For the longest time, many Herbalife skeptics have wondered what is preventing California Attorney General Kamala Harris from enforcing a permanent injunction against the company that, among other things, calls for the company to maintain records of its sales to distributors, stop making health claims, and stop pumping absurd income related claims that have driven the company’s success over the last decade or so. Click here to see a video where Herbalife’s CEO tells you that being a distributor is a “solution for these tough economic times.”
Pretty bold claims for a company that says people only sign up for a little part time income, no?
An article was published this evening by Matt Handley that is a must read. The article details the 1986 permanent injunction against Herbalife. I have also detailed the injunction on my Twitter in the past. A full text of the injunction can be found here.
Among other things, it permanently enjoins and restrains Herbalife from:
- Making false or misleading representations with respect to any specific goals for participants in defendants’ marketing program relating to the number of new customers or new participants a participant may obtain within a specific time period or an amount of money a participant may earn through bonuses and overrides.
- Defendants shall not use any “live” testimonials relating to the experience the individual giving the testimonial had with one or more of defendants’ products unless prior to the taking of any testimonials at live presentations, defendants shall indicate, orally or in a conspicuous writing, to those giving testimonials that: (1) testimonials cannot contain any untrue or misleading representations; (2) testimonials regarding any of defendants’ weight loss products or products for- special dietary use may not describe curative or preventive properties or experiences for disease or illness
- Defendants shall not establish, maintain or operate a marketing program in which:
- (1) A participant pays a valuable consideration for the chance in whole or in part, to receive, either directly or indirectly, compensation, which is based on other than retail sales for introducing one or more additional persons into participation in defendants’ marketing program or for the chance to receive compensation., either directly or- indirectly, when the newly introduced participant introduces a new participant into defendants’ marketing program;
- (2) Any compensation, however denominated (including but not limited to “commissions,” “overrides,” “achievement bonuses,” or any term of similar import), defendants pay or participants receive is based upon anything other than the retail sale of defendants’ products; and
- (3) A participant can obtain any specific level in defendants’ Marketing program based upon criteria other than the amount of retail sales made by the participant or person (s) introduced into defendants’ marketing program by the participant.
As anyone following the story knows, Herbalife has violated many of these injunction conditions – over and over again. The California residents that are getting bilked by the Herbalife fraud look like this:
All the while, these people’s protests seem to be falling on deaf ears. For the longest time I wondered – why isn’t California Attorney General Kamala Harris enforcing this permanent injunction? It reads as clear as day. What is preventing her from taking a look at this company that operates in her home state? And what’s the point of writing a permanent injunction into law if future Attorney Generals are going to denigrate it by ignoring it ever existed?
Today, I feel like I may have the answer.
First, while researching Kamala Harris, I found she recently married to Douglas Emhoff:
Mr. Emhoff happens to be PARTNER at a law firm called Venable, LLP:
And interestingly enough, Venable, LLP has been retained by Herbalife on NUMEROUS occasions in 2013.
Surely this would seem like some sort of enormous conflict of interest, no?
What is Kamala Harris thinking when she looks at the 1986 injunction that is currently being nothing short of egregiously and utterly degraded by Herbalife’s current business tactics – and then she turns and sees her husband who is PARTNER of the firm retained as Herbalife’s counsel for several matters in 2013?
The questions this leaves me with are:
1. What is Herbalife’s current relationship with Venable, LLP?
2. Where does Kamala’s husband stand on involvement with any and all Herbalife litigation?
3. Why has this relationship not been disclosed as some sort of potential conflict of interest?
Your move, Kamala Harris. Do the right thing.
(Disclosure: Short Herbalife)