By LOUIS FLORES
A global nutritional supplement corporation, which is reportedly under investigation for exploiting hundreds of thousands of Latinos as salespeople, is sponsoring the SOMOS 2014 fall conference in San Juan, Puerto Rico, according to a report published by Capital New York.
The controversial corporate sponsor, Herbalife, arranged for its logo to be "prominently displayed in the name tags given to conference attendees, and in the conference’s brochure and schedule," according to the Capital New York report.
The sole Latino official to denounce Herbalife's sponsorship is New York City Council Speaker Melissa Mark-Vivierto, which isn't saying much, given her poor record on city ethics rules and conflicts of interest. Her office waited until she was en route to the San Juan conference before issuing a statement to the press. It's not known why the other Hispanic leaders at the SOMOS 2014 fall conference have remained mum about the controversial sponsorship.
Yesterday, a handful of city and state officials sent a letter, made public by Albany reporter for Time Warner Cable News, Nick Reisman, asking one of the SOMOS conference organisers, the publication City & State, to end a co-sponsorship arrangement with another controversial corporation, the apartment subletting service, Airbnb, which critics say is responsible for eliminating the stock of affordable housing for New York City's low-income and working class communities, displacing, amongst others, Latinos. Progress Queens reposted the letter onto Scribd. (See postscript)
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. Herbalife's business is modeled as a multi-level marketing, or MLM, enterprise, which watchdog experts and investors have said has been transformed into a pyramid scheme. According to a public service video produced by the social service organisation, Make the Road New York, Latinos, who had previously worked as distributors or supervisors, as Herbalife describes its sales work force, described how they paid thousands of dollars to buy into a business opportunity to sell Herbalife's products, only to never make any of that money back.
Brent Wilkes is the national executive director of the League of United Latin American Citizens, or LULAC, an influential nonprofit that fights discrimination against Latinos. He and other Latino leaders have criticized Herbalife for “predatory business practices” that they say exploit the Latino community.
“There are 550,000 Herbalife distributors in the United States. Somewhere between 60 to 83 percent of them are Latino,” Mr. Wilkes wrote in an essay published in The Huffington Post, adding that, “300,000 to 400,000 Latino distributors will quit 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.”
For a report published last week by Progress Queens, representatives from Herbalife promised to answer questions posed by Progress Queens, but the representatives were not true to their word.
The New York State Attorney General's Office is reportedly just one justice or regulatory office that is investigating Herbalife. However, the size of the staff and the amount of resources that the New York State Attorney General's Office has reportedly worried Herbalife executives, so much so that Herbalife has retained the consulting firm that employs New York State Attorney General Eric Schneiderman's ex-wife, Jennifer Cunningham. Herbalife has previously made contributions to lobbying groups that then make campaign donations to states' attorneys general, including to Attorney General Schneiderman. All these conflicts point to a desperate lobbying operation by Herbalife to quash investigations into its business practices.
To further deflect criticism that Herbalife preys on a huge workforce of Latinos, Herbalife has begun to sponsor conferences and awards shows that target the Latino community, as a way to curry favour with influential Latinos in government, business, and the media. Herbalife has previously sponsored SOMOS conferences, and earlier this year, Herbalife was a sponsor of the 2014 Billboard Latin Music Conference and Awards in Miami.
Herbalife's sponsorship of the 2014 SOMOS fall conference is a height of duplicity, say some critics of Herbalife. According to a prior economic development conference organised by SOMOS, "Tens of thousands of Hispanic owned businesses have exponential capacity to grow and create jobs and prosperity for our State and Country, but an effective support system must be developed to maximize this economic potential." However, Herbalife's business practices and its record of creating prosperity are under investigations for fraud and for operating as a pyramid scheme.
A prominent, New York-based Latino journalist, Gerson Borrero, is a contributor to the publication City & State. He also appears on the television news program, Inside City Hall, on NY1. Mr. Borrero and Morgan Pehme, City & State's editor, have been heavily promoting the SOMOS 2014 fall conference. A late request for comment was sent to City & State. In the response to Progress Queens' request, Mr. Pehme vigorously denied that the publication has received any money or has any association with Herbalife.
In a further response to this report, Mr. Pehme stated that City & State was not a sponsor of the SOMOS 2014 fall conference, describing City & State's role in at the conference as one that would allow the publication to cover Latino politics by bringing up Latino subjects to be discussed. When pressed whether City & State was free to ask difficult questions of conference organizers or participants, including questions about Herbalife's sponsorship, Mr. Pehme said that some topics did not come up in City & State's interviews, that reporters were unable to interview Senator Espaillat, and that the members of the Board of Directors of the conference's organizers, Somos El Futuro, were likewise unavailable for interview. Mr. Pehme further said that it was unfair that City & State was being singled out for Airbnb's advertisement when City & State had nothing to with Herbalife.
This article has been amended to reflect responses from City & State.