Letter to Congresswoman Sue Myrick

June 5, 2004

The Honorable Sue Myrick
6525 Morrison Boulevard, Suite 402
Charlotte NC 28211

Dear Congresswoman Myrick:

Based on the May 7 NBC Dateline exposé of large-scale consumer deception perpetrated by top sales representatives of Amway/Quixtar, we ask you to immediately remove your name from the sponsorship of HR 1220, the so-called anti-pyramid promotion act.

NBC Dateline revealed the deceptive marketing practices that this bill specifically seeks to protect - the sales of high priced marketing materials to consumers who are recruited into multi-level marketing schemes. Amway/Quixtar is the largest company in the world whose sales leaders are perpetrating these practices and it is the greatest beneficiary of provisions in this bill.

We ask you to remove your name from sponsorship from HR 1220 also because it is a direct conflict of interest. The bill financially benefits Amway/Quixtar from which you have financially benefited as a sales representative, promotional speaker and recipient of campaign funds at company-related events.

As the show uncovered, the purchase of books, tapes and seminars by new recruits is a critical element of the Amway/Quixtar enterprise. HR 1220 specifically excludes these purchases by new recruits from being defined as paid "consideration", thereby exempting the practice from prosecution as an illegal pyramid scheme.

Not only are these sales an integral part of participation in the scheme, but, as the show exposed, they constitute the main source of income of the scheme's promoters. The speakers extolled the Amway/Quixtar business to new recruits as a viable and profitable business opportunity. They claimed the Amway/Quixtar business provided their own highly touted wealth and urged the new recruits to invest in that business.

But, the NBC show revealed, the real business which enriches these organizers is not the sales of Amway/Quixtar products but rather the sales of marketing and motivation tools that they falsely induce the recruits to purchase. The organizers also do not divulge that 99% of Amway/Quixtar recruits never earn a net profit.

The sales of these "tools" is organized in a pyramid structure in which some of the recruits can recoup their investments by recruiting others who are then induced to buy the same goods. None of these products are ever resold to the general public.

The show revealed that the very same type of Amway events at which you frequently spoke and received hundreds of thousands of dollars in campaign funds were part of a massive and highly organized deception, and the money raised was therefore ill-gotten.

In addition to the deceptive program of selling marketing "tools" to recruits, Amway/Quixtar is in continuous jeopardy of prosecution for operating as an illegal pyramid scheme. This is due to its practice of selling the great majority of its goods to sales representatives who do not resell the products to end-users. Rather, they are induced to recoup their investment by recruiting other investors. The North Carolina statute against pyramid schemes (N.C. Gen. Statute §14-291.2) prohibits this practice. For more than two decades the Federal Trade Commission has defined and prosecuted multi-level marketing companies operating in this manner as "endless chains" that doom the vast majority of recruits to financial loss and which must ultimately collapse.

HR 1220 seeks to redefine a pyramid scheme so as to legalize this practice and to thwart effective enforcement of state laws such as our own in North Carolina, to reverse decades of FTC policy and to supercede numerous court rulings. Amway/Quixtar is the largest and most direct beneficiary of this attempted legislative maneuver.

We respectfully ask you to respond to our formal request that you remove your name from co-sponsorship of HR 1220. Thank you for your consideration.

Sincerely,

Robert L. FitzPatrick, Pres.
PYRAMID SCHEME ALERT