Behind the Bastards - Part One: Amway: The Gravedigger of Democracy

Episode Date: October 5, 2021

Robert is joined by Jack O'Brien to discuss Amway. FOOTNOTES: https://jacobinmag.com/2018/09/richard-devos-amway-multi-level-marketing-conservatism https://www.motherjones.com/politics/1996/09/she-did-it-amway/ https://www.nytimes.com/1977/09/17/archives/amways-direct-sales-foster-zeal-success-and-criticism-amways-direct.html?_r=0 https://archive.org/stream/MerchantsOfDeception/MerchantsOfDeception_djvu.txt https://www.michigandaily.com/uncategorized/dems-devos-owned-troubled-nursing-home/ https://www.cs.cmu.edu/~dst/Amway/AUS/directly.htm https://www.washingtonpost.com/archive/politics/1984/01/22/rearranging-amway-event-for-reagan/b3e74482-5ce0-4d20-9f98-ebdc9b4d4918/ https://www.nytimes.com/2015/09/15/opinion/joe-nocera-the-pyramid-scheme-problem.html https://time.com/5877434/first-ponzi-scheme/ https://www.sjsu.edu/faculty/watkins/ponzi.htm https://thebaffler.com/salvos/dreams-incorporated#anchor1 https://www.americanprogress.org/issues/default/news/2017/01/23/296947/the-devos-dynasty-a-family-of-extremists/ https://www.politico.com/magazine/story/2018/12/30/rich-richard-devos-obituary-amway-politics-2018-223306/ https://www.metrotimes.com/detroit/you-dont-know-dick/Content?oid=2185621 Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

Alphabet Boys is a new podcast series that goes inside undercover investigations. In the first season, we're diving into an FBI investigation of the 2020 protests. It involves a cigar-smoking mystery man who drives a silver hearse. And inside his hearse look like a lot of guns. But are federal agents catching bad guys or creating them? He was just waiting for me to set the date, the time, and then for sure he was trying to get it to happen. Listen to Alphabet Boys on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts. What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science?

And the wrongly convicted pay a horrific price? Two death sentences in a life without parole. My youngest? I was incarcerated two days after her first birthday. Listen to CSI on trial on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts. What's syphilitic my 1870s sailors? I'm Robert Evans, host of Behind the Bastards. That introduction had really nothing to do with the topic today. But I mean, sailors in the 1870s had a hell of a lot of syphilis.

You can't argue that. That's just fact. That's just science. Here with me to talk about syphilis a little bit more is my once and current and probably future boss, Jack O'Brien. Actually, it ends after this episode. One more time. It's over. This is your swan song. Yeah. No pleasure to be here. Pleasure to just be on a zoom with both of you, Robert and Sophie. It's good.

And what is more the American way than syphilis? It is the most American disease and I think one we ought to bring back. Let's bring back everybody slowly losing their minds as worms eat their brains. It's good for you. It brought us, there's a bunch of art we got because of syphilis. What are we losing now that we've cured it? A lot is my contention. We're losing a lot. And possibly a Hitler or two?

Yeah, we might be losing exactly. We're losing a Hitler or two and maybe a... Well, okay, probably good. This has nothing to do with what we're talking about today. It really doesn't. It really doesn't. Jack, attack. Robert. O'Brien. Attack.

Jack Tobrefest. This is, every time I do this, I'm continuing a series of jokes that our colleague, Dan O'Brien, did when I was like 17. Yeah. It's funny the things that stick with you. Yeah. Jack. How do you... Yeah, it is funny the things that stick with you, like that being a thing that everybody says to me.

And also people thinking that I am a fictional character created by Daniel O'Brien. Aren't you? I did think that right up until you called me about the internship when I was a kid. I'm just somebody who saw a branding opportunity and reached out to Daniel and said, hey, I want to occupy this character of Jack O'Brien that you invented. We should really be nicer to Jack. He employed both of us. He's employed me virtually my entire adult life. Jack saved me from the tech world. He saved me from being a teacher.

Well, you're still teaching people stuff. I would feel more bad about that, but I feel like you do a good job teaching people stuff. I appreciate that. Well, Jack, how do you feel about Amway? I mean, I don't know a ton about it. That's good. I know it as a like door-to-door sales thing, and I know it as sort of the grandmother of multi-level marketing, which has turned into a massive thing now. Yeah. Yeah. That's the basics.

And the most important thing to know about Amway, Jack, is that it is not legally a pyramid scheme. Never. Yeah. Legally not a pyramid scheme. And the fact that we have to say it's legally not a pyramid scheme does say all that you should know about the kind of business Amway is, as in it's the kind of business where you have to specifically note that legally it's not a pyramid scheme. They have a lot of lawyers. They have a lot of lawyers and a lot of money.

I wonder if there's like a mathematical equation you can do based on like the amount of money you have and then how much of that money you spend on lawyers that just like attack people on your behalf. Yeah. Yeah. And so it is not legally a pyramid scheme, but the Consumer Awareness Institute has calculated that Amway's loss rates for distributors exceed 99.9%, which means virtually all of the people who are kind of sort of employees of Amway, of course, legally they're not employees, they're independent distributors, make zero money or lose money. And nearly all of the profits that Amway makes come from its distributors and are funneled up to a tiny group of people at the top.

While the vast majority of people at the bottom make nothing, you can visualize the shape of that arrangement in your head. But it's legally not a pyramid scheme. Yeah. How about that? 99.9 is not great. It's a really different podcasting industry. Well, I guess that is like if you look at podcasting as a whole, but that's not, you know, a company. I'm just saying most podcasts are like my favorite.

Did I ever tell you about my favorite podcast, Jack? What's that? Oh my God. I came across this before I ever got into podcasting, but when people started talking about it as a thing, I think around 2014, 2015. And I fell in love with it because it was the most tasteless, tactless thing I have ever encountered in my life. It was a vaping podcast by like four kind of chuddy dudes in South Carolina. And the name they picked for their podcast was The Serial Vapists. No, they didn't.

Yeah, they sure did. They sure did. And the content was exactly what you'd expect. It was horrible, but it was very funny. I'm fairly certain they never made Joe Rogan bucks off of that show, but it was very funny to me. I was really hoping you were going to name drop one of your own podcasts as your favorite. I was hoping you were that guy. No, no, no.

I don't listen to podcasts, Sophie. I just make them. I've actually never heard a podcast in my life. Exactly. Too busy making the podcasts. Too busy making them. It's like Dan Aykroyd's never seen one of his own movies. No, that can't be possible. Is Dan Aykroyd the only man who hasn't watched Ghostbusters?

Probably watched that one, you'd have to think, but he claims he doesn't watch his own movies. Yeah, I mean, that would be... Did you just... When you were discovering the serial vapists, did you just put... Is there like some function on... I was looking for serial. It was like when serial... It was whenever, whatever year the first serial came out.

So I was looking for serial and I saw underneath it like, and I had to listen. And it was amazing. Like one of the episodes, the first like 20 minutes was just a guy talking about taking a shit at a vape store and the fact that they were cool with the fact that he took a giant shit in their bathroom. Like it was an incredible moment in content history. If someone can find their old episodes, by all means do. It was amazing. So, Jack, the first important thing to know about Amway is that it's legally not a pyramid scheme.

The second most important thing to know about Amway is the history of pyramid schemes because once you learn the history of pyramid schemes, why Amway isn't legally one makes somewhat more sense. Now, if you go into this line of research, if you Google for first-ever pyramid scheme, you will generally be directed towards the tale of Charles Ponzi, who we've discussed a couple of times on the show in brief. He was an immigrant from that perfidious peninsula, Italy, who in 1919 hatched a scheme involving what were called international postal reply coupons. These were essentially stamps that had been created for small international transactions

and they were redeemable at post offices in the United States for real stamps, which obviously have a cash value. Ponzi got one of these international postal reply coupons from a friend in Italy while he was in Boston and he realized that the coupon he'd gotten had been purchased in Spain because they were cheapest there. And because of basically, to make a long story short, because of how much stamps were worth in the US and how cheap these things were to get in Spain, you could make a profit just buying these in Spain and redeeming them for stamps. It was kind of a loophole in the system.

So Ponzi hatches this... That sounds like basically the most honest way that somebody could make a living today at a hedge fund or something. That just sounds like every financial job in existence. Well, this is not what he actually does, but this is how he just... So his initial plan was to do this at a huge scale, like getting people to give him money to use to buy these international coupons that he would then redeem for stamps, which he would sell for cash, and then just redistribute the profits. That was the idea on paper.

That was a cover story. Yes, so he found the security and exchange company, which was not... He wasn't trying to do a thing with the SEC. The SEC did not exist at this point, so he just came up with the same name they did, which, think of that, what you will. So he comes up with the SEC to facilitate this scheme and he promises a 40% return to investors in 90 days, which is obviously bullshit. Anytime someone tells you, unless it's drugs,

if someone's telling you that if they're going to do that with your drug money, that might be real, but it's drugs. So it did well for a few months, but Ponzi never really went through. He got a bunch of investments, but he never did the international coupon thing. Instead, he just lived the high life for months and would repay early investors with money from new investors, which is obviously an unstable situation that can't last forever, and eventually the Boston Post found out what he was up to. They wrote a bunch of exposés on it, and the district attorney of Boston got all aggro about the whole thing.

In the end, Ponzi was arrested and his name went on to adorn countless other similar schemes. So that's where we get the Ponzi scheme from. You can look like Bernie Madoff did that. And kind of over time, the term pyramid scheme became the catch-all term to refer to a wide variety of cons that were all descended from Ponzi scheme. So Ponzi generally seems like the first pyramid scheme, but it's also worth noting that he wasn't the first pyramid scheme. As a matter of fact, if you want to look at the real originator,

and maybe the person Ponzi was copying, as best we can tell, it was a woman named Sarah Howe in Boston in 1879. So the first pyramid scheme properly may have been the invention of a lady in Boston in the 1870s. She just very rarely gets the credit for this. But we're all about giving credit to the women grifters. So I'm going to talk about Sarah Howe for a little bit. She created a con called the Ladies' Deposit Company. And the Ladies' Deposit Company was ostensibly a bank run by women and exclusively for women.

Now, in the 1870s, women weren't allowed to have open bank accounts on their own. If you had a bank account on its own, it was because your husband or your dad had opened one for you and they would have a co, whatever on it. So it was a fairly huge deal that Sarah was creating a bank that was for women. And specifically, Sarah's bank only accepted deposits from women who were what she called unprotected, i.e. they did not have a male guardian in charge of their finances. So this was a big deal. But of course, it was a giant scam.

So Sarah promised that in exchange for investments from these unprotected women, she would give them an 8% interest on their 8% return on any money they invested. So if you deposited $100, at the end of the year, you'd have $196 in your account. And she was also giving out the first three months of interest in advance to women who started accounts with her. So even today, that would sound like a scheme. And it was definitely a scheme back then. So people at the time asked how this could work, how the bank could possibly profit doing this. And Sarah assured them it's because it was not a for-profit endeavor.

She claimed that her bank was funded by Quaker philanthropists, which was a lie. But it was a very successful con. And you can see why she picked this population to con. The fact that these women are unprotected means, like, who are they going to go to, right? Like, they don't have, like, they don't, presumably, these are like kind of these poor women, right? If you're an independent woman, you don't have, like, a man, either a father or a husband, you're kind of in the least protected segment of society. So she's going after these people in part because she figures they're not going to be able to, like, do anything, right?

And the con is very successful because there was a huge need for a bank that would actually serve these women. And in short order, Sarah gathered between $250,000 and $500,000 in 1870s money from close to 1,000 people. A local paper. Yeah, she made a lot of money off of that. That was millions in modern dollars. Ponzi was just the first one to get caught, basically. No, she gets caught before him, but she's a woman. So they're not going to name it a Sarah scheme, you know?

That literally does seem to be, like, why? Right. So a local, I mean, Ponzi scheme was larger, but Sarah's scheme was not small. This is not a low-level con. You know, you're making a quarter of a million dollars or more in the 1870s. You have pulled off a good scheme. As with Ponzi, a local paper exposed this as a scam. Sarah had been a fortune teller in the past, so that was a big part of, like, the reporting on her that, like, this is not a banker.

This is, like, a person who, you know, told fortunes and stuff. That's how I pick all my financial advisors is making sure that they have a background in fortune telling. You could argue that that's what any stockbroker is. They just don't want to admit it. There is that fun article about how there's that hamster that has outperformed the vast majority of humans in the crypto industry, which I do love. They even made him a cute little desk. So yeah, and the articles also exposed that in addition to having a background that maybe was not the most credible basis for someone who founded a bank,

she had, you know, essentially created, I mean, she didn't create a Ponzi scheme. She created a house scheme, and Ponzi created a house scheme. But I'm going to quote from a write up on long reads here. When a new depositor arrived, how would use their money to pay out older clients? So the whole scheme required a constant influx of new depositors to pay out the old ones. Like every other Ponzi fraudster, House Bank would have eventually run out of new money. The run of stories in the Boston Daily Advertiser instilled enough fear in the bank's investors that they began to withdraw their money, and eventually there was a run on House Bank.

It took two weeks and five days from the first story published in the Advertiser uncovering House fraud before she was arrested. The press extended her victims a modicum of sympathy, describing their plights will also remind the reader that they deserved their pain for trusting a woman with their money. I put every dollar I had into the bank, and if I lose it, I am a beggar, one depositor told the Boston Globe at the time. I wanted the interest so badly that I placed a mortgage on my furniture to secure the principal to deposit. Oh, I wish I hadn't now, for I shall have my goods sold from under my head, said another. I feel like those characters were made up by writing that story. They're just lying. Also, talk to a woman, I'm a journalist.

Also, is it true that women couldn't have credit cards until the 1970s? That's a very deeply entrenched myth about women. There's a lot of fucked up stuff about what women were and weren't allowed to do financially, but in the 1870 it was basically nothing. She was going after the most desperate people, and it says a lot about society that they were just like, well, they trusted a woman with their money, even though they weren't allowed to trust a man with their money. They legally couldn't. What were they supposed to do? That's also probably why it got picked up and we still know the story is because it goes to prove a thing that everybody, all the white men in existence, wanted to believe. Yeah, it's funny, and by which I mean it's fucked up.

And I guess it should be a house scheme, we should call them house schemes in fairness, but also a Ponzi scheme is just a great name. Ponzi did have a better name objectively for calling a scheme. It's funny, it's Italian, we all know the Italians can't be trusted, it's just good. So Sarah Howe and Charles Ponzi were the first of what would become an American institution. Confidence games of one sort or another have existed, probably as long as economies have existed. One could argue that most states and corporations are just confidence games on a very grand scale, but I'm not going to get into that right now. What made the schemes that Howe and Ponzi started different was the fact that they were built to masquerade within the facade of reputable institutions, banks and other like financial investment companies.

By the late 1800s, capitalism was a very rock solid concept for most Americans and inequality was soaring. People were enticed by a scam that seemed to offer them a way out of wage slavery by doing what looked on the surface to be the same thing that all of the rich people around them were doing, right? They weren't promising anything like new and fantastic, they were saying, hey, you know all those bankers are rich because of interest, here's a way you can get interested, you can get out and like move up into the middle class and whatnot, right? Not, this is a, you know, fanciful scheme, this is an investment and it's an investment that, unlike the other investments that you know the rich people are in, like I'm letting you win on this, right? We talked about this a little bit with the Nesserist scheme. It's a big part of just saying like, hey, this, if you frame your scheme as we're giving regular people a chance to do the stuff rich people do all the time,

that's the best kind of financial scheme because you're building it on a basis of, well, people know there's some way to make money with interest, people know some people get rich off of investments, why couldn't it be me this one time? Haven't I worked hard enough, you know? And then in the case of Bernie Madoff, he did it to the people who were the financial institution themselves, which is like, wait a second, nobody knows how any of this shit works. And that's why you're never going to hear about Madoff on Behind the Bastards because I don't have a problem with what he did. Oh, of course. Yeah, fucking avenging Angel. I mean, I'm sure he did a lot of shit, but like I don't give a shit. His victims were people like whatever.

So in Sarah's day for impoverished single women, like the thing that she was promising this downtrodden group of people was like, you know that rich people, number one, have bank accounts and make interest, I'm going to give you that opportunity. So it didn't seem these people weren't making a dumb decision. They thought they were getting a chance to do the thing that the people who have money have been doing forever. In Ponzi's day, investments like the stock market was starting to get to be a huge deal and he made people feel like, well, now you can get in on that thing. Both schemes work because most of the targeted people simultaneously misunderstood the real thing the scams were pretending to be, but also knew enough about that real thing to know that something like what the scammer was promising was how all of the rich people they knew had gotten that way.

So that's why these things work. Now, the exact origins of the term pyramid scheme are unclear, but the term certainly seems to have come into widespread use during the early 1970s. Thanks to a scam cosmetics company named Holiday Magic, which if you listen to the podcast The Dream, which is a very good podcast, they go into a lot of detail about this. I'm just going to give you the cliff's notes. So Holiday Magic had started in the mid-1960s. The project of a man named William Penn Patrick and he, oh, Billy was a real character. He had had a bunch of failed businesses.

He apparently came upon, he was like walking past and smelled like or like saw like cosmetics stacked up in some guy's garage and bought the business off of him. It was a very like sketchy story. What? William Penn Patrick is a fascinating guy. He unsuccessfully ran against Ronald Reagan from the right as governor of California. He was a one-time vice presidential nominee of a party called the California Theocratic Party, which just seems like it's straight up fascism. And of course, he was a member of the John Birch Society. Oh, yeah.

You know this guy, right? Everybody's got a picture of William Penn Patrick in their head now. Holiday Magic sounds like a name you would give to actual snake oil. Like that you would sell to people. The Holiday Magic, it'll kill the grip. Yeah, whereas like where I feel like we're learning the importance of names because like with Ponzi and Amway sounds like, you know, that they build fucking trucks or something, you know, like it's like. Sure. Such.

What do you drive? Yeah, exactly. Or at the very least like a place to buy sturdy groceries or something like that, you know. So Holiday Magic was a multi-level marketing company. It was not the first. In fact, by the time William Penn Patrick started it, there was Avon, Amway, Mary Kay, a bunch of other MLMs existed. We'll talk about what maybe the first was in a little bit. But Holiday Magic was probably was within the first generation of such companies and it was by far the scamiest.

The basic idea behind Holiday Magic was that women would become distributors and buy makeup kits that they could then throw parties where they did the makeup for their friends and they would sell the makeup via this. The makeup was terrible and it was so heavily marked up that, you know, number one, it was very much impossible for distributors to make money off of it. And number two, William Penn Patrick made a shitload of money off it. He was in very short order making like $6 million a month. He had quite a few mottos for his distributors. One was, tell recruits they're going to be happier, healthier, wealthier and receive what they want out of life with the Holiday Magic program. Any person who fails in the Holiday Magic program must fall into one of the following categories. Lazy, stupid, greedy, or dead.

I mean, that guy fucking knows. He's the best. Also, is he a time traveler from the 1920s? That's just my 1970s. Jack, you know that. Okay, okay, this is happening in the 70s though, right? Yeah, this is happening in the 70s. I mean, that's the voice that I pitched behind the bastards to you on.

We're going to talk about Hitler, Jack. We're going to talk about Saddam Hussein. It was really impressive because you were doing it all with, while doing a soft shoe and like taking your hat top hat on and off. Juggling a little. Yeah, yeah, yeah. Doing some close-up magic. Jack and Jack and I went, that's the guy we want. Yes.

So his personal motto was, those who condemn wealth are those who have none and see no chance of getting it. So again, you see the guy that he is. Now, as I said, there were other MLMs out there at the time. What made William Penn Patrick special, and you really have to say all three names, is that he was very astutely married, the kind of American dream-style grift of a pyramid scheme with cultic influence techniques. So he was kind of the first to like, I'm not just going to have a money grift to get money out of people. I'm going to keep them there by kind of making my grift into a cult, right? Because if you're just taking people's money in a scam, eventually they'll figure it out and leave.

If you get them to like believe that they're getting, them getting scammed is like, makes them morally superior, like, keys them in spiritually to something as part of some sort of sacred, you know, thing, then you can keep them forever, right? Like, that's the church of Scientology, you know? That's the way to really make a grift last. And William Penn Patrick is kind of the first MLM dude to get it right. Well, sort of. He went a little far. I was going to say that Holiday Magic is too stupid a name for a cult, and then you immediately disproved that by saying Scientology, which is the name of...

And, you know, the cult, he had another organization that was the cult, and this was called, it was a series of courses called Leadership Dynamics, which we build as like a training conference for Holiday Magic and other MLM distributors. So like, on paper, Leadership Dynamics is a course that you take in order to learn how to run your own business selling MLM products. The reality of the program is that people would pay like $1,000, and again, 70s money, to hang out in a horrible hotel getting locked in coffins and mentally abused. It was all these like weird power games and shit, like quasi-torture of people. It involved a lot of, we've talked about Synanon and Chuck Dedrick,

it involved a lot of the game where like you'll sit around in a circle and everyone in the group will harass one person for a period of time and insult them. It was a lot of like fucked up cult shit, you know? Yes, Nexium vibes. Yeah, yeah, Nexium vibes. Everything that came after Nexium is very much descended from this cult pyramid scheme too. Now again, if you want to learn a lot more detail about this, because I'm really breezing over a lot, the podcast The Dream has done an excellent series of episodes on this. For our purposes, what you need to know is that Chuck's dream fell apart

as a result of the fact that he was just promising way too much. And it wasn't really a product he was selling, he was just getting money straight from distributors to sell the product and like that was too much of a scam. Holiday Magic generated enough complaints that it kept coming up in the House of Representatives and eventually the FTC took him to task for being a pyramid scheme. And I'm going to quote from the excellent book, Cultish, by Amanda Montell here. Patrick's behavior was unhinged from all angles, but when the FTC brought him to court, their most compelling argument against him

and what eventually allowed them to shut down Holiday Magic was their points about his speech. Ultimately, the court ruled that Patrick's deceptive hyperbole loaded buzzwords and gaslighting disguised as inspiration were what defined him as a pyramid schemer. This makes sense because in every corner of life, business and otherwise, when you can tell deep down that something is ethically wrong, but are having trouble pinpointing why, language is a good place to look for evidence. This is where the FTC turned to squash Holiday Magic. And over the next few years, its attorneys cited the same kind of outlandish,

fraudulent messaging as they prosecuted a litany of MLMs, including the biggest one they went after, Amway. Now, Amway, as we started the podcast by stating, is legally not a pyramid scheme. And to explain why the FTC blasted William Penn Patrick's scam to hell, but did not do that to Amway, we have to talk a little bit about the men who founded Amway. We're going to be veering back and forward in time here. Sophie, can we cut in some of Cody's time machine noises here? No. Okay, well, did you say no?

No, it's horrible. Let me try. Oh, come on. Oh, right. Okay, I know what you're talking about. Like a cockroach. Yeah, I think he'd be proud. I feel him smiling upon me from heaven.

By the way, so, you know, I host the show The Daily Zeitgeist. I'm not just putting that in there as a plug, but we have been covering co-hosts with Miles Gray, former guest on the show. We've been covering a lot of Amazon lately, and they also have coffins and like scream at each other until they start weeping at work. Like, did you know about that? No, I didn't realize they were doing the holiday magic scheme. Amazon booths, which are just these like booths at the office where you go,

and like they are like, you're good. You weren't worth it. I hate that. It's basically like a place, a coffin you can cry in for like 15 minutes. That's hot as hell, Jack. Yes. I love it. I love to see a company respecting tradition, you know?

Exactly. That's really what it's all about to me. Embrace tradition, reject modernity, put your employees in coffins and scream at them. Yes. Speaking of that, Jack, do you know who else puts their employees in coffins and screams at them? It's going to be like an accident on Amazon ad. There's a decent chance that's a non-zero. It could happen.

Might be Chevron, you know? I really hope not. I don't know. Look, I think one of the great things about this country is that we all have a sacred right to force our employees into coffins and scream at them. Yeah. It's the American way. It's the American way.

It's the Amway. Yeah. That's what Amway comes from, right? American way. Yeah. Well, yes, it actually does. We'll be talking about that briefly. But first, products.

During the summer of 2020, some Americans suspected that the FBI had secretly infiltrated the racial justice demonstrations. And you know what? They were right. I'm Trevor Aronson, and I'm hosting a new podcast series, Alphabet Boys. As the FBI sometimes, you got to grab the little guy to go after the big guy. Each season will take you inside an undercover investigation. In the first season of Alphabet Boys, we're revealing how the FBI spied on protesters

in Denver. At the center of this story is a raspy-voiced, cigar-smoking man who drives a silver hearse. And inside his hearse was like a lot of guns. He's a shark. And not in the good and bad ass way. He's a nasty shark. He was just waiting for me to set the date, the time, and then, for sure, he was trying to get it to heaven.

Listen to Alphabet Boys on the iHeart Radio App, Apple Podcast, or wherever you get your podcasts. What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science? The problem with forensic science in the criminal legal system today is that it's an awful lot of forensic and not an awful lot of science. And the wrongly convicted pay a horrific price. Two death sentences and a life without parole.

My youngest, I was incarcerated two days after her first birthday. I'm Molly Herman. Join me as we put forensic science on trial to discover what happens when a match isn't a match and when there's no science in CSI. How many people have to be wrongly convicted before they realize that this stuff's all bogus? It's all made up. Listen to CSI on trial on the iHeart Radio App, Apple Podcast, or wherever you get your podcasts.

I'm Lance Bass, and you may know me from a little band called NSYNC. What you may not know is that when I was 23, I traveled to Moscow to train to become the youngest person to go to space. And when I was there, as you can imagine, I heard some pretty wild stories. But there was this one that really stuck with me about a Soviet astronaut who found himself stuck in space with no country to bring him down. It's 1991 and that man, Sergei Krekalev, is floating in orbit when he gets a message that down on Earth, his beloved country, the Soviet Union, is falling apart.

And now he's left defending the Union's last outpost. This is the crazy story of the 313 days he spent in space. 313 days that changed the world. Listen to the last Soviet on the iHeart Radio App, Apple Podcast, or wherever you get your podcasts. Oh, we are bad. What the fuck? I don't know, Jack.

I don't know. Is my connection slower? We do a lot of podcasts. Did you just glitch out? We've been casting too many pods lately. I'm overwhelmed by the amount of content. The sheer well of it. No, I get it, man.

I'm right there with you. We just recorded our 1,000th episode of Daily Zeitgeist. Jesus Christ. We've always done a cracker. I'm so sorry, but all of you have. We realize that because somebody wrote it into an Aka, otherwise we have no idea. Yeah, you never, I have no idea how many podcasts I've done other than far too many. But, you know, the nice thing about this, Jack, is when we're both dead, teenagers,

100 years from now, will be able to make us say literally anything. There's plenty of our voices. Yeah, we can finally immortality, Jack. Yeah. And then my kids will finally be able to hear me speak to them because, yeah. Yeah. You're famously have never, never speak around your children. I only speak Klingon to my children.

You're doing like a Star Trek version of the experiment that one poked it. Exactly. There's actually a psychologist who did a Klingon thing to his children. They only spoke Klingon around them. That's this beautiful mix of like kind of abusive and also kind of rad. Like it's a really unique area. Okay, so Amway got its start thanks to a company called Neutrolite, which was a dietary supplement business founded in 1934.

And I think from the name Neutrolite, you know, it's a scam. Yeah. Yeah. Now the founder was an American businessman named Carl F. Rainberg, who as far as I can tell. What? Yeah, I don't know the degree to which this guy was a total con artist. Neutrolite definitely sounds like a scam.

By some accounts, it may be the first MLM company, but also I think it was MLMs were not quite as much of a bald-faced scheme at that point because it was really just like a modification of door-to-door salesman, right? That was a big thing at the time. The fact that the idea that like someone would buy products and then go to door-to-door selling them was like not weird like it is now. So I don't know. Rainberg had been working for the steel industry as well as Colgate in China.

When the Chinese Civil War forced him to flee and he claimed that seeing so much poverty and starvation convinced him of the value of vitamins. And so he got into the dietary supplement business next. Again, Neutrolite may be the first MLM company. It's unclear to me how scammy it was. He sold his products wholesale to distributors who eventually formed their own companies to sell it. And two of the people who became independent distributors of Neutrolite were Jay Van Andel

and Richard DeVos. They got involved in 1949. Yeah. We all know that last name. Yeah. I was waiting for the first DeVos mention. Oh yeah. This is a big old DeVos episode.

I feel like we need like a horrifying sound effect. Yeah. Let's... Here. No, not that one. That's the good... I kind of like it. That's the DeVos sound.

Feels appropriate. So they become independent distributors in 1949 and there is not a tremendous amount that I found of reputable information about these men's early lives. They both did kind of write memoiry books, but they're again mainly existed to sell you on Amway. So not the best sources. Jay was born on June 3rd, 1934, which is the same year that Neutrolite was founded. He was the grandchild of Dutch immigrants.

His parents were extremely religious and members of the Christian Reformed Church. He attended a Christian high school and when World War II broke out, he joined the Air Force and trained bomber crews. After the war, he became a door-to-door salesman where he met his wife. Jay had met Richard DeVos back in high school. They both went to the same Christian Academy. Now Richard DeVos, who we'll call Old Dickey D, was born on March 4th, 1926 in Grand Rapids, Michigan.

He was a true child of the 20s, by which I mean his mother was named Ethel and his father was Simon Cornelius, which I know it's a name you just have to punch. So his family, I think we're fairly, he would later say that like they had hard times during the depressions that was difficult for them. I'm sure it was tighter than other times where they also paid to go to a private school. I don't think it was like, like my grandpa had to leave the family when he was 17 because they didn't have enough food. I don't think they were that kind of poor, but he makes a lot out of how poor they were

during the depression. I don't know, I wasn't there. His family and Jay seemed to have been, you know, more comfortable than most in this period of time. Again, they're able to send their kids to a private school. There is fairly little about the early lives of either men and sources that are particularly trustworthy. When he was 88, Rich wrote a memoir where he described his grandfather as a huckster,

but he meant that in a positive sense and I'm going to put it from a write up in Politico here. Grandpa Decker had been an immigrant from the Netherlands, Dutch in origin, like the word huckster itself. During the Great Depression, he sold freshly farmed vegetables door to door in Grand Rapids, Michigan. Rich DeVos used to tag along, noting the way the old man's neighborly demeanor and good humor gave him an instant rapport with customers.

At the end of the usual routes, young Rich had the chance to peddle the leftover vegetables. The first thing DeVos ever sold was a bag of onions. His father let him pocket the profit. So that's apparently how Richard DeVos claims he got. And that may very well be a lie because it's a very folksy story, you know? But Rich is very, very bullish about the craft of being a salesman. He kind of builds his whole life around that. The official Amway account of both men's life from the website amwayglobal.com runs just

a few paragraphs long. They stayed up front, quote, the founders of Amway, Rich DeVos and J. Van Andel, first became friends in high school in Grand Rapids, Michigan. They had no way of knowing that their individual lives would become forever entwined or that their combined work would change the landscape of business for good. But they don't give a lot of detail about these guys. Again, it's kind of hard to nail down on a whole lot about their early lives. So as I stated, Richard and Jay started as independent neutral life distributors in 1949,

right after World War II. Direct sales were a big deal at the time. And the concept of people going door to door to sell things was still fairly common and not really weird, right? Part of what's weird about MLMs now is that business doesn't work that way anymore, where a salesman just buys a bunch of products wholesale and goes around selling them. That did used to be kind of normal. When Jay and Rich got involved in neutral life, it was fighting off an attack by the

FDA who accused the company of false advertising. So again, I think that their vitamin things were kind of a scam. Jay and Rich were very good salesmen, but the brouhaha with the FDA concerned them. So after 10 years as neutral life distributors, they quit and they spun off their own company to sell different household products. They called it the American Way or Amway for short. Now a few short years later, Von Andel and DeVos would buy neutral life from Karl Rainberg and it today remains one of the staples of their product line.

But the first Amway product was a type of highly concentrated organic detergent, which they bought as a patent from a Detroit area scientist who'd fallen on hard times. The organic home cleaner was called Frisk and the men liked it because it was the kind of product that they claimed anybody could sell. Amway was successful early on, offering Americans during an unprecedented economic boom the chance to quote, own a business of their own. And this is from the beginning, a huge part of the pitch, right? A lot of people are getting rich.

This is the biggest economic expansion in history. And they're like, Amway is a chance to own your own business. So you're not our employees, you're starting your own business to sell these great products and like, that's how you're going to get your piece of the American dream. That was the Amway pitch from the beginning. And Amway wrapped itself in the cult of the American dream. Rich and Jay's most quoted line on modern Amway company websites is, quote, we were just two guys from Adam, Michigan, USA, who wanted to have a business of our own.

The Amway slogan is, you can do it too, right? And you see the, I mean, the, this is a little bit of the evolution of the grift, right? These Ponzi and Hal, these first schemes, it's, you know how rich people are making their money. You can do that too. And this is more of like an intimate sort of thing. We're just two regular guys who started a business and it got us rich and you can do that too.

They're selling entrepreneurship as a brand, right? Like you too could be your own entrepreneur. You could start your own business, be your own business owner, because that is what all the rich people that you've read about have always done. Like they really are like basically selling the American dream or the American way. Like that they tell you in the title exactly what they're going to do to you. Yep. That's exactly right.

Now, Rich DeVos, I think was more the driver of the duo. And he was first and foremost a salesman. He wrote in a 1965 book, quote, my own particular thing has always been salesmanship. I am always amazed to see how many people look down their noses at salesmanship as a worthy occupation. Now to sell Amway, Rich had to sell his own lifestyle, the fact that he was rich, big house, nice cars, and he'd all earned it through Amway. And if Rich could do it, you could do it too.

He would warn his new distributors that Amway wasn't about making a quick buck. It was about making your own slice of the American dream or reality through hard work. From Politico, quote, he helped his distributors along the way with guidelines and best practices, but he mostly saw himself as a cheerleader for people to realize their own capabilities and to expand their ideas of what is possible. All while undergirded by specific political and spiritual ideas, he saw as fundamental to the American way. And this is, again, what separates this from these early pyramid schemes are promising,

90 days, 40% return, you'll get rich, you know, you do nothing but hand in your money, you get rich. The much more durable version of the grift is it's going to be hard work. It's going to, you'll get rich, sure, but you have to do, you know, you have to put in this work. This is the, you know, you can, this is your own business. This is not like a quick return thing. You'll get, you'll be a millionaire if you follow these steps, but you have to follow

these steps and it's going to be hard. And that's a lot more durable and it also means if all you're doing is handing in money, being promised a return, when the return doesn't come, it's pretty easy to figure out who to blame. If you have to do, put in the hard work, quote unquote, then if it doesn't work out, because maybe it's close to impossible for it to work out, the blame is on you, which is a much smarter grift, you know? Right.

You're, and like your family, as you're, you know, taking out a second mortgage on your house to buy like wheelbarrows full of fucking cleaning solution that doesn't really work in your family is like, don't do this. You're like, don't you trust me? Like I'm going to, I am going to make this happen because just through sheer tyranny of will, because like that's what America treats, teaches us as possible. And then, you know, when it doesn't happen, you're kind of fucked because you already like kind of put it on your own shoulders.

Yeah. Yeah. That's exactly right. And that's brilliant. Yeah. It's a lot more than what Ponzi and how we're doing. I mean, it's evil as fuck. It's very evil, but it's also legally not a scam.

Yeah. Yeah. So for divorce, the American way meant a country that embraced the free enterprise system, exalted God, and held true to the conservative Christian principles. This country was built on a religious heritage, he wrote in his book, Believe, and we'd better get back to it. It meant a country where the only limit to what one could achieve was how hard one worked. I think being poor is something many people do, he said in a 1966 speech.

It sort of has to do with being poor by choice, and it meant a country where personal responsibility and belief in yourself were two sides of the same coin. In the 1960s and 70s, DeVos believed that those values were under threat from the rise of the welfare state and the decline of religion to the Soviet threat and the spread of communism in Southeast Asia. At the time, conservative Christians hadn't become yet a potent political force, but the makings of the movement were there. The sexual revolution, the Supreme Court's Roe v. Wade ruling, the pornography wars,

the white backlash to desegregation, the backlash to the women's lib movement, the rise of the silent majority, end quote, that's all from Politico's obituary of the man, and it makes a good point about where this guy is situating himself very consciously. So he's from the beginning, not just a businessman, and from the beginning, doing the kind of thing that William Penn Patrick did, this isn't just a money-making scene, this is wrapped up in this coat of Americana, and it is wrapped up in Christianity and this religious belief in the free market. And again, that makes it all much more durable, because it's not just a matter of, well, if

this doesn't work, maybe it was a scam, it's a matter of like, well, this must work. And so if it's not working, it's on me, because this is what God wants, you know? Now the religious right in the 1970s, which is when Amway really starts to make serious money, was not yet an organized factor in US politics. That didn't come around until 1979, but Richard knew the future was in marrying conservative electoral politics with Christian fundamentalism and free market ideology. By the early 1970s, he was wealthy enough to start spreading some of his money around to deserving causes.

He founded the Christian Freedom Foundation, which he chaired. Now today there's an organization by this name that claims to be an apostolic law ministry, but that is not the CFF that existed at his time. According to a Mother Jones report from 1981, the purpose of the CFF was quote, was as stated by a member during one meeting, to elect conservative Christians to Congress. Shortly after giving it $25,000, Richard DeVos took control of the board of the CFF and ran it. He used funds from the organization to funnel money into yet another right-winged, theocratic

organization, third century publishers. These fund folks published a guidebook for conservative Christians who wanted to win local elections. They framed this as returning to America quote, as it was when first founded a Christian Republic. Now during the same period, J. Van Andel, the co-founder of Amway, organized the Chamber Citizens Choice Lobby, which agitated against government regulations that he claimed reduced choice and that other people said reduced the ability of corporations to like crush workers

with factory equipment. So both of these guys are seeing both like the fight for deregulation and whatnot and the fight for corporate rights as the same as like fighting for a Christian Republic because obviously a Christian Republic would have no limitations on what capital can do. Now the Amway co-founders established the Center for Free Enterprise in Ada, Michigan, and this is like kind of like a museum it sounds like. The lobby of this building featured life-size bronze statues of both men. Mother Jones described it as quote, one of many displays in the saucer-shaped building

that illustrate the rewards of a capitalism stewarded not by the federal government but by God fearing tycoons themselves. It's like a propaganda outlet, right? This like this museum dedicated to the wonderful history of free enterprise and all that goes great when the government stays out of the way of rich men. In its first full year of business, 1960, Amway had made just half a million dollars. By 1977, the company was selling more than $300 million in products per year, mostly to its own distributors.

While Amway had started off as a multi-level marketing company, the focus was initially on selling products to actual customers. It quickly became clear that this was not the best way to make a fortune. If you relied on selling products the normal way, you had to worry about whether or not they worked or will market it well to customers. Instead, DeVos and Van Andel created a modified cult dedicated to convincing people to buy more Amway products in the guise of independent businesses that they would ostensibly sell, but in most cases would just kind of accrue in their house because they were unable to

move them. Mother Jones lays it all out, quote, Amway measures a distributor's success by how many products the person sells and by the size of their distributor's downline. Each time the distributors get a new recruit, they add to their personal sales force and elevate their own position, increasing the amount of money they get from people below them while acquiring ever loftier titles, first direct, then ruby, emerald, diamond, and so on. So you can technically make money by selling the products, but the real way to make money

is by selling Amway to new people, right? Because then you get a cut and in order to stay in it, you're pressured to buy a certain amount of the products a month. Most of what's bought is distributors buying it just so that they can say that they're continuing to quote unquote sell products and if those people are in your downline, you get a chunk every time they buy more Amway stuff, so they pressured them to buy more Amway stuff. And if you have a lot of people in your downline, you make a shitload of money, you know?

On your downline means like, so you get somebody to join Amway who like answers to you and then they get 300 people to join them, all those people are in your downline, their money is rolling up flowing up to you as they buy the products to then sell. Yeah. Exactly. And again, you don't, if you could think about the shape that that would be if you were to draw out the way that arrangement works, but yeah, that's all we can say on the matter. So it's like a triangular, definitely like a triangularish shape to the way the money

would be flowing. Interesting. Okay. William Campbell, a distributor for the company, explained the traditional Amway sales pitch this way for when he was interviewed for a 1977 article, Amway is just a good old American dream. Everybody has the idea to open their own business and see it go. Amway lets you.

And of course, most Amway distributors either made nothing or lost money. This discrepancy between the wealth made by Amway and the poverty of many Amway distributors led DeVos and Van Andel to earn the nickname The Gold Dust Twins. I don't know who gave him that nickname, but that's what people are pretty sure they gave themselves. Yeah, it does sound like a nickname you give yourself. Despite all of their growing propaganda operations, DeVos continued to prefer to deliver his sermons on capitalism and Christianity in person to wrapped audiences of Amway distributors.

His speeches at regular Amway events were said to drive the audience into a quote near frenzy and always ended in a chorus of weepy God bless Americas from the mostly husband and wife teams who attended. Amway purchased its own radio broadcasting system. In one interview, DeVos explained that purchasing the media directly was important to Amway, so that quote, we can expose to a broader audience the things we feel are important in the future of this country. Keep that in mind, because that's going to come up again soon.

Amway also increasingly published its own cartoons, films, booklets, and audio cassettes. Many of these were geared at training people to sell, but more were pure ideology aimed towards, in their words, objectively fighting the unfair scapegoating of the profit motive by the left. Now, DeVos and Van Andel also took the fight directly to politicians in Washington, generally by buying them outright. When Gerald Ford took office in 1973 after some unpleasantness with his old boss, the Amway founders had been shotgunning money his direction and towards the Republican Party

for years. And so they quickly became regular guests at the White House. This came in really handy for them, because in 1975, Amway fell under a Federal Trade Commission investigation to determine whether or not they were a pyramid scheme. Good to be on speaking terms with the president when the FTC starts looking into whether or not you're a grifter. Right. But Jack, you know who the FTC never looks into?

As far as we know. As far as we know. Yeah. Yeah. Is it the product? Is it the product? Is it the product? On that show?

Never. The FTC isn't even aware of them. We fly right under the FTC's radar, baby. That's the promise behind the bastards. They didn't even know what we're doing. We use a VPN. It's fine. Here's ads.

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These returns from Ed Brickser. Yeah. He's incredibly... Award winning. We've never won anything. Yeah. I've never won an award. And never will.

Ever. Not a one. We're, you know, awards, Jack, we're back. Shit. Okay. You know what, Robert? You just reached my ruby level of podcast hosts. So you get that reward.

You're certified ruby. Thank you. Does that come with a car? Do I get the Cadillac? Yeah, yeah, of course, the red Cadillac. The bright red Cadillac. I'm gonna go cruising in the main drag. You know, just a question on kind of what we've covered so far because they're, you

know, they have these people who are like the foot soldiers, like, are they rewarding those people based on how enthusiastically they like sing the praises of Amway? Because that does seem to be like part of it, right, is like, I'm assuming they think by kissing ass and saying his speeches, like, throw them into like, you know, orgasms of fucking capitalist joy that they are then like, kind of finding favor in the Amway world. Yeah. I mean, obviously you have to praise the boss, but also the people, the only people who. Yeah, Jack, you're really great.

Yeah. Thank you, Sophie. I was getting it and I appreciate it, the only people who like get to give talk for Amway are going to be other successful distributors. So you do have, you have the people who are actually trying to run a business and like sell Amway products who don't make money and wind up broke and dying on the street. And then you have the people who are really good at getting people to be that person. And those people do make money.

There's not a lot of them, but those are the people who get to like, who, when you go out for quotes and whatnot are representing Amway, right? These big distributors who are not Amway employees often. We'll talk a little bit about that, but like, that's, like, in a big part of it is like building this, this cult of personality around the founders and around the successful distributors. And it's this, a huge part of what works about Amway is the worship of success. So when somebody does make money, you put that person in front of crowds, you have them deliver these and the kind of people who are capable of making money at Amway are going

to be good public speakers because they're kind of people who are charismatic, right? They're good at getting people to buy into things. Yeah. And I don't think, like, I don't think that audience is faking it, that audience is cheering and losing their minds because they desperately want to believe in what Amway promises because it's the only hope they have of living a life that isn't wage slavery. And so they, they, they, they, they want the promise that Amway is making them. And so when they, they hear someone tell them it's possible, you can do this, you know,

you can succeed, you can have the big house and the boats and everything. They don't question it and instead they find it like inspiring and I'm sure when they get home that night to their house full of unsold Amway products, there's, there's a crushing feeling of inadequacy and failure, but it's, it's maybe even made worse than it otherwise would have been because they've convinced themselves, well, this guy was able to do it. And so as the Amway motto goes, I can do it too, you know, and so if I haven't done it, there must be something wrong with me. It's, I mean, it's, it's how America talks about homeless people and poor people, right?

It's just like a company that's bottled that, that discussion of like, if you're not succeeding under this system, it's because there's something wrong with you. Makes sense. Yeah. So in 1975, as I stated, Amway, the FTC is like, this might be a pyramid scheme, a holiday magic had just been busted and the FTC was at this point kind of going bullishly after other MLMs. Their argument against Amway seemed pretty strong.

Despite Richard DeVos's strident claims that Amway was a good way to build an independent business and get rich, the average gross monthly income of distributors was $67 a month. And you have to consider that's average when you consider guys like Von Andel and DeVos who are making millions of dollars a month, right? That's the average when you include the people who are getting rich off of this stuff, which means the vast majority of the 750,000 Amway distributors were making nothing or losing money, right? I mean, didn't you say at the top, the independent distributors lose 99.9% of their money?

Yes. Yeah. That's a more recent number. But yeah, like this was the number back then, right, was $67 a month was the average in 1975. We now know based on, again, what I started the episode with, yeah, 99.9% of people lose money. The data on Amway, obviously, it's different throughout the years and we know more now than we did at that point.

So that same year, 1975, Van Andel and Richard DeVos met with President Gerald Ford in the Oval Office for 43 minutes, the same year that this investigation gets underway. Next, from The Washington Post, a month later, Van Andel was quoted in a Michigan newspaper as saying that Ford was aware of Amway's troubles with the FTC. Later, Warren Rustint, director of Ford's scheduling office, and William Nicholson, his assistant, were listed as stockholders in a Nebraska insurance company being formed by Van Andel and DeVos. Rustlin and Nicholson dropped out of the venture despite White House approval of their participation.

Nicholson was later hired in Amway's government affairs office. You know, there's ways of greasing things. Wow. In 1979, the FTC ruled that Amway was not a pyramid scheme. But that the recruiting strategy, yeah, amazing. A true underdog story. Yeah. If you have a 43-minute meeting with the President of the Oval Office, you too can make court

stuff maybe not continue. Yeah. DeVos's picture on Wikipedia is him standing next to Ford at the White House holding up what appears to be the Constitution. Yeah. I don't know what it... Well, I don't know exactly what they're holding. It's like a single-page document that looks very official.

The list of how much money he makes. Yeah, exactly. Yeah. Interesting. It's very funny and not at all corrupt. In 1979, again, the FTC rules Amway's not a pyramid scheme, but the FTC, the judge did note that their recruiting strategy had the capacity to deceive prospective marks because it heavily implied they'd get rich.

They were fined and Amway had to agree to change their ads to more accurately reflect what people could actually make. The reality is that they just got slightly more cunning at promising the same things to people while skirting right up to the legal line. I found a book, Merchants of Deception, published by a former Amway distributor named Eric Scheibler. He came into Amway well after the FTC case and he explains how it was sold to him. This is kind of how they've modified things since the case to not make fraudulent claims, so to speak.

Hmm. Quote, one of the many analogies used by Amway distributor leaders to illustrate this was a reference to the McDonald's franchising scheme. Would you rather own one McDonald's or be Ray Kroc and have the right to franchise or duplicate your efforts? Isn't it far better to have 10% of 100 businesses than 100% of one? By helping many people succeed in owning their own franchise, so to speak, you could literally work yourself out of a job and live comfortably on the residual income generated by the businesses

you started. This residual income stream could even be passed on to your children as part of your estate. There was no way to lose money, that's a quote, as it was the perfect business opportunity with no employees or overhead, because again, the people under you weren't your employees. No sales. Yeah, no sales. When we questioned them about the apparent pyramid nature of the business, we were advised

no one makes more money off your business than you. Kerry later informed us this is a legal requirement that keeps this business from being an illegal pyramid. Amway claimed that the worst deception found in their marketing strategy was the fault of rogue distributors, individuals who had made their own money signing folks up for Amway and who had started pushing motivational tapes and pamphlets at conferences to teach people how to become super salesmen. This is not entirely untrue.

All these things are hallmarks of Amway today, but they actually started as independent from the main Amway business. Again, everybody in Amway, these are all independent little companies and some of them are independent large companies, the people who are really successful, the guys who are good at getting people to buy into Amway. Those guys start selling books and pamphlets where they're talking about how rich you can get. Amway claims, well, that's a big part.

That's what the FTC had an issue with. It wasn't what we were doing. We just weren't keeping enough of an eye on these distributors. Kind of reminds me of gig workers almost, like all these massive tech companies built on gig workers who are not actually employees. It does seem a lot like what Uber is doing. Uber the company that a lot of people got rich for starting and has never made a profit, which is fun.

It's neat. As I noted, the way this worked in the beginning is that Amway sold products to distributors who often started their own companies to sell said products much in the same way as DeVos and Van Andel got into the business. The money was in selling the products to distributors and the smartest Amway distributors made money by promising the good life to smaller fish and getting them to buy a bunch of Amway products. Thanks to a 1980s court case, we have a memo Richard DeVos wrote in the late 1970s as FTC scrutiny of his company reached a height.

In it, he very bluntly laid out what the FTC would later say was true. Amway distributors were being lied to, quote, and this is Richard DeVos, widespread illegalities inherent in Amway distributor designed systems of tapes, books and rallies. While most of these systems were conceived of in the late 1960s and early 1970s as genuine support programs to help Amway distributors develop their Amway business, entrepreneurial higher higher pins discovered and developed programs for substantial, separate and additional income under the Amway umbrella. Again, he was very aware of what was going on.

Richard outlined these support systems as a threat to the future security of the Amway corporation. He acknowledged to his subordinates that the disproportionate to Amway sales, intensity and solicitation of these tool systems are illegal per se under several US federal and state laws. So he's aware in like the early 70s that a lot of his distributors are breaking the law, but he can't really like, there's not, he's not going to do anything about this because those people are how Amway makes money, right?

Those big fish distributors who are all breaking the law and the promises they're making are also where his money comes from because they all have a bunch of people in their downline. But they're not Amway employees and they're not, you know, and he's not the one doing the lying. So it's like... Exactly. It feels like he's good. Yeah.

I mean, legally he was good. So after the FTC decides that Amway is not a pyramid scheme, a bunch of different state attorneys general start investigating Amway to like try to figure out if there's anything else they're doing illegal that they can, because they're getting a lot of complaints. People who like come out of the Amway cult are like, well, I lost a bunch of money. Something seems like there'd be wrong here. In Wisconsin, the state attorney general sent people into Amway meetings and he found these shady distributors running conferences and hawking tapes that made promises about wealth

that Amway absolutely could not back up. The state filed civil complaints against Amway, which sent journalists undercover to poke around, which is when Richard DeVos finally started to care. He proposed a number of possible solutions, perhaps the funniest of which was to create what he called a truth squad to ferret out big distributors who were lying in their supplemental materials. So corty. DeVos very quickly realized there was nothing Amway could actually do without harming his

ability to make money. As Dr. Carol Juth, a sociologist who studies direct marketing, wrote, The entrepreneurs of the Amway corporation, perhaps unwittingly, created an organizational structure which evolved into two powerful symbiotic organizations. The survival of the corporation and the distributor organizations are now dependent on and constrained by the other. The Amway corporation is constrained in its ability to garner desired profits because of the amount of money it must allow for distributor incentives and the fact that distributors

are more inclined to sponsor rather than to sell retail. After the FTC fined Amway for false advertising, the company was forced to make changes. Since Amway couldn't actually do without these big distributor organizations, they brought them and their propaganda into the whole deal. So they actually like kind of merge these two. They bring a lot of these distributors into like and particularly the propaganda they're making. They start selling that as part of Amway.

These big distributors with ranks like Double Diamond became a key part of the internal Amway business and their motivational speeches and books were rolled into the product line. The grift got slightly smarter. Instead of saying, this Booker conference will teach you to be a millionaire, it became, if you want to grow your business, this mentoring can help. I found one story in a Mother Jones article from 1996 that relates the tale of two Amway distributors, Karen and Craig Jones. I think this illustrates the where Amway moves after 1979 in terms of like how these promises

are made to people. After paying about $100 for a starter kit, the Joneses started buying motivational audio tapes recorded by such Amway leaders as DeVos, Yeager, and Bill Britt, another well-known distributor. Before long, Amway pressured them to place a standing order for new tapes, which cost $6 apiece. They'd tell you that the people who are serious about their future in the business do this, Craig says.

Soon, the Joneses were receiving two tapes a week by mail, and we also expected them to buy at least $200 in Amway products each month. You start believing them, says Karen. You want to do what they did to get to where they are. Karen quit her cleaning business. The couple sold their three-bedroom home in Charlotte and moved their three young children an hour north to Concord to be close to their upline. They contacted every acquaintance they could think of trying to recruit new distributors.

It didn't work. Karen said they lost friends and, within a year, were broke. We would eat beans all week long. We sold our living room furniture and our TV. As Craig lost interest in Amway, Karen says she received a less-than-Christian response from her sponsors, who implied she should file for divorce. They tell him, they tell me, flush him. Flush my husband, says Karen.

If he's not doing this part, then flush him. After Karen stopped going to meetings in April 1995, Craig returned to work full-time as an architectural engineer, and we'll squeeze the Joneses out. I know, right? Their business had made... He was an architectural engineer? Yeah. People had real jobs, but it's, again, a real job is hard, and you have to do it for years.

Maybe you never even get to retire today, Amway, you get rich. They had three kids eating beans for every meal because they wanted to live closer to the person that they bought their giant boxes of soap from that they would just end up storing in their basement because they couldn't sell them to anyone because nobody wants this shit. Yeah, their business peaked at revenues of $300 a month, and the couple claims that Amway cost them $50,000 in 1990s money and four and a half years of their lives. Having people who are struggling financially, who just keep spinning their wheels, blaming themselves, and then a group of people in power also blaming them is the most American

thing that I can possibly imagine. This is just, I mean, couldn't be a better metaphor for everything about our country. Yeah, it's perfect, Jack. It's perfect. Yeah. It's going to be the end of part one. I don't know, I was being Italian. Jack, that was wildly offensive.

You're the co-host of The Daily Zeitgeist. That's one place people can find you. You can also find me on Twitter at Jack underscore O'Brien. And yeah, those are kind of the two main places. Awesome. I end this with a little plug for something cool that a fan is making. Those of you who listened to our Christmas episode on Nestor Makhno, who is an anarchist warlord in Ukraine, this is about a different anarchist revolutionary guy who actually knew

Makhno and fought during the Spanish Civil War, a guy named Buenaventura de Rudy. There's the Ringo Award-nominated comic creator, Brenton Lengel, is creating a new comic series called De Rudy's Shadow of the People, and he's looking for people to back it on Kickstarter. If you go to Kickstarter and you search for D-U-R-R-U-T-I, De Rudy, you'll be able to find it. If you back at the book level or hire and comment Bastards, he'll send you a unique signed print free. It's a cool product, De Rudy at Kickstarter, and you'll find Brenton's project.

So I think it's neat. Check it out. Anything else, Jack? Nothing for me, Robert. Nothing from you? That's all for me also. All right. I can't wait until next episode.

I can. I can. Okay. I can. All right. Let's wait like a day. Let's wait like a day. Okay.

Sounds good. All right. Alphabet Boys is a new podcast series that goes inside undercover investigations. In the first season, we're diving into an FBI investigation of the 2020 protests. It involves a cigar-smoking mystery man who drives a silver hearse. And inside his hearse look like a lot of guns. But are federal agents catching bad guys or creating them? He was just waiting for me to set the date, the time, and then for sure, he was trying

to get it to happen. Listen to Alphabet Boys on the iHeart Radio app, Apple Podcast, or wherever you get your podcast. Did you know Lance Bass is a Russian-trained astronaut? That he went through training in a secret facility outside Moscow, hoping to become the youngest person to go to space? Well, I ought to know because I'm Lance Bass. And I'm hosting a new podcast that tells my crazy story and an even crazier story about

a Russian astronaut who found himself stuck in space with no country to bring him down. With the Soviet Union collapsing around him, he orbited the Earth for 313 days that changed the world. Listen to The Last Soviet on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts. What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science, and the wrongly convicted pay a horrific price? Two death sentences in a life without parole.

My youngest, I was incarcerated two days after her first birthday. Listen to CSI on trial on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts.