Information continued to pour in from various sources. Many had now heard that I was investigating these bizarre allegations. Just what kinds of tactics were being used? The meeting that I was to have with Carl Issenberg of Medford, Oregon, gave me a clearer picture of strategies and techniques used by some of the people in this business. It was as if another light had been switched on revealing more about this ever unfolding story.
As I pulled up in front of Carl's bungelow, I saw a tall, slender man with a pleasant smil'step outside, motioning me to come in. Once inside, I settled myself down into a comfortable easy chair while Carl paced back and forth. He had a lot to tell me, and he was anxious to get started.
"Mr. Kerns, these people don't care who they step on as long as they make a buck. lt's 'Onward Christian soldiers, marching as to war' First they love you into the business. They entice you to comply and buy. Then if you don't see things their way, they discard you like rubbish, all in the name of Jesus."
"Who would discard you like rubbish?" I shot back.
Carl shrugged, "Well, there are so many people involved. It's really hard to say. I, uh..."
He paused for a moment, searching for the words.
"You see, that's really a hard question to answer. The 'legs of sponsorship,' you know, those businesses that practice this type of baloney most likely span all over the globe. Don't get me wrong. Not everyone in Amway acts in this same fashion. There are a lot of fine, well-run businesses."
"Who's pushing people around like this? Get specific!" I urged.
Carl bent over and shook his head back and forth. I anxiously awaited his reply.
"One of them is Warren Perkins, an Emerald Direct in Washington state. In fact, he is my sponsor. You see, I feel that Warren has used me. That's why I was willing to talk to you. I want others to become aware of some of the tactics being used in this business."
I sat back down and leaned forward, listening more intently than before.
"Now when I got into this business, I intentionally decided to be sponsored by Warren Perkins. You see, I had my pick of distributors because I am an Amway truck driver. I still work for the firm, which has a contract with Amway to deliver products to various households throughout the Northwest. From my ledgers I knew Warren was one of those who was moving the largest volume in my area, so I decided to be sponsored by him. Now I wish I had never made the mistake of joining up with him."
I sensed that Carl's spirits began to spiral down. I knew he had much, much more to share. I listened patiently as he described how Warren got him started into this business. He explained what I had heard so many times before, but this time there was a new twist.
As far as Carl was concerned, Warren was a "high roller" and knew how to move quickly. At Carl's first meeting, Warren gave the presentation and afterwards passed out some non-Amway produced book sand tapes to the group. A teach meeting, there after, he did the same. Carl explained that after he had sponsored a sizeable group, Warren sent him a bill for $225.64, the cost for materials passed out at several meetings.
It was a total shock to me! I didn't expect this bill. It was like a slap in the face. Why hadn't he told me that he was going to charge me for these items!" Carl exclaimed.
Later when Carl went to Warren's home, he carried with him all of the non-Amway produced materials he had collected from his downlines and demanded a refund. Warren interpreted this as quitting altogether.
"No, I'm not quitting the business. I'm just quitting your personal sideline of distributing all this non-Amway produced junk!" Carl had retorted.
Warren reluctantly refunded his money minus a five percent restocking fee, but he didn't stop here. The battle was on! After this incident, Warren went around Carl and began to belittle him in front of those who Carl had sponsored.
"Oh, he's negative! He's going to ruin each and everyone's chance for success! I'm telling you that you need these tools!" Warren would make statements like these each time he met with one of those recruited by Carl.
I could now see as Carl shared his account of this backbiting and disparagement that down inside he was hurting. His eyes became clouded, and I could tell he was really upset.
"This guy would never let up," Carl painfully continued. "He went to my friends and said ... I couldn't believe it when he went to those I care for so much and told them Satan had gotten a hold of me, and that's why I was negative."
I had heard of these same tactics being used before. Many were led to believe that this business was ordained by God and anything contrary to what the leaders say or do was of the devil. Didn't this guy, Warren, have a conscience? Here before me sat the by-product of these questionable tactics. What would cause anyone to say or do such things? My only conclusion was greed--an obsession for money.
I changed the subject, and it wasn't long before we were laughing and carrying on like old friends. Carl was truly a warm human being. it was beyond me how someone could treat a person in this way for the sake of money.
Say, Phil, I sure wish I could show you what all of those Amway distributors look like!" Carl exclaimed. Together we laughed.
Carl explained to me that the large white panel truck he drives is generally fully loaded with boxes of Amway products to be delivered on the route. He went on to tell me how almost every garage where he unloaded Amway products would seem to house almost as many non-Amway produced items. There are books, easels, boards, "decision" packs and all sorts of literature. Some garages are literally full with thousands of dollars worth of this kind of inventory. He had witnessed in excess of $200,000 worth in just one day!
It's just as I had thought. All of this activity was really going on--even as Sutter had said, in spite of the manifesto.
"That's how they make their money, Phill" Carl explained. "Now you can see why in the beginning Warren sold me 200 percent more of this stuff than soap!"
I thought about all of the questions Carl still had not answered. How much more did he know about the business? Could he confirm any of the allegations made in the complaint by Sutter?
I soon found Bret Sutter was not the only one who knew of humiliating incidents such as people removing their pants on stage before an audience. Carl shared how Diamond Direct Fred Doan bragged about taking down his pants for John Wells at a function held back east. He said that this was his way of demonstrating his loyalty to John, and by doing this he knew John wouldn't do anything to hurt him.
"Tell me, Carl, how can you be sure they are really looking for total obedience?" I asked.
Carl turned his head and grinned. "Let me give you an example, he said. "I remember hearing about Fred Locke standing up in front of a crowd and saying, 'The degree of obedience required in this business is if your upline tells you to jump off a bridge, don't ask questions. Do it!"
"How screwy and unbalanced. What did taking down one's pants or jumping off a bridge have to do with selling soap?" I thought to myself.
Carl had seen and heard a lot. He continued. "Phil, have you ever wondered what happens to some of the money that is collected at various functions? I have seen distributors who were hosting events walk up to the money box, and when they thought no one was looking, they would slip some of the cash in to a coat pocket and walk out. The only other person who knew what was going on was the one watching the box. Who is accountable? So many of the functions require only cash, and seldom are receipts given."
The questions that Carl was asking brought to mind a conversation I had with Al Inder, a Pearl Direct from Tacoma, Washington, who said that he was tired of apologizing for an hour and a half for the mistakes of others in this business. Mr. Inder is an Amway veteran, who has been in the business for twelve years, and is one of the 6,000 voting members of the Amway Distributors' Association. He also feels that there is a real possibility that much of the money received from these non-Amway produced materials is not declared as income.
His statements made me wonder how many millions of dollars in cash receipts are escaping the tax bite of the Internal Revenue Service? Does the IRS know that there is a massive "ghost", system of non-Amway produced materials being sold behind the front of this legitimate Amway enterprise? Apparently from what I have learned, this business is widespread. Since talking with Mr. Inder, I have questioned many distributors about the size of this side business, and some have expressed a belief that it is larger than the Amway business itself!
Could that be possible? Bret Sutter in his complaint said that he was spending 56 1/2 cents for non-Amway products versus every dollar he spent on Amway products.
During the course of the time that I talked with Carl, incident after incident kept unfolding, each one giving me additional insight into this business. One particular story that really stands out in my mind was the time Carl met Tom Kenney. He had just gone to a rally at the Marriott Hotel in Portland, Oregon.
"Come on, Carl," Warren insisted. "This is your big chance to meet a Diamond. We'll go up to his suite."
By this time, Carl was already be coming disillusioned with all of the fanfare, but he reluctantly followed Warren upstairs. Both men and their wives had to fight their way down the hallway through the mobs of people to get to Tom's suite.
As Carl walked in along with Warren, he saw the room surrounded with familiar faces including Dick and Kathleen Emery, Steve and Teresa Ferrera and Jim Mate. Directly across the room sat Tom Kenney in his shirt sleeves, wearing a big smile on his face. They all just quietly sat and looked at him.
"is this a set up?" Carl thought to himself.
Warren moved across the room and pulled up a chair for Carl.
"Carl, this is your golden opportunity. it may be the only one you'll get. If you have any questions that you want to ask Tom, go right ahead."
Carl really didn't have much to say, but he was startled when Tom leaned forward and said, "How would you like to try on my Rolex? Here, go right ahead."
Carl said that he couldn't believe it. This guy was taking off his watch and wanting him to try it on.
'Look, Carl, you don't have to sit there in awe. I'm not god. I'm just a man!"
Everyone in the room laughed in unison except Carl. Carl slipped the expensive watch on his arm, as requested.
"Here, go on. Try on my diamond ring. And if you would like, try on this gold bracelet, too. Someday you just might have one."
Carl told me that he resented this child's play. "Why is this guy trying to dangle 'carrots' in front of my nose?" he thought.
By now everyone in the room was passing around all of Kenney's treasures. Carl carefully concealed his feelings as he bid all good night. When he opened the hallway door, he was met with hundreds of mesmerized admirers, attempting to catch a glimpse of Tom Kenney. Carl violently lunged forward into the crowd, pushing his way to wards the stair well. Carl wanted out. Not only did he want out of this crowd, he wanted out of this kind of business. This obsession with material things was not for him.
A similar episode that Carl related was from a tape he had listened to where John Wells took Lee and Bobby Jane Brown, now Diamond Directs, out to his luxury motorhome. On the counter John had a cardboard box full of cash for them to see. "You can touch it. Go ahead!" he had urged them. As the tape revealed, Lee ran his fingers through the cash.
"This was the same kind of technique used by Lester to entice me into the business," I reflected.
Today Carl Issenberg is out of this "side" business. He no longer is associated with these people. He has built his Amway business independent of all this razzle dazzle and hype. The last time I spoke with Carl, he had approximately 60 downline distributors in his organization and a $5,500 per month business volume. Carl's business is growing. Carl just got new friends.
"Ladies and Gentlemen, I want to tell you, you have made me an honest man in my own family. Because I was here not too many years ago, as you know, not in this exact place, but speaking to this meeting. And I went home and told Nancy, who wasn't with me at the time, about it, and I don't think I could quite make her believe it. Now she knows. (Cheers)
"Well ' it's a great pleasure to be back here and a great pleasure to be talking to you again. Because I think I told you the first time, you really are capitalism in America!" (Cheers)
RONALD REAGAN
Amway Convention May 3,1980
the web address for this page is http://hunza1.tripod.com/amway/fakeit10.html
Back to the Beginning