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Monday, 10 October 2016
'Herbalife (HLF)' deploys yet more 'Scientology'-style tactics.
Filmmaker says lobbying firm tried to ‘thwart’ screening of documentary critical of Herbalife
From the movie “Betting on Zero” at Double Exposure: Investigative Film Festival and Symposium. (Zipper Bros Films/Double Exposure: Investigative Film Festival and Symposium)
The director of a documentary critical of Herbalife says a lobbying firm employed by the nutritional supplement company, Heather Podesta + Partners, tried to keep a Washington audience away from a screening.
Ted Braun, the writer and director of “Betting On Zero,” says 10 people who work for Podesta’s firm purchased 173 tickets — roughly half the seats — to a showing of the movie at the Double Exposure film festival Friday night at the National Portrait Gallery. The tickets, which the Podesta staffers bought in batches, were never picked up, and the seats went vacant, festival organizers said.
In a statement, Braun called the move a “deliberate attempt to thwart an interested D.C. audience from seeing our documentary.”
The movie is unflattering to Herbalife and its use of a citizen sales force. Its hero is hedge-funder and prominent critic Bill Ackman, who charges that the company’s tactics amount to a pyramid scheme. Herbalife has pushed back against the film, including buying the domainbettingonzero.com and creating a website critical of it. The company has also reportedly spent tens of millions, including on “Democratic operatives, three public relations firms and two law firms stacked with former prosecutors,” according to the New York Times, in an effort to counter Ackman’s campaign against the company.
Neither Podesta nor an Herbalife spokeswoman immediately responded to requests for comment.
In the statement, Braun noted that the screening was part of an event meant to highlight revealing films. “In the context of a festival devoted to investigative filmmaking such actions are particularly questionable and disappointing for a publicly traded company operating in an open democracy.”
The theater was half empty, according to those there, and the director blamed Herbalife.
Ted Braun, director of “Betting on Zero,” told the audience before the showing that Herbalife’s lobbyists had bought 173 tickets but no one claimed them, according to a video reviewed by MoneyBeat.
“I had hoped this would at last allow us a chance to engage in an open discussion about the merits of the film and about Herbalife’s endeavors,” Mr. Braun told the audience. In a statement he criticized the move as “another step by Herbalife to avoid the serious questions raised by the film.”
Buying 173 tickets to the showing would have cost more than $2,850, including an online convenience fee, according to Double Exposure festival’s website.
Herbalife didn’t respond to a request for comment.
Herbalife has made a point of discrediting the film since its debut this year, even buying the website “bettingonzero.com” where it has posted about Mr. Braun and Mr. Ackman, accusing them of “manufacturing” a grass-roots campaign for the film. It’s also criticized the film’s funding from another short seller who has been betting against the company.
Mr. Braun has said he made the film to depict the battle between the two sides and tried to get Herbalife to participate. He said he attempted to get Herbalife to come to the screening but they didn’t respond.
Friday’s efforts are just the latest in Herbalife’s continuing battle with Mr. Ackman since the FTC settlement. The company has released political-attack style videos about Mr. Ackman on its website “therealbillackman.com” and mailed to media members a 158-page book that includes “recent media coverage” that’s largely negative about Mr. Ackman.
The FTC settlement in July imposes changes to Herbalife’s business that will force the company to prove it has underlying sales. The company says it will produce the evidence, including receipts. The stock shot up the day of the settlement, but has since dropped back below.
Mr. Ackman has stuck by his version and says the FTC complaint will threaten the business.
The stock is up 18% this year, roughly double Mr. Ackman’s break-even price.