| February 2,
2005
MLM Software Resources:
Candidate's Campaign Fundraising:
MLM or Pyramid
Scheme?
An Associated Press story originating from
Mobile, Alabama on February 1 reported that Jim Zeigler,
a Republican planning to announce his candidacy for the
state auditor position on February 9, was ordered by the
attorney general's office to immediately halt his fund-raising
campaign, labeling it a pyramid scheme.
Zeigler's fund-raising program called "$top
the Wa$te Inc.", pays commissions to campaign workers
who recruit other campaign workers. He calls it a
direct marketing approach. But Assistant Attorney
General Bill Garrett said the payment plan violates Alabama's
Deceptive Trade Practices Act, and ordered the program halted
and funds from the "pyramid scheme" returned to
the donors.
The Deceptive Trade Practices Act prohibits
selling or offering to sell, either directly or associated
with the sale of goods or services, a right to participation
in a pyramid sales scheme. Violation is a misdemeanor.
Zeigler, an attorney, agreed to temporarily
suspend the fund-raising activity, pending a hearing.
He says it is free to join his plan, and that Garrett's
interpretation of the law is "clearly erroneous".
Jack Skinner, Zeigler's donor coordinator,
told Associated Press reporter Garry Mitchell that "networking
is a proven method" to raise money. "It's
not an endless chain concept. No one has tried this."
He explained to Mitchell that a person could earn $2,000
in commissions by raising $12,600, for example, recruiting
126 people donating $100 each. He said, "it's
not a get rich scheme." He told Mitchell it would
"cut the strings" attached to a political candidate
by special interests.
Zeigler told Mitchell that politics is "too
dependent on big donors" and his method would allow
more citizens to participate in fund-raising. His
donations started on December 1 with two people and he now
has 36 "independent fund-raising coordinators."
He added, "we expect to have over 1,000 paid part-time
campaign workers by the June 4 Republican primary."
According to Mitchell's article, Zeigler's
plan calls for coordinators to raise or donate $100 once,
and recruit two independent fund-raising contractors who
each do the same. You quickly earn $200. You
then earn dozens of $5 and $25 checks totaling $2,000, starting
from a $100 base, according to Zeigler.
Money goes to the "$top the Wa$te"
fund and Zeigler's auditor campaign. A former Public
Service Commission member, Zeigler told Mitchell he came
up with the "untested" fund-raising plan because
he had been outspent in his previous campaigns.
Original
Source:
Associated Press (by Garry Mitchell), February 2, 2002 |
