I have stated a number of times now on this web site that Amway has never once refuted any of the information on my web site, nor idicated to me why anything on this site would be considered illegal⁽¹⁾. This is still the case, despite requests from my attorney to Amway's attorneys to identify exactly what it is about my site or my conduct that they believe is actionable. Amway has also continued to imply--despite admitting that it has no evidence⁽²⁾, and having never found or produced any such evidence in court or elsewhere despite its investigations--that there is something improper or even illegal about my consulting relationship with Procter & Gamble. Apparently Amway is not only contemptuous of the right to free speech when such speech is critical of Amway, but also has little regard for the notion of "innocent until proven guilty."

Amway's actions, while shamefully unethical, are hardly surprising when you consider the position in which Amway has put itself. Faced long ago with widespread, serious abuses perpetrated by the purveyors of the "tools business"--a system which Amway itself found to be "inherently illegal"⁽³⁾--Amway has not only failed to take adequate steps to protect distributors from these continued abuses⁽⁴⁾, but has continued to glorify and promote as role models the originators and purveyors of the very system it determined to be illegal and abusive. This is not to mention Amway's history of other illegal and unethical activities, like customs fraud⁽⁵⁾, price fixing⁽⁶⁾, illegal misrepresentation of income⁽⁷⁾, and (according to numerous lawsuits) improperly interfering in the businesses of its distributors⁽⁸⁾ and failing to enforce its own rules⁽⁸⁾.

Up until fairly recently, much of the information regarding these matters has been difficult for most people to come by, if indeed they even knew it existed. The lawsuits in particular are a prime example of this. With the advent and increasing popularity of the World Wide Web, however, millions of people can now locate with relative ease information which Amway could previously count on to remain buried in a box somewhere in a courthouse basement, or to molder away in library stacks. (Although, as we will see, Amway is now trying to bury this information even on the internet.)

Amway now finds themselves caught, through no one's fault but their own, with their ethical pants down. Faced with glaring evidence of unethical and illegal conduct, they have the same choices that we as individuals have (and one that most of us don't):

1. They can attempt to refute the evidence. Amway has so far not even tried to do this, at least not that I've seen.
2. If unable to refute the evidence, they can own up to what they did and try to make it right, or...
3. They can continue to deny what is there in black and white for everyone to see. And if you're a billion dollar company, you can devote your considerable resources to trying to suppress embarrassing information and harass and intimidate those who would try to make this information available to the public.

Now that Amway's statements have been put in their proper context, I'd like go through them point by point. Amway's statements are in italics.

[Update: Return here when you're done to read my response to Amway's further attempts at malicious disparagement]

. . . ON FREE SPEECH
Since its founding in 1959, Amway and its founders have been active supporters of personal freedoms, including freedom of speech. Freedom is one of the essential elements of Amway's fundamental business philosophy.

. . . ON THE INTERNET
Amway is excited about the Internet and its potential to foster greater international communication and understanding.

Further evidence of Amway's hypocrisy regarding the Internet is the admission by an Amway Vice President that Amway is doing all it can to ensure that those who use the WWW to research Amway will have a harder time finding the kind of information that Amway finds embarrassing. And as many of you have already noticed, if you use one of the popular search engines to search on the keyword "Amway," you'll come up with hundreds of sites put up by Amway Corp. and the Amway Distributors Association. Unable to intelligently refute the information on the many Amway Information sites, Amway is instead trying to use its resources to "bury" them.

Amway also believes that respect for basic rights, as well as honesty and civility, are essential to any marketplace of ideas, including the web.

Amway carefully reviews all its postings to ensure they are absolutely truthful, legal and respectful of the rights of others.

While we respect and welcome honest disagreement and discussion, we expect that others who comment about Amway -- or about the millions of hard-working, dedicated Amway distributors worldwide - will also seek to tell the truth, obey the law and respect others and their differences.

I should add that Amway has never once contacted me to express the slightest bit of concern over the many nasty, obscene and hateful emails, including threats of violence and death, that I've gotten from Amway distributors. Apparently civility and respect don't apply when attacking Amway's critics.

. . . ON SIDNEY SCHWARTZ AND P&G
For some time, Amway has been aware of a web site created by Mr. Sidney Schwartz. Mr. Schwartz makes no secret of the fact that he disapproves of Amway and has little or no respect for our distributors and their business opportunity.

By itself this causes Amway no problems; everyone is entitled to express his or her opinion. But Mr. Schwartz also posted a considerable amount of material, some of it clearly written by others, that we believe crossed the line from truth and honest opinion to defamation and lies.

I will point out, again, that Amway has never identified to me why anything on my site is "defamations and lies". You'd think that if they were genuinely concerned with having these "defamations and lies" removed from my site, as they claim to be, they would have identified them to me long ago. So why didn't they?

Also, some of the material posted on Mr. Schwartz's site clearly infringed Amway's trademarks and republished copyrighted material without permission.

We recently learned Mr. Schwartz removed most of his web site. While Amway naturally was pleased with Mr. Schwartz's voluntary decision to remove materials we believed were in violation of laws, his explanation and his vague and ominous references to threats by Amway are sensational, inaccurate and highly misleading.

"Still further, Amway is investigating possible causes of action against Mr. Schwartz."

Also, in an 11/21/97 hearing before Judge Boyce in Utah, in which Amway sought to have my deposition unsealed, the following statements were made:

Mr. Delaney: We would like if it is not confidential information [the deposition], we believe we should be able to use it for any purpose under the Federal Rules.

The Court: Any purpose but I want to know what it is you have in mind, how you're going to promote this investigation. That is what I'm concerned about.

Mr. Delaney: Well, there is, you know, there is a number of people that Mr. Swartz is in daily communication with over the internet and there is some people that we could, you know, discuss, find out what we learned to see if they have heard anything about the situation, as an example."

So here Amway's attorneys are plainly stating that they are not only considering suing me, but also intend to involve people who have been communicating with me. How "ominous" would it sound to you if a billion dollar corporation with an army of lawyers stated in writing that they were considering suing you?

It is important to also mention that these statements are being made in the larger context of Amway's false and malicious accusations regarding my relationship with Procter & Gamble, and their attempts to embroil me in that litigation. Considering all of the above, and the relative resources of myself and Amway Corp., my reasons for removing most of my web site are hardly "sensational, inaccurate and highly misleading." And, unlike Amway, I am willing to both be specific about issues I discuss and to back up what I say with evidence, and not just continually repeat malicious and empty accusations.

Mr. Schwartz falsely states that Amway has never tried to contact him when, in fact, Amway's attempts to initiate dialogue with Mr. Schwartz and discuss his concerns have been rebuffed.

"In all that time Amway has never once contacted me and requested or demanded that I remove or change any of the information on my site."

Notice the part that Amway deceptively omits, knowing that it is in fact true and undermines their own claims concerning me.

The truth is that prior to being served with a subpoena, I was never contacted by any officer or employee of Amway Corporation, period. The only "contact," if you interpret the word broadly, was an informal invitation in September of 1996 by Paul Pilzer, an Amway distributor and motivational speaker, to meet with Amway Vice President Ken MacDonald. At the time Pilzer (not Amway) extended this invitation, it was never stated or suggested that the purpose of the meeting would be to discuss what information on my site Amway considered false, defamatory, or in some other way illegal. What Pilzer communicated to me was that 1) My web site had gotten Amway's attention, and 2) He (Pilzer) felt that it would benefit Amway to speak with me and get my input on how to deal with the problems raised on my site. For reasons explained in my response to Pilzer's invitation and in my sworn affidavit submitted to the judge here in Oregon, I declined. Moreover, the invitation was not Amway's, the purported purpose of the meeting was unclear, and I felt I had good reason to "rebuff" it in any case.

The first time Amway actually invited me enter into a dialogue regarding their concerns about the information on my web site was in a letter to my attorney dated 12/10/97, after I had already taken most of the information off the site. As our response clearly shows, I am willing to review Amway's concerns and respond if they will finally be specific about what those concerns are. I have always been willing to do so...Amway just never before had the courtesy to approach me with their concerns. Our response is further evidence that Amway's attempts to characterize me as unwilling to enter into a dialogue with them are false and intended to disparage me.

He also gives others the false impression Amway has sued him.

To date, even though we are reasonably certain some of the material on his web site violated federal and state law, Amway has chosen not to pursue any kind of legal claim against Mr. Schwartz.

Given the fact that Amway has yet to indicate anything on my site that was in violation of any law, I think the much more likely explanation is that they know they have no basis for a lawsuit. As already pointed out, Amway has still not indicated to me why anything on my site would be considered illegal or improper. Wouldn't this be the logical and sensible first step, if they truly believed their objections were legitimate ones, rather than jumping directly to threats of lawsuits?

Now, Mr. Schwartz is encouraging others to duplicate the illegal material that was presented on his site.

The truth is that Mr. Schwartz is a consultant to Procter & Gamble and is being used in a commercial lawsuit P&G has brought against Amway. The truth is that Amway has the right to question Mr. Schwartz and P&G about their secret consulting relationship so Amway can prepare for trial.

I wonder how Amway explains the fact that there are almost two dozen other web sites critical of Amway. Is P&G paying all these people, too? Did P&G also pay the hundreds of people who emailed me to say that the information on my site was an accurate reflection of their own Amway experience, and to thank me for making it available? Oh wait...I suppose P&G is also behind all the "negative" books, articles and court cases that I cite. When examined with a bit of logic and common sense, Amway's assertions are laughable.

The truth is that Amway has been met with resistance from Mr. Schwartz and P&G every step of the way, and the court has ordered Mr. Schwartz to answer questions about his consulting relationship with P&G.

It should also be pointed out that Amway has not named me in their countersuit against P&G. Indeed, I am not even mentioned in that countersuit. As P&G correctly pointed out in their objections to the subpoena served on me by Amway, "No allegations in Amway's counterclaims, however, discuss Mr. Schwartz or even remotely suggest that any activity of Mr. Schwartz has any bearing on any matter at issue in either the Utah or Texas Cases. Indeed, Amway has wholly failed to assert any such nexus." Amway also "forgets" to mention that I have already answered, during a lengthy deposition, all of Amway's questions about my consulting relationship with P&G.

The truth is that Amway has tried to contact Mr. Schwartz, but he will not talk.

The truth is that Amway prefers dialogue and has shown great restraint by not suing Mr. Schwartz.

The truth is that this is not about free speech. This is about defending Amway in litigation brought by a competitor - from someone who cloaks himself in free speech and under that guise attacks Amway and its millions of distributors.

1. Amway has never even attempted (to my knowledge) to refute any of the information on my site⁽¹³⁾.
2. Amway has never indicated to me specifically why any of the material on my site would be considered actionable, so that I could respond to their objections.
3. Amway has never shown that my relationship with P&G is anything other than what I have claimed it to be.

Amway always has and continues to welcome open, honest discussion of any questions or concerns Mr. Schwartz or anyone else has about Amway or the Amway opportunity.

"Buck passing is...also one of the most salient features of those organizations that, as we shall see, are Crisis Prone: their fundamental inability to tell and to admit the truth to themselves, let alone the world. Instead of allowing the truth to come out, they suppress it or obscure it, worsening their reputation. They persist in communicating the belief that is is they who have been wronged, thus contributing even further to the very thing they continue without much success to combat, their appearance of arrogance."⁽¹⁴⁾

1. "As already mentioned, Amway's other objective is to discredit me and the information on this site. Unable to come up with a substantive and intelligent rebuttal to the over 3 megabytes of information gathered from articles, books, court documents, first-hand accounts etc., and presented here (only 63k of which, by the way, is devoted to P&G's case), Amway has instead chosen to resort to name calling and oily insinuation."
-- from my previously posted response to Amway's false and defamatory accusations of an improper relationship between Procter & Gamble and myself

"In the eight years that I've been compiling and posting information about Amway from books, articles, court documents and other publicly available sources, Amway has never once shown any of this information to be inaccurate or defamatory. In all that time Amway has never once contacted me and requested or demanded that I remove or change any of the information on my site."
-- currently on the main page of this site

2. "The detailed nature of the Schwartz/P&G relationship is unknown at this time but is now being investigated."
-- From a similarly misleading statement previously posted on Amway's web site.

3. "The purpose of this memorandum and the attachments is to communicate to Senior Corporate Management - worldwide, as clearly and concisely as possible, Sales Division programs that are currently being carried out in North America to ... Eliminate the illegalities and abuses inherent in distributor (motivational) "systems" of non-Amway designed/produced audio visuals, literature, rallies and seminars."
--from an internal Amway memo, probably written in 1982, introduced as evidence in Cairns case.

"Widespread illegalities inherent in Amway distributor designed "systems" of tapes, books, and rallies. While most of these "systems" were conceived in the late 1960's and early 1970's as genuine "support" programs to help Amway distributors develop their Amway businesses, entrepreneurial "higher pins" discovered and developed programs for substantial, separate, additional income, under the Amway umbrella.

"Appendix 'A', a confidential memorandum to Policy Committee of August 1982, provides you with all the background as to how these "support systems" escalated to what we believe is now a threat to the future security of Amway Corporation, at least in the United States.

"As this document - 'Challenge of the '80's' - points out, the escalating profits and pressures of these businesses lead to an alarming rise in violations of the Code of Ethics and Rules of Conduct. Subsequent legal evaluations disclosed that the disproportionate (to Amway) sales, intensity and solicitation of these 'tools/systems' are illegal, per se, under several U.S. federal and state laws.
--same source

"Now, the tape business, if it is not used as a support for the Amway business, will oftentimes be an illegal business -- in fact, it could be called a pyramid -- because, d -- does not get sold to the consumer. Which means that all the tape business does is take money out of the organization, and because the final person can't retail it, it never brings money into the organization."
--Rich DeVos, "Directly Speaking," January 1983

"I guess if I'd been told all these years you don't have to sell the product, all you have to do is wholesale it to people, then I guess maybe I wouldn't pay any attention to pricing, either. But that's an illegal business. And those of you that preach it and foster it and talk about it are operating illegally. I don't know how often I have to tell you that."
--Rich DeVos, "Directly Speaking," probably Feb. or March 1983

"For some distributors, including Plaintiffs, the sale of business support materials produces revenues far exceeding the revenues generated from the sale of Amway's consumer goods."

"Yager derives a substantial portion of his income from the sale of business support materials down the lines of distribution in the Amway Network. On information and belief, over 70% of Yager's Amway-related income is derived from the sale of business support materials, constituting $40,000,000.00 per year in gross income."
--Double Diamond Brig Hart, in his lawsuit against Amway filed in April of 1997.

4. The continuing filing of lawsuits by distributors harmed by "The System," as well as the many comments received by distributors, are ample evidence that little has changed since Amway determined "The System" to be illegal.

5. See the Canadian fraud case, in which Amway's founders, Rich DeVos and Jay Van Andel, pled guilty on behalf of Amway Corp. to defrauding the Canadian govt. out of millions of dollars.

6. FTC 1979.

7. FTC 1979, state of Wisconsin 1982, Justice Department 1985.

8. See Gommeringer v. Amway, Baker v. Amway, Hayden v. Amway, Touchton v. Amway, Cairns v. Amway, Bartlett v. Amway

9. See the Arbitration agreements that Amway distributors must now sign.

10. From Amway's Business Compendium, copyright 1996:

Rule 102(e) Retail Stores "... Further, distributors may not use mass communication methods such as television merchandising channels, computer networks, national or international advertising, etc., to secure Amway customers.

Amway's rules on distributor web sites also states the following:

1. Content
The purpose of the Personal Home Pages is to share your own personal story with friends and downlines. You may share information about yourself, your Amway business, your hobbies, and your interests. Please be aware this information can be viewed by anyone on the Internet, so you may not wish to publish information considered private and personal. All content must follow the included Personal Home Page Claims Criteria. Content may consist of the following:

* Distributor name and state.
* Amway distributor achievement level.
*Personal statements adhering to the Guidelines, Claims Criteria, and Rules of Conduct.
* A photograph of the distributor about whom the information on the Personal Home Page is written.
* Artistic elements in good taste which will reflect positively on Amway distributors, Amway Corporation, and the Amway opportunity. This would include various background patterns, colors, text styles, headlines, and other imagery.
* An audio greeting to your page.

2. Content Exclusions
* You specifically may NOT include the following content:
* You may not sell products via the Internet.
* You may not recruit new distributors via the Internet. You may not include any information that would allow the reader to contact you to become an Amway distributor.
* You may not advertise products, services, or the Amway opportunity using the Internet.
* You may not include language which reflects poorly on Amway distributors or Amway Corporation. * You may not include income representations, either explicit or implied. Subjects discouraged in the ADAB adopted Speaker Guidelines.

4. No Return Communication
No Personal Home Page may have a method by which a return communication can be received. This would include electronic mail (E-mail), telephone, postal service, fax, or any other form of communication.

5. Links Distributors may have only the following links from their Personal Home Page to other WWW sites:
1) The Amway Corporation Web site: http://www.amway.com
2) The Amway Distributors Association Board Web site: http://www.adaboard.com.
3) The authorized line of sponsorship (LOS) home page of the distributor who is posting the page on the WWW. The LOS site must be authorized by the Business Support Materials Administration department of Amway Corporation prior to being posted on the WWW.
4) For future use, the Amway Secured Site http://www.amway-abn.com

11. For example, Amway has recently filed suit against James Dyson, inventor of the "Dual Cyclone" vacuum cleaner upon which Amway based its "Clear Trak" vacuum. Amway is attempting to prevent Dyson from publishing his autobiography, in which he discusses a lawsuit in which he sued Amway for "patent infringement and misappropriation of confidential information." According to an article in the 5/16/97 Business News, "Amway objects to Against the Odds on the grounds that it violates the terms of that settlement and that it deems certain passages to be defamatory." Also, according to Forbes magazine, Amway in 1984 "obtained a gag order...in a Grand Rapids court" to prevent a "former Amway insider" from writing a book on Amway.

12. In 1985 Double Diamond Rick Setzer, who is still a distributor and a member of the ADA Executive Board, sued Amway, charging the corporation with, among other things, racketeering, breach of contract, and fraud. (It would be interesting to ask Setzer why he chose to remain in business with people he had such a low opinion of.) In a Request for Production of Documents filed by Setzer's attorneys on 3/23/87, plaintiffs asked the court to order Amway to produce "Copies of all law suits filed against Amway Corporation and or Richard DeVos or Jay VanAndel for the past 10 years." In response, Amway's attorneys stated the following:

"The request imposes an undue burden in that the number of lawsuits filed against Amway Corporation and/or Richard DeVos and/or Jay Van Andel for the past ten years represents literally thousands of lawsuits, with the file on each lawsuit varying from several pages to entire rooms filled with documentation."

Even if we estimate the number of lawsuits conservatively at 2,000, that's one lawsuit filed every 1.8 days. Even if only 10% of those were lawsuits filed by distributors, that's still one lawsuit filed every 18 days, or 20 per year. For a company like Amway, legal expenses are just part of the everyday overhead, like the electric bill.

13. Amway published in the August 1997 an article entitled "How to Deal with Inaccurate or Misleading Internet Reports." Typically Amway, it fails completely to actually identify, let alone refute, a single piece of information from this or any Amway Information other web site. Instead, Amway again resorts to their usual sleazy tactic of implying that anyone who says anything critical of Amway must have some mysterious "agenda" and therefore be untrustworthy.

14. "We're So Big And Powerful Nothing Bad Can Happen To Us: An Investigation of America's Crisis-Prone Corporations," Mitroff and Pauchant, Birch Lane Press