The fascinating and shocking documentary on HBO, The Vow, is a gripping true story about a strikingly unremarkable person, Keith Raniere, who somehow made dozens of young women his “sex slaves.” As part of a cultic program that he named, NXIVM, pretentiously using Roman numerals to add gravitas, he was able to manipulate women to brand (like a calf) each other, with his own initials. Incredibly, the film tells how the women pledged total obedience supposedly for their own personal development. In perfect Orwellian terms, they became convinced that slavery is freedom.
The HBO series is presented as an intimate picture told by former “slaves” and top level adherents with extensive private video that had been originally authorized by Raniere himself for an idolizing self-portrayal he planned to produce.
Yet, for all its advantages of insider footage, whistle-blower testimony, and the protection that Raniere was in jail and unable to exact retribution, the story leaves out the core reality of Raniere and his scheme. Raniere’s program is vaguely characterized as a “company,” a profit-making business. But what kind of “business” can be a “cult” and engage in such barbaric behavior? The operating model and definition of this “business” and its source of revenue – which made the entire sordid activity possible – are unexplained. Where Raniere learned the extraordinary tools of persuasion to subjugate people is also not presented. If NXIVM was a “business”, can they be called “marketing”?
The story omits and thereby covers up these grounding details for a lurid, mysterious and moralistic account of sex, evil and enslavement. The NXIVM phenomenon is made to appear unique and exotic with just one person as ultimate source of unspeakable abuse. With NXIVM lifted out of its historical and commercial circumstance, which would give context and insight, not just titillation and horror, The Vow becomes a kind of docu-porn.
In reality, NXIVM’s methods of persuasion, Raniere’s absurd pretenses to moral authority, the ridiculous claims that NXIVM is a “world-changing” business and the pseudo-psychological teachings are not mysterious or unique. They are in fact aspects of an American-invented, commonplace type of business. An essential element of this type of company is to strip people of their capacity for critical thinking, to lure them into a make-believe world where “anything is possible.” In this “business,” leader-worship is standard along with the surrender of personal freedom to divert attention from its impossible promise of “unlimited” income and perpetual expansion. Raniere’s talk of NXIVM “changing the world” is standard fare in this type of “business” to mystify its bogus operations and falsely portray its promoters as visionary evangelists, not guileful manipulators. The intimidation of whistle-blowers and critics with bullying threats and bankrupting lawsuits, which Raniere practiced for years, is also standard practice in this “business”, since none of the promises of income and personal fulfillment are ever delivered.
In the “business” model that NXIVM followed, labor is routinely obtained without paying for it, thereby accruing enormous profit to the owners and top promoters. Economic “slavery” is intrinsic, not a malicious concoction of one sociopath. Though NXIVM and Raniere are extremes within the model, business practices leading from financial enslavement and mind control to more insidious personal abuse, including sexual, are not unusual. Other abuses include dangerously false medical claims, unhealthy dietary restrictions, disrupted marriages and friendships, demands of 24/7 availability and “total” commitment, regardless of devastating losses. Divorce, bankruptcy, debt and even suicide are not uncommon. They are incidental to this “business.”
The “business” is called “multi-level marketing”, the model of perhaps as many as a thousand other enterprises operating in the USA. It was invented in America and has been operating internationally for more than 50 years. Incredibly, The Vow never states that NXIVM was merely a classic MLM scheme. If it had, the story might have served as a powerful warning to viewers against the many other companies with similar characteristics and revealed a wider potential for similar harm. It might even have been a clarion call to regulators to investigate other schemes engaged in similar practices.
The Vow’s omission of NXIVM’s identity as “MLM” and its avoidance of business fundamentals such as revenue source, pay plan, profits and losses follow a longstanding pattern in the media. Typical coverage of MLM focuses on hyped-up, over-priced commodity products, e.g., anti-aging creams, vitamins, weight loss powders, as The Vowdoes on Raniere’s ridiculous training courses that he called a “technology” or on the hope-filled testimony of “winners”, without acknowledging the scale of overall loss and attrition. MLM leaders are often colorfully profiled as charismatic, assigning the scheme’s explosive growth to leadership style. News coverage does also include allegations of pyramid fraud, deception and abuses, but is always “balanced” with positive testimonies and reminders that “MLM is legitimate, according to the Federal Trade Commission.”
Why does this pattern prevail, which The Vow follows with its out-of-context, obscured and incomplete picture of NXIVM?
With 20 years experience being called on by the media for quotes, interviews and background on multi-level marketing, I conclude the media literally can’t handle the truth about MLM. The unspeakable realities of MLM are that it promises “the greatest income opportunity in the world” while delivering 99% annual loss rates, and its famous “endless chain” proposition guarantees these massive loss rates. One-in-six American households are under MLM “contract” each year in the belief it is about “direct selling” and “income opportunity.” The reality of a scam of this scale challenges the media narrative of a fair marketplace. Similarly, the plain truth that such a scheme is openly promoted, inflicting industrial-scale losses on millions of people raises the specter of entrenched, systemic corruption of regulators, which violates media views of government oversight. The abusive cultic methods and the troubling signs of mind control exerted over so many MLM adherents are outside the media’s purview, raising questions few editors would dare explore. Finally, the possibility that millions of people are tragically plunging into an orchestrated sham in a vain pursuit of the American Dream violates the foundational myths about hope, fairness and economic opportunity for the average person.
It is not likely that the directors of The Vow, Jehane Noujaim and Karim Amer,were unaware the true nature of NXIVM as a classic MLM income fraud. The lawsuit filed in early 2020 by some of the same people whose experiences and views the film narrates, spell it out:
Drawing from methods used in pyramid schemes and multi-level marketing, NXIVM induced students to recruit and form their own downstream sales organizations within NXIVM, so that the students might work their way up in the hierarchy, known as the “Stripe Path” to a level where they could earn commissions and build careers and income for themselves.
The lawsuit connects NXIVM’s structure and compensation plan directly to the earlier MLM, Consumer Buyline, that Raniere had operated:
Before forming ESP … Raniere ran another pyramid scheme called Consumers Buyline Inc … Pursuant to the consent decree entered in that case, Raniere was permanently prohibited from “promoting, offering or granting participation in a chain distributor scheme in the State of New York.” Two years later he was back at it with ESP. (the predecessor name for NXIVM).
It documents how NXIVM produced the appalling financial outcomes for participants that all MLM “endless chain” schemes do:
Out of the more than sixteen thousand people who took NXIVM’s courses, fewer than one hundred ever earned any income from NXIVM’s businesses, and fewer than twenty-five received substantial earnings within NXIVM. Most of the earnings were received by the small group collectively known within the organization as the “Inner Circle.”
A hundred out of 16,000 making any money at all, with actual profit gained only by 25, the cadre of top recruiters, is the same model and the same economic outcome repeated in MLM after MLM, year after year.
The Vow does, briefly, reference that Raniere previously operated the MLM, Consumer Buyline, but it does not connect it to NXIVM. It also does not trace Raniere’s history in MLM before Consumers Buyline to where he learned the model. Raniere began where so many other MLM charlatans were tutored and mentored – in Amway.
In fact, Keith Raniere’s biography is not unique or exotic. He is a typical MLM figure, the narcissistic, megalomaniac who has failed or is undistinguished until finding his way into “MLM.” Raniere spent several years in the 1980’s in Amway, the first MLM to be publicly identified as a “cult.” From Amway, he fashioned his own MLM, substituting Amway’s laundry soap with a discount buying club membership as the “product” for transferring money from newer recruits to earlier ones. The raging furnace of Raniere’s narcissism was stoked at Consumer Buyline by thousands of adoring and deceived followers, just as he had seen Amway’s “Diamonds” exalted and revered. Reportedly, Raniere’s Consumer Buyline scheme lured over 250,000 “distributors” before being investigated by multiple states as an illegal pyramid scheme.
Also, in typical MLM fashion and reflecting the political protection for MLM that Amway built up with influence buying, Consumer Buyline was not criminally prosecuted. Raniere escaped with only a small fine and the realization that regulators were not to be feared, which likely emboldened him, leading tragically toward forming NXIVM. According to news reports of the time, Raniere then became a “consultant” to the “MLM industry” and subsequently started up another MLM, selling the typical MLM commodity, vitamins.
Upon this foundation of years of MLM experience, NXIVM was built. Having worked with disguises of laundry soap, discount buying club membership and vitamins, Raniere arrived at the perfect MLM product, which only a seasoned MLM veteran would understand. He realized the true basis for MLM is not its consumer products or a personal selling opportunity, but the magical “endless chain” income proposition and its mystical claims that belief shapes reality. With its mystical capacity to expand to “infinity”, MLMs – and only MLMs – are allowed by federal regulators to promise each participant “unlimited income” based on the perpetual duplication of paying participants. The “belief” dogma overrides critical thinking and math calculations that a recruit might employ in due diligence.
Despite this claim to mystical financial power and protection from pyramid prosecution, MLMs such as Amway, learned years ago that a direct and crass promise of wealth is an insufficient lure. It triggers skepticism, due diligence and risk of discovery of the impossibility of perpetual recruiting. Under Amway’s seminal influence, the MLM income plan was recast in social and spiritual terms, as a divinely ordained manifestation of superior character, social value, service, and contribution, part of a metaphysical plan. Translated into a commercialized Calvinism, success in MLM is portrayed as a mystical reward for goodness – believing the leaders, obeying the “plan”, and recruiting, (converting) others to do the same. Failure, then, becomes a dreaded manifestation of sin or heresy – critical thinking, doubting and quitting – the certain mark of “losers.”
Wealth itself is presented as a gateway to the realization of life-dreams, not just an end in itself. Offering a “plan” (it is called just that: the plan) that can magically produce unlimited income for all, MLM leaders assume super-hero roles of dispensers of grace and holders of great secrets. MLM effectively franchised the copycat role that Raniere played at NXIVM. The guileful, duplicitous, manipulative, and amoral Raniere is an MLM stereotype.
Dispensing with silly commodities like vitamin pills, Raniere made NXIVM’s “product” the mystified and electrifying promise of personal fulfillment, total happiness and prosperity. NXIVM sold courses and experiential learning programs that promised what Amway claimed would be gained only when a recruit reached “Diamond” level: joy, financial success, emotional stability, time freedom. These transcendent states of being became NXIVM’s stock in trade.
Making the training the MLM product was not at all original to Raniere or NXIVM. The first large MLMs all used this model. The early MLM, Holiday Magic, which was shut down by federal regulators, included an adjunct training MLM, Mind Dynamics. MLM pioneer and convicted felon, Glenn Turner’s MLM, Koscot, was affiliated with the training MLM, Dare To Be Great. Amway the oldest and largest of all MLMs has employed the infamous Amway Motivation Organizations, reportedly the most lucrative source of income for its top recruiters. Each of these had their respective pyramid reward plans.
All MLMs operate “training” programs to indoctrinate recruits into believing that the schemes are a true pathway to happiness, even if the products are ordinary, unneeded and overpriced and the recruits themselves only experience financial loss. The “training” program is where the MLM ideology is most forcefully imposed on recruits, mind-control professionally administered, and where the leader, with assumed mystical wisdom, is exalted as benevolent genius. All MLM trainings trap the recruit into making a stark binary choice: total belief and pursuit of the pay-and-recruit program or be cast into the hell of doubters and “losers.” This soon is presented as a life choice. With keys to unlocking “human potential” as its official “product,” as well NXIVM’s cult power to indoctrinate, dominate, divert, and abuse was greatly enhanced.
In my new book, I call this delusional ideology, Ponzinomics. It has two main tenets. The first is a belief in the fraudulent pyramid scheme or endless chain as a magical economic model, mystically capable of delivering prosperity to all, forever. Supporting this fantasy is the magical doctrine that reality can be reshaped with mental training; nothing is true; belief determines all. This is the narrative and the ritual of multi-level marketing. Recruits are introduced to the “plan”, the endless recruiting chain as their path to prosperity, and then persuaded that wealth and happiness are available only to those who believe. Ponzinomics separates adherents from objective reality and then swindles them with the classic pyramid proposition. To those who are lured into this dream world, the promoters are presented as economic wizards and model human beings, setting the stage for a destructive cult to operate as a “business.”
The Vow shows only the pseudo-psychological part of Ponzinomics, the manipulative gibberish about transformation, breakthroughs and enlightenment. It leaves out the critical context of NXIVM’s business identity as “multi-level marketing”, camouflaged as “direct selling”, and protected from law enforcement by the “MLM” lobby. It portrays Raniere as a rare and unfathomable individual, calculating, sadistic and power-mad, while also charming and seductive,
Without historical, political and financial context, the NXIVM story becomes sensational and undoubtedly more valuable to HBO, but it is distorted and incomplete. The Vow is a harrowing film revealing the capacity for large numbers of people to be lured into personal and financial self-destruction. It reveals the vulnerability of all people to unwittingly fall into “cults.” Yet, The Vow misleads the viewers in portraying NXIVM as a singular enterprise, the original brainchild of an anomalous, sociopathic narcissist.
Unfortunately, NXIVM and Raniere are not at all singular. NXIVM is representative of a syndicate of hundreds of essentially identical schemes that make the same pseudo-economic promises and perpetrate the same pseudo-psychological manipulations, run by Raniere-type look-alikes. NXIVM enjoyed the official status of “legitimate” sales business, granted by the Federal Trade Commission to all MLM schemes, even while it promoted a pyramid income proposition and an abusive and authoritarian ideology, grotesquely portrayed, as all MLMs are, as a breakthrough pathway to the American Dream and “human potential.”