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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 RESEARCHno author Media Matters Action Network acquires MediaTransparency.org from Cursor, Inc.Today, Media Matters Action Network and Cursor, Inc. jointly announced the sale of Cursor, Inc.'s website MediaTansparency.org to Media Matters Action Network. Together they released the following statements:
Bill Berkowitz BornAliveTruth.org plays loose with the facts in targeting ObamaHead of anti-abortion group claims Obama 'supports infanticide' Two weeks ago, BornAliveTruth.org, an anti-abortion group headed by Jill Stanek, launched a major attack on Sen. Barack Obama with a very personal and heart-wrenching television advertisement aimed at the voters in the toss-up states of New Mexico and Ohio. The ad, which according to Stanek cost the organization $338,000 to run -- in addition to what it is paying its public relations firm, CRC Public Relations -- was titled "The Gianna ad," and features Gianna Jesson, who is identified as an "Abortion Survivor."
Bill Berkowitz PAC manOur Country Deserves Better PAC aims to 'define' Obama's 'weaknesses' and make him 'an unacceptable choice to serve as our nation's next president and Commander in Chief' He maintains that the newly-launched anti-Obama political action committee is not tied, nor related, to the campaign of Sen. John McCain and that it is not out to Swiftboat Sen. Barack Obama. The PAC intends to "define [his] weaknesses as a candidate, and thus make him an unacceptable choice to serve as our nation's next president and Commander in Chief." One of the group's earliest fundraising pitches, posted at the TownHall Spotlight, is titled "Barack Obama Sinks To A New Low." And among its ready-for-prime-time television advertisements are spots titled, "Obama Mocks America's Christian Heritage," "Obama's Patriotism Problems" and "Obama's Wrong Values."
Bill Berkowitz Freedom's Watch smearing Democratic Congressional candidates with false robo-calls'Shady soft money group' going after Senate and House seats Early last month the Republican lobbying group Freedom's Watch (FW) launched a series of television and radio advertisements criticizing congressional Democrats for going on vacation instead of staying in Washington and dealing with energy legislation. One ad urged supporters to "Tell Mark Udall," the Colorado Democratic Congressman now running for a Senate seat, "to show up to work and start fixing Colorado's energy crisis."
Bill Berkowitz Republicans resurrecting Jeremiah Wright as campaign issueConservative philanthropy funded Media Research Center astonishingly claims news networks held collective tongues on the Wright affair In 1962, two years after losing the presidency to John F. Kennedy, Richard M. Nixon ran and lost the governor's race in California. At a post-election press conference, Nixon famously told reporters that they wouldn't "have Richard Nixon to kick around any more, because, gentlemen, this is my last press conference." It wasn't. He won the presidency in 1968, escalated the Vietnam War, was re-elected in 1972, and two years later he was forced to resign in disgrace over the Watergate Affair.
Bill Berkowitz David Bossie's big playIt won't be a post-Labor Day blockbuster or win critical acclaim, but Bossie's Citizens United is rolling out 'Hype: The Obama Effect,' an anti-Obama documentary that aims to make waves Regnery has published a major anti-Obama book -- David Freddoso's "The Case Against Barack Obama: The Unlikely Rise and Unexamined Agenda of the Media's Favorite Candidate" -- and 2004 Swiftboater Jerome Corsi has written his -- "The Obama Nation: Leftist Politics and the Cult of Personality." All sorts of folks are peddling anti-Obama t-shirts, mugs, bumper stickers and more. Now it's David Bossie's turn for a big politico/merchandizing play.
Bill Berkowitz Defining Obama 24/7Conservatives try to make presidential race about Democratic nominee, painting him as unreliable As Senators Hillary Clinton and Barack Obama trekked toward the final Democratic primaries, and it looked inevitable that Obama would be the Democratic Party's presidential nominee, conservative pundits and cable television talk-show hosts, a host of blogs, and a number of newly formed organizations began intensifying their attacks on Obama, embarking on the early stages of one of Karl Rove's most effective political strategies: Directly attack the opponent's strengths. In the case of Obama, this means turning his very popularity into a negative, defining him as effete and more interested in celebrity before the Democrat can introduce and define himself to the larger nation.
Bill Berkowitz Anti-gay politics continues to drive Don Wildmon's American Family AssociationCalifornia's Proposition 8 draws big-buck supporters, while Wildmon declares that outcome of 'culture wars' depends on turning back gay marriage Two different -- yet ultimately interlinked -- issues relating to the "homosexual agenda" are agitating the folks at the Tupelo, Mississippi-based headquarters of Donald Wildmon's American Family Association (AFA) these days. One is your basic AFA-sponsored boycott; the other, according to Wildmon, will determine the final outcome of America's "culture wars."
Bill Berkowitz A president desperately seeking a legacyGeorge W. Bush goes back to touting 'compassionate conservatism' and the 'successes' of his faith-based initiative In 2004, at the annual White House Correspondents Dinner, President Bush's contribution to the evening's entertainment was his narration of a slide show that pictured him looking around the Oval Office for weapons of mass destruction. In one of the shots, Bush is looking under some furniture and remarked: "Those weapons of mass destruction have got to be here somewhere."
Bill Berkowitz 'Battling for America's Soul'The American Society for the Defense of Tradition, Family and Property leaps headlong into the showdown over same-sex marriage in California They've been around for more than 30 years; trace their roots to a Brazilian anti-communist dissident Catholic; wear colorful outfits during their protests on college campuses; and apparently have enough spare change to fund three 4,000+ word simultaneously-placed advertisements in three national dailies.
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