Trump made millions from endorsing multilevel marketing firm

Admin   |   14 August, 2015   |   448   |   3980

ACN paid Trump $450,000 apiece for 3 recent speeches

Over the past decade, Donald Trump has earned millions of dollars for extolling ACN Inc., a multilevel marketing firm that has weathered regulatory investigations in three countries.

Trump not only endorsed ACN, he twice featured the company on his former reality TV show, “The Celebrity Apprentice.” Both episodes featured teams of entertainment figures competing to promote versions of a video phone sold by the North Carolina firm.

“I think the ACN video phone is amazing,” Trump said in an ACN news release just before a two-hour, prime time Sunday night Celebrity Apprentice episode on the product in 2011. “I simply can’t imagine anybody using this phone and not loving it.”

Even before the show aired, the ACN video phone was in trouble. It sold poorly in part because it only worked with other ACN video phones, unlike Skype’s video-calling technology. The company had slashed orders for the phone from its supplier, which laid off 70% of its staff just before the show aired and later filed to liquidate in federal bankruptcy court, according to regulatory filings.

The bad news about the phones was never mentioned by Trump on the show, nor did he disclose to viewers he had been paid by ACN for appearances over the years. According to documents recently released by Trump’s presidential campaign, he received $450,000 apiece for three of the most recent speeches for ACN, in 2014 and early this year.

Privately held ACN, based in Concord, N.C., said it has more than $800 million in annual revenue and about 200,000 sales representatives in 24 countries.

New ACN recruits pay $499 to become “independent business owners.” Representatives can earn money by selling ACN services to others. Marketing materials emphasize recruiting new salespeople, who often buy ACN services as well as sell them. These new sales agents then are encouraged to recruit others.

ACN has successfully fought off legal actions by regulators in Montana, Canada and Australia who claimed it was running a pyramid scheme, in which income comes primarily from recruiting new members instead of selling products. Canadian and Australian courts decided the company’s business model didn’t violate anti-pyramid-scheme laws, and in Montana, ACN resolved the matter by agreeing to beef up training.

Trump said he never heard of any government allegations against the company.