Latino groups' opposition to a nutritional supplement company has put them in the middle of an attempt by a hedge fund manager to shut down Herbalife and profit from its failure, the New York Times reported Monday.
In a front-page story, the newspaper reported that hedge fund manager William Ackman had organized protests, news conferences and letter-writing campaigns to pressure state and federal regulators to investigate Herbalife.
Williams has said he has waged the campaign to protect Hispanics who are often recruited by the company as distributors, the Times reported. But the Times said the opposition also is part of his $1 billion bet that pays off for shareholders with the failure of the company, accused by some as operating on a pyramid scheme. The company has denied those accusations.
The Times reported that the League of United Latin American Citizens, LULAC, which has opposed Herbalife, returned a $10,000 contribution from Ackman following questions about the money from the newspaper. Brent Wilkes, LULAC's executive director, told the Times, he did so, so no one could suspect LULAC's campaign against Herbalife was done "for a mere $10,000 table purchase" at one of its fund-raising events.
The Times said Ackman hired Washington lobbyists to speak out against Herbalife and write letters to federal regulators. The letters came from the Hispanic Federaton, among others. Also, Herbalife boosted spending to nonprofits to counter Ackman's work, including contributing $25,000 to the National Puerto Rican Coalition and the U.S. Hispanic Leadership Institute, the newspaper reported.