In Defense of The Pyramid

I am writing in response to Matt Stroud's recent article, "A Better Life?" (Cover Story, April 18). His article contains several factual inaccuracies about the network marketing industry and what is often referred to as "pyramid schemes."

It appears Matt Stroud should have done more research before publishing this article. In particular, he should have read The 45 Second Presentation That Will Change Your Life by Don Failla or, better yet, interviewed Don personally. In addition, if he had spent more time researching the industry, he would have known that Warren Buffet purchased a network marketing company (Pampered Chef) and that other Fortune 500 companies are leveraging a "network marketing"/referral marketing model to generate more business.

Second, using Dr. Jeff Kallis' quote to suggest he is an expert on this industry is irresponsible. Most marketing professors are not practitioners or even students of network marketing. I know because this form of marketing certainly was not taught or discussed at length at the Leavey School of Business at Santa Clara University.

There are many reasons why people do not succeed in this business. However, most people do not succeed in this business because they have not been taught a "system" that enables them to succeed. In addition, most do not evaluate the network marketing opportunity like a business person would (i.e., product, industry, company, cause, compensation model and sponsor). It's no wonder so many fail to succeed, as is the case with any other kind of business outside network marketing.

While it is too late to dispel some of the misperception that Matt Stroud is perpetuating about network marketing, I hope I have planted a seed that stimulates further investigation and encourages a fair and responsible journalistic practice at Metro.

Brion Lau, Founder and President, Financial Fitness San Jose

Offshoring Visalus

Visalus is now in Jamaica. My wife and I have been approached to become distributors. However I am very cynical about the claims and have decided definitely not to become a distributor. My wife is interested, as she wants to have a BMW.

I have advised her that she is on her own as the recruitment is spreading real fast and she will soon have no one to recruit or sell to.

These schemes are confidence trickster schemes and they should be investigated thoroughly before being allowed to make the miraculous claims they do.

Courtney Brown, Kingston, Jamaica

Feinstein Responds... Sort Of

Don't know if you saw this, but Feinstein has responded to your story about Milcon, point by point: http://capitolideaortwo.blogspot.com/2007/05/feinstein-responds-to-conflict-of.html.

I can't find this response on her website, so I figure she's only releasing it to those who ask for it—but she doesn't want to put in on her site because that would cause reporters inside the Beltway to think she was really worried about these allegations.

Here's my take on her points, for what it's worth:

1. You suggest she quit from Milcon because she was getting too much heat; she says it was just part of the normal rotation of committee assignments when the Dems won Congress. On this one, there's no clear winner, no smoking gun. Yes, committee assignments change when terms end, but why would she quit from this committee if it is as noncontroversial as she claims, with no conflicts for her, etc.? And why wasn't this switch announced earlier?

2. She said she sought the advice of the Senate Ethics Committee on her own. OK, when? The date of her request, and the request itself, should be a public document. If it was after your investigation began, then she's a crook. If it was years before your investigation began, then you shot at her with a blank.

3. She makes the distinction between approving appropriations for projects that have not been awarded to contractors, and awarding contracts. Her argument is pretty convincing on this one—that she, as a senator, should be in a position to designate money for projects, but that the decision of who gets the contracts to do those projects falls to others. It's this point you guys should address. Maybe she had influence over the contracting process? If so, say how she did it—or admit that she bested you in this contest!

Anyway, be honest journalists and present her side of the story. Then address it. I think it's entirely possible that she put billions into companies owned by her husband, but you've got to prove that point—put out the evidence that refutes her points. Then let readers decide.

Bob Gamboa, Redwood City

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