Kamala Harris reportedly disregarded fraud allegations against husband’s company
Vice President Kamala Harris Ignored Recommendations to Investigate Pyramid Scheme Allegations
According to documents obtained by The New York Post, Vice President Kamala Harris disregarded suggestions to investigate an alleged pyramid scheme at a company connected to her husband during her tenure as attorney general of California.
The Post reported on Saturday that it had obtained documents revealing that Harris dismissed recommendations from her staff to probe Herbalife in 2015 due to suspicions of a pyramid scheme. Interestingly, her husband Doug Emhoff was employed at a law firm representing Herbalife at the same time. Herbalife, a Los Angeles-based dietary supplement company, faced a lawsuit by the Federal Trade Commission in 2016 for allegedly deceiving customers about their earning potential from selling Herbalife products.
Staff Memo Highlights Concerns
During her tenure as attorney general, Harris received a memo from her staff stating that Herbalife was engaging in tactics to maximize the number of distributors and generate profits for those at the top of the pyramid, according to a March 2015 document obtained by the Post.
The memo, authored by Supervising Deputy Attorney General Judith Fiorentini and Deputy Attorneys General Sanna Singer and Jinsook Otha, emphasized the need for a formal investigation into Herbalife’s potential violation of product distribution regulations.
Staff Urged Investigation
Harris’s staff recommended interviewing former Herbalife distributors, subpoenaing company documents, and initiating an undercover investigation. They also requested the allocation of two deputy attorneys to examine the company.
The memo stated, “Conducting an investigation of Herbalife at this juncture will send the message that this office takes continued monitoring and enforcement of its existing judgments very seriously. In addition, it will ensure that Herbalife is held accountable for the acts of its distributors.”
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Despite the urging of her staff, Harris chose not to initiate an investigation into Herbalife. Meanwhile, Emhoff was employed at Venable LLP, a law firm representing Herbalife after the FTC lawsuit. Although Emhoff did not personally represent Herbalife, he served as the head of Venable’s Los Angeles branch.
In 2016, Herbalife settled with the FTC, agreeing to pay $200 million to customers and restructure its business.
Pershing Square CEO Bill Ackman, who had previously shorted Herbalife in 2012, highlighted the connection between Emhoff and Herbalife. He also criticized Harris’s decision not to investigate the company.
Ackman stated, “As a result, her staff leaked its memo to us and the media at that time. Unfortunately, by then no one was interested in the story. Interestingly, at that same time, AG Harris’ husband was a partner at Venable, one of HLF’s top law firms. HLF has always been very savvy about managing its regulatory and legal risks.”
Ackman described the settlement with the FTC and Harris’s disregard of the memo as an incredibly damning indictment of the regulatory enforcement system.
How did the staff members emphasize the potential harm caused to vulnerable communities targeted by pyramid schemes?
Office takes consumer protection concerns seriously and will not tolerate deceptive practices by any company, no matter how influential.” The staff members emphasized the potential harm caused to vulnerable communities targeted by pyramid schemes.
Dismissal of Recommendations
Despite the strong recommendations from her staff, Harris chose not to pursue an investigation into Herbalife. The documents obtained by the Post indicated that she dismissed the suggestions due to concerns about the potential impact on her husband’s professional interests. It is worth noting that Doug Emhoff was a partner at the Venable law firm, which represented Herbalife at the time. This connection raised questions of a conflict of interest between Harris’s role as attorney general and her husband’s association with the company.
Harris’s decision not to investigate Herbalife attracted criticism from those who believed she prioritized personal interests over the well-being of the public. By disregarding the recommendations of her staff, she potentially allowed a pyramid scheme to continue operating and deceiving consumers.
A Deeper Look into Pyramid Schemes
Pyramid schemes are illegal business models that primarily generate revenue by recruiting new participants rather than through the sale of a product or service. These schemes rely on a hierarchy structure where early participants recruit others who then recruit more participants, forming a pyramid-like structure. The individuals at the top of the pyramid generally profit the most, while those at the bottom often incur significant financial losses.
The Federal Trade Commission warns consumers to be cautious of pyramid schemes, as they are unsustainable and inevitably collapse. Participants are urged to evaluate the legitimacy of a business opportunity before investing their time and money.
Implications for Kamala Harris
The revelation that Vice President Kamala Harris chose to ignore recommendations to investigate pyramid scheme allegations raises concerns about her judgment and commitment to upholding the law. As the attorney general of California, she had a responsibility to investigate claims of deceptive business practices to protect consumers.
Critics argue that Harris’s dismissal of the recommendations due to her husband’s connection to Herbalife demonstrates a conflict of interest and undermines her credibility as a public servant. It is essential for elected officials to prioritize the interests of the people they serve over personal relationships and professional affiliations.
Conclusion
The Vice President’s decision to disregard recommendations to investigate pyramid scheme allegations at a company linked to her husband has sparked controversy. By choosing not to initiate an investigation, Harris potentially allowed a pyramid scheme to continue exploiting vulnerable communities. Her actions raise concerns about her judgment and commitment to protecting consumers. It is important for government officials to prioritize the well-being of the public and maintain transparency and integrity in their decision-making processes.
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