Yesterday morning Amway co-founder Jay Van Andel passed away at age 80. Extensive coverage was given in the local media to the billionaire’s death, with over an hour of airtime being dedicated to the story in the evening news broadcasts of channels 8, 13, and 17. As could be expected, the media coverage was completely uncritical, being merely tributes to the great “entrepreneur and philanthropist” who “changed the face of Grand Rapids.” In all their heaping of praise on the man who’s name adorns so many buildings in Grand Rapids, the press completely overlooked the fact that Van Andel’s millions were earned by running and owning a company with a controversial and checkered past.
In 1959 Van Andel and his partner Rich Devos founded a direct marketing company called Amway, now called Alticor. Amway went on to become one of the largest privately held companies in the world, making both of its founders billionaires. From the beginning the company was more about marketing and sales techniques than about product. Van Andel and Devos were able to convince people that a pyramid scheme involving poor quality soap was somehow the embodiment of the “American dream.” While the two founders went on to make fabulous amounts of money, many of the people that bought into the Amway program did not fare as well. Many personal testimonials as well as statistical analyses exist which show that the high profits promised by Amway to its independent distributors/sales reps are highly exaggerated.
The lack of profitability for the majority of the participants in the Amway system was covered up by a level of indoctrination that has been described as “quasi-religious.” Amway and its two founders are very image conscious, constantly presenting themselves as godly americans selling not just a product but a dream and a lifestyle. This has led to various people, both from outside and inside the organizations to describe Amway as cult-like, relying on peer presure and the selling of false hope to keep members buying and selling Amway goods. The alleged dishonesty of the Amway program has led to numerious lawsuits against Amway/Alticor. In the case of Proctor and Gamble vs. Amway, law professor Robert Bleckley wrote a report in which he stated that the structure of the Amway corporation paralleled in many ways the structure of organized crime.
Considering the questionable nature of their business, it is not surprising that Van Andel and Devos would engage in public “philanthropy” to generate positive public perception. Aside from these highly visible public works (all of which are designed to create a better business climate in Grand Rapids), the Van Andel and Devos families have given huge amounts of money to other, much more dubious, politically charged causes. These will be detailed more in tomorrow’s post.