Bush Authoritarianism: Blackwater+Amway=GOP, Pt. 3
Sun Oct 21, 2007 at 05:33:35 PM PDT
The administration of George W. Bush has pursued an agenda and engaged in a governance style that breaks radically from any previous administration. Some of the characteristics of what I’m calling Bush Authoritarianism are variants of previous ideological beliefs or forms of governance. Many others are the realization of decades of marketing and propaganda by the interlinked network of rightwing donors, foundations, think tanks, marketing and media operations, opinion leaders, political operatives, and allies within the Republican party.
One of the main hallmarks of Bush Authoritarianism is a variant of privatization, in which public goods or services supplied directly by government employees are "outsourced" to a private company, which takes tax dollars, but over which the government has much less control than public employees performing the same task. Privatization has been happening at all levels of government for a couple of decades. In some cases it’s warranted and in the best interests of citizens and taxpayers. But often, privatization results in inferior good or services, higher costs to taxpayers, and diminished accountability to the government and the public.
An extreme version of privatization has accelerated during the Bush administration: the privatization of warfare. Privatizing war is at the cutting edge of Bush Authoritarianism, and Blackwater, whose business practices and niche I discussed last week, is an archetypal "winner" in the new authoritarian system emerging under the Bush administration. Blackwater is not the only example, however; it is simply one of the more public and extreme examples of Bush’s base of support and the recipients of his governance, which transfers public moneys previously spent on government employees to perform government services, to private entities over which the government can exercise much less authority and accountability.
Blackwater CEO Erik Prince is a product of the world of ultra-conservative donors who’ve funded the vast right wing conspiracy. His father, auto parts mogul Edgar Prince, was one of the largest funders of the right wing movement. Notably, he was an original funder of James Dobson’s Family Research Council, and the younger Prince counts such major rightwing Christian operatives as Chuck Colson and Gary Bauer as close friends.
Another major emphasis in Bush Authoritarianism is political and financial support from, and governmental support to the owners and investors in private enterprises that produce little in the way of concrete goods and provide little or no support to their employees (such as health insurance, pensions, or even the payment of payroll taxes). Some of the key industries for support to George W. Bush and the GOP have been the "extractive" industries (such as oil, coal and timber), industries significantly affected by government regulation (such as freight rail) and low-wage industries that are often hostile to unionization (such as fast food, retail, nursing homes and unskilled construction).
In many ways, the Alticor corporation is the private sector counterpart to Blackwater as a producer and a beneficiary of the authoritarianism of the Bush administration. Like Blackwater, Alticor—best known by one of it’s primary subsidiaries, Amway—provides little support and maintains few ties to the contractors who make it money. Its founders and the heirs to the fortune it created are ultra-conservatives who’ve been among the most important funders to the right wing ideological and political network. The company and the foundations created by the recipients of its profits are based in West Michigan. It is highly controversial and has had numerous legal problems. And beyond the various affinities of ideology, politics and business operations, Alticor and Blackwater are directly related by marriage: Alticor/Amway heir Dick DeVos is married to the former Betsy Prince, older sister to Blackwater CEO Erik Prince.
Part 1
Part 2
When George W. Bush became President, for many it was an opportunity they had sought for decades, the opportunity to radically remake the federal government, and by extension, the entire economy and the entire country. In the next installments, I will lay out in much more detail the financial and political history that connects Blackwater, Amway, the rightwing political network, the Republican party and the Bush administration, and that provided many of the ideas, blueprints and implementors for Bush’s brand of authoritarianism. But as in the previous installment, where I described Blackwater as an archetypical corporation connected with Bush Authoritarianism, tonight I will give an overview of Amway.
Alticor is the parent company of group of companies of which two are Amway and Quixtar, both of which operate on a business model known as multi-level marketing (MLM). Other examples of businesses that use multi-level marketing are Avon and Tupperware. However, multi-level market is a common model used by more dubious ventures, like many non-traditional medical products. Critics often characterize multi-level marketing operations as ponzi or pyramid schemes.
Here’s how Russ Belant, a longtime researcher of the far right in America, describes how Amway works:
As a multilevel marketing system, each Amway distributor has someone over them that gets a cut of their sales. The direct distributor is the first supervisory level where they get cuts on all sales below them. Because they have recruited enough people, they just make money off them, usually friends and relatives. As they grow more groups they proceed upline, becoming ruby, pearl, emerald, diamond, double diamond and finally crown ambassador distributors. Only about 1% make it to the first level or above. The highest level only had two people in the world. So the 99% at the basic level, who average about $130 per month, are providing all the income for the rest of the upline. The upline’s only job is to keep the people at the bottom motivated to keep selling Amway. So the upline folks suck up part of their meager earnings of their distributors by selling them motivational tapes, books and $100 tickets to rallies. One Crown Ambassador earned an estimated $35 million per year, not by selling Amway, but by selling motivation "tools."
Amway rallies are heavily themed with patriotic appeals and or prosperity gospel (god wants you to be rich) and energetic music, so that you come away seeing Amway standing with moral rectitude, righteousness and purpose. When most fail to earn the thousands per month they were lead to believe was realizable, they certainly do not blame Amway - they blame themselves.
Like Blackwater, which has few permanent employees but instead serves primarily as a middleman between the federal government and the individual contractors for whom it does not provide permanent health insurance, pensions or on whom it even pays payroll taxes, Amway has almost no lasting responsibilities to the people who provide the company’s profits. They produce almost nothing, and instead just move money around, primarily upward from individuals at the bottom of the pyramid to the top of the company, who are now primarily the heirs of the company’s founders, Richard DeVos Sr and Jay Van Andel.
Businesses that operated this way are generally considered pyramid schemes. Pyramid schemes are generally against the law, and the Federal Trade Commission (FTC) warns consumers about being scammed by MLM schemes. Amway is technically a legal pyramid scheme, but a prominent expert in the Racketeering and Corrupt Organizations Act (RICO) had a different take on Amway: he likened Amway to the mafia:
It is my opinion that the Amway business is run in a manner that is parallel to that of major organized crime groups, in particular the Mafia. The structure and function of major organized crime groups, generally consisting of associated enterprises engaging in patterns of legal and illegal activity, was the prototype forming the basis for federal and state racketeering legislation that I have been involved in drafting. The same structure and function, with associated enterprises engaging in patterns of legal and illegal activity, is found in the Amway business.
At various times, the FTC has found Amway in violation of the law. Again, Russ Bellant:
The Federal Trade Commission ( FTC ) investigated Amway and found fraud and deception in Amway’s methods in 1979...
In 1989, when Amway attempted a hostile takeover of Avon, the cosmetics company rebuffed Amway, calling them in a public letter a company "marked by zealotry" and "morally bankrupt and criminally corrupt," according to the Detroit Free Press.
When Avon called Amway criminally corrupt, they referred to settlements that Amway had to pay for systematically defrauding the Canadian government of customs duties and taxes. Its Canadian subsidiary paid $21 million in fines, while the Ada-based headquarters paid $38.1 million in 1989, the highest in Canadian history. They also referenced the decision of the Federal Trade Commission and the Wisconsin Attorney General’s office that charged Amway "with price fixing and misleading claims in connection with the recruitment of distributors."
As the Amway name has become increasingly tainted with the public, Alticor has shifted emphasis to Quixtar. But as NBC’s Dateline showed in 2004, Quixtar operates in essentially the same was as Amway, with most people making no money but providing the people at the top of the pyramid with profits from the sales of tickets to revival meetings, books, promotional tapes and the like.
Beyond the connection of Betsy Prince marrying the son of Amway’s co-founder, what, you might wonder, links Amway so tightly to Bush Authoritarianism? A few examples, which I will explore further next week:
The MLM business model used by Amway was the foundation of much of the GOP’s get out the vote (GOTV) operation in 2004.
Amway parlayed it’s MLM network to elect one it’s own to Congress through a pyramid fundraising model using the very same people it uses to send profits to the corporate leadership. The reward for this and other political efforts was a multi-million dollar tax break for Amway’s China-related activities.
The Richard and Helen DeVos Foundation is one of the pillars of the right wing, in most years giving upwards of $20 million to conservative causes. The Dick and Betsy DeVos foundation has also become a major donor of rightwing causes, especially privatization and school vouchers.
Betsy DeVos has twice served as the chair of the Michigan Republican party, and Dick DeVos was the 2006 GOP nominee for Governor.
Finally, there’s the direct money: According to a report by the Center for Public Integrity, in the 2004 election cycle, members of the Van Andel and DeVos families were the second, third and fifth largest donors to the Republican party.
Blackwater and Amway are not just model corporations for an era or radical privatization and corporate abdication of any ties or responsibilities to its employees. They are in many ways creators and beneficiaries of the entire hard-right authoritarian approach to politics and governance embodied in the administration of George W. Bush.
[Many of the links in this piece were discovered via the dozens of excellent posts that can be found at Michigan Liberal. In particular, bloggers DemWave and Nirmal wrote several good, well-sourced pieces that I found very valuable]
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