Note: Phil Kerns' also wrote a book called People's Temple, People's Tomb; it is about the Jim Jonestown Cult and the mass suicide. Phil quit the cult before the move to Guyana. He lost his sister and mother in the mass suicide. Some years later his co-writer and friend Doug Wead (Amway Diamond, and spiritual advisor to President's Bush) sponsored Phil and his wife into Amway with the hope that Phil would write a pro-Amway book and speak at many functions. Doug made it clear that there was much money to be made from selling books, among other tools. Phil took the high road and quit Amway and wrote Fake It Til You Make It. Appearances on Donahue show with the Rich Devos followed, as well as the infamous 60 minutes segment on Amway.
FAKE IT TIL YOU MAKE IT
DEDICATED TO VICTORIA WHO HAS ALWAYS BEEN AN INSPIRATION IN MY LIFE
This incredible story is true. These pages unfold well-guarded secrets of Amway Corporation's "Winner's Circle." It is an account of over one million distributors, many of whom are considered to be carbon copies of the corporation's curators, Jay VanAndel and Rich DeVos. The sheer numbers of this group draw politicians like Ronald Reagan, Gerald Ford and Jesse Helms. This massive worldwide corporation has over the years become a haven for professional singers and motion picture stars. It has not been uncommon for pastors, evangelists and gospel singers to trade their humble flocks for sheep of a different kind.
Amway has been frequently called a "rags to riches" corporation, which was pulled up by its bootstraps in 195 9and now in 1982 proudly exceeds the $1.4 billion mark in retail sales. Although impressions of the mechanics of the company will be described from time to time, the focal point of the story is directed towards the distributors themselves and the Amway Distributors Association of America, a separate non-profit entity. The issue in this book is not the Corporation and not SOAP, but rather distributors who have a mission and a hope, a dream. Their mission is to sponsor others and their hope and dream is to build a financial empire. To many of the distributors, no price is too great to pay in order to achieve this mission and this dream. One will discover in reading through these pages that there is indeed, a price to be paid--to a "hidden" business carefully concealed behind the infrastructure of Amway's hierarchy. It is a multi-million dollar enterprise, cleverly designed and fueled by excitement and hero worship.
Some have said that this "ghost" system of "non-Amway" produced materials has created a massive surge of grabby avariciousness from many of the top leaders, much more today than ever before. Other distributors complain that this selfishness is destroying the credibility of their own businesses, and they feel that if this display of outlandish coveting continues, it may inevitably destroy their own personal enterprises.
The complaints I have heard are endless. They include everything from outright lying to prospective distributors to even exalting leaders as prophets of God. I have compiled reams of information and interviewed hundreds of distributors all across the nation and abroad concerning Amway's distributor organization.
Th is story would not have been possible without the courageous and outspoken contributions made by people in Amway, some of whom are mentioned within the pages of this book. Some of these individuals, today, are still Amway distributors operating successful businesses! They have vehemently protested the cult-like tactics used by certain leaders in Amway. In their official complaints, they have cited harassment, character assassination and religious fanaticism--all of these tactics used to peddle huge volumes of products not related to Amway.
This book also contains my own personal experiences in the Amway business. Included is my association and subsequent recruitment by two of Amway's most highly acclaimed distributors. The names of these distributors and others have been concealed.
Places and characteristics also have been changed. If you see names of famous persons you recognize, it is because they are peripheral and not key in nature. My full intention in writing this book is not to tear down but rather to help open the eyes of many persons who are being deceived.
Therefore, I believe it is justifiable to say that this is not a "classic mudraker." Instead it is two years of carefully documented affidavits, letters, notes and tape recordings uncovering this mysterious and very lucrative "ghost" system within Amway's legitimate enterprise.
In Amway's own Corporate Compendium an unusual question is asked in bold italics, "is Amway a Religious or Political Cult?" Never before have I seen such a question in any corporate literature. Could it be that they too, are beginning to feel the stress of a distributorship organization out of control, thereby possibly apologizing for the actions of those within its very own ranks?
This is mystery. It was designed to be a valuable spiritual handbook to assist you in making a more objective decision--whether you are already in the ranks or considering subscription to this organization.
LEVELS OF ACHIEVEMENT
The year 1981 was a time of fury. Our nation was staggered by the shooting of President Reagan, and the entire world cringed when Pope John Paul 11 was gunned down in Rome. Millions of Americans watched from the protection of their living rooms as hails of bullets smashed through Anwar Sadat's reviewing stand. It was a bitter year of turmoil for Poland, El Salvador and the Middle East. West Europeans marched for peace as Libya's Muammar Kaddafi terrorized the world with his threats.
Somehow through all of the pandemonium in the world, pomp still proved to be glorious when Prince Charles and Lady Diana exchanged their wedding vows. Millions watched with childlike fascination as this procession of royalty fulfilled this once glorious nation's traditional dream.
Another event of international prominence to catch the attention of the public's eye was the dedication of the magnificently restored Amway Grand Plaza Hotel in Grand Rapids, Michigan. The registration list for this gala event revealed 600 prominent guests. Some of the most notable persons to be invited included President and Mrs. Ronald Reagan, former President and Mrs. Gerald R. Ford, Vice President and Mrs. George Bush, President Jose Portillo of Mexico, Prime Minister Pierre Trudeau of Canada, former President Valery Gisgard d'Estaing of France, Foreign Minister Sunao Sonada of Japan and Ho1lywood's acclaimed Bob Hope.
It was a grand affair of elegance and nobility. During the early evening hours on the night of the dedication, security officers directed traffic for dozens of limousines, each struggling for a place in which to deposit its distinguished guests. It was an exquisite parade of the elite and well-to-do. Each was being escorted into this newly renovated building which was previously known as the Old Pantlind Hotel. Inside the scene was breathtaking. The vaulted ceilings gleamed with approximately one million square inches of hand applied gold leaf. Richly polished mahogany paneling provided resonance for the newly painted decor. Prisms of light shot about the expansive rooms, bouncing from one luxuriant chandelier to another. Bouquets of fragrantly scented flowers added an aroma of paradise to the surroundings.
This event would be historically noted as a week of splendor never to be forgotten. Here under one roof had gathered many of the world's most well heeled and opulent leaders. All of this international socializing would not have been possible without a "Dream". This "Dream" began in the minds and hearts of Amway's founders, Rich DeVos and Jay VanAndel. The entire vision was the product of two determined entrepreneurs. They had built an empire, and it was now time to enjoy the prestige and fruits of their labors.
In looking across the expanses of the world, millions of determined entrepreneurs can be found. They may be seen pushing a sandwich cart in New York or even selling ash from the eruption of Mt. St. Helens. Determination and creativity are the two vital ingredients necessary to propel these daring and ambitious tradesmen on towards success.
Each has probably chosen to ignore the circumstances, which constantly surround and threaten him with extinction. Usually his pride or bravado catapults him beyond all obstacles, thus proving to all unbelievers that he is, in fact, a doer! All scoffers are put to open shame by his ability to achieve, and excel.
Of course, no tall businessmen will produce with the same degree of vigor and enthusiasm. Some look to the trade as a mere livelihood, while others see the market place as a very competitive battleground where there can only be "winners" and "losers." The Amway distributor, like many other entrepreneurs, has much determination. However, uniquely apart from most other businesses, this business requires little "creativity." "That's the beauty of the business," some distributors will tell others. All the groundwork has all ready been laid. One only has to remember four things: Setup a meeting, go to a meeting, recruit someone at the meeting and set up another meeting. It is as simple as that!
Or is it? After several months in the business, I found that it was not as easy as I had been led to believe. In fact, there was a price, which I personally had to pay when selling the "Dream." This price was less time with my family and a deficit in my checking account!
After leaving Amway myself and during the course of my investigation into the very depths of this company, I met Michelle. She is an attractive young blonde who works for a very active inner city Christian ministry in Portland, Oregon.
She explained to me how she had been approached about Amway by Larry, a close friend whom she had known for several years. One day at work Larry came by. Michelle was shocked to see him wearing a suit. "He never wears a suit, not even to church!" she thought to herself.
"Michelle, "Larry stammered, "I've gotten into my own business, and I'd like you to come over tomorrow night so I can tell you all about the opportunity! How about it?" "What kind of business is it?" Michelle asked.
"Just come to my house and you will find out" Michelle pressed for more information but was unsuccessful.
She then remembered talking to a girl friend that had complained about some of the tactics that certain Amway distributors had used to get her to go to a meeting. Michelle sensed the possibility that this might be such a ploy and so the asked Larry, "Is it Amway?"
Larry hesitated, smiled and then exclaimed, "No, it's just a great business opportunity. How about us getting together, and I'll tell you all about it?" She agreed to attend the meeting the following night. Michelle arrived promptly at 7:30 p.m. After Larry had lectured for an hour and a half about the fantastic opportunities the business had to offer with the possibility of earning an income to match one p s dreams, one fellow finally asked, "What is this business called?" Larry replied eagerly, "The American Way!" "Oh, you mean Amway!" the man concluded. Michelle was devastated. "How could Larry have lied to me!" she thought. Something strange seemed to have gotten a hold of her friend. For months everywhere he went he carefully concealed the name Amway in an attempt to recruit others into this organization.
"I felt used I" Michelle exclaimed to me. "When I tried to talk to Larry about it, he just wouldn't listen. Because I didn't join, he felt I was a loser and that my way of thinking was totally negative. The only thing he would talk about whenever I saw him was his Amway business, even at church! This business has really affected our relationship. Our friendship has never been the same."
Another girl, whose name was Jessie, related to me her experience with this business. She told me how one day some of her old Schoolmates from a Bible college in California had called her" out of the blue. "These friends, now married and living in Central Oregon, were very anxious to get together with Jessie and seemed more than willing to make the long drive over the Cascade Mountains to
Portland, Oregon, to see her. Jessie eagerly looked forward to an evening of reminiscing and fellowship with these friends. She was, indeed, very disappointed when she found out that the reason these guests had driven hundreds of miles was to try to sponsor her in to the Amway business.
Michelle's and Jessie's stories are not unique. For the past two years, I have carefully collected dozen of stories similar to theirs-- only the names and places have changed. But let's go a step further. I have also discovered that thousands, like Larry, have eventually dropped out of this business. In fact, more than 50 percent of the total distributors quit in any given year. I'm sure that they felt like failures, and that is understandable. Most sales companies reward only those who produce results. The evidence shows that the vast majority of Amway distributors really earn very little, while a very small percentage of the entire one million distributors enjoy enormous profits. These tremendous adverse odds are not obstacles to those with this mission and its accompanying dream. Despite the world's situation, they are single minded in their determination.
Everyday newspapers, radio and TV bring us more bad news. The world is shaking at its very foundations. Famine, drought and rumors of war threaten to engulf us all. Skyrocketing inflation and unemployment push us to the brink of chaos. Yet) there are those among us who are dedicated to a dream. The dream is that they are going to make it and make it big in this business. Unfortunately, in most cases, it is only a dream. It will probably never come true.
It was a misty Sunday evening in the month of May when my wife Victoria and I followed Mark and Denise Hall, our upline' sponsors, into their motel room in Eugene, Oregon. Mark, a full-time evangelist, had just concluded a speaking engagement for a local congregation. Accompanying our party was Millie Hooper, a well-known gospel singer, and Don and Melissa Griffin, close personal friends of ours. We all pushed into the small, but attractively decorated, room only to quickly discover a lack of seating. We opted for the adjoining bed.
As soon as Mark closed the door, he focused his gaze towards me. Then, and very much the same way that he would open a sermon, he threw his arms outright and began to exclaim. "Phil, you must become a Direct Distributor before September! Don't get me wrong. You're doing a great job, but you are going to have to sponsor a lot more people into this business if you want to make it! Lester Canon wants you to be the guest speaker at his convention this fall. There will probably be over 15,000 people present. Can you imagine that? As an author, just think of all the money you'll make selling your books! You will need a semi trailer full of books to accommodate this crowd!" (Not until much later did I realize the full impact of his emphasis on selling books.)
Our eyes remained riveted on Mark as he stormed back and forth across the room delivering his message.
IA genealogy term used in Amway to denote those individuals who have personally recruited you in the business or any distributors in levels above you. Visualize in one's mind a "family tree."
"Phil, you have to be there I You won't believe this mob. They are the wildest and most excited group of people you will ever witness in your entire life. When Lester stands up and commands them to go to the back of the room and buy books, they obey! It's crazy, but it's fool proof. It's simple. You'll walk out of that convention with a suitcase full of money!"
By now Mark was in a complete frenzy of excitement, walking briskly around the room waving his arms descriptively through the air. "Man, they'll fill their arms full with books. They'll buy them by the case and run home to give them to their friends, downlines' and anyone even remotely interested in this business." Mark never let up. He pressed on. Now leaning across the bed, gesturing with his right hand, he continued. "Listen to me, Phil I Last year I walked out of Lester's convention with two briefcases full of money from selling motivational books. I made over $100,000 in cash in one night. We're talking about 'megabucks. "You can do the same thing. I'm counting on you now. You have to break 'Direct' before September."
Mark turned towards Miss Hooper. "And Millie, if you were to get into this fabulous organization, I'm sure that with your notoriety as a singer, Lester would invite you, too. Just think of all the albums you could selling". Millie looked at Mark with a big questioning expression, probably because she had absolutely no idea what the Amway business was all about. However, her reply reflected her deep and sincere faith in God. "Albums, Mark? You really believe that the only reason I would attend a function of that size is to sell albums? Only one thing would thrill my heart--seeing souls saved for the kingdom." Mark's face registered embarrassment. I myself felt rather ashamed participating in this conversation, especially since only an hour before we were in a service together giving praise to God. Subsequent experiences, such as the one this evening, would
'A genealogy term used in Amway to denote those one has recruited personally and those individuals
Recruited by distributors in one's own group. continually shed more light on the perceived motives of Amway's top distributors. I had not realized until that night that the money the really big money could be made in selling books, records, tapes and other items, not directly associated with Amway. Mark Hall, who is now an Emerald Direct, is sponsored directly under Lester Canon, Crown Direct who in the past has sat on the Board of the prestigious Amway Distributors' Association. This is a separate unincorporated organization, which works in conjunction with the Amway Corporation.
Mark was always telling me much about Lester Canon. He wanted to make it clear in my mind how important and influential this man is. As far as he was concerned, I was not to forget it!
Lester is considered legendary among his Amway distributors and has become to the masses a symbol of accomplishment, achievement and ultimate success. Here was a commoner who pulled himself up by his own bootstraps to become a self-matearistocrat. His vast accumulation of wealth today is not a privilege or birthright.
Canon is well known for his incredible ability to organize some of the largest and noisiest Amway meetings in the nation. These are fully supercharged, highly motivating events with attendance often running in excess of 15,000 distributors.
Mark himself has become widely known in Amway circles. He and Lester are constantly flying back and forth across the country to address their disciples at these large functions.
Prior to this meeting in the motel room, we had been in the business about five months, and already there were certain business practices and philosophical viewpoints with, which my wife and l did not agree. One of the practices which Lester always instructed, but annoyed me the most, was never to reveal the name of the company
'A level of achievement awarded to Direct Distributors who personally sponsor at least three 25 percent point value groups, each of which has obtained this level for at least six months out of a given fiscal year.
2A level of achievement awarded to Direct Distributors who personally sponsor 2 or more 25 percent point value groups in one given month. until after you had the prospect go through an "opportunity" meeting. This was called the curiosity approach. Another favorite viewpoint frequently expressed by various leaders is that the wife should never interfere with the husband's decisions in this business. It is said that this philosophy is Biblical, and supposedly, one is not expected to flinch when it was screamed at meetings, "Wives, keep your mouths shut!" Clearly, the Bible says, "Husbands love your wives as Christ loved the church, and wives submit yourselves un to your husbands as unto Christ." So far as we were concerned, there were abuses expressed here in the area of wives' submitting to their husbands. Sure, it's important for the wife to submit to her husband, but voluntarily! It should be an act of love.
But somehow, somewhere along the line, many of the leaders of this organization went beyond just selling soap. They wanted to control the lives of their downlines--even the most personal aspects. It's a well-known fact that many of Amway's leaders are very chauvinistic. This philosophy has become common among certain lines of sponsorship.
One friend who is still in the business commented on this subject of abusive submission in this fashion. "These people know exactly what they're doing. Surely, you don't think they want the wives opening up their husbands' blind eyes, do you?"
Many questions and doubts kept coming to our minds. Was this business really for us? Could we be as successful as we were led to believe--with hard work, of course? Why weren't we allowed to build our own business the way we saw best--by emphasizing the retail selling of products? It seemed that we were always subjected to the unquestioned direction of our upline sponsors. This was not only true for myself, but it was widely known through certain lines of sponsorship in the Amway Empire--that you are to be completely loyal to your upline. Somehow I never could feel comfortable reporting to a single sovereign authority like Lester Canon. From the very beginning, I struggled with these powers to be.
During our drive home after our visit with Mark and Denise that night, my wife and I began to reflection the evening's events and how we had gotten caught up into this fast moving, fast talking business. We were beginning to get a better understanding of something very important: How the really big money was made. I had sponsored so many of our closest friends and relatives during the last several months, but we were continually hearing a common complaint from most of them--the high cost of participating in this business. There was, at rallies and meetings, a constant emphasis on the purchase of non-Amway produced motivational tools such as books and tapes. In addition, the monthly expenditures for rallies were outrageous.
Up until this evening I had dismissed these grumblings simply as misunderstandings. Mark had assured me that these books, tapes and rallies were, in fact, valuable tools needed to build the business. I believed as I had been taught--that my downlines needed to trust me the way I trusted Mark and Lester. Never before had it occurred to me that those at the top may have had an ulterior motive for our purchasing these non-Amway produced items, many of which are downplayed and described simply as motivational tools.
I trusted my sponsor Mark explicitly. He had assisted me in a previous business venture, which proved to be more than successful. "Undoubtedly he could also instruct me in how to build a successful business like his," I thought. "After all, Lester had said many times, 'Success breeds success."'
Before, it was the unquestioning faith and loyalty to a friend. But now that was all beginning to change. There were questions and doubts coming to my mind. I needed answers.
I pulled the car into our driveway and turned off the ignition. All I could hear was the patter of rain droplets hitting the metal and glass of my Ford. I reached over and pulled my wife closer to me. Quietly we sat together, reflecting on what we had seen and heard. We now realized that there was a darker side to this business. We looked back on how it all began--the first time I met Lester Canon!
The place was Chicago, Illinois, and it was a stormy and dark winter day in December. The roads were covered with black ice, and the rain would freeze as it fell. Mark picked me up at the airport, and together, in his big Cadillac sedan, we slid cautiously and quietly across the ice. Never before had I been to Mark's home. It was a massive and impressive split-level, nestled in a park like setting.
"Phil, look, I've got to get dressed. You goon into the den and find something to read. Okay? I have a friend coming over whom I would like you to meet. His name is L ' ester Canon!"
Well, Lester did not arrive that evening. I did not get a chance to meet him until the following morning. I had no idea who this man was nor what his affiliation was with Mark.
I remember the doorbell ringing and Mark exclaiming excitedly, "That must be Les and Sherry!" Mark grabbed my arm and together we walked to the door while he quietly murmured under his breath, "Phil, this guy is a multi-millionaire. He's stinking rich, and he's got important friends in government and big business all over the country. "Mark was really trying to impress me with this man's wealth and influence. When the door opened, there stood before us a rather cheerful looking fellow, tall and strong in stature, with a strikingly attractive blonde on his arm.
"Come on in, Sherry. Come on in, Lester." Mark closed the door behind them and made the introductions. "Sherry, Les, this is Phil Kerns. He's the fellow I have told you all about. We're going to be doing great things together. Phil and I." Mark motioned us on ahead. "Let's all go to the kitchen. The girls can drum us up some breakfast." Mark's kitchen was really cramped, but that was okay. We just crowded around the small dinette set. I surmised we were not eating in the formal dining room in order to spare the cleaning later. Together Lester and I pulled the small table away from the wall. He smiled and sat down.
Here I was sitting across the table from a man whom I had never laid eyes on before, and Mark was standing before me giving a long dissertation on the wealth, riches and influence of this person. Mark never let him get a word in edgewise. At the time I thought it was all crazy. Mark went on to tell me that Lester, whom I could have reached over and touched, was worth more than 80 million dollars! He owned not just one, but rather an entire fleet of RolIs Royces, a bank, and a home with over 10,000 square feet.
I began to wonder if Mark was embarrassing this man. I watched Mark as he walked back and forth through the kitchen explaining how Lester had made his fortune selling SOAP! Mark roared in laugher. It was an absolutely nutty scenario. Was this really happening? I peered over my shoulder behind me. Sherry and Denise were frying and eating bits and pieces out of the pan. In front of me strolled Mark, now shouting the praises of this man, intermittently stuffing raisin toast into his mouth. "Why was it so important for me to know of this man's wealth?" I thought. My thoughts immediately were expressed in a somewhat watered down question: "Mark, why are you telling me all of this?" "It's simple, Phil," Mark replied. "I believe you could be a smashing success in this business. You're an articulate speaker. You have thousands of friends who love you. You're an author of a best seller.
Look at what this soap business has done for the Canons! They're rolling in the dough!" Mark gestured towards Lester. "Show him your bank roll, Les," Mark began laughing all over again. I was certain that mark had now devastated this man with his embarrassing request. Lester rolled his head back and forth, hesitated slightly, and then with what appeared to be some sort of reluctance, he replied, "Well, okay Mark." Mark took the liberty and reached down by Lester's belt. From a small leather case sitting on the chair next to Lester's side, he pulled out a thick stack of $100 bills. There were several packets of crisp new mint fresh bills with $5,000 bands around them. I couldn't believe it! I'm sure my astonishment was apparent. Mark goaded me on "Look Phil, over $50,000 in CASHI Do you want to touch it? Go ahead. it's real--really--real. Do you get to carry spending money like that around back home? I'll bet your property management business doesn't allow you that luxury, does it?" Mark continued with his laughter as he removed a couple of the bands. He spread the $100 bills all over the table in an apparent effort to emphasize the huge amount of money before us. He threw some of the bills in the air, and his laughter continued. Finally Lester spoke. "Phil, what Mark is trying to tell you is that we would like to make you a millionaire!" "He wanted to make me a what?" I thought. "Okay, explain it, Mark. I want to hear how you are going to make me into a millionaire!" I exclaimed. Now I was laughing, mostly in disbelief. My thoughts continued, "Is he going to write me a check? Ls that how he is going to make me a millionaire?" Mark quit laughing and quieted down. Lester then took charge. "Phil, I'll do the explaining, all right?" Lester's tone had changed. I could see he was serious. He meant business. Lester gave me a brief history of the company and its yearly success--from its birth in 1959tothe present.
He told me he grew up very poor and was just looking for an opportunity like this in order to buy the things he so desperately wanted for his family. He motioned to his wife, who sat down next to him. He took her hand and gently pulled it out in front of me so I could seethe enormous diamond set in white gold. If I remember correctly, he said that it was worth over $100,000. 1 couldn't believe the size of it. He then reached out to her slender neck and cupped his hand under the huge diamond that hung there in a manner of proud display. He went on to tell me that he could buy anything he wanted in the world. It-didn't matter what the price was. He said it was like a dream come true. His wife, interrupting, told a story to emphasize what her husband was saying. A few weeks earlier she had left a $20,000 diamond ring in a restroom while washing her hands. Only after they had left the restaurant and were driving down the road did she miss it. They turned around and drove back, but the ring was gone. "Oh, well," Sherry said, "we will just buy another one." "And listen, Phil," Lester went on, "this same kind of opportunity is yours. You could have anything you want in the world. The choice is yours." When I looked up, I realized that everyone was now seated. All were looking at me expectantly. Quiet but anxious looks were on their faces. Each face was waiting for my decision. I was stunned. This was all happening so fast. Never in my life had I been offered the opportunity to live in the seven digit realm. "Well, okay, I'll do it." I replied hesitantly. "But what do I have to do?" Mark sprang to his feet. "Whoopee, Phil, you'll never regret it. We're on our way!" "On our way? I don't even know how the business works!" I shouted back. "Don't worry about a thing, Phil," Lester reassured me. "I'm going to call one of my associates in Miami, Florida. He'll beat your home this coming Monday night. You just make sure you have a house full of people there. Okay? He will explain everything."
That same afternoon I was the guest of the Canons and the Halis for lunch. Then, that evening, I attended my first rally with Lester and Mark, who were the guest speakers. The following morning I flew home. The moment I stepped off the plane I began rambling to my wife a hundred miles an hour about this wonderful and crazy soap business we were getting into. I presented her with the small gift I had purchased from a concession at Lester's and Mark's rally. It was nothing extravagant--a small diamond encircled with a cluster of emeralds, They explained to me that bringing in wholesale jewelers to these events was a courtesy service and a common practice. "Honey, I think we're onto something big! You know how I have always wanted to get away from this property management business and have some freedom. I think this might be it!" Here she expressed a mixture of joy and apprehension. I could not answer her questions. That didn't matter much, though. Gene Williams, an associate of Lester's, was coming to our home on Monday night to explain the whole plan. The only thing that I really understood was that we had to make up a "success" list. This was a potential recruiting list of individuals we would invite over to our home--everyone we knew who uses soap. My wife seemed more than willing to assist by making some telephone calls. Besides I had already won her over with my small token of love and my enthusiastic description of the possibility of financial independence.
AINT IT GREAT?
"Dream, dream, dream!" Those were the words Gene Williams used to begin our first in-home presentation or "opportunity" meeting as it is often called. He explained how through this business, we would be able to fulfill our wildest dreams.
"Just what is it you want in life? "he asked. "Is it a college education for your children? Is it a Caribbean cruise? May be it's a new home, or even a Cadillac? May be you would just like to have more money to give to missions or charitable organizations. What ever your dream is, no matter how large, it will be well within your reach with this opportunity!"
Our first Amway meeting was considered a success. At least Gene felt that it was successful. We had sponsored three couples from the group who showed up. "I'd travel across the country to sponsor just one person," Gene said in his deep Southern drawl, "because one person is like a million dollars in the bank!" Gene was not by any means a dynamic speaker. He stammered and had difficulty with his words. Yet some how through his acrobatic abuse of the English language, he was able to keep everyone rolling in their seats, halfway between pain and laughter.
When the meeting was over, Gene invited those who had questions to stay. I stood to the rear of the room and bid those leaving good night. I was flabbergasted when one of my dearest friends whispered in my ear, "Phil, this guy's a con artist."
A long-time business acquaintance boldly denounced the evening's event as a "waste of time--a ridiculous get-rich ploy." "Haven't you ever heard of the pyramid schemes?" he retorted with a smirk. "But, but it's not a pyramid," I stuttered, taken back by his reaction. Another man walked directly up to me and growled, "Why didn't you tell me it was Amway in the first place?" He then stormed out of the room.
I didn't expect these types of reactions. I was only doing as instructed by Lester and Mark. It seemed like everyone was leaving. I was baffled. Some left quietly, with no comment. Others told me they had already been in Amway and shook their heads in disappointment as they left. Those who were going had made up their minds. They wanted nothing to do with this venture. Either they had heard the plan before or had made a value judgment of the speaker's presentation. Some were just not interested.
I felt bad. Most of those I had invited were family friends and close business acquaintances. This really bothered me. I had so many questions. After all, what did I even know about the business?
On reflection, Gene really didn't say much that night, even though he did a lot of talking. He brought no products. He brought no literature. As a matter of fact, he brought nothing except this smartly dressed self, wearing boots with an 18-carat gold tips and a pin stripe suit. All he did was talk and draw circles--lots and lots of circles.
"Each circle," he had explained, "represents $100." Soon he had duplicated enough of these spheres and drew enough connecting tentacles to allow us to earn $96,000 or more. The possibilities were unlimited!
"What kind of rut are you in today?" Gene had asked the group. "I'll bet many of you here are on the S.I.A. Budget. You know, the 'Spend It All Budget'! Well, with this business you can quit your job in 90days.You can be financially independent in two years. There are only three ways you can fail, 'Detailitis, Excusitis and Procrastination!...
Comments like these had enticed the three couples who remained to hear more. They finally left around 1:30p.m., but only after Gene had made certain to schedule meetings for the min their own homes that same week. It was now time to drill Gene for answers. He could sense my anxiety. I explained to him the reactions I received from those who left the meeting earlier.
"Phil, you are worrying about absolutely nothing. Not everyone is going to get into this business! Besides, you just wait. As soon as you become successful, they'll all jump in, too. Happens all the time." That was not my concern. I felt I had to explain.
"They're my friends, Gene, and my family. They really believe they were being used or something." "In this business, Phil, you will find out who your real friends are! Some people are just born losers. Everyone is not a winner. You're a winner. just hang in there!"
His answer did not fully satisfy me. "But, then, maybe Gene was right," I thought. "Maybe they were just negative." Anyway, I had already committed myself to this venture, and I had to find out what it was all about. Even Lester must have felt that I could be successful in this business. He had sent Williams all of the way from Miami, Florida, to Oregon just to hold this meeting.
(I feel I must make this point clear. Never for a moment did I see my beloved family or friends as "losers." As a matter of fact, statements like this, together with other tactics to be explained later, eventually caused me to withdraw from the business.) The Amway opportunity up to this point was not easy for me to understand. In my mind, there were just lots and lots of circles. So far, I had heard nothing but fantastic speeches by Lester, Mark and Gene on how I could become rich. All of the emphasis was on how much money could be made and on how successful one could be. (To better understand the Amway plan see Appendix A.) No one ever told me anything about the products or how to sell them. But how was it going to happen? I needed more information and facts. My upline sponsor was almost three thousand miles to the east, and this presented a communication problem. Fortunately, when I called Mark.- I found him home. "Mark, I sure appreciate al I of the assistance you and Lester have given me so far in this business. . ."Mark interrupted, "Phil, you're doing great! Gene Williams and I just talked, and he said -you had 35 people present. That's fantastic! I've never had a downline with a start like that. Boy, wait until Lester hears this. He'll be very impressed!"
"Mark," I interrupted. "I still don't understand what is going on. Gene Williams never really explained how this business works. He just drew circles on a board and told us we all could become a Direct Distributor in 90days. I need a manual. I need some sort of literature. I'd like to see what the products look like. I'd like to know how good the products are. I haven't even seen a box of soap. After all, isn't Amway known as a soap 'business?" I could hear Mark chuckling on the other end of the line.
Then he quit laughing, and in a serious tone he said, "Now listen to me. You don't need that manual at all. Lester says it was simply written to satisfy the Federal Trade Commission. And, besides, if you sit around reading that manual, you'll get all confused. You won't be out sponsoring people." "Mnn," I replied. I listened quietly as Mark encouraged me. His voice made me feel more reassured. He always had an uncanny way of making one see things his way. I explained to Mark the disappointing reactions I had received from my family and friends. Mark continued, "Look, Phil, you're getting help from the top people in the business. Lester wants to see you make 'Direct' really bad. He even paid Williams a $5,000 honorarium to make your speaking engagement! Who are you going to listen to anyway? How can you expect to get good advice from your family and friends? Are they successful? Aren't you going to listen to the advice of someone who is successful?" - Mark took another breath and finished. "You don't need to read a manual. I'm sending more speakers to Portland to help you. They'll explain everything. We'll build this business together. Williams will be back, and I will have an Emerald from Olympia come down to personally help you. Don't give up! Okay? Just sponsor, sponsor, sponsor. Build that organization! Listen, there are very few people in the business who receive first-class treatment like this. You should take advantage of it. if you are having any doubts about the business, look, even Pat Boone is in it. I'll call you next week. Bye!" I felt better after having listened to Mark.
In the following weeks, everything happened just as Mark said it would. Our business was frequently visited by guest speakers like Tim Sevrson of Olympia, now a Diamond Direct'; Mark Hall, Emerald Direct, our sponsor; and, of course, Gene Williams, Diamond Direct and Lester y s associate of Miami, Florida.
For additional assistance, my wife and I were plugged into a Northwest organization headed by Tom Kenney, Diamond Direct. Mark had felt it to be to our advantage to have help close by, and he was searching for the ideal couple. He explained that Lester had real clout, and anything he told his distributors to do, no matter what, they would do. Therefore, providing assistance for us was no problem for Lester. If he requested it, it was done.
Each evening, Monday through Friday, we held meetings. This went on week after week, religiously, as instructed by my team of experts. At the conclusion of each meeting, I made arrangements with those interested in the business to have a meeting in their home the following night, if possible, or sometime during that week. The amazing thing about all of this is that up to this point I
'A level of achievement awarded to Direct Distributors who personally sponsor at least six 25 percent point value groups, each of which has obtained this level for at least six months out of a given fiscal year.
I had never seen a product, signed a document nor read a manual of instruction. As a matter of fact, it was almost eight weeks before we received our first kits, which included a variety of Amway products and some motivational materials. When the kits finally did arrive, I did just as Mark said. I threw the manual in the trashcan, and every time I sponsored others, I instructed them to do the same.
One day Mark called to tell me that he had found the ideal couple to assist us. They were Mr. and Mrs. Terry Bayer of Portland, Oregon. The Bayers were in the Kenney's "line of sponsorship"' and were more than happy to help us in building our Amway distributorship. I remembered the first night I was invited to the Bayers' home. Their "office" was wall-to-wall cassettes. Terry had a complete library of tapes on speakers in various lines of sponsorship. There must have been, in my estimation, over 150 titles. The garage had shelf after shelf of various Amway products. It was an impressive display of inventory, obviously worth thousands of dollars. The Bayers urged us to go to the rallies, seminars and all other upcoming events sponsored by their line. Together my wife and I attended these meetings, and we invited those we had recruited to go, too. It was life in the fast lane. Sponsor, schedule that person for a meeting the next night, if possible, and again at this next meeting look for a gleam in someone's eyes. Sponsor that one, move to their house the next night, give another meeting and so on.
It was just as Williams said. Before long some of those who were negative in the beginning began to jump aboard simply because they saw I could sponsor people. One such person was my father-in-law. This caused utter disbelief throughout my immediate family. I kept at it, however, and eventually I also recruited my own father. One by one other members of my family was wanting to get in.
'This phrase may also be referred to as "leg of sponsorship" If you personally sponsor one person and he sponsors another that is the beginning of a line or leg. This is like a branch of a "family tree."
It seemed as if everyone became my target. No one could carry on a conversation with me unless they were somehow invited to an "opportunity" meeting. I spoke with doctors, lawyers, dentists and building developers. I didn't stop there. Every restaurant waitress was subjected to my dissertation. Every airline stewardess was delayed until she had heard about this business.
On one occasion I flew into Atlanta, Georgia, Lester's hometown, to go on a television program to talk about my book, People's Temple, People's Tomb, and my experiences with Jim Jones, the cult leader. Mark had told me that I would find one of Lester's limousines out front to pick me up. When I walked outside the terminal, I saw that there were three black Cadillac limousines. Each one was spotlessly clean and highly polished. The license plates said, "LES 1, LES 2and LES 3." 1 was really confused so I went over to LES 1 and asked the chauffeur, "Which car am I supposed to ride in?" He smiled and said, "This one will do." As we drove through Atlanta, I must admit that I wondered if Lester had sponsored this guy. "Better not ask," I thought to myself. "He would probably tell Lester I tried to recruit him." By now I was really good at presenting this opportunity to others. I found I could schedule seven out of every ten people with whom I spoke to come to a meeting. I drew those silly circles on everything-napkins, table tops and even candy bar wrappers. Sometimes if I were in a jam and couldn't find a scrap of paper in order to tutor my new prospect,. I would just use the back of my hand.
I found myself, in a matter of less than 90 days, giving meetings through this domino process all throughout the states of Oregon, Washington and eventually Florida. I flew to Miami, Tampa and Key West in one week.
My normal office hours in our property management business were from 8 a.m. to 5 p.m. five days a week. My second shift, the Amway business, began at 7 p.m. and commonly ended around midnight seven days a week. Being away from our business as much as I was had taken its toll. But that was a storm I was willing to weather for success. Every spare minute was spent in talking, listening and dreaming about Amway. We had purchased a number of cassette tapes at different rallies and conventions, and we would listen to them in the car while driving to and from these events. Don't think I wasn't excited. I most certainly was. I was building an organization. Lester and Mark kept telling me to "Believe in the Dream!" I guess you might say I was becoming a believer.
"Look at all the people we've sponsored into this business and those who are interested in possibly joining, Vicky!" I exclaimed to my wife. She did not share my enthusiasm. instead she peered out the plane's window at the ocean below. We were preparing to land in San Juan, Puerto Rico. This was once home to my wife. She had grown up here as a child, nourished on the tropical sugar cane and mangoes.
She turned to me and rested her head on my shoulder. I could see the tears welling up in her eyes. Concerned, I asked, "What is it, Honey?"
"Do you really think that Jesus wants us in this business?"
"I'm really not sure, Sweetheart." Her question had good reason to make me feel guilty because I really hadn't given it much thought. "All I know is that it is a great opportunity. The door appears to, be open, and the possibilities are unlimited. Besides, if we do earn a million dollars as Les and Mark say, then we'll have so much more we can share with those in need."
My wife's tears now flowed down her cheeks. I put my arm around her and held her close to me. She laid her head on my shoulder. At that moment, I began to seriously question what this business was all about.
"You don't really believe all that talk about losers do you, Phil, just because they decide not to join? Many of these people are our dearest friends." My wife reminded me how disgusted I had often felt when listening to so many of the speakers at various functions. I remember the night we attended a rally where John Wells, Triple Diamond', was the guest speaker, John is in Lester Canon's line of sponsorship. it was a Sunday and thousands were now attending John's meeting, which was advertised as a non-denominational Christian service. I remember John, seemingly self-composed, as he walked up to center stage in his all white tuxedo. He stood there for the longest time; his arms hung next to his side as he stared out at the audience.
Then, suddenly, "in what appeared to be an agitated display of emotional anger, he wrestled his white jacket from his back. As the audience recoiled into their seats in unbelief, he simultaneously threw his coat clear across the stage in great animation. With his left arm stretched out, he shook his tighten fist towards the ceiling and screamed, "Get out of here, Satannnnnl" I looked around the large auditorium. With this fit of nervous discomposure, he had succeeded in capturing the attention of every person in the room. Face after face focused on John in complete silence. He continued by expounding on the virtues of this business and how God had blessed it in such a wonderful way. I guess you might say his speech was a total reflection of his philosophy--PROSPERITY. To John, poverty appeared to be a demonic trait. He went on for over an hour that particular night, hammering away at all dissenters and critics of the business. As far as John Wells was concerned, there was only one rational decision to make and that was to either be in Amway or be stupid! John's statements on other occasions could be construed to some as contradictive of his public testimony of being a Christian.
'A level of achievement awarded to Direct Distributors who personally sponsor 16 or more 25 percent point value groups in one month.
"If you're broke, you've got to be stupid I" he screamed to the crowd. "But you see, most people are too stupid to realize the disease they have called Stinkin' Thinkin'! Stupid Stinkin' Thinkin'!"
After reflecting on this particular meeting and others where similar thoughts and statements were expressed, my wife and I began to discuss the tapes we so often were asked to listen to (and pay for). One particular excerpt came to mind where John Wells was speaking at a Tampa, Florida, rally. "Some of you may think I'm a kook, but I'm a rich kookl" He went on to proclaim proudly that he had earned $70 million plus that year, and then, very boldly, he challenged the crowd, "Anyone out there want to criticize that? Put that in your pipe and smoke it!"
These kinds of comments were irritating to us; they had crept in and touched a very sensitive part of our lives. They seemed like arrogant statements laced with bigotry. My wife reminded me what the Bible says, "You will know God's people by their love." I John 4:7-8
The scriptures also read, "if a man says he loves God and hates his brother whom he has seen, how can he love God whom he has not seen?" I John 4:20 These were Biblical truths we could not ignore.
As the plane sped silently through the sky, I remembered the story in the Bible of the woman who gave her last two pennies. The Bible says God considered her gift to be more precious than all the money that the rich boaster had given. I believe God was speaking to me to get my priorities in order and give what I possessed now no matter how small the amount. To Him, little things are worth just as much, especially if the gift comes from the heart.
I was more determined than ever to find out what the business was all about. I needed to think on my own--not just listen to Mark and Lester. I didn't want to admit that the Amway toothpaste tasted like glue and cost twice as much as the drugstore brand. I didn't want to confess that my retention rate of those whom I had sponsored in the business was really poor or that I was constantly having to pump them up to keep them in. Did I really need a million dollars? Didn't God say He would supply all our needs? Did I need success to fulfill my life? Besides, where was all my success? I sure couldn't see it. As a matter of fact, I was spending a fortune for gas, telephone bills and airfare in order to sponsor all those people on my "success" list. What did the bottom line say that month? $7.78 net. Hard to believe? Well, it's true!
BEHIND THE CURTAIN
It was a Friday afternoon when Mark and I arrived at the Portland Coliseum. The parking lots were vacant, but I knew that by 7 p.m. it would be havoc trying to find a space. This was "West Coast Free Enterprise Day," the biggest and most exciting event of the year for Amway distributors in the Northwest. It was going to be held in the home arena of the NBA Portland Trailblazers.
Mark had called from Chicago, Illinois, and asked that I attend. He said he wanted some assistance in coordinating the book sales. I felt this would be my golden opportunity to see firsthand how such an event was put together. Soon I was to learn that it was a methodically well rehearsed program. I sat and listened as Tom Kenney, Diamond Direct, who is in John Wells' line of sponsorship, gave orders to workers inside the arena. He had them position the speakers' platform and arrange the folding chairs into neat rows in front of the stage. Then Tom called everyone together to discuss each person's respective part in the program. How long should the band play? Who would be the first speaker? Do we have all the doors covered with individuals to handle tickets and security? Tom covered every detail. Nothing was left to chance. Before the night was over, he would relinquish his position as foreman, shed his shirtsleeves and slacks and return in his best evening attire as the host of this magnificent program. All this activity was designed to give the Northwest distributors the most exciting extravaganza that they had ever experienced. After purchasing tickets, a program and possibly a tape packet to take home, it would be easy for a distributor to drop over $50 for the evening. The people who were attending tonight were coming to witness something spectacular. They wanted to see success, hear success, feel success and touch success. They were not to be disappointed. People started filtering in the large auditorium about 6 p.m. By 7:30 there were in excess of 10,000 people there. Before 8 p.m. the coliseum appeared to be packed. People were crowded in like sardines. At 8p.m.sharp the band struck up with the "Rocky Theme." The lights were dimmed, and the mood was set. Tom Kenney stood next to the exit door, rubbing his hands together with great anticipation as he waited for his introduction. "And now, Ladies and Gentlemen...," the announcer bellowed, "that moment you have all been waiting for. I'd like to present to you our host, Diamond Direct, Tommmmm Kenney!"
The trumpets blared even louder than beforehand the drums once again beat out that famous "Rocky Theme." It was a song of victory. Tom Kenney sprang from the exit and broke out into a full run as he raced down the isle and up to center stage. The crowd rose to their feet. People cheered and whistled. I had never seen anything like it in my life. The roof literally came off the place. It was louder than any Blazer basketball game. No presidential candidate would receive this kind of applause. It went on for a full two minutes. It seemed like ten.
Then, when Tom Kenney introduced John Wells, Triple Diamond, the crowd once again sprang to their feet, screaming and clapping with great enthusiasm. It was a thunderous response. It kept getting louder and louder. The crowd began to push forward towards the stage like a mob trying to get into a Tokyo subway train. Cameras were flashing, hands were being thrusted out and books and programs were being waved, requesting an autograph. "So this is what it is all about!" I remembered thinking to myself. Even though I had been to a number of rallies, I, too, had been caught up in the emotion of the moment. This time, however, I needed to be more objective. I didn't waste any time. I wanted to analyze what was making this all happen. It wasn't going to be easy, but I had to get backstage. Pearl and Ruby Directs, loyal to Tom Kenney, were posted carefully in this area, seemingly acting as guards. As I walked down the long corridor, the screams and applause continued. "If only there was a way I could get past that guard," I thought. "Of course--Mark. He is one of the guest speakers. He can get me backstage." it didn't take me long before I had tracked him down. He was busy in the hall supervising the sale of motivational books. I explained to Mark that I wanted a ringside seat backstage. I wanted to see these stars up close. Mark obliged and together we hurried downstairs. It was a simple matter for Mark, since he was a star speaker, to introduce me to everyone and thus allow me the privilege of complete freedom all around the platform as well as backstage. Now leaning on the stage, I had a bird's eye view of everything. I could hear the various Diamonds in another room arguing about who was going to get what share of the booty from this event. I watched Tom's wife, Debbie Anne Kenney, scurry back and forth with proceeds from the ticket sales. She was stacking money upon a table and seeking the assistance of others to count it. Most of the tickets, I was told, were sold prior to this particular event. However, tickets could still be purchased at the gates. Walking around backstage like this required that I always act positive, especially since I was not wearing a Diamond pin. These people possessed a keen ability to discern if one was with them or against them. I knew full well how Tom Kenney perceived those who were negative or those who questioned, even in the slightest way, his leadership. "Just flush them!" he would say, matter of factly. As far as he was concerned, there would be no heretics in his group. Now one can understand why I spent the entire evening with a bigger-than-life smile pasted across my face. I knew that if I wanted to gain some insight into this business, I had to conceal my indifference and possible suspicions.
It was, indeed, a very interesting evening. Up on stage there was much talk of villas, cruises, expensive cars, banking practices and upcoming events. In the hallways, tables were heaped full of tapes, books and lots of American memorabilia. Events similar to this could go on all day and all weekend. Were there spin-offs? You bet. The record breaking ticket sales, catered dinners, books and cassettes were just a few. Others include soft drinks, hot dogs, calendars and even bumper stickers. At some of these events, it was not uncommon to see additional spin-offs such as the sale of suits, jewels and automobiles. All of these were considered "tools of the trade"-even custom tailored suits. Whoever sponsored the event was like any well-schooled promoter. He would make certain that he profited from absolutely everything, if possible, sold at his event. I had the opportunity to speak at some length with Dave Beach, Diamond Direct. He was an extremely sharp young man who prior to joining Amway, had been an electrical engineer. He had rapidly climbed the "ladder of success" and would, later in the evening, share with the audience some of the experiences he encountered along the way. Many questions darted to my mind as I stood back and observed. Why would Wells and Kenney bring in a Diamond all the way from New York? After all, wasn't this "West Coast Free Enterprise Day"? Why was Mark being flown from one "Free Enterprise Day" to another? My only conclusion to these questions was that it must be HYPE! The guest speakers for this event were carefully handpicked. The enthusiasm they could generate was hard to believe without witnessing it firsthand. It was a common practice to bring in outside guest speakers, not just on a "Free Enterprise Day" but all throughout the year for various rallies and seminars. This always brought a lot of fresh new "success" stories, which fueled new excitement.
These special speakers and other members of the Board of the Amway Distributors' Association constitute a small elite private club. You scratch my back, and I'll scratch yours. Some have said that the company frowns on this activity, but its use is widespread. Possibly millions of dollars each year are spent in honorariums to cover the costs of these expensive guests. The reader is probably asking himself how I can be so sure about all of this? Well, I, too, was asked to go out of state with al I expenses paid to dazzle others in different lines of sponsorship because I was an author. It seemed that the leaders enjoyed using people of notoriety to draw crowds and breed enthusiasm in this business. This "Free Enterprise Day" event was no different. It was just on a much grander scale. Dave Beach was young, very handsome and successful. He would be well worth whatever price they paid.
Later I was to learn that the cost of these honorariums was a small price to pay in comparison to the enormous profits reaped by the host at these functions. My thoughts came back to my own business. As the meeting continued in the auditorium, I went upstairs to question Mark as he supervised the sale of hundreds of books and tape packets. "Mark, when I continually sponsor and don't retail as you have instructed, I don't make any profit. But tonight the light has really dawned on me. I have invited all my downlines to this event, and they will probably pay the asking price of $39 for your tape packet and purchase a myriad of motivational books, not to mention the admission fee, all of which will benefit no one except those putting on this gig, right?"
I did not receive a response. Mark has a unique way of ignoring a person when he wants to but can keep right on smiling as he does. Mark was now autographing motivational packets. After a few moments he finally backed away from the table. He reached out and draped his arm across my shoulders. With a squeezy clasp and a smile, Mark led me across the hall to the stadium entryway. Thousands were crammed into the stadium singing, "God Bless America."
Together we stood and watched this spectacle. Hundreds now stood many holding hands, and some gently swaying to the song's cadence. "Look, Phil, they're happy. Just look! That's what counts. You want to take that away from them?" I couldn't believe my ears. I turned and solemnly walked away from my sponsor. My wife was waiting down the hall, and together we left this event in Portland, very disillusioned. Already we had spent hundreds of dollars on rallies and seminars prior to this particular "Free Enterprise Day" Well, it wasn't free. We weren't equals. Those who organized this event would walk away with their attaché cases full of cash, just as they had previously predicted. The sponsors of these events almost always insist that tickets be paid in cash only. At many events I have seen doormen ask that checks be made out to "cash." No receipts are given.
I was now convinced how my uplines perceived this business. It was a colossal plan aimed to appeal only to selfishness and carnality: the obsession of money and things, regardless of the price. Their brief cases full of money were sufficient evidence of that. Our zeal was gone. We were now uncertain about our future in this business' I assured my wife that our friends and family members were much more important than all the money in the world.
Besides, the Amway business, as we were instructed to conduct it, was showing us little or no profit. This evening was additional proof that the big money, indeed, was being made by a very select few, and not by selling soap. Later we learned that many times these events were scheduled to be held concurrently with a function being offered by the Amway Corporation--the same date and the same city. The hosts would urge their downlines to attend their rally rather than the Amway sponsored event. Were the leaders really wanting to motivate these people, or were they wanting these individuals to spend money for their own profit? I felt I had already seen enough. Certainly over the months I had witnessed, unknowingly, millions of dollars being cleverly siphoned away from thousands of unsuspecting Amway distributors.
"For there are the charlatans--torturing old writings to use on the gullible and unfortunate; inventing weird and wonderful concepts to lure the lonely, twisting Christianity in their avarice for power, riches or fame."
By Richard Mathison
From the book God Is A Millionaire
ENOUGH IS ENOUGH!
Several days later, still reflecting on the events at the coliseum, I thought back on that night Vicky and I spent with Mark and Denise in the motel room in Eugene, Oregon. Mark's message to me was, "Become a Direct Distributor. You'll sell $100,000worth of books in one night. You'll walk out of a rally with a briefcase full of cash."
I certainly wasn't making much money in Amway. I found it easy to sponsor people, but I couldn't get them to order or purchase products.
I went to the telephone and called Mark. "I'm tired of this, Mark. This business is a bunch of baloney. The only real money I have seen during the past l3 months is the money spent on books and tapes of which I have received absolutely no percentage--not to mention that every rally or seminar we have attended has cost us money, too."
"It's okay, Phil," Mark assured me. "Take it easy. That's all part of the program. But remember you're not selling the product. You're selling the 'Dream'! Product sales will just happen. You'll see. That will be explained to you later."
This time Mark's answer was not satisfactory. I needed to know more. Now! Not later. Besides, at the rate I was going, these "dreams" would never be fulfilled. Up to this point, they were costing me a bundle.
"Mark," I protested, "if I continue to sponsor in the fashion you and Lester suggest, I will be broke before the year is out. I need to retail in order to cover my expenses."
"No, don't retail, Phil. That's terrible," Mark interjected. "Trust me, will you? Just keep buying the products that you use and instruct your downlines to do the same."
It was time to hang up anyway. These "long distance tax deductions," as they are called in the business, were breaking me.
I was now discovering something I should have known in the first place. I really couldn't make decent profits in this business continually sponsoring and wholesaling the way Lester and Mark had instructed. It just did not pencil out. But how could I have figured it out? From the very beginning they had me so hyped up and moving so fast that I never had a chance to think. From the moment I said, "Yes, I'll join," I was being urged to sponsor as many friends and family members as I possibly could. Training? Forget it! This was a key tactic I was told. "Don't give them time to think. Just have them trust their upline and do as they are instructed."
A frequently used slogan is, "The more you know, the less you'll grow." We were also advised that whatever one does when contacting another, "Be sure you don't tell them it's Amway! You wouldn't want them to be deprived of an opportunity would you?"
I couldn't help but remember what my precious wife had said to me as we were flying into San Juan. "Do you really think Jesus wants us in this business?
What she should have been saying was, "Boy, you sure blew it this time, Phil." I was beginning to realize I had blown it, and I thank God for such an understanding wife.
Both of us agreed that we had had our fill of these Babylonian high priests preaching the gospel of gold. We were tired of seeing these self-appointed prophets strut back and forth across the stages of America daring the living God and using Him for financial gain.
I remember how at one particular event a leading distributor explained to the audience how Amway got its start in the Bible. He said it began in the "Book of Exodus." Casually he began to tell his tale with his hands tucked into his trouser pockets.
"I'm going to tell you tonight a story I haven't told you before. This is a true story, and you can al I check me out when you get back to the Hyatt because you can find this in any Gideon Bible ...
"The Time God Drew Circles for Moses" The crowd burst into laugher.
"Now Moses was shepherd, herdsman and cattleman, and he was a farmer. He was the whole works. He was a forest ranger. If it got done, he had to take care of it cause it was his land; and if he didn't care about it, nobody else would.
"So Moses was on his mountain one afternoon, and he saw a bush burning, and he paused. If that fire jumped from the bush and spread to some of the other little scrub bushes on the mountain, he had a problem on his hands. He'd have to run for help, and they'd be digging ditches and fighting that blaze all across the mountaintop.
"So Moses had to watch to see if the fire would either spread or wait until it consumed the bush and went out. So he stood there for a few minutes with his hands on his hips ... but the fire didn't spread. The bush wasn't consumed. It just stuck there like glue. Moses continued to watch. He was fascinated a little at first, then disgusted. The fire stayed right there. Wouldn't go out. Wouldn't consume the bush. Moses was afraid to go on till it had done its dirty work and he could be sure; but it didn't spread either. He stood for the longest time. Finally Moses kind of tilted his head and said, "'GOD, is this AMWAAAY?"'
By now the crowd was roaring. The speaker continued, "And God said, 'Moses, if I could tell you what this is in one or two sentences, I would have told you in one or two sentences! Now I don't have time to talk about it at this moment, but it's going to take at least a couple of hours so get your shoes off. Come up here and relax. Sit down and I'll tell you what this burning bush is all about.' "Now this is true. God used the curiosity approach! I know there are some people who are against the curiosity approach, but even God used the curiosity approach. Now attracted to the burning bush, God launched into a dream session that would make Donald Chaney envious. God began to describe to Moses a land flowing with milk and honey and a place of freedom and a place where people could wake up in the morning without a chain around their necks in a land of plenty. 'And the great thing about it,' God said, as He was not describing some climbing-the-mountain success game where you get to the top and you're lonely and cynical and you've stepped all over peoples' backs to get there, but God said to Moses, 'YOU CAN TAKE YOUR PEOPLE WITH YOU! You can take your friends and your relatives and anybody who's tired of be in a slave, and they can go with you into this freedom!'
"And Moses shrugged and God began to describe the Promised Land, 'And here's how you'll get there, 'and a white board mysteriously appeared behind God. He took a magic marker, and He drew a great big circle on the board and said, 'Moses, this is youuuuu,' and drew a line with a circle at the top and said, 'I AM YOUR SPONSOR!'''
This is only one example of many similar situations. At practically every event we attended, there was someone who would figure out a way to bend, twist and malign the scriptures for financial gain. Usually it was in a "Steve Martin fashion," designed to keep the listeners in stitches. I had always tried to reassure my downlines not to be disturbed by this. We were building our own organization. Almost everyone I sponsored had a sincere and deep love for God and found the use of the scriptures in this fashion blasphemous.
Curiosity approach- utilizes various techniques to get a prospect to an opportunity meeting without telling him it is Amway.
I was hoping we could build our business outside of this arena, but this constant abuse of the scriptures could not be escaped. The business was absolutely full of it. Almost every tape that one would listen to seemed to have. Another religious or philosophical viewpoint. Every book seemed to shout, ''You can do it. What do you need God for?"
Oh, don't get me wrong. God was in the picture. But He became "The Almighty Shelf God." Move Him from one shelf to another, using whatever shelf was most convenient. What did all of this twisted religion have to do with selling anyway?
When Vicky and I greeted Lester and Sherry at the Seattle, Washington, convention, we had more or less made up our minds to get out even if Lester was pushing hard for us to become Directs. The place was packed with thousands of screaming admirers. The band was still playing "Rocky," and I remember Lester's words after he got the crowd to calm down. He is considered by his followers to be the pinnacle of success. Each distributor in Lester's downline is taught that a key to success is to cling to his every word. Lester exhorted the audience.
"I know a lot of you here today are excited about this business. And many of you want to tell people about Jesus, but it's better to get someone in the business first and get some money in his back pocket. Then you can tell him about Jesus."
Statements like these led me to question whether or not God had now become something insignificant. He seemingly had been coolly deported and ostracized for a box of soap! I thought, "Why even bring up God unless He takes top billing?"
It was time for us to leave. We had made up our minds. No obsession for money or power would come between us and our faith in God. Lester had always insisted, "The lack of money is the root of all evil." But we knew this could not be true for the Bible itself says, "The love of money is the root of all kinds of evil."
In traveling around the United States on my schedule of speaking engagements for the People's Temple book, I had the privilege of meeting many wonderful people. Although many of them had been blessed financially, God, not money, came first in their lives. We knew God had to be first in our lives, too. As we walked out into the night's rain from that rally in Seattle, we could hear the crowd inside chanting and clapping together in unison, "We are family! Brothers, sisters, Amway, and me. We are family! Stand up everybody and sing!"
Deep inside I felt that we had to getaway from there. We did not want to bow down before this modern day Baal. This business could not become a god to us. These people were not our family. The overt demonstrations of loyal adoration we had just witnessed, as far as we were concerned, were not directed to God.
"...Amway's claims on the amount of money distributors are likely to earn had the capacity to deceive potential distributors."
FTC News File
FREE AT LAST
Lester Canon had said on many occasions that there would come a time in this business when I could experience freedom. He was absolutely right, but not in the way he thought! After quitting, I experienced total freedom. Gene Williams was also correct when he pointed out, "In this business you will find out who your real friends are." Well, I found out who my real friends were because when I quit, they quit!
In the weeks that followed I must have confessed my blunder a hundred times over. Some of those who had avoided me like the plague because of my winsome attempts at indoctrination now curiously listened as I acknowledged, in detail, my genuine reformation. One such person was Rupert Koblegarde. Rupert is one of Portland, Oregon's first-string corporate attorneys. If he weren't such a splendid and enjoyable sort of guy, he would have most likely thrown me out the day I barged into his office declaring, "I'm free, Rupert!" "What are you free from, Phil?" Rupert mused, now leaning back in his big leather chair' "You know that soap business I was in? I quit. I feel great! For a while I was beginning to feel like a zombie all over again. I thought I could never be deceived after my experiences in the Temple. I thought my ability to discern deception was now sharp. Now I know that I was wrong to have gotten in, but it all seemed so straight." His secretary, who momentarily had to retreat when I so suddenly burst in, stood at the door expecting an explanation. "It's okay, Dolores. Phil just had some good news to share." With that she closed the door and left us to our conversation. Rupert got up, walked over to the window and stared out to the city below. I knew how he felt about this particular business, but I was hoping he would share some of his feelings concerning my newest declaration. He just stood there holding his chin for several moments. Finally he slowly turned, looked right into my eyes and asked, "What are your plans now, Phil?" "I'm going to tell the story," I replied quickly. "What else? Someone has to tell it!" Looking over my head at the shelves of books on the wall behind me, Rupert said, "Then I have a book you need to read."
I left his office with a copy of Con Man or Saint? by John Frasca. As I walked along the Portland sidewalks, dodging the oncoming pedestrians, I thumbed briefly through the text. I couldn't believe what I was reading! Glen Turner, a hare lipped sharecropper, had borrowed $5,000 and turned it into $100 million in 24 months. He had started a cosmetics business called "Koskot." One of the characters in the book was Willie Towner of Marion, South Carolina, a dump truck driver turned super salesman. Here's an excerpt of the story. Willie Towner strode into the room. Glen was dumbfounded. Willie never had worn a necktie in his life. Now he was wearing a suit that shimmered. He wore a pink shirt and a fancy silk tie, a darker pink than the shirt. His shoes were made of alligator skin. Is that Willie Towner who used to drive a dump truck for the county? Holy cow. Willie smiled at the small group. "Gentlemen, I'm going to show you how you can become wealthy beyond your wildest dreams. I'm going to show you how you can earn more money in a month than most people make in a year." He spoke quickly, confidently. He walked over to a small blackboard set in a corner. He pulled it to the center of the room. While he talked, he scratched astronomical numbers on the board-'
There was no way I could put this book down. As soon as I got home, I continued reading and didn't stop until I had finished it about 4 a.m. The Glen Turner story was full of strikingly comparable methods and often-repeated statements which ironically are used by many Amway distributors today. Some of the most commonly used cliches' are "Dream," "Believe," "Think success," "Believe in yourself," "The only way you can help yourself is by helping someone' and "Fake it til you make it!"
After reading Con Man or Saint?, I have often wondered if Amway distributors borrowed this terminology from Turner's group, or was it Turner who confiscated these words and phrases from some Amway distributors? Could it simply be a coincidence? For 24 months I dedicated countless hours in researching and compiling reams of information on the Amway Corporation, Inc. and the Amway Distributors' Association of the United States, an unincorporated association. I would eat, sleep and dream Amway--not in building a business, as before, but in finding out how it was built and how it operates!
'Droke House Publishers, Inc., Anderson, South Carolina, 1%9, p. 81-82.
I spoke with distributors at all levels of achievement. I interviewed scores of individuals who left the business for one reason or another--some at the Diamond level, others who were just beginners. I have read page after page of public and government testimony concerning this business. I have interviewed hundreds of distributors, many of whom have confirmed the existence of problems which I had suspected for so long. Leaving the business and now attempting to come back to collect important information was like pulling teeth. You see, quitting this business, especially in my line of sponsorship, is similar to being excommunicated from a church. Everyone associated with the organization avoids you like an epidemic. You are labeled as "one who is negative--a loser!"
If you are in John Wells' line of sponsorship, you have most likely heard John's lesson on how to handle these failures. Somehow one gets the feeling he was talking about some maggot species when he stood before the crowd and said, "I wish these dead losers would just get out. All they seem to do is lie around and stink up the place." The man who made this statement and his sponsor, Mr. Lester Canon, have both been in powerful positions as board members of the Amway Distributors' Association of which Jay VanAndel, chairman of the board, and Rich DeVos, the company's president, are also members. I believe it is important for each reader to understand the power these individuals have over their followers. The statements, which I have pointed out, are really just the tip of the iceberg! There is no doubt in my mind that these men possess some sort of charismatic power, which enables them to control such a large organization. These types of comments have had devastating and crushing effects on many of the individuals towards whom they were directed. In my estimation less than one-half of one percent of the entire assembly of distributors has and holds this unimaginable power to control others; therefore, we are talking about a very small number of people controlling a vast number of individuals.
I remember the telephone call I received from a very frantic woman in Salem, Oregon. She was calling me about my book on the Jonestown tragedy. I was new in the business, having been in only a week. "I hope that I am not disturbing you, Mr. Kerns. I go t your telephone number from your publisher in Plainsfield, New Jersey. I read your book on the People's Temple, and I just wanted to give you my condolences on the loss of your mother and sister in Jonestown. Towards the end of our telephone conversation, she asked, "Oh, by the way, are you aware of the Amway business?" "Yes," I replied, but I did not tell her I was in the business. "You know, every time I go to one of their meetings, it reminds me so much of your book--all of the chanting and the way they malign and twist the holy scriptures for gain. I feel that this business is a cult. I think you need to tell the world about this company." inside I was chuckling to myself. "This is so far from the truth thought. "This is just a soap business--an opportunity." I dismissed her statements from my mind because I felt they were unfounded and drifting somewhere between "Star Wars" and the "Twilight Zone."
However, today I know better; I wish I had not shunned this woman's notion so abruptly. I hope that if she reads this book, she will call back so I may apologize.
Could this organization be classified as a cult? There are, without a doubt, many different characteristics utilized within this integration of salespersons which could lead many individuals to arrive at the same conclusions this lady did.
I now realized there was more to this business than just soap and spinoffs. There was POWER! Amway speakers are most dynamic.
"The question of who is brain washing whom depends on which side you are on and what you are calling 'brainwashing."'
There has always been an aura of mystery and intrigue to the conclaves of senior Amway distributors. One must wonder if the secrecy with which the fraternity surrounds itself is designed to keep the layman from discovering how much he knows or how much he doesn't know. One such person who desired to uncover these truths was Don Griffin, a native born Oregonian who is half Klamath Indian. He, too, was an ex-Amway distributor with an inquiring attitude for more information regarding this "inner circle."
I knew where I could find Don on a Saturday afternoon. He was coaching basketball for his church team in Portland, Oregon. When I arrived at the church gymnasium, Don looked up, waved and went on up the court to complete a fast sprint, gently demonstrating to his team a neatly tucked dunkshot. He ran over to greet me as he always did with his big bear hug. He was drenched in sweat. "What are you trying to do? Give me a shower? Where's a towel?" I teased. Don smiled. For years he had been more than a friend. He was like a brother.
"Good to see you, Phill We're still going to that Amway meeting tonight, right?"
"you bet," I replied.
"Great! I've been looking forward to this meeting all day."
"Did you get the information I needed?"
"I sure did and more, too!" The way Don answered told me he must be onto something big.
He was bouncing up and down as quickly as the basketball he had just been dribbling. "Well ,fill me in!" "You know all that bragging we've been hearing at various rallies around the country about how the Amway Corporation won great victories in court with the Federal Trade Commission?" Don asked. "Yes, yes, go on. "Well, it isn't at all what those distributors are blowing it up to be. I guess you might say it's in the eyes of the beholder. In fact, the FTC in its final order shot the company down on two key points. They said that Amway had to 'cease and desist' from two major violations. One was price fixing, and the other was misrepresentation of distributors' income." I was stunned. So far, prior to hearing this from Don, many distributors whom I knew had been led to believe that the company was the underdog and was being harassed by big government." "How can you be so sure, Don?" I asked. "It's all in black and white. I've seen the report myself. It's at the State Consumer Protection Agency. It's hot! In fact, it's really a mind blower. The report' tells you everything you need to know about the entire case. It shows the complaint, the opinion of the commission who reviewed the case and, of course, the final order which tells Amway to' cease and desist' from certain practices. I'll get you a copy this week, okay?"
'After personally reviewing the FTC report and speaking with the FTC attorneys concerning the commission's final order, it is my own opinion that this order was not a victory for the company.
However, because some of the original charges were re versed, it was understandable how Amway could interpret this otherwise. One could also see how they would want to.
"I'd sure like to know how they are complying to this final order." "Oh, they're complying all right. They have to. I have also seen a copy of Amway's compliance report--what a stack of papers! The real question should be, 'Are the one million distributors complying?' But let's not belabor that now," Don calmly replied. "Besides, we have a lot to do tonight, right? I'll see you later this evening. I've got to shower."
Don ran off across the shiny hardwood floor, slapping the back of his teammates as he went. He had always been an extrovert and was deeply loved and respected by his peers. That night was going to be a very important evening. Don and I had decided to attend a "line" seminar being held at a new local hotel, the Marriott. Our plan was to gather as much information as possible concerning the activities of the distributors during this three-day event. This was not the first time Don and I had worked together in this fashion to gather information. We had visited dozens of homes, rallies and conventions in a blitz of documentation.
Our purpose was to poll as many distributors as we could to determine their "business volume." We would also question the hotel's catering department to find out what the actual costs would be to the promoters of this event. What kinds of profit would be realized from this weekend for those in command? Soon we would have a good idea.
When Don and I arrived at the Marriott Hotel, we could see that the promoters of this event had really gone all out. There was a Rolls Royce parked at the front door. Directly behind it was a 32-foot luxury motorhome. We stood together and watched as dozens of Amway distributors took turns sitting in this classic automobile.
"Oh, look at that interiorly exclaimed a young woman, carrying an oversized handbag. She gently and lovingly ran her fingers across the supple leather seats and polished wood trim interior.
"Someday I'm going to own a car just like this!" she declared, now smiling and perching herself into the back seat. The others laughed and crowded around to experience the pleasure of how it felt to sit behind the wheel of this fabulously expensive automobile.
The motorhome received the same reverence. There was a line of distributors anxiously waiting, each desiring to see the inside of this luxury coach. Each distributor was easily identified by his large blue "Dream Weekend" nametag. Boy, were they doing just that-dreaming! The retail price on these two vehicles totaled close to a quarter of a million dollars!
Don and I did not waste any time. After watching the distributors with the Rolls and the motor coach, we went about our outlined assignments. We split up and questioned as many of the distributors as possible prior to the evening's program. Our objective was to find out the business volume (approximate amount of retail sales for the month) of each distributor we interviewed.
Approximately 90 percent of all those we interviewed were more than willing to provide us with the much needed information. Our approach was simple and, of course, enthusiastic.
"Hil My name is Philip Kerns, and I'm doing a story on free enterprise. Would you please assist me in collecting some important information for this vital success story?"
In most cases after securing the name of the distributor, our conversation continued something like this.
"How long have you been in the business?" I asked.
"Oh, I'd say about six months."
"And what was your total business volume this last month?"
"Now wait a minute. That's personal."
"Sure, I understand that, sir, but we're just doing a poll to determine the average business volume of all distributors. This information will be kept confidential," I reassured him.
"I see. Okay. Well, it was $175 this last month."
"Have you ever had a better month?"
"Thanks so much. I appreciate your cooperation!"
Just as soon as I would finish one interview, I'd turn to start another. Sometimes I'd glance at the person I had just talked to, only to see that he was telling others I was doing a story. This would invariably cause some excitement. It wasn't uncommon for a mob of enthusiastic ladies to follow me through the lobby, clawing at me and begging for an interview. It was all in fun, of course.
But I couldn't afford using time for only fun. Too much attention in this posh hotel lobby could cause me to be banished. Some of these meetings were considered "closed functions" because of the type of information given. Only distributors from this line of sponsorship could attend. Whenever this interviewing generated too much activity, I'd politely thank them for their time and slip away to find my partner.
Over a period of several months, we interviewed 156 distributors. We found that the average business volume of the combined group was $402 per month. Strikingly, this figure came close to the one Amway posted in its monthly magazine as required by the FTC. I learned later by studying the final report from the FTC that Amway was ordered to print this information. It was not merely an act of volunteerism.
This polling helped confirm the reliability of the company's statistics. Amway reported that the overall average active distributor produces only $454 in business volume each month. That is a gross earnings before operating expenses of about $135 (based upon a 30 percent margin for retail profit) each month for retail sales. If you wholesale the products, the earnings drop drastically. This is hardly enough money to pay for much in the way of operating costs such as gas, other car expenses, supplies and the like, let alone some of the expensive weekend events one is encouraged to attend. Tickets for these events range anywhere from $4 at the door up to $280.
Finally it was time for the rally to begin. Don and I now stood and watched as hundreds of people stood in line to enter the hotel ballroom. To the rear of this large room, one could see a well dressed tailor measuring a rather large portly man for a suit. He was bending over with his arms expanded from waist to heel, carefully stretching his tape vertically along the trouser leg. I watched carefully as he held this position for quite some time. I could see that he wanted the measurement to be exact.
It was 7:55 p.m. and in just five minutes the doors would open to the ballroom. in order to kill some time and to get a better look at the transaction, I stepped closer to the tailor and his customer. Behind them stood a long rack of handsomely designed threepiece suits.
All of a sudden, a very stylishly dressed brunette came up and took the arm of the tailor's patron. The gentleman seemed quite pleased that she had joined him. I watched carefully as he reached into his jacket and removed his wallet. He carefully counted out several large bills and was promptly given some change and a receipt. The tailor and his client shook hands. The tailor gave a stiff respectful bow, and the customer turned, put an arm around his confrere and walked happily away. Onlookers nodded in approval. It was quite a show.
I thought to myself, "Couldn't he have purchased this same suit for much less at a retail outlet?" Then I remembered my first rally when I had purchased a ring for my wife. I had questioned Lester about the table full of expensive jewels, but he had said that they were being provided by local wholesalers, which he had invited to participate in the rally. However, later when my wife had her ring appraised, we learned I had paid full retail price, plus some.
Clearly, concessions are an important part of these rallies. The magnitude of this unorthodox traffic is enormous, and the cash profits resulting from it are huge.
The doors had now been opened for several minutes. It was a beautiful ballroom with exquisite chandeliers. The tables were adorned with crisp white linen tablecloths, crystal and fine china. The water-filled goblets glistened in the dim light. Scurrying to and fro across the floor were well mannered waiters and busboys attending to the needs of those now seated. Each attendant, properly dressed in a white jacket with gold buttons and shiny black slacks, was ready to assist. Don motioned me to follow him and together we slipped into the kitchen. We found a doorway unattended next to the speakers' platform. This was where we waited and watched. All around us scurried the hotel staff carrying trays of various entrees. They were so busy serving the 1,500 hungry guests that they never even blinked at us.
As soon as the meal was over, the lights were dimmed even more; and once again, as in most such functions, the band began to play. This time a triumphant march set the stage. The announcer named the couple to be honored, and then the spotlight was swung to the side door. just as I had witnessed at dozens of these events, a long procession of distributors filed past the crowd up to the stage. Every achievement was recognized no matter how small.
Now was the moment for which everyone had been waiting. The host was standing at center stage, edifying the individual he was about to present. Sometimes this narration would go on for several minutes, elaborating on how much this person (usually Diamond level or above) loved everyone in the audience and how everyone should listen to each and every word he was going to say if the listener wanted to be successful.
I looked out at the sea of faces. The speaker seemed to hold them spellbound. Some were nodding and smiling approvingly to their neighbors. Others just shook their heads up and down showing their approval to his statements. All appeared to be hanging onto his every word.
As I stood there, I found myself concentrating so hard on these reactions that I missed the big introduction of the honored guest. As I analyzed the individual faces, I was so fully absorbed in their expressions that the throbbing of the band could only be faintly heard in the background. Suddenly I awakened from my trance of thought and turned to the platform. The leader now jerked his coat from his back and threw it over a chair. He stormed back and forth across the stage, exhorting his listeners to be winners, not failures! He bellowed out his message with promises of freedom and financial independence. Frequently, he would pause to absorb the enthusiastic applause of his listeners.
As I watched this exhibition, my subconsciousness reminded me of the statements I had previously missed.
"Ladies and Gentlemen, the greatest leader who ever lived. Our BODY could not exist without a head like this. The most wonderful man in the world..."
it suddenly hit me that this was how they had announced this leading dignitary! I had heard that sort of glorification at rallies all over the country. "But isn't Christ the head of the church body?" I thought.
The crowd was now laughing. As I looked up, I could see this leader, who was exalted much like a god, moving even faster than before. Body girations and descriptive arm and head motions accompanied his every word.
"Do you people out there want to be free?" The crowd now sprang to its feet and screamed back to him, "Yes! Yes!" Their arms were stretched outward and upward, hands open, in a Pentecostal fashion. Many were swaying and waving their arms back and forth as they responded to the speaker.
"How many of you people want to tell the boss to kiss off?" Again the crowd screamed back, even louder than before. The applause now became rhythmic. They all stood and clapped in unison. Some stamped their feet while others beat on the tables! It just kept going on and on. This pseudo Christ like figure lifted his hands towards the heavens and nodded his head to each beat. It was an orgy of enthusiasm.
Even after the crowd sat back down, their voiced responses continued. Each statement the speaker made generated more excitement in the crowd. The beating of the tables became more intense. Then those sitting at the table closest to me stood again. Hundreds of enthusiastic followers all across the room followed suit. Each was fully engrossed in the leader's words. As I looked out into that sea of faces, every eye appeared to be fixed upon the speaker with a glassy stare. They seemed hypnotized.
One black fellow directly across from me was beating the table so hard with his fist that the water goblets were beginning to spill. His face expressed utter jubilation, and his body was rocking to the throbbing beat.
Hundreds were now screaming at the top of their lungs, encouraging the speaker on. Dozens of individuals stood on their chairs; some whistled while others took their napkins and twirled them over their heads like rodeo stars.
I couldn't believe what I was seeing. It just wouldn't stop! For a moment the noise began to die down, and I thought they were going to quit. Instead the unified clapping took an intense upswing. They were now whistling, stamping and beating on the tables faster than ever. The noise was deafening. Bodies were twisting, jumping and dancing to the beat.
The speaker was dripping with sweat. His head was nodding with intense rhythmical sways. His hands, fists clenched beat up and down as if striking invisible drums. He intermittently lifted his arms upward and outward in a victory like stance.
"What do you need if vou're going to succeed?" he roared into the microphone.
The crowd responded instantly. They knew the answer, and without missing a beat they chanted loudly, "Books, tapes, rallies! Books, tapes, rallies! Books, tapes, rallies! Books, tapes, rallies! Books, tapes, rallies!"
After what seemed like an eternity of chanting, the leader, much like the conductor of an orchestra, thrust his hands out slashing the air in an apparent signal for the crowd to stop. Instantly the room became silent. One could have heard a pin drop.
Then, after a few moments, one could see that people were now looking at each other. Some were smiling. Others were laughing. The host for the evening's program was now making announcements of future events, and the black fellow near me, like many others throughout the room, went around and began to shake the hands of everyone within reach.
"Ain't it great? Man, I'm excited!" he would exclaim to each person. Many, in turn, would acknowledge that they, too, were excited.
This fellow then came up to me and put his sweating palm into mine and with a gleaming smile asked, "Are you excited, Brother? Are you excited?"
I really didn't know what to say, so I just returned the smile. He went on and shook another dozen hands, expressing the joy and delight that he felt that night.
This same type of electricity was being generated all over the room. Don came and stood next to my side. I wondered what he was thinking.
All of this allegiance shown to the leader reminded me of what Lee Brown, Diamond Direct, had told a crowd at a different function. He urged them on with words similar to the following:
"Step out on faith now, not understanding, like I did not understand. I didn't know what it was all about, but I believed in my friend. I believed in my sponsor! And I stepped out in faith, not knowing what to do; but everything he suggested I did. But I also believed my sponsor and my friend would not do anything to hurt me. Do as your friend and your sponsor will do. Accept that on faith. And do that what is suggested for you to do. And just follow these principles which are proven to work, to have whatever you want in life!"
As I reflected on Brown's words, I felt Don nudge me. "C'mon, let's get out of here, Phil. All of this is making me sick. How could we possibly have been taken in by all of this at one time? We were so blind."
I stood fast and took one last long look. I felt compassion. My heart ached for all those I was watching.
"Phil, let's get out of here," Don pleaded. I surrendered to my friend's request. It seemed that reaching those people with the truth would be an insurmountable task, but I knew we had to try.
As Don and I walked back to the car, I remembered another event where the speaker seemed to hold this same kind of mesmerizing power over his fold. It was still vivid in my mind. The crowd really wanted to believe. The room was filled with the same type of hype and electricity.
As I reflected on that other event, I remembered the words, which he so dynamically exclaimed.
"I know what I'm going to have to say when I see someone who's got his nose so high in the clouds that if he walked outside and it was raining, he'd drown to death. I know what I'm going to have to say. I'll just have to say I've got a really good friend. No, this really good friend didn't have status. He got down on his knees and washed people's feet. And you know, baby, he made you and 1. His name is Jesus Christ. So what gives you the right to have status?..."
Don was now driving up Powell Boulevard. He pushed the accelerator to the floor, and I sunk back in the seat, trying to remember more of what this distributor had said and why he had such an apparent hatred for status seekers. What was the real motive for his speech? His later statements revealed more of his intent.
"Now they got some books on the table back there. Be my guest. As a matter of fact, if I was back next to that book table, I'd be throwing them out into the audience because that's what you need. That's where it's at. Read! Read! Read! Listen to tapes!
I was dead tired, and I fell asleep immediately upon reaching Don's place. I slept until late morning, and when I awoke, I just lay there and thought back upon the events of the preceding night. It had all seemed like a dream--the Rolls Royce, the motorhome, the tailor, the ballroom, the speaker, the hype--but I knew full well that it was not. It had really happened.
When Don finally got up, we sat at the table with a cup of coffee and analyzed not only the events of the night before, but all of the functions we had attended that month. This had become a ritual for US. In the past we, too, had been caught up in the put-on glamour and magic of these types of festivities; but now we were looking below the surface.
I would venture to believe that Amway distributors are motivated more than any company in America. Some distributors attend functions every week of the year. There are, for example, "Nuts and Bolts Seminars," "Dream Weekends," "Family Reunions," "Diamond Opens," "Pearl Opens" and a myriad of other sessions which climax with the biggest event of the year, "Free Enterprise Day."
The "Dream Weekend" at the Marriott Hotel proved to be a great financial success, not necessarily for those in attendance but for its sponsor. We learned from the catering department that the actual cost charged by the hotel per person for the program was $54.75. However, the host of the event charged $90 per ticket, thus grossing $135,000. The total gross profit was $52,875, as there were 1,500 in attendance. That's certainly not bad for a weekend's work. Of course, this figure includes only the tickets. It does not include the profits made from the sale of books, tapes, automobiles, programs, clothes and other concessions. That's all additional profit! One distributor told me that most Diamonds put on 10 to 12 rallies per year, and if they are not making $50,000 per weekend on concessions, they are just plain stupid!
Remember the "West Coast Free Enterprise Day" held at the Portland Coliseum? Well, the following year I did some research about that event. The stadium manager told me, "Free Enterprise Day was a mad house! And if you thought that the event you attended was crazy, how about this year. There were 17,000 present."
He went on to explain that it cost $2,000 per day to rent the arena for a total cost of approximately $6,000 for the three-day event. Tickets sold for $18 each so that translates out to $306,000. When you subtract the $6,000 cost, you see a $300,000 gross profit--for ticket sales only. All of the other items that were sold, no doubt, added greatly to the gross profit figure, perhaps even multiplying it several times.
But you say, "Hold it! What about costs like the band who played that famous 'Rocky Theme?"' I spoke with two members of the band, Marvin Bright and Daniel Lents. Both complained that they were never paid to play at these functions. In fact, the host insisted that they pay their own admission fee, transportation and lodging.
He's just greedy," said Lents. "Now that's what I call beating the band!"
We have only touched the surface on possible profits. Let's take a closer look at the kinds of money that could be made from the sale of concessions as well as rally tickets. The following is an example of total gross receipts which might possibly be made:
17,000 /2 (couples) buying 1 tape pack @ $39
17,000/2 (couples) buying 1 book @ $5
17,000 tickets sold @ $18 =
Total Gross Receipts
I believe I am being conservative in this example because many distributors buy boxes of books (paying full retail price) at these events to sell or distribute to their downlines. it is also considered taboo for distributors to attempt to purchase non-Amway produced books from local wholesalers.2
The leaders, therefore, have a captive market--a market that is, in my opinion, incredibly more lucrative than Amway could ever be! Remember, this example is for just one event. Canon, Wells, Hall and others fly to and fro across the country and hold event after event each year.
The number of persons in attendance at this rally. Lester has had over 15,000 present at his Atlanta conventions.
Let's look at another aspect of this non-Amway produced business. If you are subscribing to a "Tape of the Week" Club, which would cost approximately $30 for eight weeks, you would be spending an additional $195 per year for tapes. If only one half of the entire Amway population, or approximately 500,000 distributors, subscribed to this program, that alone would add up to a staggering gross receipts of ninety-seven and one-half million dollars ($97,500,000.00) per yearl
I have in my possession a distributor's income chart (non-Amway produced) which purports that the largest amount ever earned by selling AMWAY PRODUCTS in a given year was approximately $416,000. How did John Wells earn over $70 million in one year as was claimed? Was it on Amway products, or was it on concessions?
Thousands of distributors each year go to functions all over the country as well as abroad. Millions upon millions of dollars are spent at events on non-Amway produced materials, which can be found stacked in heaps and mounds on concession tables everywhere. From my estimation, during fiscal year l981 Amway distributors may possibly have contributed in excess of $791 million' on concessions to be motivated I
I found a distributor who stated that he spent 56 l/2 cents for every dollar worth of Amway products
He bought during a six-month period. I took his number and multiplied it by the retail sales amount of $1.4 billion as reported by Amway Corporation in 1981. I have spoken to distributors who claim this figure (56 1/2 cents) is higher while others say it is lower.
Life in Lincoln City, Oregon is tranquil in January. One can avoid the hurry and scurry of tourists and traffic, which overwhelms this coastal city during the summer months.
My wife and I have time and time again returned to this little town to enjoy both the solitude of the day and the joy of each other. Some of our friends believe we are "looney" to go strolling hand in hand along the beach during this season of the year. After all, most of the shops are boarded up for the winter, and the weather can be dreadful But it is moments like these that I cherish the most--the times when the weather would become too unbearable and we would laughingly retreat to the nearest cafe, usually overlooking the sea.
God has given me Victoria, such a beautiful gift, and together we are able to simply share one another and marvel at all creation. We have come to the conclusion that we don't really need material success in our lives, at least we do not want to be obsessed with obtaining it. Our lives are flourishing and prospering in many other ways, though not in monetary terms. We have already been married eleven years and our son Timmy, who is a joy to us, has grown up and graduated to soccer, Cub Scouts and basketball.
We don't have much, at least by some people's standards. But we know we have each other and for us, that's what counts!
As my wife and I stood peering into a craft shop window carefully protecting ourselves from the rain, I thought about my nephew Garron, who is blind. He has suffered all his life. As an infant his eyes were removed to prevent the spread of cancer. Now at the age of eight, another medical team is preparing to remove a large tumor from his skull. He is a remarkable pianist; so much so, in fact, that his gift is often shared before audiences in his own hometown.
Garron knows what fate may await him in that operating room, but he has a tremendous source of courage. It comes from heaven above. No material or carnal possessions or human touch could create the strength he possesses. He is not a child who would covet, probably because his blindness protects him from coveting.
One day while I was talking with Garron, he confided in me a secret he had on his heart: "Uncle Phil, there is only one thing that I want in life, and that is to go to heaven and be with Jesus. This life holds nothing for me except pain."
Garron's faith is wonderful, and it has touched the lives of many people. I just wish more people could see that there is more to life than just being mesmerized by money or material things. Certainly it is okay to have possessions. I just don't believe possessions should possess you. To possess material things or money is one thing; to be obsessed by them is quite a different thing. Life is full of riches. Just look about and you'll find them. Look up and you'll find the greatest treasure of all.
WHAT EXACTLY IS A CULT?
In general, a cult is a small religious group outside the established churches, usually with a charismatic leader who is a strong authority figure. One psychiatrist has described cults as "religions that haven't grown up yet."
It was December 9,1 981, at approximately 5 p.m. when I received a telephone call from Don Griffin. I had previously asked Don to find for me any complaints in the United States addressed to consumer protection agencies which would specifically allege abuses concerning either the sale of concessions or emotional injury to distributors. Up to this time, most of the complaints we were able to compile either referred to products or non-payment difficulties. Don had always been a whiz at research, but I was astounded once again by his ability to retrieve information.
"Phil, I've found what you've been looking for! And more! And it is right hereon the West Coast!" Don stammered. I could tell by his voice that he had discovered something valuable.
"Well, what is it?"
"Now listen carefully. There's this fellow in Portland, Oregon. His name is Bret Sutter. He is a building developer and an Amway distributor. This guy filed an official 29-pagecomplainttotheAmway Corporation purporting mind control by some distributor organizations, and he has documented some of the same things you've seen. I talked to the guy, and the whole thing is really revealing! "How do I get in contact with him?" I asked anxiously.
"He's waiting for your call. Now I'm not sure about this, but I believe he's really frustrated because Amway hasn't done much in response to his complaint."
I called the number Don had given me. I found a somewhat suspicious voice on the other end.
"I received a call from Don Griffin with whom you spoke.
Bret interrupted, "Mr. Kerns, can we meet somewhere and talk?" "Of course. Where would be a good rendezvous point?" I asked. We didn't waste any time. I met Bret at the Red Lion Inn within the hour.
Bret's story as I was soon to learn, was spellbinding. I sat across the table from this blonde, thinly framed man and listened intently as he described, in detail, the circumstances leading up to his complaint.
Bret was unique--so different from most of the distributors I had interviewed. He possessed a keen awareness of what was going on. He also was well-schooled and retained a self-possessed ability to communicate his feelings and observations.
"Mr. Kerns, I got into this business solely for the purpose of increasing the bottom linel" "Please, just call me Phil," I interrupted.
"Sure, well, okay Phil. As I was saying. .
He appeared frustrated that I had broken his train of thought. I felt he needed to get this story out. it must have been building up inside of him. He contemplated his words before speaking.
"I got into this business to make money. Nothing else As the months went by, l discovered it was much more than that! A lot more was going on. Do you know what a cult is, Phil?"
"Of course," I replied, realizing his question was rather strange. It was as if he were probing to find out whether or not he could trust me with what he wanted to share. I encouraged Bret to continue.
"I believe things have been allowed to get out of hand. It's like a herd of cattle running through Times Square, trampling all over people."
"What makes you so sure?"
"Look I have no quarrel with Amway, okay? Their business concepts are great. It's just that I feel when you've got over one million little toadies running around out there. It's awfully difficult to keep them all in line!" "Okay," I interjected. "But what makes you feel it's a cult or that it may be out of control?"
"First of all, I didn't say the company was a cult! However, I believe some key people on the Amway Distributors' Association Board and thousands of people downline are using the same techniques the cults are using in order to control the minds of the people in their groups. I believe they study this stuff, and they know precisely what they are doing. It's gotten crazy! I'll explain the cult thing a little later, okay?" 'Sure."
'Now let me go on. You see Amway tells you this is your own business. But in some lines of sponsorship, the leaders do not let you operate it as your own business! You've always got some twerp upstream telling you what to do. When you break off and go' direct' to the company for your products, supplies and other needs, you're supposed to be really independent. Right? No way! They still keep the chain of command strictly intact. Sure, the FTC ruling says they are not a pyramid. Technically speaking, Amway is not a pyramid. Their manual purports they are a direct distributorship business, but behind the scenes, many of these little ole brainwashed toadies are moving millions of dollars worth of non-Amway produced products --such as books, cassettes, easels and rally tickets. You name it! These lower echelon distributors and newcomers have absolutely no idea what's going on, not to mention that they never see a dime from this junk. They just flush this stuff downstream, and others eat it up. There is such a large appetite created for this stuff that one can imagine practically no end to the volume they can push.
"Man, they're running around with tapes in their cars, tapes in their homes and tapes at work. Everybody is listening to the 'Dream' and how they are going to get rich. It's the slickest thing happening in America today. Millions and millions of cash receipts are being raked off by a select few from the high-volume peddling of all of these non-Amway produced materials. People are told, and they believe, that they must have them in order to succeed. I am absolutely sick of the whole thing." "Bret, tell me about the cult angle?"
"Okay." Bret sat u p straight and continued. "Have you ever heard of Dr. John Clark, J r., a professor at the Harvard School of Medicine?"
"No, can't say that I have."
"Well, he did an extensive study on all these little toasted groupies as they walked out of the back door of your local guru meetings, and he came up with some pretty interesting thoughts. I found that the points he was making were describing a perfect profile of your class A-1 brainwashed Amway distributor."' Bret pulled a large yellow piece of paper from his pocket and began reading its contents.
"They appear to have become rather dull and their style and range of expression is limited and stereotyped. They are animated only when discussing their group and its beliefs. They rapidly lose a knowledge of current events. When stressed even a little, they become defensive and inflexible and retreat into numbing cliches'. Their written or spoken expression loses metaphor, irony and the broad use of vocabulary. Their humor is without mirth I"
He also described programmed people and the characteristics of a cult.
I reached over and touched Bret's arm to stop him before he could continue. "Now tell me, where have you seen someone being programmed?"
"That's simple. You're programmed every day--every time you turn on the TV Programming is a gradual sort of thing. Doctors have been saying for years that the human mind is always more susceptible to suggestion whenever there is excitement present."
I began to understand. "So that's what they do-at these meetings,
'Bret Sutter is presently an Amway distributor. He is referring to leaders within this business who use
brainwashing techniques on their followers. Not all Amway distributors participate in these practices. I thought to myself. "The band, the bragging, those colorful pictures of Cadillacs, Mercedes and Rolls Royces. It's all part of the plan I And once they get you, they gradually program you into seeing things their way."
"What about the guys who surround the leader? Aren't they suspicious?" I asked.
Bret began to laugh aloud. "Sure, they know what's going on. But the only thing that the leader cares about is whether or not they are loyal. That's all. The reason I was laughing is because i n my complaint to the Amway Corporation I described, in detail, how they break a man and test his loyalty. Now you're going to think this is really bizarre, but," Bret broke out laughing again. "Really, Phil, it's not funny, but ... (gulp) but I just can't help myself every time I think about it.
"You see on several occasions I questioned one of my uplines' Dean Robertson, regarding the idea of the leader being the 'God man'--you know, the oracle of God crap? We're told by our uplines to shave and to have that clean look, but what about the leader! He's got twigs sticking out all over his face. But that's okay because he's arrived and he's supposed to be our figurehead.
"Robertson has told me, 'We use the same techniques that the Nazis used. Hitler used it for evil, and we use it for good."' Bret continued. "All of what Robertson was saying didn't make sense until some of these Diamonds started to publicly humiliate people. Here's exactly what they would do."
Bret leaned across the table and began reading directly from his papers. "I should note at this point that at the Kenney's Family Reunion, Wells held a meeting for those at 1,500 PV (point value). A friend of ours, who subsequently quit the business, attended that meeting. Another distributor and friend who also later quit the business came to us with the following report.
"At the meeting John Wells entered the room with a squirt gun. He mounted the stage and announced that he was going to test the total faith of the Directs. He called all Directs and Silver Producers' up on stage and instructed them to strip to the waist. They did so. He then teased them with the squirt gun, ordering some to do a number of push-ups and so forth. Two were ordered to drop their pants, which they reportedly did. One was Marvin Curtiss, and the other was Dean Robertson.
"Kathleen Emery is in possession of the photographs showing Robertson, Curtiss and the others. She volunteered to show the photographs to one witness and did so. The other witness was present at the meeting. A few weeks later Lucy, my wife, was with a couple of individuals who were talking about the incident. They said that distributors are sometimes required to humiliate themselves in public places to show their loyalty to their uplines. Through this process it is known that they can be trusted and can be depended upon to do what they are told."
"Incredible," I thought to myself. "This all sounded so familiar-the hype, the dream goals, the misrepresentation, all of the pressures exerted upon these people, and now this! Humiliation tactics! Were they actually testing their loyalty?"
"That sounds so much like the tactics of Jim Jones and his inner circle,"' I thought. I looked and listened to Bret more intensely than before.
Bret continued, "My complaint went before the Amway Distributors' Association Board. Ed Postma, the Sales Coordinator for the Northwestern Regional Sales Department, said that it caused quite a fracus. In fact, I believe my complaint, along with lord knows what other issues, caused the board to reevaluate their position. The reason I believe this is true is because the board, shortly after I filed my complaint, published their manifesto on April 16,1980.
"I believe they were freaking out, especially after that Federal Trade Commission bout. It seems to me that this manifesto is an attempt to correct some of these practices. Allow me to read you Chapter 3 of the manifesto."
'A level of achievement awarded to a distributor who reaches the 7,500 point value in his personal group in any one month or who sponsors one 25 percent group.
Again, Bret read from his documents: "The only requirement which distributors can impose on prospects whom they are willing to sponsor is that the new distributor shall have an official Amway Sales Kit (without substitution or alteration), sign the SA-88 Distributor Application form and mail it to Amway.
"A new distributor must not be required, as a condition to becoming a distributor, to purchase a specific product volume, maintain a specific minimum level of product inventory, procure a 'starter' or 'decision' pack, purchase tapes, books and other materials or attend meetings, seminars or rallies; however, many of these may be desirable or important to the development of their business."
"Correct me if I'm wrong, but what you are telling me, Bret, is that Amway and the Amway Distributors' Association Board in their manifesto are saying, 'Hey, we don't want you heavy bowlers out there cramming all this unnecessary non-Amway produced paraphernalia down the distributors' throats. Right?"
"Is this activity still going on?" I asked.
"You bet it is! I know plenty of people who will tell you that many of these distributors have more non-Amway produced junk in their garages than Amway products."
"Why?" I asked.
"Because they're told that without these valuable tools, they cannot succeed. They'll fail. It's ridiculous. They can't get ahead because they're spending a fortune on this garbage. The tapes and books don't tell you how to build a successful Amway business. They are just full of philosophy and religious wisecracks. They only emphasize how to sponsor new people (which creates new consumers for the non-Amway produced junk). The leader's market is not the general public; it's his own distributor force so retailing is not stressed."
After this engagement with Bret Sutter, I learned that the distributors named in his complaint were required to defend the allegations made against them.
Sutter's complaint cited a myriad of subjects. How ever, two of the key issues were (1) misrepresentation of the sales plan and (2) programming for the sole purpose of having unsuspecting individuals purchase non-Amway produced materials and attend seminars--all of which only enriches the leaders.
Later I obtained letters, which were written by those accused in the Sutter matter. These letters of rebuttal revealed that, in fact, Sutter was telling the truth when he said these people were required to strip in front of the audience. However, the respondent of this complaint alleged that it was all only in fun and pointed out that they were wearing bathing suits under their pants.
Was it really only in fun? Or was it a demonstration for a predetermined result--a means of mind control? Were they, in fact, wearing suits? Regardless of whether it was only in fun or not, the point seems to have been well made: Do as you are told by your upline, without asking questions.
Today Bret is still running a successful Amway business. He says he is satisfied with Amway's response to his complaint; however, he wishes that more would be done to clean up the business. Bret, like many others with whom I have spoken, just wants to run his business of retailing products, privately, and without all of these additional pressures from upline. Sutter feels that if the Amway Distributors' Association Board can't resolve and police this problem, then who will?
"I don't know what a cult is."
U.S. Attorney General
Griffin B. Bell
Los Angeles Times
THE TRUCK DRIVER
Information continued to pour in from various sources. Many had now heard that I was investigating these bizarre allegations. Just what kinds of tactics were being used? The meeting that I was to have with Carl Issenberg of Medford, Oregon, gave me a clearer picture of strategies and techniques used by some of the people in this business. It was as if another light had been switched on revealing more about this ever unfolding story.
As I pulled up in front of Carl's bungelow, I saw a tall, slender man with a pleasant smil'step outside, motioning me to come in. Once inside, I settled myself down into a comfortable easy chair while Carl paced back and forth. He had a lot to tell me, and he was anxious to get started.
"Mr. Kerns, these people don't care who they step on as long as they make a buck. lt's 'Onward Christian soldiers, marching as to war 'First they love you into the business. They entice you to comply and buy. Then if you don't see things their way, they discard you like rubbish, all in the name of Jesus."
"Who would discard you like rubbish?" I shot back.
Carl shrugged, "Well, there are so many people involved. It's really hard to say. I, uh ...
He paused for a moment, searching for the words.
"You see, that's really a hard question to answer. The 'legs of sponsorship,' you know, those businesses that practice this type of baloney most likely span all over the globe. Don't get me wrong. Not everyone in Amway acts in this same fashion. There are a lot of fine, well-run businesses."
"Who's pushing people around like this? Get specific!" I urged.
Carl bent over and shook his head back and forth. I anxiously awaited his reply.
"One of them is warren Perkins, an Emerald Direct in Washington state. In fact, he is my sponsor. You see, I feel that Warren has used me. That's why I was willing to talk to you. I want others to become aware of some of the tactics being used in this business."
I sat back down and leaned forward, listening more intently than before.
"Now when I got into this business, I intentionally decided to be sponsored by Warren Perkins. You see, I had my pick of distributors because I am an Amway truck driver. I still work for the firm, which has a contract with Amway to deliver products to various households through out the Northwest. From my ledgers I knew Warren was one of those who was moving the largest volume in my area, so we decided to be sponsored by him. Now I wish I had never made the mistake of joining up with him."
I sensed that Carl's spirits began to spiral down. I knew he had much, much more to share. I listened patiently as he described how Warren got him started into this business. He explained what I had heard so many times before, but this time there was a new twist.
As far as Carl was concerned, Warren was a "high roller" and knew how to move quickly. At Carl's first meeting, Warren gave the presentation and afterwards passed out some non-Amway produced book sand tapes to the group. A teach meeting, there after, he did the same. Carl explained that after he had sponsored a sizeable group, Warren sent him a bill for $225.64, the cost for materials passed out at several meetings.
It was a total shock to me! I didn't expect this bill. It was like a slap in the face. Why hadn't he told me that he was going to charge me for these items!" Carl exclaimed.
Later when Carl went to Warren's home, he carried with him all of the non-Amway produced materials he had collected from his downlines and demanded a refund. Warren interpreted this as quitting altogether.
"No, I'm not quitting the business. I'm just quitting your personal sideline of distributing all this non-Amway produced junk!" Carl had retorted.
Warren reluctantly refunded his money minus a five percent restocking fee, but he didn't stop here. The battle was on! After this incident, Warren went around Carl and began to be little him in front of those who Carl had sponsored.
"Oh, he's negative! He's going to ruin each and everyone's chance for success! I'm telling you that you need these tools!" Warren would make statements 'like these each time he met with one of those recruited by Carl.
I could now see as Carl shared his account of this backbiting and disparagement that down inside he was hurting. His eyes became clouded, and I could tell he was really upset.
"This guy would never let up," Carl painfully continued. "He went to my friends and said ... I couldn't believe it when he went to those I care for so much and told them Satan had gotten a hold of me, and that's why I was negative."
I had heard of these same tactics being used before. Many were led to believe that this business was ordained by God and anything contrary to what the leaders say or do was of the devil. Didn't this guy, Warren, have a conscience? Here before me sat the by-product of these questionable tactics. What would cause anyone to say or do such things? My only conclusion was greed--an obsession for money.
I changed the subject, and it wasn't long before we were laughing and carrying on like old friends. Carl was truly a warm human being. it was beyond me how someone could treat a person in this way for the sake of money.
Say, Phil, I sure wish I could show you what all of those Amway distributors look like!" Carl exclaimed. Together we laughed.
Carl explained to me that the large white panel truck he drives is generally fully loaded with boxes of Amway products to be delivered on the route. He went on to tell me how almost every garage where he unloaded Amway products would seem to house almost as many non-Amway produced items. There are books, easels, boards, "decision" packs and all sorts of literature. Some garages are literally full with thousands of dollars worth of this kind of inventory. I have witnessed in excess of $200,000 worth in just one day!
It's just as I had thought. All of this activity was really going on--even as Sutter had said, in spite of the manifesto.
"That's how they make their money, Phill" Carl explained. "Now you can see why in the beginning Warren sold me 200 percent more of this stuff than soap!"
I thought about all of the questions Carl still had not answered. How much more did he know about the business? Could he confirm any of the allegations made in the complaint by Sutter?
I soon found Bret Sutter was not the only one who knew of humiliating incidents such as people removing their pants on stage before an audience. Carl shared how Diamond Direct Fred Doan bragged about taking down his pants for John Wells at a function held back east. He said that this was his way of demonstrating his loyalty to John, and by doing this he knew John wouldn't do anything to hurt him.
"Tell me, Carl, how can you be sure they are really looking for total obedience?" I asked.
Carl turned his head and grinned. "Let me give you an example, he said. "I remember hearing about Fred Locke standing up in front of a crowd and saying, 'The degree of obedience required in this business is if your upline tells you to jump off a bridge, don't ask questions. Do it!"
"How screwy and unbalanced. What did taking down one's pants or jumping off a bridge have to do with selling soap?" I thought to myself.
Carl had seen and heard a lot. He continued. "Phil, have you ever wondered what happens to some of the money that is collected at various functions? I have seen distributors who were hosting events walk up to the money box, and when they thought no one was looking, they would slip some of the cash in to a coat pocket and walk out. The only other person who knew what was going on was the one watching the box. Who is accountable? So many of the functions require only cash, and seldom are receipts given."
The questions that Carl was asking brought to mind a conversation I had with Al Inder, a Pearl Direct from Tacoma, Washington, who said that he was tired of apologizing for an hour and a half for the mistakes of others in this business. Mr. lnder is an Amway veteran, who has been in the business for twelve years, and is one of the 6,000 voting members of the Amway Distributors' Association. He also feels that there is a real possibility that much of the money received from these non-Amway produced materials is not declared as income.
His statements made me wonder how many millions of dollars in cash receipts are escaping the tax bite of the Internal Revenue Service? Does the IRS know that there is a massive "ghost", system of non-Amway produced materials being sold behind the front of this legitimate Amway enterprise? Apparently from what I have learned, this business is widespread. Since talking with Mr. Inder, I have questioned many distributors about the size of this side business, and some have expressed a belief that it is larger than the Amway business itself!
Could that be possible? Bret Sutter in his complaint said that he was spending 56 1/2 cents for non-Amway products versus every dollar he spent on Amway products.
During the course of the time that I talked with Carl, incident after incident kept unfolding, each one giving me additional insight into this business. One particular story that really stands out in my mind was the time Carl met Tom Kenney. He had just gone to a rally at the Marriott Hotel in Portland, Oregon.
"Come on, Carl, "Warren insisted. "This is your big chance to meet a Diamond I We'll go up to his suite."
By this time, Carl was already be coming disillusioned with all of the fanfare, but he reluctantly followed Warren upstairs. Both men and their wives had to fight their way down the hallway through the mobs of people to get to Tom's suite.
As Carl walked in along with Warren, he saw the room surrounded with familiar faces including Dick and Kathleen Emery, Steve and Teresa Ferrera and Jim Mate. Directly across the room sat Tom Kenney in his shirt sleeves, wearing a big smile on his face. They all just quietly sat and looked at him.
"is this a set up?" Carl thought to himself.
Warren moved across the room and pulled up a chair for Carl.
"Carl, this is your golden opportunity. it may be the only one you'll get. If you have any questions that you want to ask Tom, go right ahead."
Carl really didn't have much to say, but he was startled when Tom leaned forward and said, "How would you like to try on my Rolex? Here, go right ahead."
Carl said that he couldn't believe it. This guy was taking off his watch and wanting him to try it on.
'Look, Carl, you don't have to sit there in awe. I'm not god. I'm just a man!"
Everyone in the room laughed in unison except Carl. Carl slipped the expensive watch on his arm, as requested.
"Here, go on. Try on my diamond ring. And if you would like, try on this gold bracelet, too. Someday you just might have one."
Carl told me that he resented this child's play. "Why is this guy trying to dangle 'carrots' in front of my nose?" he thought.
By now everyone in the room was passing around all of Kenney's treasures. Carl carefully concealed his feelings as he bid all good night. When he opened the hallway door, he was met with hundreds of mesmerized admirers, attempting to catch a glimpse of Tom Kenney. Carl violently lunged forward into the crowd, pushing his way to wards the stair well. Carl wanted out. Not only did he want out of this crowd, he wanted out of this kind of business. This obsession with material things was not for him.
A similar episode that Carl related was from a tape he had listened to where John Wellstook Leeand Bobby Jane Brown, now Diamond Directs, out to his luxury motorhome. On the counter John had a cardboard box full of cash for them to see. "You can touch it. Go ahead!" he had urged them. As the tape revealed, Lee ran his fingers through the cash.
"This was the same kind of technique used by Lester to entice me into the business," I reflected.
Today Carl Issenberg is out of this "side" business. He no longer is associated with these people. He has built his Amway business independent of all this razzle dazzle and hype. The last time I spoke with Carl, he had approximately 60 downline distributors in his organization and a $5,500 per month business volume. Carl's business is growing. Carl just got new friends.
"Ladies and Gentlemen, I want to tell you, you have made me an honest man in my own family. Because I was here not too many years ago, as you know, not in this exact place, but speaking to this meeting. And I went home and told Nancy, who wasn't with me at the time, about it, and I don't think I could quite make her believe it. Now she knows. (Cheers)
"Well ' it's a great pleasure to be back here and a great pleasure to be talking to you again. Because I think it old you the first time, you really are capitalism in America!" (Cheers)
Amway Convention May 3,1980
THE ODDS FOR SUCCESS
"Your income can match your dreams!" This statement is frequently used by the Amway Corporation and Amway distributors throughout the world. Can one really earn large profits and purchase the luxury items that are displayed in Amway's literature such as yachts, expensive automobiles and extended vacations?
Before I answer this question, let's just find out what it is like to dream. One leader who has thousands upon thousands of distributors in his organization can show us how. He will be explaining in great detail how to escape the New England snow.
"Can you picture us now? Relaxing and tomorrow the snow is still four feet high and so we go out to the local air port to get on a private jet. We walk up the steps that's got red carpet down the stairway. It says, 'Welcome Aboard' and it's got your name on it. You walk into the private lear jet and you turn to the pilot. 'is everything ready?' 'Yep
"You and al I the kids get aboard. 'Let's go to Florida. Take off for Florida.'
"Two hours from now you are landing at Miami International Airport. You step down out of the plane. May be you had a little snack aboard because your pilots know what you like to eat. You walk out of the plane and up pulls a big black Cadillac limousine. The chaffeur gets out, opens the doors and says, 'Step in Mr. and Mrs. John Doe.' "You get in. He drives you over maybe to the local yacht club. You walk aboard your private yacht. Maybe it's a hundred feet long, crew of eight, red carpeting coming in. They pull up the gang plank, start the engines, and you take off. And you're cutting through those waves, a n d may be those waves a re a foot or two high, and you are just breaking the waves. And now it's 90 degrees. The sun's beating down. You go up to the upper deck, and you put your bathing suit on. You lay up there, and you are relaxing. You just feel those little bits of perspiration. Those large drops of water are all over your body. They just start to form from that’ sun which is drawing the water out of your system.
"And you just feel our body's getting a little bit red here and there from the beautiful sun, and a beautiful breeze is coming across. You can feel the body heat, but the breeze is there to make it so cool. Where shall we go? Oh, just take a cruise out aways. Relax. Maybe you lay there for awhile and then your wife says, 'Honey the chef has got dinner prepared. 'So you walk down the circular stairs, walking in your swimsuit into the main dining room which is very elegant. They're all dressed up with their white uniforms with all the gold braid and everything on them cause they got jobs!
"The chef says, 'I cooked your favorite,' and he names this big fancy meal.
"And your wife says, 'Great.'
"And you say, 'Make me a hamburger.'
"You sit there and eat and relax. Maybe you go up to the front of the yacht. You put your hand out there and feel the water just breezing by. You feel a little ocean spray. And it just feels so refreshing. You might just take your finger and taste the salt water.
"Maybe you sit up there with your wife and put your arm around her. You look over in her eyes and say,'Darlin', I love you. Do you believe this is happening to us? You and I? Remember back home? Probably five feet of snow now. It's hard to believe. Just three years ago we were broke. Remember that rotted out old car we had? You were afraid to wash it because you might find out there wasn't a body under the dirt and the rust? But now here we are. Remember how our friends laughed at us? They said, 'You're going to sell soap? You're going to be in Amway? Oh, those poor people."'
Sometimes this type of story would go on and on. Evidently, many people in the business believe it is possible to achieve this level of success. As one can see, this person is very successful in painting a fantasy in the minds of his followers. But now let's come back to reality is it really possible for one to achieve this much success in this business?
I remember talking to a young boy at a seminar. He was telling me that someday his parents were going to be "millionaires."
Let's pretend that Amway decided to be benevolent about this whole thing, and they attempted to fulfill everyone's "new found dream" of becoming a millionaire. We know that the corporation reports retail sales in excess of $1.4 billion in 1981. This information is from the 1981 Amway Annual Report, which includes all subsidaries and affiliates. Obviously, there are substantial expenses, including cost of merchandise, operating expenses and taxes. The net profit would probably be only as mall fraction of the$1.4 billion. We cannot use the actual net profit figure for l981 because those figures are not available. Interestingly enough the l981 Amway Annual Report has a very limited amount of financial information. It contains No financial statements or accountants' reports.
For the sake of discussion and in an effort to give the corporation the benefit of the doubt, let's presume the net profit after expenses and taxes equaled 25 percent of the gross retail sales, or approximately $350 million. We also know there were one million distributors according to their manual in this same year. Therefore, the company, if it retained no profits whatsoever, could create only 350 millionaires. But what about the other poor individuals? You know, the other 999,650 distributors? Don't they receive anything for their efforts?
Let's say that the company exclaimed, "Oops, we've made a big mistake I We're going to have to be more democratic about this. In order to fulfill the dreams of a greater portion of the distributors' force, we'll just create "thousandairesl" Simple as that!
Now if we have 10,000 distributors earning $35,000 per year that would equal the $350 million. There would still be the corporation and the other 990,000distributors left penniless. By itself, it's a great deal of money, but $350 million is not very much money when you are dividing it up among a large corporation as well as one million distributors. So, if the average active distributor only sells $454 per month in business volume, who then is making the larger profits?
The illustrations just cited were used only to make a point. However, let's be realistic concerning this issue. In the April 1982 issue of Reader's Digest, it stated that approximately 275 individuals in Amway earned in excess of $100,000 and that only 11 earned in excess of $200,000.We really are talking about a very small number of people in the distributors' organization earning the big money.
Mr. and Mrs. Ken Johnson of Norfolk, Virginia, at one time were Amway Diamond Directs. They verified that there were approximately 6O Diamonds in Amway in 1970. They sold their business in the early 1970's in order to build their own direct distributor business, which proudly claims to pay larger profits than Amway. During an interview Mrs.Johnson told me, "We pay six times as much as Amway on one-fourth of the volume." She also pointed out the reason she and her husband left Amway was because there just wasn't enough money in the business for the field people. "We didn't feel it was fair to keep telling everyone they could make it. Besides, the Amway name, as far as we were concerned, was well overworked."
Using the ratio that the Johnsons gave me, I calculated that there should be approximately 450 Diamonds in Amway today. Gary Hardy, a Diamond from Bellevue, Washington, told me in a phone conversation that there are approximately 400 in the Diamond level and above today. Let's give Amway the benefit of the doubt and say there are a thousand Diamonds. That's still a very small percentage above Direct Distributor
Amway had been contacted concerning the approximate number of distributors at the various levels. They said that they were unable to give us this kind of information. When one considers that there is a total of one million distributors What are one's chances of becoming a Diamond? I don't want to say "slim" because that would not be fair. Some just do make it!
Maybe a person doesn't want to be a Diamond I How about one just becoming a Direct Distributor? The only information Amway would disclose concerning levels of achievement was that there were approximately 24,000 persons in 1981 at the level of Direct Distributor or higher. There is sporadic information on levels of achievement published but nothing in its entirety.
Did you know that a Direct Distributor when he achieves the7,500 point level earns approximately $1,000 per month before paying expenses? In order to achieve this income, the Direct and his downlines have to move approximately $13,000 worth of products each month. How many people does he need in his organization? Well, if one is using Amway's $454 average business volume per distributor, a person would need approximately 30 people in his organization. That may not sound like many, but remember, every single one of these downlines would have to be moving over $400 B.V (business volume) per month. In addition to this, the FTC report said that the annual turnover rate for the average distributor is 50 percent per year. Is someone telling people this business is easy? It's a tough row to hoel
All of these figures remind me of a story my banker related. She was very close to a couple named Terry and Mark, who lived in Oregon and had just started in Amway. Terry was due to give birth to a child during the same week a rally was scheduled in Spokane, Washington. She had told everyone she was going, due date or not. Her husband said he would attend the rally even if she were in the hospital. Her mother tried to discourage Terry from making the four-hour trip. "What would you do if you went into labor?" her mother asked.
'This figure was the approximate amount given when I was a distributor. At the present time it may be higher. Undoubtedly, her mother was totally heartbroken, but she sighed
In relief when her daughter finally gave birth to the baby a week before the event. That didn't stop this highly motivated couple. They went to the rally anyway and took along their week old infant.
Mark was so confident that he quit his job in order to pursue his Amway "Dream." Shortly after he had left his relatively high paying position, he discovered that he was unable to support his family. The Amway business did not create the profits he had expected. This young family had to start all over again, greatly disillusioned.
Before one accepts and believes any dream, he should ask a few questions first. How much is the dream going to cost? What are the chances of making the dream a reality? What are the "odds for success?" Then get specific answers!
THE BROAD WAY THE NARROW WAY AND NOW AMWAY
Why was Lester Canon so anxious for me to break Direct and speak before his Atlanta convention? That question always seemed to perplex me so one day I called my previous upline, Mark Hall, to find out the answer.
"Hello, Mark, how have you been?"
"Couldn't be better, Phil I In fact, the wife and I are making plans to move into our new home. It has over 10,000 square feet, five fireplaces and seven bathrooms!"
Mark sounded just as positive and enthusiastic as always, but I didn't want to waste time on small talk so I came right to the point.
Tell me, Mark, why was it so important for me of all people to beat the Canon convention? He usually only invites key people, such as politicians, movie stars and the like."
I could hear Mark chuckling in the background. He always had a great sense of humor, but I noticed that his laugh was not hearty. It rapidly diminished. He knew I needed an answer.
"Are you sure you want to know?"
"Of course, I do."
I waited for a few moments. It sounded as if he were collecting his thoughts.
"Well, it's like this, Phil. Lester can buy literally anything he wants in life--no matter what the price is. He can buy a bank or a hotel or just travel if he pleases. You see, money does not totally gratify him anymore. He's got this giant ego that has to be fed. That's why he likes to stand up in front of ail these crowds. It makes him feel really good.
"You were supposed to be part of his ego trip. He wanted to stand up in front of that crowd in Atlanta, Georgia, to show each and everyone that in his downline was an ex-cultist from the People's Temple who had succeeded in becoming a Direct Distributor. He knew, with out a doubt that the people would just eat it up! It would send a reassuring signal to the entire crowd. 'See, if he can do it, you can do it!' It would build and reinforce each person's belief in the business!" Mark's statement did not come as a total surprise. Somehow I knew all along that this might be a possibility. However, it was likely that Lester was more interested in increasing their belief than in gratifying his own ego. Even though I had divorced myself from this organization, I have not been able to totally relinquish all thoughts concerning the people I have met within its ranks. Most of them are sincere and genuine individuals. Each one is Uniquely independent and most likely perceives this business just as it is often portrayed--all American, God fearing and, of course, the best opportunity in the world I
These thoughts lead me to ask the following questions: If some of the leaders of this organization are really all American and God fearing, why do they take advantage of so many of their friends? If they care about others, why would they charge them $280 per ticket to get into a rally and $75 for a set of tapes, and then stand there and tell these same individuals that someday they will achieve the kind of financial success that the leaders have obtained?
If a person loves others, does he go and tell them they're a "loser" because they decide not to continue in his footsteps? If one loves others, does he lie to them about the business and his income by buying possessions he cannot afford, only to entice them?
It seems to me, by the statements they have made, that many of the leaders who have been portrayed in this book really don't love people as they say; instead, they love themselves, and they love money. They are obsessed with money and what it can buy.
But what about all the little guys who are not making any money to speak of? I am reminded of a distributor whom I recently called. I found her name listed in the yellow pages of a telephone book. During our conversation l brought up the subject of money. After all, isn't that the reason why we operate a business--to make money? When I asked her what her business volume was, she became defensive. Many do. When I asked if she had made Direct, she angrily replied, "No, but I've been in this business eighteen years. Even if I never make a dime, I'd stay in because of all the loving people."
Another person I encountered lives in Pendleton, Oregon. Prior to quitting, Charles Bartholomew also filed a complaint to Amway Corporation. Interestingly enough, he, too, was sponsored by Warren Perkins, Emerald Direct.
Charles went through the same rude awakening that Carl Issenberg had experienced. Warren went around Bartholomew and bad mouthed him to his downlines because he would not purchase non-Amway produced materials nor attend rallies.
"But how do some of these people afford to go to all of those rallies! "Charles exclaimed. "I went to one rally in Georgia 'Which cost me over $200 for the weekend plus air fare just to hear John Wells' layman Christianity. To top that, when I got there, my room had been changed to a different motel seven miles away from the convention, and I had no car to use."
Warren insisted that Charles attend all functions even if he had to lie to his employer in order to go. "I just couldn't do it. I wouldn't feel right about calling in sick," Charles explained.
Charles told me that God was first in his life and as far as he was concerned, many of the individuals in Amway were turning it in to a religion. Many of the followers were now looking up to the leaders as if they were gods. "I had to get out, "he said, "even though I had built a successful business and established my own warehouse to service my downtimes. Warren had ruined my business. He had now taken over and was selling all of the products to my people. I had thousands of dollars worth of inventory which I could not move."
"You know, Phil, something else really bothers me, too. Have you ever heard the expression, 'Fake it til you make it ... ?
"Sure!" I replied and then went on to tell him that this phrase also happened to be the title of the book I was writing.
"Well, as long as I have been in Amway, it's been a very common cliche'. Some good friends of mine believed it was such an important aspect of the business that they went out and bought a brand new Cadillac. Financially they were not prepared for it, and it almost forced them into bankruptcy. I have met a lot of people in this business who find 'faking it' to be a justifiable means of building their organization even if they are broke! It is sad to think that they must lie to others, and perhaps even to themselves, about their income in order to look like they are really 'making it."'
With over 2,000 direct sales businesses in the United States, why do so many flock to this particular organization? It couldn't be the money because a very small percentage of people make large FTC amounts of money in this business. This is substantiated in the report, which stated that only one-half of one percent of the 340,000 distributors in 1974 earned $10,000 or above.
We II then, if it isn't the money, what is it? I n a nutshell I believe it is this: IT'S THE DREAM--THE PROMISE OF BIG MONEY.
That's all. All those glamorous mental and paper pictures of wealth are still just pictures of wealth. The leaders know people are scratching. People are trying to find their niche in life. They know that they all have hopes! They know that they all have dreams! Can money really fulfill their hopes and dreams? Can it bring contentment and happiness? As I have indicated before, there is a vast difference between the possession of money and the obsession of money.
Solomon is thought to have been one of the wealthiest men in the world or possibly "the wealthiest." In the Bible he admitted, "Pleasure, what does it accomplish?"
He went on to say, "Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This, too, is vanity."
Solomon confessed in the "Book of Ecclesiastes" that even with all his wealth and greatness, a day would come when he would pass from this world just like the poor man and stand before God in judgment.
Conclusively, he summed up the pursuit of riches as "futility." I agree that this life is a dead-end street unless one has a dream, but that dream will be totally futile if it is an obsession to obtain great wealth.
When I was married but a few months, I witnessed tragedy. A five-year-old boy was crushed under the wheels of an automobile. As I held him in my arms, I became helplessly horrified as the warm blood drained from his body. I remember just sitting there and trembling as I felt him breathe his last breath.
Looking up, I could see a crowd gathering about me. Several people had to restrain the dead boy's mother as she wailed in agony. At the age of 18 it was my first lesson on eternity. The Bible says, "It is appointed that every man will die once." No one shall escape it. Why then is it that so many people feel they must heap up treasures here o n earth in order to provide themselves with security when we k now it is impossible to take these things with us after death?
Andrew Bates, an Assembly of God pastor, told me, "I wish people in our church had the same zeal for Christ and lost souls as they do for this business. Many times I have gone to the homes of my parishioners who are in Amway, and I have found pictures of Rolls Royces and Cadillacs taped on their refrigerators."
I have found many pastors around the country that feel this very same way. Some individuals would never walk across the street to minister the gospel or assist their neighbor; yet they would drive many hours to share the Amway "opportunity."
Somehow thousands have been led to believe that this is a wonderful Christian organization and that God has put his blessing upon it. So much so that recently Christian magazines have featured articles praising the World of Amway. One Christian editor openly admitted that he knew very little about Amway but printed the article any way. Charles Paul Conn, the author of The Winner's Circle, stated in his book that Amway was not a Christian organization. Yet I have seen function after function being held on Sunday mornings in conjunction with a church service.
Amway Corporation says that it is not a Christian organization. Why then do we constantly hear references to Christianity throughout this vast business? Are the leaders within the distributors' ranks concerned about how the public might possibly view this organization?
Parade printed, in January 17,1982, a Gallup poll listing 24 professions and occupations. They asked 1,564 persons how they would rate the honesty and ethical standards of people in these different fields. Clergymen ranked first in the poll, and car salesmen were on the bottom of the list.
Is it possible that some distributors in the Amway business are putting up a Christian front in order to give their business practices credibility? Why is it that Amway brings up in their compendium this bizarre question: " Is Amway a religious or political cult?" Of course, the corporation denied the question, but why even bring it up? I will let each make up his own mind as to the answers to these questions.
I have written this book from my heart. I cannot be ashamed of the gospel; nor can I, in good conscience, allow millions to be deceived by practices, which make constant misrepresentations of scripture.
Are there "winners" and "losers" in life? Oh sure, there are. But whether one is a winner or a loser is not dependent on whether one is or is not in Amway. There is only one time when a man succeeds or loses in life--when he either makes a decision to follow God or to reject Him. The choice is for each person to freely make. To succeed is to trust God with one's entire life, even when things look futile. To lose is to walk away from the only hope for this world.
Not everyone within Amway's ranks conducts business as depicted in this book. Certainly many individuals desire to operate their private enterprises in a conscientious and ethical fashion.
Does Amway realize there is a problem inside the distributors' ranks? Apparently so. The April 1982 issue of Amagram indicates the founders, JayVanAndel and Rich DeVos, are aware of these internal problems and have addressed this fanaticism in this edition of the magazine.
I contacted Amway's Legal Department in March of 1982, just thirty days prior to this Amway publication and interviewed the Chief Legal Counsel. He sent to me an eleven-page document, which seemed to avoid most of my original questions.
I also asked one of Amway's Legal Counselors how many people had been dismissed for misconduct since the new manifesto had been drafted. His reply was, "Oh, I guess about 10, but not more than 50."
Some of my sources tell me that possibly as many as 200,000 to 500,000 distributors may be involved in deceptive behavior. One person said, "This particular group of distributors always works on the edge of the law."
This same source allowed me to listen to a taped message recently delivered by a Diamond Direct. He instructed the crowd, "We don't lie; we just tell the truth in advance." My point is this: If the Federal Trade Commission can't get a handle on this due to budgetary problems and if Amway's owners won't stop it, then who will?
I hope you will. It is for this reason that the book was written.
Since the book's completion, numerous things have been taking place in the World of Amway. I'll sum them up quickly.
On April 16,1982, the Wall Street Journal reported, "AMWAY DISTRIBUTORS' BIG TAX BREAKS STIR INVESTIGATIONS BY CONGRESS, IRS. "This investigation was headed by Representative Pete Stark of California. Allegations were that distributors were using all sorts of innovative tax deductions as instructed by an ex-IRS agent. The IRS said the ex-agent was "out of line" and that the deductions claimed by distributors were "game playing."
Two weeks later this investigation died. I have sent telegrams to Representative Stark asking him why he backed off from this investigation. I have called his office, but he never returned my calls.
On July 28,1982, the Attorney General of the State of Wisconsin announced that the Justice Department has filed a lawsuit against the Amway Corporation and some of its distributors for misrepresentation of income. He points out in his suit that distributors misrepresent individual or personal incomes utilizing unrealistic, hypothetical or projected income. (See Appendix A.)
Prior to this lawsuit Amway and its distributors were given a
Cease and Desist, Order from the Federal Trade Commission. The order insisted that persons in Amway stop misrepresenting income.
The Wisconsin lawsuit bases its allegations upon an income tax audit, which averages distributors' income. Should the State of Wisconsin be successful in obtaining a judgment, it will be interesting to see what action, if any, the Federal Trade Commission will take.