The evolution of the anti-Mary Kay movement


What began as a loosely organized group of women casually discussing their dislike of the “business opportunity” offered by multi-level marketing companies like Mary Kay Cosmetics, has been slowly developing into an organized, credible attack on the tactics that abuse participants.

Pink Truth, a website created and maintained by me, systematically exposes the lies and half-truths told by those trying to recruit new independent beauty consultants. I thrive on numbers, and regularly expose the pathetic reality of the Mary Kay business. While women regularly brag about bringing home “executive” incomes for part-time work, the reality is that the vast majority of the so-called executives in Mary Kay (sales directors) make annual incomes in the $20k’s, if they’re lucky.

The recruiting process includes parading around “high checks”, which are the largest commission checks sales directors have received. These don’t even come close to representing the normal commission checks, and they don’t reflect any of the expenses that go into running a Mary Kay business.

Half-truths about “free” cars are told. The amount of time required to earn an income is generally downplayed. Recruiters brag about the 50% profit that can be earned on the sale of the cosmetics, but never mention that most products are sold at a discount and therefore that 50% will never be realized. (That’s if they can actually find anyone to buy the products.) New recruits are encouraged to buy large inventories without any sales experience or a customer base to support the inventory.

These realities are exposed daily on Pink Truth, much to the chagrin of the sales force that is attempting to recruit new blood into the Mary Kay pyramid. The longer the site exists, the stronger and more refined our message becomes. And people are listening. Mary Kay Inc. is listening.

Ethics charges filed against Duke lacrosse case prosecutor


The prosecutor in the Duke lacrosse sexual assault case may be forced off the case because of a conflict of interest related to ethics charges filed against him.

The ethics charges were filed against District Attorney Mike Nifong on Thursday by the North Carolina bar. The charges generally accuse Nifong of violationg the professional conduct rules for attorneys by making misleading comments about the athletes accused in the case.

The North Carolina bar said it opened a case against Nifong on March 30, two weeks after the stripper at a lacrosse team party alleged she was gang raped.

Nifong claims he was only trying to get information to the community and encourage those with information to come forward. However, the bar’s charges included 41 quotes and eight paraphrased statements made by Nifong to reporters about the lacrosse players’ credibility and reputation.

Included in the statements cited by the bar:

  • Referring to the lacrosse players as “a bunch of hooligans.”
  • “I am convinced there was a rape, yes, sir.”
  • “One would wonder why one needs an attorney if one was not charged and had not done anything wrong.”

He is also accused of telling reporters that the Duke players were not cooperating with the investigation and were refusing to make statements to law enforcement.

Nifong is further accused of breaking a bar rule against “dishonesty, fraud, deceit and misrepresentation” when he told a reporter that the failure to find any DNA evidence against an accused lacrosse player mmight be because he used a condom. The bar alleges that Nifong knew this assertion was misleading because he had received an emergency report showing the accuser said the attackers did not use condoms.

Don’t Let Those Christmas Gift Cards Go to Waste


Recently, there have been reports that indicate 15% to 19% of gift cards purchased from retailers are never redeemed. Huh? Up to 1/5 of people don’t spend that gift cards they’re given??? What a travesty!

But there is hope. Websites like Cardavenue, Plastic Jungle, Gift Cards Again, Gift Card Buy Back, and help people trade gift cards or turn them into cash. Some sites generally have a small fee for selling a card, but it’s a small price to pay in order to swap a gift card for one you’ll really use. Other sites buy the cards directly from users, paying them 60% to 75% of the remaining value on the card. The sites then resell those cards for full value.

Another option to unload your gift card is eBay. Look for the “gift certificate” category. Often buyers can get deals on gift cards, so they’re actually receiving more value at the store that they’re paying for the card.

The market for gift cards is estimated to be about $60 billion. That’s a lot of money, and think about how much retailers are keeping from those who never redeem theirs.

Apple Computer stock option problem


The confession by Apple Computer executives has gotten more serious. Previously, it was believed that stock options were backdated a’la several public companies. It’s now been revealed that executives also falsified documents related to stock options in order to personally make more money on them.

Apparently, federal prosecutors are now looking at documents related to the stock options. It’s also been revealed that CEO Steve Jobs has hired an attorney to represent him personally.

Yes, the stock price (AAPL) has been up and down quite a bit since this revelation.

UPDATE: On Friday, the company said that an internal investigation cleard Steve Jobs any wrongdoing.

Whistleblower Cases in 2006


A recent article on put the whistleblower issue in perspective financially. In the last year, the Justice Department says that whistleblowers revealed $1.3 billion of fraud, mostly in the health care arena. This was apparently one of the bigger years for the Justice department. The whistleblowers were paid $190 million for their assistance.

This fiscal year, the Federal government recovered $3.1 billion in settlements from people and companies in whistleblower cases. The largest settlement was $920 million from Tenet Healthcare, the second largest hospital group in the country. Tenet was accused of overbilling the government for $806 million in Medicare and paying $49 million in kickbacks to doctors.

President Clinton’s national security advisor stole classified documents


According to a report by the Associated Press, President Bill “Clinton’s national security advisor removed classified documents from the National Archives, hid them under a construction trailer and later tried to find the trash collector to retrieve them.”

Former national security advisor Sandy Berger pleaded guilty and was sentenced over a year ago, but the report is first being issued now.

Berger stole the documents in October 2003 while preparing himself and Clinton to testify before the September 11 Commission. He was supposed to make sure that the commission got the proper classified documents. Instead, he stole documents from the archive and no one is sure if there are still any missing materials.

The former national security advisors was in the Archives when employees noticed some suspicious behavior. They did not confront him, but employees had been tracking the documents Berger was looking at because they were suspicious that he had removed materials during previous visits to the Archives.

An investigation revealed that Berger then stepped outside by himself with four documents in his pockets. He walked to a construction area, did not see any people around, and slid the papers under a construction trailer. Berger returned later to retrieve the documents and took them to his office. Two days later, Archives officials contacted Berger about the missing documents. Three of the four documents had been cut into small pieces and placed in the trash.

Berger pleaded guilty to unlawfully removing and retaining classified documents. His sentence included 100 hours of community service and a fine of $50,000. He is also prohibited from having contract with classified materials for three years.

Even more taxes proposed for Southeastern Wisconsin


In order to support a rail service that won’t have even close to enough ridership to pay for itself, officials are proposing more sales taxes.

The proposed KRM Commuter Link, a train connecting Kenosha, Racine, and Milwaukee, has been discussed for quite some time now. There would be 14 round trips per weekday, with 7 round trips on weekends and holidays. Shuttle buses would run between train stations and local sites.

They say the rail line would be aimed at people looking for short trips between downtown Milwaukee and suburbs, not the riders who now ride the train between Milwaukee and downtown Chicago.

One of the reasons why some are pushing for this commuter rail is the scaling back of service by the Milwaukee County Transit System. Hello? Service would be greater if there were more riders. If there isn’t sufficient ridership, why should we continue to dump tax dollars into these transportation options?

I promise these people that the commuter rail will fail. The numbers currently forecast for ridership are bad in terms of how far the rail line falls short of paying for itself. Actual ridership will be well below those forecasts. Taxpayers will spend hundreds of millions of dollars on this, and in the end we will be left with some vacant train terminals and a whole bunch of useless train cars.

Who are these people who think that people want this rail line? The media cites “business leaders” who say we need commuter rail. I would put money on it that almost none of those leaders will actually be passengers.

More Fraud Related to Hurricane Katrina


Media outlets report that there are more than 1,300 open investigations of alleged FEMA fraud in the southern district alone. The U.S. Attorney’s office has said that the United States intends to investigate and prosecute aggressively.

Currently, 92 people are under federal indictment for fraud related to Hurricane Katrina. About half have already pleaded guilty and one has gone to trial. Continue reading

Milwaukee Assessor’s Office and Milwaukee Public Schools screw up on property taxes


Milwaukee’s public school district is crying because $9.1 million that they wanted to squeeze out of taxpayers was erroneously left off property tax bills that were sent earlier this month. They’re pointing the finger at the Assessor’s Office, who is pointing the finger right back at them.

Milwaukee Public Schools initially voted to soak taxpayers with a tax levy of $221.2 million, a 3.5% increase in the levy. On October 24, a letter was faxed to City Clerk Ron Leonhardt, City Assessor Mary Reavey, and City Comptroller W. Martin “Wally” Morics confirming the amount of the assessment.

On that same day, the school board decided that increase wasn’t painful enough for property owners, and decided to increase the levy by another $9.1 million (a 7.7% increase over the prior year’s budget).

News of the increased increase found its way to City Clerk Leonhardt, who added the information to the Common Council budget file. Morics and Leavy did not get copies of the new and improved tax levy. Therefore, Morics relied upon the original October 24 letter regarding the levy.

MPS is defending itself by saying that state rules require that the district only notify the city clerk of the tax levy information. Since Leonhardt was notified, MPS believes it did what it was required.

The $9.1 million error was not discovered until after the bills went out. The impact to property owners is about 35 cents per $1,000 of assessed value. Now everyone is trying to figure out the best way to squeeze this additional money out of taxpayers. I say they should find a way to do without.

New Tax Laws Affect Your 2006 Filings


The recently passed Pension Protection Act of 2006 puts in place some new rules that will affect many filers of 2006 tax returns. The legislation was geared at stabilizing corporate pension plans, but other provisions will have an affect on individuals. Some of the changes include:

  • 401(k) enrollment is now automatic. Whereas new employees previously had to affirmatively sign up for the programs, now employers can automatically enroll them in the plans.
  • The IRS will now offer taxpayers the option of having their refund deposited directly to an IRA. Continue reading