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 That amount is dwarfed by the nearly $2 million Herbalife spent in
2013 on federal lobbying as the nutrition and weight loss company
fought the billionaire investor's claims it runs a pyramid scheme.
In an illegal pyramid scheme members earn more for recruiting new
members into the scheme than for selling the products outside the
network.
Ackman's $12 billion Pershing Square Capital Management hired three
lobbyists in 2013, marking the first time ever that the New
York-based hedge fund has spent money on Washington lobbyists, data
from the United States Senate Disclosure Act Database show.
In October Ibarra Strategy Group began working for Pershing Square
and earned $30,000 for the year, the filingshows.
The group, founded by Mickey Ibarra, a former Director of
Intergovernmental Affairs under President Bill Clinton, specializes
in Latino outreach.
Ackman has accused Herbalife of unfairly targeting minorities. Civil
rights group League of United Latin American Citizens, which has
asked California's Attorney General to probe Herbalife, echoed the
fund manager's accusations. Herbalife said last month that it does
not target members of minorities or low income communities.
The battle for the future of Herbalife is heating up this year with
each side trying to press its case with Washington lawmakers as well
as regulators, who may ultimately control the company's fate.
In the last days, the Securities and Exchange Commission and the
Federal Trade Commission refused to tell U.S. Senator Edward Markey,
who asked them to probe the company, what they were doing on
Herbalife. But each offered plenty of examples of having shut down
illegal businesses before.
SEC chair Mary Jo White, who last year touted the benefits of
shareholder activism, said the SEC's Enforcement Division has
previously probed whether statements made about a business are
"materially false or misleading, including statements regarding the
compensation levels."
Ackman has said that 88 percent of Herbalife distributors earn
nothing. That stands in stark contrast to some Herbalife
distributors' testimonials where they tout lavish lifestyles as an
incentive for others to sign up. Herbalife has said distributors
results' depend on time, energy and dedication.
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Ackman has forecast that Herbalife's share price will plummet to
zero amid regulators' scrutiny but so far the fund manager is in the
red on the bet, as Herbalife shares have climbed 61 percent in the
last year. Since January, the shares have lost ground however,
falling 17 percent.
Pershing Square also paid $84,000 to Moffett Group, run by former
U.S. Representative Toby Moffett, who promises to bring clients'
messages to the highest levels in Washington.
The bulk of its lobbying budget, $150,000, went to Wexler & Walker
Public Policy Associates, which describes itself as a full service
government affairs firm.
During the same year, Herbalife spent at total $1.89 million on
lobbying, according to public data from the Center for Responsive
Politics.
Herbalife paid $250,000 to government relations firm Downey McGrath,
which counted Boeing, Microsoft and Time Warner among its past
clients.
IBC earned $30,000 from Herbalife last year while $140,000 went to
Ogilvy, $160,000 was paid to Podesta Group and $40,000 went to
Glover Park Group.
Herbalife also spent $1.27 million on lobbying on its own behalf.
Separately the company made a $10,000 donation last year to
Democratic Attorneys General Association, according to the Center
for Responsive Politics. Pershing Square did not donate to this
group. California's Attorney General, Kamala Harris, the person the
Latin civil rights group LULAC last year asked to probe Herbalife is
a Democrat.
(Reporting by Svea Herbst-Bayliss;
editing by Andrew Hay)
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