Brownie should have stayed in Massachusetts so he could have picked off Markey:
"Markey says he was unaware actions would aid firm’s rival; Letters seeking probe of Herbalife helped hedge fund" by Noah Bierman | Globe Staff, March 10, 2014
WASHINGTON — Senator Edward J. Markey said Monday that his work as a “consumer advocate’’ led him to urge federal regulators to open a fraud investigation of Herbalife and that he was unaware an activist investor who lobbied his office stood to make a profit from his actions.
The investor, William A. Ackman, has made a $1 billion investment in a “short’’ position on Herbalife stock that will pay off if the company’s stock price falls.
Related: CIA Chauffeur
No one investigating him stopping short.
The New York Times reported on Monday that Ackman had embarked on an unusual effort to push federal regulators and lawmakers, including Markey, to take action against the company.
Ackman has publicly charged that Herbalife, which sells weight management and nutritional supplements, is a pyramid scheme, something the company denies. His financial interest in seeing the company fail was made public more than a year before Markey wrote letters to federal regulators demanding a probe of Herbalife.
But Markey, a Massachusetts Democrat, said in an interview Monday that his staff did not inform him that Ackman stood to benefit financially if Markey took action.
Oh, that's weak.
Markey’s spokeswoman, Giselle Barry, as well as Ackman himself later confirmed that Markey’s staff was aware Ackman’s company would benefit. Ackman said it was the first thing he told Markey’s staff when he sat down with them for an hour in October.
“The issue itself was handled just as a consumer issue and evaluated as a consumer protection issue right from the beginning of it, right from the entirety of it,” Markey said Monday.
When asked whether his staff should have alerted him, Markey said, “I honestly believe that they were looking at it from a consumer protection perspective.”
The lying makes it worse.
Markey wrote letters in January to Herbalife, the Federal Trade Commission, and the Securities and Exchange Commission citing Massachusetts constituents who he said lost their entire life savings as a result of the company. Herbalife’s stock dropped 14 percent the day Markey sent his letters demanding a fraud investigation and has barely moved up since.
So Ackman made his money, right?
Ackman said his financial interest in the issue had deterred other elected officials from scrutinizing Herbalife.
“A lot of people that we met with were wary of getting involved because they viewed it as a Wall Street thing. What I respect about Markey is that he didn’t care that we were involved,” Ackman said. “It appears that he believes there are serious questions here and he wanted to shed sunlight on the problem.”
In a statement posted on its website Monday, Herbalife accused Ackman of orchestrating “an unfounded, relentless and fraudulent public attack on Herbalife’s business model” over a 15-month period.
“Ackman’s unprecedented campaign to destroy Herbalife has now been exposed for what it is,” the statement continued, “a cynical, self-serving attempt to manipulate the market by buying his way into an investigation to cover his own reckless $1 billion dollar bet.”
Ackman’s firm, Pershing Square Capital Management, stood by the company’s efforts.
In his letter to the SEC, Markey requested “that you investigate the company’s business practices yourself to confirm that the company is acting in accordance with federal securities laws.” The Times reported that the letters included points mirroring claims made in documents released months earlier by Ackman’s firm.
The Times reported Monday that Larry Rasky, a Democratic fund-raiser and former Markey staff member, had been hired to lobby on the issue by Pershing. Another Rasky official, Mark Horan, assisted Markey in his Senate campaign last year.
Rasky’s firm is not registered to lobby in Congress on the issue but is registered in the state of Massachusetts on behalf of Pershing. Rasky said neither he nor Horan worked on the issue and that no one in his firm lobbied federal officials.
“There has been absolutely no involvement with anyone here with Markey or his staff,” Rasky said in an interview Monday. “We have been working with community groups to identify victims of the Herbalife scheme and we have absolutely been up front with everyone we’ve talked to about Pershing Square’s profit motive.”
Rasky said his staff had been in contact with Tito Jackson, a Boston city councilor who has also urged an investigation by the FTC.
Barry also said Markey did not discuss the issue with Rasky or his firm.
Markey has not received any direct campaign contributions from Ackman. But The Times reported in January that Ackman donated $32,400 to the Democratic Senatorial Campaign Committee on April 30, the date Markey won a special election primary to replace John F. Kerry in the Senate, and that the committee donated $45,400 to Markey a month later.
Ackman said Monday that he has given donations to both parties’ political committees routinely during the past five years and that he wrote his check to the DSCC before Markey’s primary victory.
A billion will buy you a lot of influence.
Barry said Markey was not aware of those contributions until earlier this year.
"Markey says he was unaware actions would aid firm’s rival; Letters seeking probe of Herbalife helped hedge fund" by Noah Bierman | Globe Staff, March 10, 2014
WASHINGTON — Senator Edward J. Markey said Monday that his work as a “consumer advocate’’ led him to urge federal regulators to open a fraud investigation of Herbalife and that he was unaware an activist investor who lobbied his office stood to make a profit from his actions.
The investor, William A. Ackman, has made a $1 billion investment in a “short’’ position on Herbalife stock that will pay off if the company’s stock price falls.
Related: CIA Chauffeur
No one investigating him stopping short.
The New York Times reported on Monday that Ackman had embarked on an unusual effort to push federal regulators and lawmakers, including Markey, to take action against the company.
Ackman has publicly charged that Herbalife, which sells weight management and nutritional supplements, is a pyramid scheme, something the company denies. His financial interest in seeing the company fail was made public more than a year before Markey wrote letters to federal regulators demanding a probe of Herbalife.
But Markey, a Massachusetts Democrat, said in an interview Monday that his staff did not inform him that Ackman stood to benefit financially if Markey took action.
Oh, that's weak.
Markey’s spokeswoman, Giselle Barry, as well as Ackman himself later confirmed that Markey’s staff was aware Ackman’s company would benefit. Ackman said it was the first thing he told Markey’s staff when he sat down with them for an hour in October.
“The issue itself was handled just as a consumer issue and evaluated as a consumer protection issue right from the beginning of it, right from the entirety of it,” Markey said Monday.
When asked whether his staff should have alerted him, Markey said, “I honestly believe that they were looking at it from a consumer protection perspective.”
The lying makes it worse.
Markey wrote letters in January to Herbalife, the Federal Trade Commission, and the Securities and Exchange Commission citing Massachusetts constituents who he said lost their entire life savings as a result of the company. Herbalife’s stock dropped 14 percent the day Markey sent his letters demanding a fraud investigation and has barely moved up since.
So Ackman made his money, right?
Ackman said his financial interest in the issue had deterred other elected officials from scrutinizing Herbalife.
“A lot of people that we met with were wary of getting involved because they viewed it as a Wall Street thing. What I respect about Markey is that he didn’t care that we were involved,” Ackman said. “It appears that he believes there are serious questions here and he wanted to shed sunlight on the problem.”
In a statement posted on its website Monday, Herbalife accused Ackman of orchestrating “an unfounded, relentless and fraudulent public attack on Herbalife’s business model” over a 15-month period.
“Ackman’s unprecedented campaign to destroy Herbalife has now been exposed for what it is,” the statement continued, “a cynical, self-serving attempt to manipulate the market by buying his way into an investigation to cover his own reckless $1 billion dollar bet.”
Ackman’s firm, Pershing Square Capital Management, stood by the company’s efforts.
In his letter to the SEC, Markey requested “that you investigate the company’s business practices yourself to confirm that the company is acting in accordance with federal securities laws.” The Times reported that the letters included points mirroring claims made in documents released months earlier by Ackman’s firm.
The Times reported Monday that Larry Rasky, a Democratic fund-raiser and former Markey staff member, had been hired to lobby on the issue by Pershing. Another Rasky official, Mark Horan, assisted Markey in his Senate campaign last year.
Rasky’s firm is not registered to lobby in Congress on the issue but is registered in the state of Massachusetts on behalf of Pershing. Rasky said neither he nor Horan worked on the issue and that no one in his firm lobbied federal officials.
“There has been absolutely no involvement with anyone here with Markey or his staff,” Rasky said in an interview Monday. “We have been working with community groups to identify victims of the Herbalife scheme and we have absolutely been up front with everyone we’ve talked to about Pershing Square’s profit motive.”
Rasky said his staff had been in contact with Tito Jackson, a Boston city councilor who has also urged an investigation by the FTC.
Barry also said Markey did not discuss the issue with Rasky or his firm.
Markey has not received any direct campaign contributions from Ackman. But The Times reported in January that Ackman donated $32,400 to the Democratic Senatorial Campaign Committee on April 30, the date Markey won a special election primary to replace John F. Kerry in the Senate, and that the committee donated $45,400 to Markey a month later.
Ackman said Monday that he has given donations to both parties’ political committees routinely during the past five years and that he wrote his check to the DSCC before Markey’s primary victory.
A billion will buy you a lot of influence.
Barry said Markey was not aware of those contributions until earlier this year.
--more--"
"FTC to probe Herbalife after request by Markey" by Noah Bierman | Globe Staff March 13, 2014
WASHINGTON — The Federal Trade Commission will investigate the controversial vitamin company Herbalife, the company disclosed Wednesday, an action that Senator Edward J. Markey had urged in a letter to the FTC in January.
Markey was the only member of the Senate who said yes to entreaties by hedge fund executive William A. Ackman to seek an investigation of the company, which were relayed to the senator through his staff.
Ackman, who has a $1 billion bet against Herbalife and lobbied Markey and other members of Congress to take action against the company, has said most lawmakers rebuffed him because they knew he would reap a windfall if the company’s stock declined significantly.
Markey told the Globe this week that he had no idea Ackman and his hedge fund company could reap a sizeable profit from his actions. Markey’s office said he sought the probe of Herbalife because his own staff’s research had made him concerned with Herbalife’s business practices. He agreed with the hedge fund manager’s complaints that Herbalife may have victimized its sales force.
The New York Times has reported on Ackman’s effort to push federal regulators and lawmakers to take action against Herbalife.
Senator Elizabeth Warren, Markey’s fellow Massachusetts Democrat, was among those who refrained from seeking an investigation of the supplement marketing company. Warren, a newcomer to Congress, seemed to have taken a more cautious approach than Markey, whose House tenure began in 1976.
“What mattered to me is that I hadn’t yet seen all the details, and the facts are moving quickly,” Warren, who is known for her consumer activism in the financial world, said Wednesday.
Ackman has what is known as a “short” position in Herbalife’s stock, meaning his firm, Pershing Square Capital Management, will profit handsomely if the stock plummets.
Like certain airline stocks after 9/11.
For more than a year, Ackman has been in a high-stakes battle with Herbalife, trying to persuade the public and key decision-makers that the company is a pyramid scheme that preys on its sales force. Herbalife, which sells nutritional supplements, has employed its own team of lobbyists. It denies the charges....
Senator Bob Corker, a Tennessee Republican, sounded surprised that any lawmaker would have been asked to get involved.
“Somebody shorting a company? No.” Corker said Wednesday. “It’s not an issue of Senate concern, is it?”
Well, it could be!
Ackman contributed $32,400 to the general campaign fund of Senate Democrats but not directly to Markey. Ackman also retained Rasky Baerlein, a Boston-based communications and lobbying firm with close ties to Markey, to work with community groups and elected officials at the state and local level in Massachusetts. Both Markey and Larry Rasky, a former Markey staff member, said Rasky and his firm did not discuss the issue with Markey.
Markey’s staff was aware that a probe of Herbalife would have potential financial benefits to Ackman, but that information was not relayed to Markey, the senator said.
OH NO!
Markey’s spokeswoman, Giselle Barry, said Markey’s staff conducted its own research into the merits of the claims against Herbalife’s business practices, and the impact on consumers, and that Markey’s decision to send the letters would not have changed, even if he had known Ackman stood to make a profit.
She said Markey would not investigate why his staff failed to fully inform him of Ackman’s motives, nor would anyone in his office face discipline. She would not say exactly what Markey was told, which staff members provided the information, or whether Markey did any research on his own before signing the letters.
It's looking like Ed knew despite the denials!
In a statement to the Globe, Markey emphasized his decades-long commitment to consumer issues, including fights over toxic chemicals in baby bottles and the safety of General Motors vehicles that were the recent subject of recalls.
“The letters I sent earlier this year are consistent with my approach to my oversight responsibilities,” he said. “Safeguarding people in Massachusetts and on Main streets across our country has always been my focus.”
Why Markey would not have been informed of such a crucial element of Ackman’s request — his profit motive — has not been explained. What is clear is that Markey’s letter to the FTC had a big effect....
Ackman’s financial interest in driving down Herbalife stock had been the subject of attention in the financial media for more than a year, often characterized as a battle of egos between Ackman and Carl Icahn, the billionaire who became the company’s largest investor....
See: Icahnic Post
In the days before Markey’s letters to regulators targeting the company became public, there was a spike in purchases of so-called “put” options of Herbalife stock. Those options, which were the subject of a New York Times report in January, are essentially bets against the company’s stock.
Though Ackman acknowledged his lobbyists were working with Markey before the January letters to regulators went out, he said on Monday he did not get early notice that Markey was sending letters out to regulators. But the New York Times has previously reported that copies of Markey’s letters to regulators were posted on the website of Ackman’s company, Pershing, originally dated January 22, while Markey’s office sent out copies with a January 23 date. Ackman said on a conference call Tuesday that his company obtained his copies of the letters on Markey’s website, which at one point posted earlier versions of the letters.
Look at this!
Though several investors in Herbalife said privately this week that they are furious at Markey, they have declined to speak publicly, for fear of antagonizing him. It could become a political liability, though Markey, who is up for reelection this year, has not drawn significant opposition.
“Senator Ed Markey’s back-room deal-making to benefit his friends is what is wrong with Washington, D.C.,” the state GOP said in a statement. “After 35 years in Washington putting politics over people, Markey appears more concerned with lining the pockets of his donors than serving the people he works for.”
Markey has maintained that he wrote the letters as a consumer advocate. And many consumer advocates in Massachusetts, though unfamiliar with the specifics of the Herbalife imbroglio, back him up.
“Ed Markey has been a consumer advocate for the last 40 years, since he’s been in Congress, and that he has sound footing in,” said Deirdre Cummings, director of the consumer program for MassPIRG, a state group active on a number of consumer fronts. “Out of the handful of people in Congress that you can count on, people who represent the consumer side, it would be Ed Markey.”
So let's overlook political favoritism and corruption.
"FTC to probe Herbalife after request by Markey" by Noah Bierman | Globe Staff March 13, 2014
WASHINGTON — The Federal Trade Commission will investigate the controversial vitamin company Herbalife, the company disclosed Wednesday, an action that Senator Edward J. Markey had urged in a letter to the FTC in January.
Markey was the only member of the Senate who said yes to entreaties by hedge fund executive William A. Ackman to seek an investigation of the company, which were relayed to the senator through his staff.
Ackman, who has a $1 billion bet against Herbalife and lobbied Markey and other members of Congress to take action against the company, has said most lawmakers rebuffed him because they knew he would reap a windfall if the company’s stock declined significantly.
Markey told the Globe this week that he had no idea Ackman and his hedge fund company could reap a sizeable profit from his actions. Markey’s office said he sought the probe of Herbalife because his own staff’s research had made him concerned with Herbalife’s business practices. He agreed with the hedge fund manager’s complaints that Herbalife may have victimized its sales force.
The New York Times has reported on Ackman’s effort to push federal regulators and lawmakers to take action against Herbalife.
Senator Elizabeth Warren, Markey’s fellow Massachusetts Democrat, was among those who refrained from seeking an investigation of the supplement marketing company. Warren, a newcomer to Congress, seemed to have taken a more cautious approach than Markey, whose House tenure began in 1976.
“What mattered to me is that I hadn’t yet seen all the details, and the facts are moving quickly,” Warren, who is known for her consumer activism in the financial world, said Wednesday.
Ackman has what is known as a “short” position in Herbalife’s stock, meaning his firm, Pershing Square Capital Management, will profit handsomely if the stock plummets.
Like certain airline stocks after 9/11.
For more than a year, Ackman has been in a high-stakes battle with Herbalife, trying to persuade the public and key decision-makers that the company is a pyramid scheme that preys on its sales force. Herbalife, which sells nutritional supplements, has employed its own team of lobbyists. It denies the charges....
Senator Bob Corker, a Tennessee Republican, sounded surprised that any lawmaker would have been asked to get involved.
“Somebody shorting a company? No.” Corker said Wednesday. “It’s not an issue of Senate concern, is it?”
Well, it could be!
Ackman contributed $32,400 to the general campaign fund of Senate Democrats but not directly to Markey. Ackman also retained Rasky Baerlein, a Boston-based communications and lobbying firm with close ties to Markey, to work with community groups and elected officials at the state and local level in Massachusetts. Both Markey and Larry Rasky, a former Markey staff member, said Rasky and his firm did not discuss the issue with Markey.
Markey’s staff was aware that a probe of Herbalife would have potential financial benefits to Ackman, but that information was not relayed to Markey, the senator said.
OH NO!
Markey’s spokeswoman, Giselle Barry, said Markey’s staff conducted its own research into the merits of the claims against Herbalife’s business practices, and the impact on consumers, and that Markey’s decision to send the letters would not have changed, even if he had known Ackman stood to make a profit.
She said Markey would not investigate why his staff failed to fully inform him of Ackman’s motives, nor would anyone in his office face discipline. She would not say exactly what Markey was told, which staff members provided the information, or whether Markey did any research on his own before signing the letters.
It's looking like Ed knew despite the denials!
In a statement to the Globe, Markey emphasized his decades-long commitment to consumer issues, including fights over toxic chemicals in baby bottles and the safety of General Motors vehicles that were the recent subject of recalls.
“The letters I sent earlier this year are consistent with my approach to my oversight responsibilities,” he said. “Safeguarding people in Massachusetts and on Main streets across our country has always been my focus.”
Why Markey would not have been informed of such a crucial element of Ackman’s request — his profit motive — has not been explained. What is clear is that Markey’s letter to the FTC had a big effect....
Ackman’s financial interest in driving down Herbalife stock had been the subject of attention in the financial media for more than a year, often characterized as a battle of egos between Ackman and Carl Icahn, the billionaire who became the company’s largest investor....
See: Icahnic Post
In the days before Markey’s letters to regulators targeting the company became public, there was a spike in purchases of so-called “put” options of Herbalife stock. Those options, which were the subject of a New York Times report in January, are essentially bets against the company’s stock.
Though Ackman acknowledged his lobbyists were working with Markey before the January letters to regulators went out, he said on Monday he did not get early notice that Markey was sending letters out to regulators. But the New York Times has previously reported that copies of Markey’s letters to regulators were posted on the website of Ackman’s company, Pershing, originally dated January 22, while Markey’s office sent out copies with a January 23 date. Ackman said on a conference call Tuesday that his company obtained his copies of the letters on Markey’s website, which at one point posted earlier versions of the letters.
Look at this!
Though several investors in Herbalife said privately this week that they are furious at Markey, they have declined to speak publicly, for fear of antagonizing him. It could become a political liability, though Markey, who is up for reelection this year, has not drawn significant opposition.
“Senator Ed Markey’s back-room deal-making to benefit his friends is what is wrong with Washington, D.C.,” the state GOP said in a statement. “After 35 years in Washington putting politics over people, Markey appears more concerned with lining the pockets of his donors than serving the people he works for.”
Markey has maintained that he wrote the letters as a consumer advocate. And many consumer advocates in Massachusetts, though unfamiliar with the specifics of the Herbalife imbroglio, back him up.
“Ed Markey has been a consumer advocate for the last 40 years, since he’s been in Congress, and that he has sound footing in,” said Deirdre Cummings, director of the consumer program for MassPIRG, a state group active on a number of consumer fronts. “Out of the handful of people in Congress that you can count on, people who represent the consumer side, it would be Ed Markey.”
So let's overlook political favoritism and corruption.
--more--"
If he is our champion we are in a load of trouble.
"Markey may have exaggerated claims about Herbalife" by Noah Bierman | Globe Staff March 15, 2014
WASHINGTON — Some of the most compelling details cited by Senator Edward J. Markey in his recent demand for a federal investigation into the Herbalife supplement sales company came from two unnamed Massachusetts residents, including the allegation that one family had “reported that it lost $130,000, including its entire 401(k).”
The stories formed the emotional backbone of Markey’s assertion “that Herbalife’s business practices may be having a negative impact on my constituents” in a letter demanding a Federal Trade Commission investigation.
But Markey and his staff did little to check out the allegations, according to Globe interviews with the two constituents. As a result, it appears Markey provided an incomplete story of their circumstances and may have overstated the financial losses they suffered at the hands of Herbalife.
OMG!
Michael Araujo, a 60-year-old Norton resident, said the $130,000 cited by Markey is an inflated number that includes rent payments and other living expenses he incurred after he was laid off in 2010 from his job as a vice president of contract management at a bank. He said the senator’s staff relied on information provided by his wife, who did not work on the business.
“I think she exaggerates sometimes,” said Araujo, who did not speak with anyone on Markey’s staff.
That was the basis for the letter?
Herbalife announced this week that the FTC has launched an investigation into its sales practices, six weeks after Markey wrote his letter citing the plight of his constituents. Markey was the only US senator to seek action against Herbalife after an aggressive lobbying campaign by William A. Ackman, a hedge fund manager who has made a $1 billion stock-market bet that Herbalife will decline in value.
Ackman’s efforts to persuade regulators and members of Congress to investigate Herbalife were detailed by The New York Times early this week, including his efforts to identify potential victims of Herbalife sales practices and put them in touch with regulators. The Times reported that Nevada’s attorney general, Cortez Masto, declined requests from Ackman representatives and community groups to investigate the company because they could not produce any people who had been victimized.
Markey avoided a Globe reporter seeking an interview request for this article in a Capitol hallway — agreeing to sit down for an interview and then retreating to a back office.
That doesn't look good.
His spokeswoman, Giselle Barry, said in a statement, “In conducting oversight, the senator always is mindful of the feelings of victims and whistle-blowers, and the courage necessary to come forward and shine light on potential wrongdoing by powerful corporations.”
Yeah, that $hould end the di$cu$$ion!
******************
The second Markey constituent involved with Herbalife is a Walpole woman who did not wish to be identified by the Globe. In an interview, she said she lost about $300 on Herbalife before she quit the program. Markey’s letter said she was pressured to recruit family members as sales agents for Herbalife, but he made no mention of the small financial loss suffered by the woman.
The woman said in an interview that she joined Herbalife about five or six years ago. She said she had never heard from Ackman or his representative and does not know how Markey’s office got her name.
Markey said in his letters to regulators that the woman “was encouraged to stay in the program even after she wanted out.”
In the Globe interview, the woman said she never asked for a refund of her $300 from Herbalife, because “I just chalked it up as being stupid and gullible.”
A Herbalife spokesman, when contacted by the Globe this week, said the Araujo family spent the $7,000 on Herbalife products over a 14-month period and never sought a refund.
Araujo said the most damaging costs were the thousands of dollars he spent buying sales leads, for $128 per contact, and other products and services he said he was pressured to purchase through the company’s network of sales people. Many of these additional expenses are the basis for accusations that the company is a pyramid scheme, which Herbalife denies....
Sounds like an Amyway program.
--more--"
More deep water for Markey:
"Senate agrees to cap on flood insurance hikes" by Kimberly Railey | Globe Correspondent March 13, 2014
WASHINGTON — The Senate on Thursday passed a bill to roll back steep increases in flood insurance premiums, clearing the way for President Obama to sign the measure into law.
The legislation, approved 72 to 22 in a bipartisan majority, would cap rate increases at 15 percent of the average policy in a flood zone, or 18 percent for any single policy, providing some relief to hundreds of thousands of property owners who had been facing far larger increases, including tens of thousands in Massachusetts.
The White House has offered no indication it would veto the measure, which sailed through in the House 306 to 91 last week.
See: House approves bill to ease flood insurance hikes
The effort to ease the insurance rate hikes has been pushed most strongly by lawmakers representing coastal states, where a 2012 law led to dramatic increases in premiums for many residents.
“We did a good thing for coastal America but the flood issue is an issue in all 50 states,” Said Senator Johnny Isakson, a Republican from Georgia.
The legislation would block sharp rate hikes from being applied to properties that would fall under a set of new, official flood maps....
The Senate vote drew support from both sides of the aisle, uniting Democratic Senators Edward J. Markey and Elizabeth Warren of Massachusetts with Republican Senators Marco Rubio of Florida and David Vitter of Louisiana.
Related: Light Lunch
They flipped on it.
Opponents said scheduled rate hikes should remain in place to promote the sustainability of the cash-strapped federal flood insurance program, which is nearly $24 billion in debt.
“I’m for causing these programs to pay for themselves, and I just didn’t want to undo the reforms that we had put in place not long ago,” said Senator Bob Corker, a Republican from Tennessee....
Eat $hit, Bob.
--more--"
If he is our champion we are in a load of trouble.
"Markey may have exaggerated claims about Herbalife" by Noah Bierman | Globe Staff March 15, 2014
WASHINGTON — Some of the most compelling details cited by Senator Edward J. Markey in his recent demand for a federal investigation into the Herbalife supplement sales company came from two unnamed Massachusetts residents, including the allegation that one family had “reported that it lost $130,000, including its entire 401(k).”
The stories formed the emotional backbone of Markey’s assertion “that Herbalife’s business practices may be having a negative impact on my constituents” in a letter demanding a Federal Trade Commission investigation.
But Markey and his staff did little to check out the allegations, according to Globe interviews with the two constituents. As a result, it appears Markey provided an incomplete story of their circumstances and may have overstated the financial losses they suffered at the hands of Herbalife.
OMG!
Michael Araujo, a 60-year-old Norton resident, said the $130,000 cited by Markey is an inflated number that includes rent payments and other living expenses he incurred after he was laid off in 2010 from his job as a vice president of contract management at a bank. He said the senator’s staff relied on information provided by his wife, who did not work on the business.
“I think she exaggerates sometimes,” said Araujo, who did not speak with anyone on Markey’s staff.
That was the basis for the letter?
Herbalife announced this week that the FTC has launched an investigation into its sales practices, six weeks after Markey wrote his letter citing the plight of his constituents. Markey was the only US senator to seek action against Herbalife after an aggressive lobbying campaign by William A. Ackman, a hedge fund manager who has made a $1 billion stock-market bet that Herbalife will decline in value.
Ackman’s efforts to persuade regulators and members of Congress to investigate Herbalife were detailed by The New York Times early this week, including his efforts to identify potential victims of Herbalife sales practices and put them in touch with regulators. The Times reported that Nevada’s attorney general, Cortez Masto, declined requests from Ackman representatives and community groups to investigate the company because they could not produce any people who had been victimized.
Markey avoided a Globe reporter seeking an interview request for this article in a Capitol hallway — agreeing to sit down for an interview and then retreating to a back office.
That doesn't look good.
His spokeswoman, Giselle Barry, said in a statement, “In conducting oversight, the senator always is mindful of the feelings of victims and whistle-blowers, and the courage necessary to come forward and shine light on potential wrongdoing by powerful corporations.”
Yeah, that $hould end the di$cu$$ion!
******************
The second Markey constituent involved with Herbalife is a Walpole woman who did not wish to be identified by the Globe. In an interview, she said she lost about $300 on Herbalife before she quit the program. Markey’s letter said she was pressured to recruit family members as sales agents for Herbalife, but he made no mention of the small financial loss suffered by the woman.
The woman said in an interview that she joined Herbalife about five or six years ago. She said she had never heard from Ackman or his representative and does not know how Markey’s office got her name.
Markey said in his letters to regulators that the woman “was encouraged to stay in the program even after she wanted out.”
In the Globe interview, the woman said she never asked for a refund of her $300 from Herbalife, because “I just chalked it up as being stupid and gullible.”
A Herbalife spokesman, when contacted by the Globe this week, said the Araujo family spent the $7,000 on Herbalife products over a 14-month period and never sought a refund.
Araujo said the most damaging costs were the thousands of dollars he spent buying sales leads, for $128 per contact, and other products and services he said he was pressured to purchase through the company’s network of sales people. Many of these additional expenses are the basis for accusations that the company is a pyramid scheme, which Herbalife denies....
Sounds like an Amyway program.
--more--"
More deep water for Markey:
"Senate agrees to cap on flood insurance hikes" by Kimberly Railey | Globe Correspondent March 13, 2014
WASHINGTON — The Senate on Thursday passed a bill to roll back steep increases in flood insurance premiums, clearing the way for President Obama to sign the measure into law.
The legislation, approved 72 to 22 in a bipartisan majority, would cap rate increases at 15 percent of the average policy in a flood zone, or 18 percent for any single policy, providing some relief to hundreds of thousands of property owners who had been facing far larger increases, including tens of thousands in Massachusetts.
The White House has offered no indication it would veto the measure, which sailed through in the House 306 to 91 last week.
See: House approves bill to ease flood insurance hikes
The effort to ease the insurance rate hikes has been pushed most strongly by lawmakers representing coastal states, where a 2012 law led to dramatic increases in premiums for many residents.
“We did a good thing for coastal America but the flood issue is an issue in all 50 states,” Said Senator Johnny Isakson, a Republican from Georgia.
The legislation would block sharp rate hikes from being applied to properties that would fall under a set of new, official flood maps....
The Senate vote drew support from both sides of the aisle, uniting Democratic Senators Edward J. Markey and Elizabeth Warren of Massachusetts with Republican Senators Marco Rubio of Florida and David Vitter of Louisiana.
Related: Light Lunch
They flipped on it.
Opponents said scheduled rate hikes should remain in place to promote the sustainability of the cash-strapped federal flood insurance program, which is nearly $24 billion in debt.
“I’m for causing these programs to pay for themselves, and I just didn’t want to undo the reforms that we had put in place not long ago,” said Senator Bob Corker, a Republican from Tennessee....
Eat $hit, Bob.
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