Tuesday, January 31, 2006

DeVos Has Questionable Ties to Enron

Oh, oh, Dicky has some splaining to do. According to Michigan Liberal, "as the lawsuit involving former Enron pyramid scheme chairman Ken Lay gets underway in Dallas today, the Michigan Democratic Party reveals new revelations regarding Enron's connection to then-Amway pyramid scheme head Dick DeVos:
LANSING- Today Michigan Democratic Party Chair Mark Brewer disclosed GOP gubernatorial candidate Dick DeVos' questionable business ties with Enron. While DeVos was president of Amway, the company collaborated with Enron during the California energy crisis by selling Enron electricity door to door. Enron's illegal conduct has returned to the public eye, as jury selection begins today in the civil suit involving Enron founder Ken Lay and CEO Jeff Skilling for allegedly lying about their company's health while selling half a billion dollars of their own stock.

"As the Enron trial begins, it is important to examine Dick DeVos' and Amway's questionable ties to Enron during California's energy crisis," said Brewer. "DeVos must explain to the people of Michigan his dealings with Enron and prove that he and Amway did not profit from Enron's illegal manipulations of electricity sales in California."

Enron started manipulating California's electricity market a month after it was deregulated in 1998, according to internal documents and phone transcripts, reported in the San Francisco Chronicle. Enron's manipulation of California markets coincided with Amway's 140,000 California distributors peddling "Electricity by Enron" on doorsteps throughout the state. Amway took a percentage of the profit for each sale they made on behalf of Enron. Enron profited at least $1.6 billion during California's energy crisis by exploiting the state's deregulation plan. Last summer Enron agreed to a $1.52 billion settlement over its role in California's energy crisis.

"DeVos' ties to Enron and Ken Lay are just the latest example of Dick DeVos' questionable business ethics," said Brewer. "Is there any business scheme that DeVos will say 'no' to?" asked Brewer. "He made a profit on the backs of the Michigan workers he laid off and he collaborated with Enron during its rip-off of California consumers. Has Dick DeVos no shame?

Click here to read a report from the San Francisco Chronicle and other articles relating to Enron and Amway.

7 comments:

Anonymous said...

I would seriously suggest actually thinking about and understanding things instead of blindly parroting the party line by re-posting MDP press releases.

Here's a quote to the one article in there that refers to Amway:

"Amway has 140,000 representatives in California who currently call on friends, neighbors and business associates to sell not only Amway products, but also MCI telephone service, travel on Northwest Airlines, other travel services and voice messaging."

So it seems that
Trying to say that by selling power (which last time anyone checked is a perfectly legal and proper thing to do) somehow "TIES AMWAY/DEVOS TO ENRON" is disigenuous, lying, manipulative, and ultimately contemptible. The Enron scandal was about executives that fabricated profits and fleeced shareholders, and has nothing whatsoever to do with Amway selling power brokered by Enron. Do you rent movies at Blockbuster? Did you know that BLOCKBUSTER HAS QUESTIONABLE TIES TO ENRON? Enron was a gigantic company that dealt with hundreds, if not thousands of other companies. To try and create guilt by association Try looking things up, instead of just reposting the latest talking points fed to you.

k said...

I just watched Enron: The Smartest Guys in the Room. I can't believe the lengths that the executives went to in the name of greed. I would highly recommend the movie for anyone who would like to get in depth information about the case before the trial. It was also just nominated for an Oscar.

Kathy said...

Anonymous, I'm not simply parroting the party line - I'm throwing out information as I come across it so people can read it and make up their own minds.

However, DeVos has many associations that lead people to question his honesty and integrity. You brought up the fact that Amway also sold MCI phone service. MCI and Worldcom merged in 1998 and became MCI/Worldcom. I find it curious that Amway happened to team up with the two companies involved in the world's largest business frauds.

I could send readers to scores of links critical of Amway, DeVos and their ties to the GOP, but for the sake of brevity I'll let Molly Ivins state my case from her 1997 column:

My favorite tax break in the new budget package is worth $283 million to one corporation: Amway. The company and its top leaders have contributed at least $4 million to the Republican Party during the past four years, so that's a $4 million investment in campaign contributions with a $283 million payoff for Amway.

That's quite a deal; that's better than 70 times your money back. Wall Street may be flying high, but Wall Street can't offer anything like the payoffs people get playing the political system instead of the stock market.

The payoff for Amway was not in the original House or the Senate version of the tax bill. House Speaker Newt Gingrich intervened at the last minute to help get the special tax break inserted in the bill.

Of course, it helps that Amway has its own caucus in Congress. Yes, the Amway caucus. 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.

House Majority Whip Tom DeLay, a onetime Amway salesman, also remains close to the company. `Mother Jones' magazine, which has followed Amway's shenanigans closely, reported last fall that Myrick owes her election to the company -- almost half of her total campaign funds came from Amway people.

The company has a curious corporate culture. It was under investigation for 10 years by the Federal Trade Commission as a pyramid scheme. It looks like a pyramid scheme, acts like a pyramid scheme and smells like a pyramid scheme, but according to the FTC, is not a pyramid scheme. It is, however, rather cultlike and extremely active politically, always in the conservative and Republican causes...


Guilt by association? Like I said at the beginning of my post, Dicky has some splaining to do.

Kathy said...

K, thanks for the tip on the movie. I'll have to make a point to catch it. Roger Ebert gave it a good review and said regardless of your political views the movie would make you made. He called it a crime story, which sounds pretty accurate to me.

Kathy said...

Oops, I meant to type the movie would make you mad - not made!

Anonymous said...

Still nothing but guilt by association in pursuit of cheap political points. Again, MCI Worldcom was about executives making up profits and fleecing shareholders, and had nothing whatsoever to do with Amway selling phone service. Using those same standards of guilt by association, you could say that every single grocery store, convenience store, and otherwise that sold simple plastic MCI phone cards has questionable ties to MCI. And while we're at it, why don't we say that every single television station that carried commercials for Enron's electricity has questionable ties to Enron. Or maybe every magazine Enron advertised in? Or maybe every airline or car rental company Enron had a special corporate deal with? Do you see how silly it quickly becomes? MCI and Enron were huge companies that dealt with millions of individuals and hundreds, if not thousands of companies. Spare the righteous indignation that calls for "splaining"--there is no there, there.
As for the Ivins column, the fact is that the tax code as it stood encouraged (through specific modes of taxation) companies like Amway to manufacture offshore--something that you would no-doubt agree is bad thing. It was not a custom made "tax break" for Amway--it was a change in the tax code that stopped punishing companies for manufacturing in the US and exporting goods from here.
Oh, and the actual bill? It was voted for and supported by Carl Levin, and signed into law by President Clinton. That's pretty interesting if it was a "special tax break" that was "bought" by "at least $4 million to the Republican Party."
As for the "pyramid scheme" slur at the end of the Ivins column, it bears little response other than to say that Amway--along with Avon, Mary Kay, and a host of other direct selling companies--is a perfectly legal, honorable, and responsible enterprise. After the conclusion of the FTC investigation, Amway became the standard against which other direct selling and multi-level companies were measured. Have Amway people said and done weird things? There is little denying that. But the fact is that Amway distributors are not employees of Amway and they instead operate their own businesses in the ways they see fit. Amway is a framework within which they work, nothing more. To continually slur Amway as a whole is offensive and harmful to one of the largest businesses and employers in the State of Michigan. And Michigan is desperately in need of businesses and employers, on this point we would most likely agree. Although when it comes down to it, I think that your actual interest in business and employment in Michigan pales drastically next to your desire to score cheap political points.

Kathy said...

Anonymous, I noticed from your IP address that you don't even live in Michigan so I wonder about your motives. Are you one of the Google bombers Quixtar once hired? Are you a Quixtar IBO? I could understand why you want to defend the company if you sell their products, and I would expect you to be loyal.

However, let me defend my reasoning on why I feel DeVos is a bad fit for Michigan. You said: To continually slur Amway as a whole is offensive and harmful to one of the largest businesses and employers in the State of Michigan.

Amway is not one of the largest businesses and employers in the State of Michigan: "By 1997, when 70% of Amway's sales were overseas, 5,300 of the company's 14,000 employees were in Michigan. Today, Alticor has about 13,000 employees worldwide, including 3,927 in Michigan and 721 in other U.S. locations, said DeVos spokesman John Truscott." - (Detroit Free Press, July 19, 2005).

Healthcare employs the most people in Michigan, followed by the automotive sector and agriculture.

You also said "you could say that every single grocery store, convenience store, and otherwise that sold simple plastic MCI phone cards has questionable ties to MCI."

A grocery store or convenience store is not a pyramid. Their employees earn wages and benefits for work performed, and the employees do not have to first buy the product from the vendor and then resell it. Your comparison is mixing apples and oranges.

How many jobs has DeVos created that paid a steady, hourly wage? How many of those jobs provided health insurance and other benefits? Those are the types of jobs we need in Michigan.

Anyway, you're welcome to your opinion, but I'm not comfortable with DeVos and the ties he has to DeLay, Gingrich, etc., and I'm not comfortable with any person or business who seeks to buy favors by throwing millions of dollars at a person or party. Money has corrupted our system and DeVos is part of the system.

This has nothing to do with partisanship either. I voted for Engler twice, and I'm not 100% comfortable with Granholm, but I won't vote for a person who has financial ties and personal relationships with some of the most corrupt people Washington has seen in years.