### Amway: The Untold Story

# A Response to Amway's Lawsuit against P&G

Following is a letter I wrote to Scott Leith at the Grand Rapids Press in response to an article he wrote about Amway's lawsuit against P&G. Scott did not contact me prior to writing this article, however I did speak with him before he wrote the follow-up article. Unfortunately, he did not get my letter before deadline, but at least he had a chance to hear my side of the story. An article also appeared in the Cincinnati Enquirer.

Since Amway attorney Mike Mohr seems to have taken the lead in spreading lies and misinformation about me and this web site, I have awarded him the much coveted title of "Official Amway Spokesweasle" (see actual photo below). I find it quite ironic that Mohr, a highly paid, full-time Amway lackey, attempts to discredit me with the fact that I once did some part-time, paid consulting work for P&G. Mohr probably makes more money from Amway in a week than I made in an entire year from P&G; if taking money makes one a whore lacking in credibility and integrity, than Mohr is the clear winner in that category.

I'll be responding more fully soon to Spokesweasle Mohr's other whoppers in these articles and in the lawsuit.

Official Amway Spokesweasle Mike Mohr

10/21/98

Scott,

Here are my responses to specific statements made by Amway in your article. I know this is much too lengthy for you to use all of it, but take whatever you feel is appropriate. I'll probably publish the whole thing on my web site, so if you'll provide your readers with the link to my site (http://www.teleport.com/~schwartz), I'd appreciate it.

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"On Tuesday, Amway Corp. filed a federal lawsuit against the rival firm, charging that Procter & Gamble Co. has served as a "behind-the-scenes sponsor of a rogue Web site" that "foments hate rhetoric about Amway.""

1. Neither P&G nor anyone other person or company "sponsors" my site. As Amway well knows, P&G contacted me only after my web site had already been up for nine months, and asked me to provide them with copies of my extensive collection of documents concerning Amway, and also to consult with them on what I had learned about Amway's operations. I was compensated for my time, and for the cost of any photocopying and mailing that I did. P&G has never paid me to set up or maintain my web site, and has never instructed or requested that I include or omit any documents or information. I am the sole determiner of what goes on my site.

2. As for the charge of "fomenting hate rhetoric," this only shows to what ludicrous lengths Amway will go to try and bash its critics. Apparently Amway would like you to believe that I'm reponsible for what other people think and say about the information on my web site. It's hardly my fault if so many of those who got mixed up with Amway feel they were deceived and cheated. Amway also "forgets" to mention that I post on my web site all comments I receive, even those that attack me and my web site, and that the most hateful and vicious comments by far--up to and including death threats--have come from Amway's defenders. Amway has never once, to my knowledge, expressed any concern about these attacks. Apparently "hate rhetoric" means criticism of Amway, no matter how well founded.

"Ada-based Amway claims that the Web site, dubbed "Amway: The Untold Story," sometimes contains vulgar and false statements, along with accusations that Amway is a cult that's guilty of "screwing people over.""

1. Amway's use of the word "vulgar" is just more sophomoric posturing. Having failed to come up with an intelligent and substantive respond to the message, they stoop to attacking the messanger, and further to nitpicking the use of words that are common and relatively innocuous--unless, of course, you're a blue-haired old woman or a desperate Amway attorney.

2. As for the allegations I make regarding Amway's unethical conduct (call it "screwing over" or "cheating" or whatever you wish), there is copious evidence of this on my web site, evidence which Amway has not even attempted to rebut, to my knowledge. The most damning evidence comes from Amway itself, in the form of its own internal documents that recognize that the "tools" business--the lucrative sales of "motivational" rallies and tapes by high-level distributors--is unethical and illegal. (http://www.teleport.com/~schwartz/directly.htm) Amway has never taken effective steps to curb the abuses that it admits its distributors have been subjected to, and the continuing parade of lawsuits filed against Amway and its "Tools Kings"--including suits in which high-level distributors admit that they make most of their money from their "tools" businesses--shows that the abuses continue unabated. Of course, Amway also profits from the unethical activities of its high-level distributors, so why bother to do more than pay lip service to cleaning up the mess (and pay attorneys to cover up that mess)?

3. The most scathing accusations come from Amway's own distributors. The Morrison and Musgrove lawsuits, just to name two, were filed by distributors who had reached the highest levels of the Amway pyramid, and can therefore hardly be dismissed by Amway as "disgruntled" or "failures." (http://www.teleport.com/~schwartz/suits.htm) The Morrison lawsuit describes Amway as a "...conspiracy and evil plan to reap hundreds of millions of dollars at the expense of thousands and possibly millions of other people...".

The Musgrove lawsuit alleges that "The Amway corporation has in fact, committed itself to supporting the Yager organization and its hierarchy to the detriment of distributors that are induced to enter the Yager organization. This subjective bias on the part of Amway favoring the Yager distributorship is motivated by money, greed and avarice. The Yager organization makes Amway a lot of money. As such, Amway is willing to disregard integrity, truth, objectivity, honesty and all other ethical concepts embodied in the Amway code of ethics to protect Yager's organization."

4. Jeff Probandt, another high-level distributor, corroborates on his web site (http://209.196.24.186/) that the tools business is unethical, deceptive and abusive. His allegations are based on his first-hand knowledge as an observer of and participant in the tools business, and corroborates the evidence on my web site. Probandt claims that his site was reviewed by Amway attorneys, and I've so far seen nothing from Amway to dispute that.

5. There is also the remarkable case, Gommeringer v. Amway (http://www.teleport.com/~schwartz/gommerin.htm) in which Amway admits in court filings that it terminated the distributorship of two of its highest-level distributors soley because of a disputed annual renewal fee amounting to $16.00. This was a multi-million dollar business that this couple had built up, destroyed by Amway for the sake of $16.00. If Amway's attorneys would like to suggest a more appropriate phrase than "screwed over" to describe what Amway admitted doing to these people, I'm certainly open to suggestions.

6. No where on my site do I claim that Amway is a cult; I have no qualifications for doing so. What I do state is that a number of sociologist, psychologists and cult experts, as well as many former distributors, make that claim, and I document that on my site. It is hardly my fault that people with expertise in these fields have concluded that Amway has some of the characteristics of harmful cult groups. Of course it's understandable that Amway would not want you to know this, or to try and excuse or rationalize it.

"Amway claims Procter & Gamble provided documents to the site's author, while also paying him as a consultant."

1. Amway repeats the word "consultant" like some sort of evil incantation. "Consultant" can mean any number of things, none of which are illegal, unethical or improper. In this case, my consulting consisted of providing P&G with information. In the course of my dealings with them I requested that P&G's attorneys, as a favor to me, provide me with publicly available court documents, documents that they would not have come across had it not been for the information on my site. Had I the time or money to travel across the country to look through court files, I could have gotten the same information on my own, but I don't. P&G's attorneys never sent me anything that I didn't first ask them for.

2. The information provided to me at my request by P&G's attorneys comprises a very small part of my site. Of the 18 lawsuits cited on my site, P&G provided documents on 3 of those, and two of those were P&G's own lawsuits. Most of the documents provided to me by P&G have not even been used on my site.

3. P&G's attorneys, at my request, also provided me with documents that were less than complimentary to P&G's case, including: the judges decision dismissing P&G's third amended complaint (noted on my site); the countersuit Amway filed (which was posted on my web site until it was thrown out by the court); the judge's decision denying P&G's Lanham Act claim; and even Amway's lawsuit that is the subject of your article (which will be posted on my web site). P&G's attorneys also informed me of the fact that P&G had been sactioned $10,000 by the court and provided me with the information that allowed me to get a copy of that decision (which is posted on my site).

If P&G is paying me to conduct a "hate" campaign against Amway, I'd say I'm doing a pretty poor job of it. Maybe P&G should ask for a refund.

"Amway claims a Portland, Ore., man named Sidney Schwartz authored a Web site "devoted to making malicious attacks on Amway.""

The usual hyperbolic lawyer talk. "Malicious" implies deliberate falsehood, and Amway has yet to show that anything on my site is false, much less deliberately so.

""Their support for him has enabled him to continue to publish negative things about Amway," Mohr said."

An outright lie on Mohr's part. The money I was paid by P&G was minimal, and had nothing to do with "supporting" my web site. The site was up long before I was contacted by P&G, and has remained up long after my consulting relationship with them was over. The site, in fact, costs me nothing to set up and maintain, and the space for the web site is included in the monthly fee I pay to my ISP, and Mohr already knows this.

"Mohr said Amway isn't interested in shutting down other "Amway haters" who post Web sites that criticize the company."

1. Another Mohr whopper. Amway's attorneys contacted the University of Michigan in an attempt to shut down the web site of Ashley Wilkes, another Amway critic. They failed. Amway's letter and the University's response can be found at http://www.tc.umn.edu/nlhome/m307/wilke001/CeaseDesist.html.

2. Kenneth Lowndes, a former distributor who is running for Congress and also has a web site critical of Amway, claims that Amway also pressured Geocities into shutting down a site that Lowndes maintained there. Lowndes' site can now be found at http://hometown.aol.com/NoMonarchy/index1.html.

It be noted that, in its lawsuit, Amway goes on at some length about how I have a link to Mr. Lowndes site on my site. This clearly shows how desperate Amway must be to try fabricate a case out of nothing. For one thing, I have links to many sites, INCLUDING AMWAY'S, and I can hardly be held responsible for the content of those sites. For another, aside from the link itself to Lowndes site, I make no comment on the truth or reliability of anything on his site. Mr. Lowndes makes serious charges against Amway, which to my knowledge Amway has not disproved. If Amway has a problem with Mr. Lowndes, it should take the matter up with him, and not harass and bully people who have nothing to do with his claims. I think people who are researching Amway have the right to at least see what Mr. Lowndes has to say. Amway obviously disagrees.

""We believe strongly in free speech," he said. "It would take a particularly egregious case for the company to go after an individual. That's not what this is about.""

Anyone can pay lip service to free speech, and one would hardly expect Amway to come out in opposition to it. Their actions, however, put the lie to their self-serving propaganda. Prior to the advent of web sites like mine, Amway could safely assume that its distributors and the public at large would remain ignorant of the large number of lawsuits filed against Amway. Now that this is no longer the case, Amway has instituted measures to protect its image at the expense of the civil rights of its distributors. Beginning in 1998, all new and renewing distributors must now agree to give up their right to file lawsuits against Amway or their upline and to instead agree to settle and complaints through binding arbitration. Worse, distributors are also prohibited from discussing any complaints that go to arbitration. Amway so believes in "free speech" that it deprives its distributors of that right as a matter of policy. Amway even insists that distributors who signed up years ago and never agreed to give up their rights do so now or lose businesses into which they have put considerable time, effort, and expense. Amway further has the incredible gall to claim that they came up with this policy out of the goodness of their hearts, to "save" their distributors from the expense and hassle of filing lawsuits.