of private companies under contract to the DWP. Certain representatives of these companies have lately stated that applications for NEA from persons involved in various 'MLM' schemes, have been numerous, but that these numerous applications are systematically refused on the grounds that 'MLM' companies offer jobs on an self-employed basis, rather than businesses. To date the DWP itself has never stated any clear policy towards 'MLM' companies in regards to the NEA scheme.
If the NEA applicant is accepted, then he/she must stop claiming all other unemployed benefits. UK Job seeker’s allowance is currently up to £57.90 per week for 19-24 year olds and up to £79.10 for 25 and over
The NEA recipient starts trading and must register his/her new business with the tax authorities.
NEA comprises a weekly allowance of £65 (paid for 13 weeks). This is then reduced to £33 per week for the next 13 weeks.
NEA recipients can finally apply for government business development loan of up to £2 500 to be paid back over a period 1-5 years at an annual interest rate of 6%.


your JSA can pay for mascara!

I'm not the only person to have noticed that social media has been infested with British 'MLM' recruiters all boasting that it is possible for unemployed persons to obtain NEA for the purpose of starting 'MLM businesses.'

Yet the hidden overall churn/loss rates in so-called 'MLM income-opportunities' has always been effectively 100%. In fact, more than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).

David Brear (copyright 2017)

Wednesday, 22 February 2017

Donald Trump - the establishment of an American kleptocracy.

For almost 10 years, Donald Trump was the paid pitchman for the 'Amway' copy-cat 'Network/Multi-Level Marketing' cultic racket known as, 'All Communications Network (ACN).' During this period Trump steadfastly pretended that he and the instigators of 'ACN' had a secret 'step-by-step plan' which could enable anyone to achieve success and that he and they were prepared to share this secret 'plan' with anyone (for a price)


Whilst reading the following article by American journalist, Michelle Celarier, please bear in mind that more than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,' etc.).

David Brear (copyright 2017)


Trump’s Great Pyramid

Multilevel marketing companies promise prosperity to the desperate. They’re thrilled about the new administration.

trump admin.
Donald Trump, Ben Carson, Betsy DeVos, and Utah Attorney General Sean Reyes all have connections to multilevel marketing companies.
Photo illustration by Slate. Photos by Chip Somodevilla/Getty Images, Joe Raedle/AFP/Getty Images, Lbrcomm/Wikimedia
During the depths of the Great Recession, Donald Trump counted among his many income sources a side gig as a pitchman for ACN Inc., a company whose “members” sold newfangled videophones and other products. “Trust me, it’s changing everything,” he promised in a 2009 promotional video shown to eager crowds of recruits, many of whom would fork over nearly $500 to sell ACN phones in hopes they could sign up more would-be entrepreneurs to do the same. “Believe me, it’s ultimately a dream come true,” said Trump, who also featured ACN on episodes of The Celebrity Apprentice.
But instead of a dream, companies like ACN have become nightmares to many of the people who buy the hype. As with many similarly structured “multilevel marketing companies,” many of ACN’s sellers say they end up losing money, even as they plunk down more and more cash to participate.
As for Trump, his pleas to “trust me” and “believe me” have continued to pay dividends, only now he’s saying, “I alone can fix” whatever stands in the way of American greatness. But even as Trump pursues his biggest scheme yet, one of his old ones will continue to thrive in 2017: The Trump era could ignite a golden age for politically connected multilevel marketing companies—or what critics (and John Oliver) say are often merely disguised pyramid schemes, illegal enterprises in which people primarily earn money by recruiting others instead of by selling products to the public.
MLMs aren’t a negligible portion of the U.S. economy, with some $36.5 billion in sales during 2015 and more than 18 million Americans participating in an MLM in a given year. A dismaying number of figures in the Trump administration also have connections to MLMs—beginning, of course, with Trump himself.
During the Obama administration, the Federal Trade Commission made its biggest-ever effort to curb this industry when last summer it slapped nutritional supplement–seller Herbalife with a $200 million fine and, as part of a settlement with Herbalife, demanded it restructure its business so that it would “start operating legitimately,” as FTC Chairwoman Edith Ramirez put it. The FTC alleged Herbalife had engaged in “unfair and deceptive practices,” and put it under a federal monitor for seven years, demanding onerous changes to its compensation plan and requiring extensive documentation of customer sales. Ramirez then set down an ambitious posture for the FTC: In the future, she said at an MLM industry conference in October, these companies should adopt the new Herbalife rules when structuring their businesses, as the FTC would be watching.
In an MLM, sometimes more euphemistically called a “direct-selling” company because the products aren’t sold in stores, salespeople frequently woo participants by dangling riches before their eyes as they are led to make big, upfront purchases of pricey products, then asked to recruit others under them to sell the product and recruit still more participants in the hopes of earning big commissions in what becomes a pyramidal structure. As Ramirez noted, most participants don’t make significant income. Following the Herbalife settlement terms would force these companies to ditch any deceptive income pitches and also keep track of sales to customers outside the member networks to prove that most of their products are not just being bought by the company’s own salespeople.

But the FTC’s newfound toughness may come to naught in the Trump era. There’s little hope, according to both critics and cheerleaders of the MLM industry, that the Trump administration will assume such a strict posture toward Herbalife’s peers. “The more likely scenario is that they just won’t bring a pyramid scheme case,” said Bonnie Patten, executive director of Truth in Advertising, a consumer advocacy group that helped the FTC in its prosecution of Vemma, a nutritional-product MLM that the FTC alleged was a pyramid scheme in August 2015. The case was settled in December on terms similar to the Herbalife one. (Neither Vemma nor Herbalife admitted guilt in their settlements.)
When Ramirez announced on Jan. 13 that she would step down from the FTC in February, shares of the largest publicly traded MLMs—Herbalife and Nu Skin—shot up.
With her departure on Feb. 10, there are only two commissioners remaining on the FTC and the acting chairwoman, Republican Maureen Ohlhausen, is a staunch supporter of self-regulation by MLMs. Trump will appoint three new FTC commissioners, including the chairperson. Whether it’s Ohlhausen or someone else, the next chairperson is also likely to be sympathetic to the MLM cause. The only name floated for the spot so far has been Republican Utah Attorney General Sean Reyes, who was also greeted with glee by MLM shareholders when his consideration was reported by Politico on Jan. 17.
There’s good reason for the industry’s cheer. In October, Reyes was a special guest speaker at an MLM conference in Salt Lake City, the capital of a state that is home to so many MLMs that the term is sometimes jokingly referred to as “Mormons Losing Money.”
“Utah Attorney General Sean Reyes has been a supporter of the direct selling industry for many years,” the organizers of the Direct Selling Edge Conference said in promoting his speech. “As a former business owner himself, Reyes applauds those who desire to manage their own businesses on their own terms,” which is the kind of “be your own boss” come-on MLMs make to prospective members.
If Reyes gets the gig, he’ll have plenty of MLM supporters as peers in the administration. Let’s start with Trump himself. In 2009, Trump licensed his name to an MLM, which became known as Trump Network, and “often gave the impression of a partnership that was certain to lift thousands of people into prosperity,” according to the Washington Post.
Instead, some participants lost everything: Homes were foreclosed on and cars repossessed. The company filed for bankruptcy in 2011. And for his job as a motivational speaker for ACN, Trump earned $1.35 million for three speaking engagements in 2014 and 2015 alone, according to recent financial disclosures.
Trump’s Cabinet picks also have MLM links. First there’s his education secretary, Betsy DeVos, whose husband’s family fortune derives from its ownership of Amway, the world’s biggest MLM, with $9.5 billion in annual 2015 revenue on everything from soap to cat food. While the company’s sales have been in decline, falling from a peak of $11.8 billion in 2013, Amway remains the 29thlargest privately held company in the U.S., according to Forbes.
The company has a long, well-documented history of legal troubles. In recent years, Amway or its executives have tangled with law enforcement around the globe, most notably in India, where its CEO for the country was arrested and accused of running a pyramid scheme in 2013, let go, and then rearrested in 2014. Amway denied any wrongdoing. In the U.S., it paid $56 million in 2010 to settle a class action suit alleging it was running a pyramid scheme but did not admit wrongdoing. Meanwhile, Amway’s donations to Harvard’s John F. Kennedy School of Government program have funded the training of more than 500 Chinese bureaucrats, who led that country to legalize direct selling, opening a new boom market that MLMs are now exploiting.
Amway’s outsize political influence goes back to 1979, when the FTC lost its pyramid case against Amway. After four years of litigation, an administrative law judge found that Amway did not run an “illegal” pyramid scheme because it had safeguards to protect against the reliance on recruitment. These included requiring its distributors to sell 70 percent of their inventory each month and to sell to at least 10 different customers per month.
The Amway decision set the stage for an explosion of copycats, which went almost unchecked by regulators until the Herbalife case. After its landmark settlement last summer, Ramirez said the reliance on the Amway rules was “misplaced.”
Both the Amway and Herbalife cases underscore one of the problems of prosecuting alleged pyramid schemes: There is no federal law defining the crime, leaving it to the courts to interpret and pricey lawyers to find wiggle room. The debate is also clouded by the rhetoric of free markets. At the far right end of that debate is the DeVos family, which has donated $200 million to Republicans over the years, and owns a company that combines Christian fundamentalism with extremist free-market ideology and maintains such a grip on many of those who join it that some, fearful for their lives and harassed mercilessly, went into hiding after they sought to expose it.

Other Trump-connected MLM fans include Housing and Urban Development Secretary–designate Ben Carson, who was once a pitchman for the MLM Mannatech, and the agricultural policy adviser from Trump’s campaign, Charles Herbster, whose Kansas City, Missouri–based company Conklin, which sells fertilizers and pesticides, is also organized as an MLM.
Next comes Trump’s special adviser on federal regulations, investor Carl Icahn, who has an estimated net worth of $17 billion. Icahn is something of an accidental beneficiary of MLM wealth, having invested in Herbalife to get back at his nemesis, fellow shareholder activist Bill Ackman, after Ackman launched a public short on Herbalife in 2012 and called it a pyramid scheme. Icahn has ended up virtually running Herbalife, owning 24 percent of its shares and holding five board seats. But despite Icahn’s clout, Ackman’s lobbying effort to bring down Herbalife led to the FTC crackdown, which could pummel Herbalife’s earnings. (The company has other problems, as it recently disclosed that it is subject to an anti-corruption probe by both the Securities and Exchange Commission and the Department of Justice over its burgeoning China business.)
Icahn is helping vet Trump’s choices to head the regulatory agencies and one of his companies has already benefited on Wall Street from the selection of Trump’s Environmental Protection Agency pick Scott Pruitt, whom Icahn helped vet. If Icahn assists Trump in naming FTC commissioners, he will be helping to staff the body charged with enforcing the Herbalife settlement.
Then there’s Congress, where critics also fear the passage of legislative efforts they say would virtually legitimize many pyramid schemes. One such bill, introduced last summer by a bipartisan caucus organized by the industry lobbying group, the Direct Selling Association, was opposed by Ramirez because it contradicts the terms of the Herbalife settlement. Days after she announced her resignation, Ramirez wrote a letter to the DSA chastising it for its opposition to the FTC view, which the DSA had laid out in a press release shortly before Trump’s inauguration. The question is whether there is retail demand for the products of MLMs or whether the purchases are just a camouflage for recruitment. The DSA, and the bill, argues that purchases by participants in the scheme, called “internal consumption,” can represent true demand, which means they would count when determining commissions paid to salespeople. Ramirez and the FTC disagree. Even if MLM participants do want to buy products for their own use, they shouldn’t be compensated for doing so, Ramirez said. To ensure compensation is driven by retail sales, she noted, companies should keep track of all customer sales outside the network (as Herbalife is being forced to do).
What this all adds up to, in the eyes of opponents and supporters, is a benign era for MLMs. Regulating these companies, with their legions of independent salespeople, is difficult for the toughest regulatory regimes. And the Trump era will be anything but that. “Anybody who would continue to expect or hope for law enforcement regarding financial schemes of this type would be living in a dream world,” said Robert FitzPatrick, the president of the watchdog Pyramid Scheme Alert. “[MLMs] are going to gain protection.”
FitzPatrick will get no quarrel from the industry’s biggest fans. “We think that with the new administration you can forget any aggressive action vs. MLMs,” industry analyst and Herbalife shareholder Tim Ramey wrote in a note to clients in January. “When Betsy DeVos was named to the Trump Cabinet we took that as a very strong signal that the Trump administration had no real issue with the MLM world. … You don’t put Betsy DeVos in your cabinet and then go out and try to put [Herbalife] out of business. We are in a post-regulatory world.”
* * *
It’s fitting that the Trump administration has such an affinity for MLMs: Their economic and political philosophies are perfectly in sync. Even though the FTC continues to say such claims are deceptive, MLM companies are notorious for making ludicrous promises of wealth that can still be found all over the internet.
It’s not dissimilar to what Trump has promised his followers. “The false income opportunities of pyramids schemes are parallel to what Trump is offering—an alternative reality, a false hope,” FitzPatrick said.
One of the earliest critics of Amway, former insider Stephen Butterfield, wrote about how its conservative economic policies actually helped bolster Amway’s ranks in his 1985 book, Amway: The Cult of Free Enterprise. “In alliance with the religious right, Amway (which stands for American Way) has spent more than three decades building an authoritarian, pro-business movement in the American middle class,” according to a promotion blurb for the book. “Amway preaches devotion and obedience to its leaders, hard work and sacrifice for the Company, contempt for the poor and worship of the rich.”
That was more than 30 years ago, and now nearly all those ideals are back in vogue—or at least cherished by those in power. And to those who perceive themselves to have lost ground, who see Trump’s  “American carnage” surrounding them, a miracle cure can hold a lot of sway.
“[The current political moment] is perfectly aligned with Amway’s mission—selling a phony lifesaving raft to people who are drowning. People will pay any price for it because they are drowning, and Amway is dependent on people drowning,” said FitzPatrick, referring to Amway’s influence in a Republican Congress, which now threatens to erode the social safety net by gutting Medicare and Social Security and repealing Obamacare. “The more there are helpless people, people deprived or struggling, the better the market is for their phony proposition.”
In recent years, the heavily publicized Herbalife battle has shined much-needed light on MLMs. Last year’s scathing John Oliver segment on them has received almost 10 million views, 2 million of them in Spanish. (Immigrant, often undocumented, Latinos trying to make it in the U.S. have become a major target group.) A documentary on Ackman’s Herbalife battle, Betting on Zero, hits theaters March 10 and will be available on demand April 7.
Even while the popular culture’s view of MLMs is shifting, FitzPatrick doesn’t think we’re yet at a tipping point where consumers reject them en masse. Trump’s election may help explain why. After the election, FitzPatrick says he sent out a newsletter to the many victims of pyramid schemes who’ve come to him for help, explaining the connections with Trump.
“I had some cancellations of the newsletter, and some of them, after canceling, just wrote the word MAGA on the cancelation,” FitzPatrick said. “This is the pathos of it. Those people in general were victims of MLMs, and yet, they are so caught and immersed in the web of lies that they really don’t know why they lost. Now they've put their faith in Donald Trump after being scammed by the type of organization that Trump endorses. But when you point out that Trump is going to enhance these schemes, protect them, and he’s part of them, they can’t hear it.”
Trump, FitzPatrick says, was their last, best hope. And like MLMs, he may yet provide a familiar disappointment.

Michelle Celarier (copyright 2017)