The New York Times’ piece on Herbalife yesterday, which details how billionaire hedge fund manager William Ackman is waging a PR campaign to destroy the supplement company for his own profit, buries the role of three of the city’s most prominent Latino politicians in a massive campaign to cast Herbalife as a pyramid scheme targeting minorities.
Speaker Melissa Mark-Viverito, Finance Chair Julissa Ferreras and State Senator Adriano Espaillat each wrote letters urging Federal Trade Commissioner Edith Ramirez to investigate Herbalife for its allegedly fraudulent trade practices. Speaker Mark-Viverito’s letter even includes key phrases (“complex and abusive”) that the Times identifies, in other letters to the FTC, as indications that the letters were composed by someone else.
The Times article leaves discovery of this connection only to the most intrepid readers of its website, because the letters in question are deep within a stack of documents provided as an annex to the main story. But the story within the story is of great interest to anyone who wants to understand how money and influence flow through consulting firms to politicians and supposedly grassroots activist organizations.
William Ackman bet against Herbalife by shorting the company. He then gave money to a number of ostensible civil rights organizations to lobby against Herbalife on the grounds that the company tricks blacks and Latinos into becoming distributors. Ackman hired prominent uptown fixer Luis Miranda of the Mirram Group to work the project locally. Ackman’s company Pershing Square Capital hired Global Strategy Group, which shares offices with Mirram at 895 Broadway, as the consultant of record. Miranda, with close ties to Mark-Viverito, Ferreras and Espaillat (Mirram has consulted on the campaigns of all three officials) likely orchestrated their letter-writing.
The Hispanic Federation, a think-tank with major institutional funding and a significant relationship with Coca-Cola in particular, was founded by Luis Miranda, and the Mirram Group is currently a registered lobbyist for the Federation. According to the Times, Ackman gave the Hispanic Federation $130,000 to push the anti-Herbalife campaign.
Other groups with very close ties to Ferreras, Mark-Viverito and Espaillat were paid by Ackman or his surrogates to support the campaign, including the Dominico-American Society of Queens (DAS), which has received tens of thousands of discretionary dollars from Ferreras, and Make the Road New York, which has received hundreds of thousands of dollars from both CM Ferreras and Speaker Mark-Viverito.
Politicians send out letters all the time. In this case, they probably agreed to sign their names to the campaign after their friend and consultant Luis Miranda or one of their contacts at Make the Road or the Hispanic Federation asked them to do it. It certainly did not occur to them that they were becoming dupes of a billionaire investor who was using a civil rights-based argument as a decoy to drive Herbalife into bankruptcy because he had a massive open short against it.
What is odd—or maybe not so odd—is that the Times chose not to even attach a sidebar explaining the local aspect of the story. They just stuck that part of the report in the footnotes.