Kamala Harris investigated Herbalife Inc.’s pyramid scheme while she was California’s attorney general and her husband, Douglas Emhoff, worked at a law firm representing Herbalife Inc., according to documents obtained by the newspaper. Staff members were ignoring calls for help.
Harris’ staff encouraged her to investigate the Los Angeles-based company, which sells nutritional supplements and diet shakes through individual sellers in a multilevel marketing structure, the documents said.
In a March 2015 memo to then-AG Harris, her staff said the company “engaged in a number of tactics designed to maximize the number of distributors selling its products.” The company proposed an investigation into the allegations that “as a result, cash flow is returning to top distributors.” of the organizational pyramid. ”
Documents obtained by the Post will determine whether Harris employees tried to “circumvent” regulations that prevent Herbalife from making “false or misleading statements” about its products or benefit distributors. This confirms that the government recognized that “formal investigative authority is necessary” in order to do so. make.
The memo, written by Deputy Attorneys General Judith Fiorentini, Deputy Attorneys General Sanna Singer and Deputy Attorney General Jinsuk Ota, recommends interviewing former distributors, subpoenaing company documents and sending undercover investigators. There is. It also asked at least two full-time lawyers to investigate the company.
“Conducting an investigation into Herbalife at this time sends a message that the office takes its continued oversight and enforcement of existing judgments very seriously,” the memo said. There is. “Furthermore, it ensures that Herbalife is held responsible for the actions of its distributors.”
Mr. Harris Didn’t Follow Staff Investigative Recommendations – Something About Bill Ackman Tweeted with X On Thursday, she suggested the decision may have something to do with her husband’s relationship with the company.
The Pershing Square CEO pointed to the fact that Harris’ husband, Doug Emhoff, was a partner at the law firm Venable LLP, which represented Herbalife during the FTC investigation.
Emhoff was partner in charge of the Los Angeles office. But he didn’t. Representing Herbalife personally. Harris and Emhoff married in August 2014, less than a year before the note was delivered.
“This entire situation is an incredibly damning indictment of how our regulatory enforcement machinery works,” Ackman wrote.
Mr. Ackman, who sold Herbalife short for $1 billion in 2012, has long claimed that Herbalife was running a pyramid scheme, and on Thursday said, “So many people with no wealth were deceived by Herbalife that they went bankrupt.” That’s sad,” he wrote.
Activists argue that Herbalife unfairly exploits the Hispanic community, where its products are particularly popular, by recruiting low-income sellers in an alleged pyramid structure.
Back in 2013, Angelica Salas, executive director of the Humane Immigrant Rights Coalition in Los Angeles, said: I called Harris. “To protect vulnerable, low-income Latinos and other minorities from these systems that are killing people.”
Ackman criticized X for celebrating Herbalife’s stock price, which fell 30% on Thursday to a 14-year low after the company reported mixed fourth-quarter results.
“[Herbalife] “Distributors are typically low-income, often undocumented, ambitious entrepreneurs pursuing what they mistakenly believe is the American dream,” Ackman said.
He ultimately abandoned his bet on Herbalife in 2017 after a conflict with investor Carl Icahn, who poured money into the company and became its largest shareholder.
Nevertheless, Ackman said Thursday was “a very good day for me, who was feeling psychologically deprived of Herbalife,” and “an even better day to see one of the world’s biggest pyramid schemes fail.” ”.
Herbalife did not respond to The Post’s request for comment, nor did a representative for Vice President Harris. A spokesperson for the California Attorney General’s Office declined to comment.
