India needs an intellectually-rigorous, and accurate, definition of 'lawful direct selling'

Shyam

I notice that (without offering to produce any quantifiable evidence to support their anecdotal claims) certain intellectually-castrated Indian adherents of 'NMart' keep bleating that 'MLM' is perfectly lawful, whilst other correspondents of Corporate Frauds Watch have politely asked: How can 'NMart' be reformed? 

Hopefully, the legislators tasked in the republic of India with drawing up a new definition of 'lawful direct selling,' will take note of what has been happening in the USA, where 'MLM/Prosperity Gospel' rackets have spread like cancers, and where (to date) they have only been challenged by less-than-intellectually-rigorous, and/or corrupt, trade regulators who have allowed billionaire-criminals to write their own inaccurate definition of 'lawful direct selling.' 

I have previously described this tragi-comic situation as the equivalent of trying to stop the spread of the 'Nazi' lie, by asking the governing body of the Boy Scout Movement to keep an eye on the 'Hitler Youth.'

Your free-thinking readers should be aware that a common-sense, but effectively-toothless, new US Federal Trade Commission 'rule' was introduced at the start of 2012 which requires anyone in the USA selling a 'business opportunity (other than a so-called 'MLM') to supply anyone buying that 'business opportunity,' with a one page disclosure-form which must include:

• evidence to support any earnings claims
• a list of any previous legal actions against the sponsoring company
• a declaration of the sponsoring company's cancellation/refund policy 

In other words, although they are obviously not described in accurate deconstructed terms by current FTC officials, this 'business opportunity rule' specifically excludes blame-the-victim 'MLM Prosperity Gospel' cults from regulation and has effectively-placed their bosses above the rule of law in the USA.

Sadly, FTC agents have completely failed to recognise 'Prosperity Gospel' cultism as a form of major, ongoing racketeering activity, because the FTC has itself foolishly allowed the instigator/leaders of these gangs lawfully to register their unlawful activities as 'direct selling/MLM' companies - 'Amway', 'Herbalife', 'NuSkin', 'Xango', etc. However, in the adult world of quantifiable reality, no evidence exists (in the form of audited accounts; particularly, income-tax payment receipts) proving that a significant number of the constantly-churning adherents of any of these organizations (which all have exhibited the universal identifying characteristics of a cult) has ever received an overall net-income from lawfully-retailing goods, and/or services, directly to the general public for a profit.

To add insult to injury, the following non-specific statement had previously been made by David Vladeck, the current  US FTC Director Bureau of Consumer Protection:

'The victims of these (business opportunity) frauds are our neighbours - people who are trying to make an honest living... they risked their limited financial resources in the response to the promise of a job or an income - a chance at a profitable home-based business. But these turned out to be empty promises - and the people who counted on them ended up with high levels of frustration and even higher levels of debt.'

David Vladeck's largely-empty rhetoric was also repeated by another leading FTC attorney, Eileen Harrington. Obviously, it is a perfect description of 'MLM income opportunity' fraud, but these laudable words were part of the FTC's ironically-titled initiative, 'Operation Empty Promises' which, unbelievably, has not targeted any of the most-pernicious 'MLM' mobs.

http://ftc.gov/opa/2011/03/emptypromises.shtm  http://www.ftc.gov/multimedia/video/cases/empty-mlmpromises_hanks.shtm .

Meanwhile, the US Dept. of Justice, which (due to its previous, let's turn a blind-eye to all businessmen, policy) is now sinking in a sea of fraud, has recently announced the following impressive-sounding initiative - a 'consumer protection working group to combat consumer fraud.' In plain language, this translates as: large numbers of US Justice Dept. attorneys now have a further pretext to keep holding 'conferences' at the expense of their employers (the public) whom they have failed to protect.

 http://www.stopfraud.gov/opa/pr/2012/February/12-ag-200.html . 

http://www.bloomberg.com/news/2011-09-20/-extravagant-spending-16-muffins-found-at-justice-conferences.html .

Judging by their previous, shameful track-record, legally-qualified, senior US government officials, would appear to be some of the last people in America who should be tasked with coming up with solutions to fraud. Self-evidently, the only common-sense legislation which could have halted blame-the-victim 'MLM Prosperity Gospel' cultism in the USA many years ago (and before it became a global problem), would have been to have made it a fundamental requirement for the instigators of all alleged 'direct selling/income opportunities' to produce quantifiable evidence to prove that they have had a significant and sustainable source of revenue other than that deriving from their own participants. Had such common-sense legislation been enacted, and rigorously enforced, then (since 1970) if the instigators of any alleged 'direct selling/income opportunity' had been unable to produce such elementary proof of the economic viability, and legality, of their alleged 'commercial' activities, they could have been immediately arrested by FBI agents, their labyrinths of counterfeit corporate structures closed-down and all their illegally-acquired assets seized, under existing RICO legislation. 

Once you understand that all so-called 'MLM' companies have been cultic Trojan Horses, it is a pointless exercise examining their reality-inverting 'commercial' exteriors. The blindingly-obvious common-sense questions which have never been put to the officers of the so-called 'Direct Selling Association' by either the American mainstream media or by US law enforcement agents, are:

• Exactly how many US citizens have signed up for so-called 'MLM income opportunities' overall, and exactly how many overall have got back more than they paid in
• Out of all the alleged 'multi-billion dollar direct retail sales ' claimed by you and your member companies in the USA down the years, exactly what percentage have been authentic, external, retail transactions to members of the general public for a profit, rather than internal transactions between your member companies and their many millions of alleged 'business owners,' but which have been laundered as 'retail sales' by you, and by your member companies, in order to dissimulate the operation of closed-market swindles from which the ill-informed ordinary contributors cannot have hoped to receive any more money than they paid in?
• Excluding all your own member companies' documentation, and that issued to their alleged 'distributors,' what quantifiable evidence can you produce proving that any of your member companies' alleged 'Multi-Level Marketing income opportunies' have actually had any significant, and sustainable, external source of revenue other than that deriving from their own participants?

Although it remains unthinkable to many people, a large part of the so-called 'direct selling industry,' which recently boasted '$28.56 billions of annual retail sales in the USA,' can be proved to have been nothing more than the 'corporate'-front for a collection of blame-the-victim 'MLM/Prosperity Gospel' cults which have been running some of the most extensive, and outrageous, dissimulated, closed-market swindles in history. 

For a long time, it has not been in the interests of the US Justice Dept. to face up to this ugly reality, because 'MLM' racketeers have greased the palms of a remarkable number of key persons, and organizations, in the American establishment (particularly, leading members of the Republican party). Indeed, the ultimatedream of 'MLM' racketeers (to have the protection of the sitting US President), might soon be again turned into a nightmare reality. 

David Brear (copyright 2012)