Sunday, January 28, 2018

Pyramid Schemes, Congress And Deregulation


Even the phrase "multilevel marketing" sounds a lot better than "pyramid scheme," let alone "Ponzi scheme." Even "multilevel marketing scheme" sounds vaguely better than "pyramid scheme." But pyramid schemes are often illegal and, somehow multilevel marketing schemes are usually not. The Federal Trade Commission differentiates between legitimate multi-level marketing (MLM) companies and pyramid schemes claiming that MLM "have a real product to sell" while pyramid schemes don't. "If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s probably not. It could be a pyramid scheme. Pyramid schemes however "may purport to sell a product, but they often simply use the product to hide their pyramid structure." According the the FBI, "Pyramid schemes—also referred to as franchise fraud or chain referral schemes-- are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses."

Late in 2016 John Oliver's Last Week Tonight video up top tackled the problem-- the annual 36 billion dollar problem-- and specifically called out Mary Kay, Ronan + Fields, Nu Skin, Amway, Herbalife, Vemma, Advacare, and Max International. So how do they get away with it? Congress, of course. These pyramid scams by fealty from lots of members of Congress-- and not just most the notorious crook of all (Orrin Hatch, who might as well be on the board of Herbalife) but loads of congressmembers from both parties. Conservative Democrat Raul Ruiz (Palm Springs), for example, took $12,700 in bribes from Herbalife in 2014 and another $6,400 in 2016. Just in those two cycles, every shady member of Congress was on the Herbalife gravy train for thousands of dollars, from Tony Cardenas (D-CA), Ben Ray Lujan (D-NM) and Juan Vargas (D-CA) to Marsha Blackburn (R-TN), Mimi Waters (R-CA) and Virginia Foxx (R-NC). In 2016 Mary Kay showed big cash onto Hillary Clinton and a shit-load of Texas crooked congressmembers:
Pete Sessions (R)- $11,100
Will Hurd (R)- $9,100
Michael Burgess (R)- $7,700
Marc Veasey (D)- $7,250
Kevin Brady (R)- $5,400
Randy Weber (R)- $5,000
In the 2016 cycle alone, Mary Kay gave Republicans $192,119 and gave Democrats $40,896. Amway gave even more-- in 2016 $792,653 tp Republicans and $14,893 (following $638,000 to Republicans and $1,500 to Democrats in 2014). Who got the big bucks from Amway, one of the worst of the pyramid scams? The 10 worst still in the House (just in 2016):
Tim Walberg (R-MI)- $34,400
Justin Amash (R-MI)- $22,655
Mike Bishop (R-MI)- $22,200
Bill Huizenga (R-MI)- $21,600
Paul Ryan (R-WI)- $21,400
Kevin McCarthy (R-CA)- $10,400
Fred Upton (R-MI)- $10,400
Martha McSally (R-AZ)- $10,100
Liz Cheney (R-WY)- $8,100
John Moolenaar, (R-MI)- $8,000
Amway gives mostly to Senators and Senate candidates though. Their biggest investments in 2016 were for Todd Young (R-IN-- $83,000), Marco Rubio (R-FL-- $61,400) and Joe Heck (R-NV)-- $37,100). And they gave widely to presidential candidates: Jeb Bush ($18,900), Scott Walker ($13,500), Hillary Clinton ($9,047), Carly Fiorina ($8,100), Señor Trumpanzee ($7,242) and John Kasich ($5,400).

They pay off everybody... but especially Republicans. That's the reason why strong regulations protecting consumers are so crucial and-- of course-- that's the reason why Republicans (and crooked conservative Democrats-- primarily Blue Dogs and New Dems) are so eager to abolish regulations that protect consumers and protect society. It's not that complicated. Did you send that John Oliver video to 10 friends? Go ahead.

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