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ORIGINAL RESEARCHBill Berkowitz Amway's GOPyramid SchemeHow the multi-billion dollar worldwide corporation recruits ordinary folks into the 'system,' and uses well-connected politicians and pastors to become Masters of DeceptionLike many other people, Eric Scheibeler and his wife, Patty, were recruited to the Amway Corporation by close friends. Amway's GOPyramid Scheme Along the "guaranteed" road to success and wealth they met powerful Documentation supports charge that 99 percent of those recruited into Amway Quixtar motivational organizations lose money Eric Scheibeler's book, "Merchants of Deception: An Insider's Look at the Worldwide, Systematic, Conspiracy of Lies That is Amway/Quixtar and their Motivational Organization," available free on the Internet, is more than a story about one family's rise and decline under the Amway/Quixtar umbrella. It is an expose of the corruption that envelops one of the most politically well-connected companies in the United States. Before signing on with Amway, Eric and his wife, Patty, were both skeptical about the rags-to-riches stories they were being told. Nonetheless, they decided to make a go of it. "One of the most significant factors that drew us to this 'business,'" Eric Scheibeler told me during a series of e-mail interviews, "was the fact that you only succeeded by helping others succeed (those you recruited). This win/win philosophy was very appealing to us and literally millions of others." By devoting a great amount of time, energy, and money to their "business," they built a global Amway distributorship. "We met many of the Amway millionaires ourselves and saw their palatial homes, exotic cars and personal jets," Scheibeler pointed out. (Amway is part of the Alticor family of companies which generated worldwide retail sales of $6.2 billion in 2004. In mid-March, Alticor Inc., which according to the Miami Herald "now records 80 percent of its sales outside of the United States," recently opened Amway Russia, which "has the potential to be our biggest market in Europe," said Steve Van Andel, Alticor chairman.) "Each of the mega wealthy leaders praised Amway for their success and the 'system' of success." New recruits get acquainted with the "system" -- an educational system of books, tapes, videos, CD's and seminars -- the method through which "wealthy people teach others how to follow their path to success." Scheibeler said that "the 'system' is described by Mega Distributor Fred Harteis as having a '100 percent success rate.'" At an Amway recruitment meeting, Harteis publicly professed that "with several friends," he "helped thousands of people become millionaires." Distributors are told that in order to create wealth similar to the millionaires they were rubbing elbows with, "they needed to buy 100 percent of their own products from 'their own' business and become completely immersed in the 'system' of success," Scheibeler pointed out. That cost thousands of dollars a year. Then, distributors would need to "recruit others and teach them to follow the same rules and eventually their businesses would contain enough consumer products that they could generate very large incomes." For nearly a decade, Scheibeler and his wife "developed a business that extended from North America to Europe, South America, and the Philippines." They were on their way. Harteis' lifestyle and the credibility of those coming in to speak at gatherings of distributors in large arenas seemed to support all of the claims. The Scheibelers met House Speaker Newt Gingrich, former Iran/Contra figure, Oliver North, Wendy's owner, Dave Thomas, TV Pastor Robert Schuller, Senator Rick Santorum (R-PA) and many others. Religious leaders like Charles Stanley (a former distributor), Dr. Schuller and Dr. D James Kennedy of Florida's Coral Ridge Ministries, a multi-media multi-million dollar ministry, gave the company and its founder a credibility that seemed to be beyond reproach. Former US Presidents Ronald Reagan, Gerald Ford, George H.W. Bush also spoke to Amway distributors. Amway's Road to Power is Paved with Political PatronageAccording to Scheibeler, some Republicans received as much as $100,000 for appearing at an Amway event. "After accepting speaking fees, [House Speaker Newt] Gingrich arranged a reported last-minute modification in a comprehensive tax bill that allegedly provided a $283 million tax break to just one company -- Amway. One report called the tax break a $283 million payoff," investigative reporter Evelyn J. Pringle pointed out in a piece on Amway. According to the San Antonio Express-News, "The payoff for Amway was not in the original House or Senate version of the tax bill...Gingrich intervened at the last minute to help get the special tax break inserted in the bill." In a 1997 column, Molly Ivins wrote that Amway had "its own caucus in Congress...Five Republican House members are also Amway distributors: Reps. Sue Myrick of North Carolina, Jon Christensen of Nebraska, Dick Chrysler of Michigan, Richard Rombo of California and John Ensign of Nevada. Their informal caucus meets several times a year with Amway bigwigs to discuss policy matters affecting the company, including China's trade status." Headquartered in Ada, Michigan, Amway (website) was founded in 1959 by two high school buddies from Grand Rapids, Richard DeVos and the late Jay Van Andel. DeVos and Van Andel came up with the Amway idea -- described by Mother Jones' Zina Klapper in a 1981 article as a "door-to-door dime store of everything from car cleaners to cosmetics" -- after "engage[ing] in a series of business ventures together, including an unsuccessful attempt to market bomb shelters." Billionaire Richard DeVos, who appears regularly on the Forbes magazine list of richest Americans also owns the National Basketball Association's Orlando Magic and has been a member of the highly secretive Council for National Policy. He once served as the finance chairman of the Republican National Committee. He also created a conservative philanthropy for he and his wife called the Richard and Helen DeVos Foundation. For more than 35 years, the DeVos family has been a major benefactor of both the religious right and the Republican Party. In the final weeks before the 1994 election, the Amway Corporation gave the GOP $2.5 million, which at the time was "the largest political donation in recent American history," the Washington Post reported. And in 1996, the company donated $1.3 million to the San Diego Convention and Visitor's Bureau "to help fund a Republican cable TV show to be aired during the party's national convention," the Associated Press reported. The program featured "rising GOP stars as 'reporters,'" and aired on the Family Channel which was owned by Pat Robertson. According to Media Transparency, a website tracking "the money behind conservative media," grant-making by The Richard and Helen DeVos Foundation, which was founded in 1970, grew from $4 million in 1990 to more than $25 million in 2001. "The family provides major funding to Concerned Women for America, Free Congress Foundation, Michigan Right to Life, Focus on the Family, Family Research Council and a number of other groups," according to a People For the American Way report. In addition, foundations with the DeVos family name attached to it branched out to include the Dick and Betsy DeVos Foundation (1990), the Daniel and Pamela DeVos Foundation (1992), and the Douglas and Maria DeVos Foundation (1992). Evelyn Pringle reported on the company's close relationship to President George W. Bush: When it comes to W and Amway, it's a give and take situation. They mutually provide "quid pro quo" favors to each other. For instance, during the 2000 campaign, W used the company's voicemail network to reach thousands of Kingpin Dexter Yager's distributors with a personalized message from none other than Bush himself. Then last summer, when Amway co-founder Richard DeVos attended a dinner party at the home of a friend in Grand Rapids, MI, he got seated right across the dinner table from W, according to the Orlando Sentinel. DeVos isn't shy about discussing his contributions to Bush. "People ask me sometimes why I support Bush," DeVos said, "I just tell them, 'Because When I walk into the room, he says, "Hi, Rich."' I've been a friend to the family for a long time." "I give the max," DeVos said proudly. "People talk about buying access, but all I can tell you is that politicians know the people who support them," he told the Sentinel. DeVos has been very generous to W over the years. The $2,000 campaign limit that he gives directly to Bush is but a fraction of total DeVos contributions to Republicans. His wife, kids, and their spouses also make large donations to W and other members of the GOP. During the 2000 election cycle, DeVos, his wife, and son contributed a combined sum of $760,000 to Republican candidates and causes, and according to FEC records. Amway itself contributed a whopping $1.3 million, with every dime going to Republicans. Pringle also pointed out that "DeVos and VanAndel, have been the largest soft money contributors to the GOP on and off for the past 20 years. Together, DeVos and VanAndel gave $4,000,000 to a 527, just 45 days prior to the last election." The DeVos family has made Michigan their personal political stomping grounds: Richard DeVos Jr., the son of Amway founder Richard Sr., served as president of Alitcor and presided over "Restoring the American Dream," an organization described by Mother Jones magazine as "a political action committee that supports candidates opposed to the 'fundamental coarsening of our culture' and the 'erosion of civility and basic decency.'" Shortly before addressing the Class of 2002 at the Christian-oriented Grove City College in Pennsylvania, President John H. Moore's office described Dick DeVos as "a nationally prominent Christian layman who led the fight in Michigan for [a] school vouchers," by co-chairing the Michigan Kids First! Yes! Campaign. DeVos' group, a network of right wing religious, civic and business leaders organized and supported the school vouchers ballot measure which ultimately "lost due to readily understood political factors," said President Moore's office. "He is a truly fine evangelical Christian business leader, one who puts his faith in practice in his business. We've had religious and political leaders as commencement speakers - we thought it was time to have a Christian businessman," Moore's office pointed out. In early March of this year, DeVos took the first step toward turning the state of Michigan into his personal political laboratory by setting up an exploratory committee to test the waters for of a run for the governor's mansion. The Crack-UpDespite their initial skepticism, the Scheibelers had bought into the program and they quickly became rising stars. "We worked incredibly hard in building a global distributorship and we rose quickly through the ranks," Eric Scheibeler said. "We reached the founder's Emerald level -- a level that less than 1/25th of one percent of Amway participants are able to achieve. We were featured in Amway's national magazine, and succeeded in recruiting physicians, attorneys, teachers, laborers and many others all eager to work towards financial freedom. These people became our closest friends; they virtually became our family." The Scheibeler's even got to spend quality time with the company's billionaire founder Richard DeVos. They were flying high, but they were headed for a crash that threatened to ruin their lives. Although they were making money, it was only "a small fraction" of what they were led to believe they would earn, and their debts were mounting. "With the growth of the Internet, allowing for a freer flow of unfiltered information," Scheibeler said, "it became clear that there were a number of unhappy members who had filed lawsuits against the company." The Internet-publicized suits revealed that massive profits were being made from the sale of books, tapes and seminars, which totally contradicted what the Scheibelers had been told during their recruitment. "We were told that these 'tools' were sold at or near break even and that some seminars were run at a loss," Eric Scheibeler says. "The lawsuits revealed that most of the Kingpin Distributors income came not from Amway but from the secretive secondary business of 'the system' of books, tapes and seminars." According to Scheibeler, those sales account for as much as 90-98 percent of the Kingpin Distributors gross income. "Without this secret income, even the most successful distributors in the country could lose money on their Amway business. This was a bait and switch consumer fraud of global proportions," Scheibeler maintains. Scheibeler says that he spent thousands of hours researching and culling documentation from global sources, managing to get ahold of over 1,000 hours of legally recorded tapes and videos as well as internal Amway documents. As a lifelong conservative Republican, Scheibeler was "disheartened" at what he discovered and documented: He found "rampant, systematic, global fraud" within the operation, and had "documentation" that "appears to reveal...two decades of systematic, global fraud [that ran]...into sums far in excess of $20 billion." At first he thought that "it only involved Kingpin level distributors in the field" so, accompanied by copious documentation he reported his findings "to Amway senior management." After all, he had uncovered documents that showed that founder Richard DeVos had "been aware" of the company's "illegal activities" for well over 20 years. Merchants of Deception says Scheibeler, "was written specifically to be a road map for regulators and prosecutors worldwide." According to Scheibeler, the documentation appears to support the charge that approximately 99 percent of those recruited into Amway Quixtar motivational organizations lose money. Instead of correcting the situation, Amway officials stonewalled and focused on the messenger, and "created pressure intended to silence me." After talking with some of the other distributors, the Scheibeler's "sole income" was shut off. The company decided to "starve" him "into silence," Scheibeler charges. Over the next year his family lost their health insurance and "were forced into bankruptcy" and subsequently lost their family home. Superiors encouraged him to get out -- sell his business, accept a settlement and "sign a legal agreement to never speak publicly of our experience." The Scheibeler's refused. In May 2004, with Eric Scheibeler's assistance, NBC's Dateline ran an expose of the secretive and illegal pyramid business run by Amway/Quixtar operatives. According to Evelyn Pringle, "During its investigation, Dateline smuggled hidden cameras into recruitment meetings in order to document the company's deceptive claims and promises, and to expose its multi-million dollar 'secret' business. The expose verified the common allegation made in numerous consumer lawsuits, that the company is merely a front for a hidden pyramid business based on selling books, tapes, and registrations to seminars and rallies to new recruits, with nearly all participants losing money." Dateline maintained that the FBI and the IRS are conducting investigations into the scheme. Ultimately, Eric Scheibeler's expose of the Amway Corporation goes well beyond the trials and travails experienced by his family and the families of thousands of others who have been taken in by the company's promises. It goes beyond the suicide of failed member/owners, and the countless bankruptcies, foreclosures and broken marriages. Since releasing Merchants of Deception for free on the Internet, over 100,000 copies have been downloaded to date. Scheibeler said that he was "inundated with near identical stories from Amway victims from around the world." Richard DeVos and Jay Van Andel's Amway Corporation has its tentacles firmly planted in late-twentieth and early twenty-first century Republican Party politics. Masquerading as a Christian-oriented family enterprise, Amway leaders have made billions by selling a phony version of the American Dream, while bilking thousands of ordinary American dreamers out of their hard-earned life savings. The wealth of the founders has supported the nearly 30+ year conservative makeover of American society through millions of dollars in donations to the creation and development of right wing institutions and causes. sign in, or register to email stories or comment on them.
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MORE ORIGINAL RESEARCHBill Berkowitz PERC receives Templeton Freedom Award for promoting 'enviropreneurs'Right Wing foundation-funded anti-environmental think tank grabbing a wider audience for 'free market environmentalism' On the 15th anniversary of Terry Anderson and Donald Leal's book "Free Market Environmentalism" -- the seminal book on the subject -- Anderson, the Executive Director of the Bozeman, Montana-based Property and Environment Research Center (PERC - formerly known as the Political Economy Research Center) spoke in late-January at an event sponsored by Squaw Valley Institute at the Resort at Squaw Creek in California. While it may have been just another opportunity to speak on "free market environmentalism" and not the kickoff of a "victory tour," nevertheless it comes at a time when PERC's ideas are taking root.
Bill Berkowitz Neil Bush of Saudi ArabiaDuring recent visit, President’s brother describes the country as a 'kind of tribal democracy' In late February, only a few days after Saudi Arabia beheaded four Sri Lankan robbers and then left their headless bodies on public display in the capital of Riyadh, Neil Bush, for the fourth time in the past six years, showed up for the country's Jeddah Economic Forum. The Guardian reported that Human Rights Watch "said the four men had no lawyers during their trial and sentencing, and were denied other basic legal rights." In an interview with Arab News, the Saudi English language paper, Bush described the country as "a kind of tribal democracy."
Bill Berkowitz Newt Gingrich's back door to the White HouseAmerican Enterprise Institute "Scholar" and former House Speaker blames media for poll showing 64 percent of the American people wouldn't vote for him under any circumstances Whatever it is that former House Speaker Newt Gingrich has come to represent in American politics, the guy is nothing less than fascinating. One day he's espousing populist rhetoric about the need to cut the costs of college tuition and the next day he's talking World War III. One day he's claiming that the "war on terror" may force the abridgement of fundamental first amendment rights and the next he's advancing a twenty-first century version of his Contract with America. At the same time he's publicly proclaiming how "stupid" it is that the race for the presidency has already started you know that he's trying to figure out how to out finesse Rudy, McCain and Romney for the nomination. And last week, when Fox News' Chris Wallace cited a poll showing that 64 percent of the public would never vote for him, he was quick to blame those results on how unfairly he was treated by the mainstream media back in the day.
Bill Berkowitz American Enterprise Institute takes lead in agitating against IranDespite wrongheaded predictions about the war on Iraq, neocons are on the frontlines advocating military conflict with Iran After doing such a bang up job with their advice and predictions about the outcome of the war on Iraq, would it surprise you to learn that America's neoconservatives are still in business? While at this time we are not yet seeing the same intense neocon invasion of our living rooms -- via cable television's news networks -- that we saw during the run-up to the invasion of Iraq, nevertheless, a host of policy analysts at conservative think tanks -- most notably the American Enterprise Institute -- are being heeded on Iran by those who count - folks inside the Bush Administration.
Bill Berkowitz After six years, opposition gaining on George W. Bush's Faith Based InitiativeUnmentioned in the president's State of the Union speech, the program nevertheless continues to recruit religious participants and hand out taxpayer money to religious groups With several domestic policy proposals unceremoniously folded into President Bush's recent State of the Union address, two pretty significant items failed to make the cut. Despite the president's egregiously tardy response to the event itself, it was nevertheless surprising that he didn't even mention Hurricane Katrina: He didn't offer up a progress report, words of hope to the victims, or come up with a proposal for moving the sluggish rebuilding effort forward. There were no "armies of compassion" ready to be unleashed, although it should be said that many in the religious community responded to the disaster much quicker than the Bush Administration. In the State of the Union address, however, there was no "compassionate conservatism" for the victims of Hurricane Katrina.
Bill Berkowitz Frank Luntz calls Republican leadership in Washington 'One giant whining windbag'On the outs with the GOP, legendary degrader of discourse is moving to California He doesn't make great art; nothing he does elevates the human spirit; he doesn't illuminate, he bamboozles. He has become expert in subterfuge, hidden meanings, word play and manipulation. Frank Luntz has been so good at what he does that those paying close attention gave it its own name: "Luntzspeak."
Bill Berkowitz Spooked by MoveOn.org, conservative movement seeks to emulate liberal powerhouseFueled with Silicon Valley money, TheVanguard.org will have Richard Poe, former editor of David Horowitz's FrontPage magazine as its editorial and creative director As Paul Weyrich, a founding father of the modern conservative movement and still a prominent actor in it, likes to say, he learned a great deal about movement building by closely observing what liberals were up to in the late 1960s and early 1970s.
Bill Berkowitz Ward Connerly's anti-affirmative action jihadFounder and Chair of the American Civil Rights Institute scouting five to nine states for new anti-affirmative action initiatives Fresh from his most recent victory -- in Michigan this past November -- Ward Connerly, the Black California-based maven of anti-affirmative action initiatives, appears to be preparing to take his jihad on the road. According to a mid-December report in the San Francisco Chronicle, Connerly said that he was "exploring moves into nine other states."
Bill Berkowitz Tom Tancredo's missionThe Republican congressman from Colorado will try to woo GOP voters with anti-immigration rhetoric and a boatload of Christian right politics These days, probably the most recognizable name in anti-immigration politics is Colorado Republican Congressman Tom Tancredo. Over the past year, Tancredo has gone from a little known congressman to a highly visible anti-immigration spokesperson. "Tancredo has thoroughly enmeshed himself in the anti-immigration movement and with the help of CNN talk show host Lou Dobbs, he has been given a national megaphone," Devin Burghart, the program director of the Building Democracy Initiative at the Center for New Community, a Chicago-based civil rights group, told Media Transparency.
Bill Berkowitz Institute on Religion and Democracy slams 'Leftist' National Council of ChurchesNew report from conservative foundation-funded IRD charges the NCC with being a political surrogate for MoveOn.org, People for the American Way and other liberal organizations If you prefer your religious battles sprinkled with demagoguery, sanctimoniousness, and simplistic attacks, the Institute on Religion and Democracy's (IRD) latest broadside against the National Council of Churches (NCC) certainly fits the bill.
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