By LOUIS FLORES
The SOMOS 2014 fall conference ended Sunday, and the many Latino elected officials, who attended the conference, are back in New York, but they are hiding from the embarrassment that a controversial corporation was accepted as a sponsor of the Latino conference.
The SOMOS 2014 fall conference approved Herbalife Ltd., a company that sells nutritional products, as a sponsor of the conference. The conference is a semi-annual event organized by Somos El Futuro, a group that promotes social and economic issues on behalf of Latinos. For years, Herbalife has been defending itself against allegations that it exploits and possibly defrauds its sales work force, the vast majority of which are Latino. As a result of those allegations and other accusations, Herbalife is reportedly under state and federal investigation for fraudulent business practices and that it operates as a pyramid scheme.
Efforts to reach the leadership at Somos El Future for comment about Herbalife's sponsorship have been unsuccessful.
In the recent past, some Latino elected officials from New York, who have criticised Herbalife for the company's business practices, included State Senator Adriano Espaillat (D-The Bronx). When requested by Progress Queens to comment about Herbalife's duplicitous sponsorship of the SOMOS 2014 fall conference, Senator Espaillat did not respond to the request. The sole Latino elected official to have thus far criticise the Herbalife sponsorship of the SOMOS 2014 fall conference has been New York City Council Speaker Melissa Mark-Viverito (D-Harlem), which isn't saying much.
When Senator Espaillat had previously denounced Herbalife, he did so by submitting a letter, dated July 8, 2013, to the Federal Trade Commission (at pp. 58-9). According to an exhaustive investigation by The New York Times, Senator Espaillat's letter, as well as letters submitted by other Latino elected officials, including Council Speaker Mark-Viverito and Councilmember Julissa Ferreras (D-Corona), appeared to have been coördinated with a $1 billion short sale of Herbalife stock by the hedge fund management company, Pershing Square Capital Management.
Herbalife has been accused of exploiting its sales work force. According to an essay by Brent Wilkes, the national executive director of the League of United Latin American Citizens, Herbalife deliberately targets Latinos for exploitation. “300,000 to 400,000 Latino distributors will quit [Herbalife] this year alone only to be replaced by another 300,000 to 400,000 new Latino distributors. If left unchecked, Herbalife could recruit, defraud and dispose of as many as 4 million Latino distributors over the next 10 years. To more and more Latino leaders and advocates, this reeks of predatory ethnic targeting of epic proportions.” In the face of these starting statistics, government reform activists find that it is outrageous that Latino elected officials would not denounce Herbalife's sponsorship of the SOMOS 2014 fall conference. The irony is all the more apparent, because, as indicated, some Latino elected officials have previously demanded investigations of Herbalife.
In a move some say was designed to encourage Latino leaders to denounce Herbalife's exploitation of Latinos and to ask for regulatory and judicial relief, officials with Pershing Square made a contribution of about $120,000 to a politically-connected Latino group called the Hispanic Federation, according to the lengthy investigation in The New York Times. The Hispanic Federation is an umbrella organization of Latino social services agencies, and the Hispanic Federation sometimes raises money that it then turns around and distributes to the Latino social services agencies under its umbrella. The Hispanic Federation was founded by Luis Miranda, an influential lobbyist and campaign consultant, whose separate consulting firm has worked on past campaigns for Council Speaker Mark-Viverito. In the latest New York City budget, the Hispanic Federation saw a quadrupling of its budget allocation from the New York City Council slush fund that is administered by the Council speaker, according to an analysis by Crain's New York Business.
Since New York's Latino elected leaders couldn't be independently counted upon to speak up about Herbalife's exploitation of its Latino work force, Pershing Square had to grease the wheels -- and palms -- of the Hispanic Federation. Only after Pershing Square apparently paid the Hispanic Federation did Latino elected officials spring into action, according to The New York Times' report.
Herbalife, realizing that elected officials could be manipulated by lobbyists and the flow of money, knew how to counteract Pershing Square's maneuvers. When Herbalife paid to sponsor the SOMOS 2014 fall conference, Latino elected officials conveniently overlooked Herbalife's exploitative and reportedly fraudulent record.
News reports by ABC News, Seeking Alpha, Al Jazeera America, and Progress Queens have documented the devastating impact on the Latino community that Herbalife has had. Senator José Peralta (D-Queens) represents neighborhoods in Queens where Herbalife's sales work force operate nutrition centers, where Herbalife products are sold and where new sales people, called distributors or supervisors, are recruited. Senator Peralta has been a visible advocate on behalf of Latino issues. He has been a vocal, lead sponsor of the DREAM Act, draft legislation that would provide undocumented New York immigrants with college tuition assistance. When contacted by Progress Queens for comment about Herbalife's duplicitous sponsorship of the SOMOS 2014 fall conference, Senator Peralta did not answer, much less acknowledge, the request.
Latinos get exploited by Herbalife in exchange for company profits. It seems that Latinos also get exploited by their own Latino elected officials in exchange for non-profit contributions or sponsorships.
Why do Latino elected officials first need to wait before the palms of the Hispanic Federation get greased by Wall Street before Latino elected officials stand up to Herbalife ? Alternatively, why do Latino elected officials wait before the palms of Somos El Futuro get greased by Herbalife before Latino elected officials look the other way as Herbalife continues to exploit Latinos and Latino immigrants ?
Government reform activists say that corporations game a broken political system that they know only responds to money. Corporations, be they Pershing Square or Herbalife, know that action by any elected official, regardless of how they identify themselves, goes to the highest bidder. Furthermore, Somos El Futuro has ridiculously sought the participation by the big business group, the Partnership for New York City, to help Somos El Futuro achieve its goals on behalf of the Latino community. The Partnership for New York City is one of the driving forces against each of : raises in the minimum wage, rolling out a progressive income tax for the state's top 1% income earners, and advocates for public education. The Partnership for New York City stands for the antithesis of everything Somos El Futuro aims to achieve.
It's not just Latino elected officials, who get played by corporations, lobbyists, and the corruptive influence of big money contributions. The knobs of corporate money get turned on for elected officials, who are willing to sell out. Corporations prey on marginalised groups or on politically-expedient leaders, who are seeking to make it in the corporate-backed world of the broken political system, government reform activists say.
For years, grassroots activists have rejected the funding reliance that the largest LGBT advocacy group, the Human Rights Campaign, has had on drone manufacturers. Police reform activists decry how key nonprofit groups rely on New York City Council slush funds to fund a police reform agenda that critics say is deliberately watered-down in order so that nonprofit groups can continue to be rewarded by elected officials with still yet more slush funds. When the politically-calculating Gov. Andrew Cuomo (D-NY) wanted to exploit the women's vote to fluff his margin of victory in this year's gubernatorial reëlection race, he formed an astroturf political party, the Women's Equality Party, publicly headed by former City Council Speaker Christine Quinn. When the real estate developer Rudin Management Company wanted to deceive voters in the Lower West Side of Manhattan into accepting an urgent care center to replace the now-demolished St. Vincent's Hospital, Rudin turned to former Mayor Ed Koch to front another astroturf group, the Westside Healthcare Coalition. Corporations and their big money lobbyists know that nonprofit groups and elected officials can be manipulated into action.
That the knobs can be turned on -- that money and resources can be disbursed -- to mobilise (or demobilise) nonprofit groups and the communities that they serve is not a new phenomenon in politics. Jane Hamsher, the founding publisher of Fire Dog Lake, observed this dynamic and appropriated the term veal pen to describe instances when elected officials deliberately deëscalate calls for reform or justice by advocacy groups. It is possible to maneuver advocacy groups into silence that would go against their own best interests, according to each of Ms. Hamsher's journalism and the growing examples of how elected officials or key nonprofit groups continue to give a free pass to corporate exploitation.
Besides Herbalife's duplicitous sponsorship of a SOMOS 2014 fall conference at which elected officials perversely called for economic justice for Latinos by demanding a raise in the minimum wage, Latino elected officials betrayed their own constituency groups when they supported the controversial appointment of William Bratton as the new commissioner of the New York Police Department. Known for his support of policing tactics that unfairly target Blacks and Latinos, many Latino elected officials nevertheless issued statements of support to the press in a campaign some government reform activists said echoed the hallmarks of lobbyist-generated synchronicity for the convenient packaging of Latino elected officials' approvals. Besides Council Speaker Mark-Viverito and Senator Peralta, U.S. Representative Nydia Velázquez (D-Brooklyn), Borough President Ruben Diaz, Jr. (D-The Bronx), Assemblymember Luis Sepulveda (D-The Bronx), and Councilmember Ydanis Rodriguez (D-Manhattan) all supported the Bratton appointment, even though Latino grassroots police reform activists were protesting the appointment out of concern for Commissioner Bratton's reliance on racial policing theory known as "Broken Windows."
In an embarrassing flip-flop ten months into Mr. Bratton's commissionership, many Latino elected officials reacted in outrage that Commissioner Bratton would continue his racial policing tactics on top of having completed a controversial purging of the police force's two highest ranking Latino and Black officials. In spite of protests by grassroots police reform activists even before Mayor Bill de Blasio was sworn into office, Latino elected leaders still went along with the Bratton appointment, against their own interests.
As a consequence of this broken political system, Latino New Yorkers and voters are being taken advantage of, government reform activists say. Latinos can't even count on their own elected officials to do the right thing, unless there is a financial motivation to coerce Latino elected officials to take action. Voters get stuck with elected officials, whose judgements are impaired by money.
With Latino leaders running into hiding over Herbalife's sponsorship of the SOMOS 2014 fall conference, the Latino community can't even hold their own leaders accountable. Latinos shouldn't have to guess why their leaders have been silent about the Herbalife sponsorship deal. Latinos and voters have a right to know, government reform activists say.
There are other consequences to Latino elected officials going soft on Herbalife, Pershing Square's mixed-motivations in apparently paying to mobilise some Latino elected officials into action, notwithstanding. New York State Attorney General Eric Schneiderman is reportedly investigating Herbalife's business practices. He is not known for staying true to his commitment to fighting fraud and corruption. Attorney General Schneiderman inexplicably remained mum as Gov. Cuomo disbanded the Moreland Commission. Now, Attorney General Schneiderman is reportedly investigating Herbalife at the same time when Herbalife is lobbying states' attorneys general in an effort to quietly end criminal investigations at the same time when the consulting firm that employs Attorney General Schneiderman's ex-wife, Jennifer Cunningham, has been retained by Herbalife to do consulting work at the same time when the Attorney General Schneiderman has refused to publicly release all e-mail communications between Ms. Cunningham and the State Attorney General's Office.
Government reform activists complain that, on a good day, Attorney General Schneiderman is asleep at the switch as political and corporate corruption run roughshod over New York, but, on a bad day, Attorney General Schneiderman is up to his eyeballs in conflicts of interests. When it comes to fighting political and corporate corruption, advocates for government reform are forced to protest against federal prosecutors, such as U.S. Attorney Preet Bharara, in order to nudge the powerful prosecutor to step up his work to fight political corruption. When it comes to fighting corporate corruption, especially by the likes of Herbalife, legal experts, such as Bruce Craig, write powerful letters to the Federal Trade Commission, drawing attention to loopholes in federal regulations that allow for the rise of pyramid schemes, as Herbalife is accused of being. States' attorneys general, prosecutors, and regulators like to pretend that independence is key for justice to be handed down fairly, but, given the extent of the broken political system, advocates for government reform find it necessary to have to pressure legal and regulatory authorities for justice.
However, it's difficult for each of Latinos and for voters to be informed about the backroom machinations that went into the Herbalife sponsorship when the press does not report about such conflicts of interest. The politics publication, City & State, was not a sponsor of the SOMOS 2014 fall conference, but it produced its own special conference publication, paid for by advertisers. City & State aimed to make money from its special SOMOS conference publication, and, by being on-site, City & State was hoping to make or strengthen its ties to elected officials, giving its reporters and editors an inside track to access both elected officials and information about government. City & State would not risk what it has at stake by confronting the Latino elected officials over the apparent hypocrisy in the Herbalife sponsorship deal, a charge that the editor of City & State denied.*
For its part, an editor at City & State vigorously refuted any notion that the news publication received any money from Herbalife. But the editor made no acknowledgement about the implications on the publication's journalism that Herbalife's sponsorship of the conference could have. In the time leading up, during, and after the SOMOS 2014 fall conference, it appears that City & State has not reported about Herbalife's exploitation of New York Latinos or Latino immigrants. In a response to Progress Queens, the editor of City & State noted that a columnist of the news publication, Seth Barron, had written about the conflict of interest in the Herbalife sponsorship, but Mr. Barron's article was posted to his own, independently-run Web site, City Council Watch, and not on the Web site of City & State.*
In the absence of action by, and continued silence from, Latino leaders, voters need to look for alternative leadership, like Mr. Craig, the legal expert trying to persuade the Federal Trade Commission to take an "unequivocal stand" on Herbalife and on other multi-level marketing companies, which are at the root of some pyramid schemes. Loopholes, bad regulations, and poor court case decisions all contribute to a regulatory nightmare that allows multi-level marketing companies to create immense financial damage, before legal and regulatory authorities, slow to react at first, finally move in to exercise enforcement after the fact.
The lack of each of a clear regulatory framework and government enforcement in relation to multi-level marketing companies means that the Federal Trade Commission does not have an outright ban of such business structures, making multi-level marketing firms legal until such time as they can be proven to be pyramid schemes, creating a tsunami of financial destruction for most people, who become involved in such businesses in the meantime. With the Federal Trade Commission so encumbered, Latinos are counting on Attorney General Schneiderman all the more, a tenuous back-up plan at best, given Attorney General Schneiderman's conflicts of interest.
Voters are disengaged enough as it is from the broken political system, and lobbyists seek to exploit the regulatory capture that major multi-level marketing companies exert over legal and regulatory authorities. Undocumented Latino immigrants, who may pay upwards of thousands of dollars for the right to sell Herbalife products as a way to make a living in Queens and in other parts of New York and the rest of the United States, have only social service agencies and community leaders to advocate on their behalf.
Judging by how easily Herbalife can silence Latino leaders by sponsoring a Latino conference in Puerto Rico, documented and undocumented Latinos face the harsh realities of a political pyramid scheme of sorts : one in which corporations can lure Latino elected officials and politically-expedient community leaders into action or inaction with payments of money, and with possible promises of future payments of money, as well.
After years of being burned by rotten elected officials, like former Speaker Quinn, and by wayward nonprofit groups, like the Human Rights Campaign, the LGBT community has had to develop new leaders and form new groups to challenge former Speaker Quinn and the Human Rights Campaign for a seat at the table where the community's own empowerment is being negotiated. If neither Latino elected officials, like Senator Espaillat or Senator Peralta, nor nonprofit groups, such as the Hispanic Federation and Somos El Futuro, will speak up to advocate for legal and economic justice on behalf of the Latino community, then the Latino community, too, faces a moment of truth about its own community leadership, just like other minority groups, whose own, respective leadership have been bought up by the corporate-backed world of the broken political system. As commented upon over Twitter, the organizers of the SOMOS 2014 fall conference chose San Juan, Puerto Rico, for the conclave, instead of the Latino neighborhoods of New York City, perhaps further revealing Somos El Futuro's corporatist strategy.
This article has been updated to reflect corrections (*) requested by City & State.