Is the Tea Party Movement Like a Pyramid Scheme?
One of the movement’s leaders, Mark Meckler, was once a top operator in a company accused of conning consumers. Is he applying the same tactics to the tea party?
There's a book Mark Meckler likes to recommend to reporters and others seeking insight into the tea party juggernaut. Called The Starfish and the Spider, it explores the "unstoppable power" of decentralized and leaderless organizations. "We're like the starfish," Meckler, a national coordinator for the Tea Party Patriots, said earlier this year. "There is no head, there is no leader of the organization. There are thousands of starfish out there and they are self-replicating in that way."
It's certainly an inspiring metaphor. If one tentacle is chopped off, the starfish grows a new one, making it a model of resilience. Yet there's another type of organization that's resilient, decentralized, and reminiscent of the Tea Party Patriots, a national umbrella organization that claims to represent 15 million activists and 2800 local affiliates. You can find it in companies like Amway, Herbalife, and others that rely on what's known as multilevel marketing (MLM), a business model some consider to be nothing but a pyramid scheme.
Like the tea party movement, these companies also operate as "leaderless," grassroots organizations. Organized by "networks," they espouse a bottom-up approach and depend on a neverending supply of people willing to work long hours with no assurance of pay. Meckler, it turns out, is intimately familiar with these types of outfits, having spent years at the highest ranks of one accused of preying on consumers with promises of easy money.
Few tea party activists—or journalists, for that matter—seem to know much about Meckler's life before he became one of the best-known faces of the movement. A regular TV presence and a veritable quote machine for the mainstream media, he's often identified in the media as an Internet lawyer, and the National Journal's Jonathan Rauch dubbed him "the closest thing the movement has to an organizational visionary." But before he became a go-to guy for the press and old-line conservative groups seeking a tutorial on the tea party movement, Meckler was a top distributor for Herbalife, a controversial company that peddles dubious nutritional supplements and weight loss programs by way of "direct selling" or "network marketing."
The company has a long history of run-ins with state and federal regulators, as well as congressional investigators, for its business practices and products. As early as 1982, the Food and Drug Administration sent Herbalife a notice of adverse findings for falsely claiming that its nutritional products could cure pretty much any disease. As a result, the company ended up removing questionable ingredients from some products and promised to modify the claims that it made in sales materials. The FDA also received a host of complaints from consumers about noxious side effects from Herbalife's products as well. A few years later, in 1985, the state of California sued the company for making false claims about its products and for running a pyramid-style marketing scheme. Herbalife settled the case for $850,000 without admitting wrongdoing.