Documents obtained by The Post indicate that Kamala Harris ignored calls from her staff to investigate Herbalife for pyramid-scheme behavior while serving as Attorney General of California — all while her husband, Douglas Emhoff, worked for the law firm representing Herbalife.
According to the documents, Harris’s staff recommended she investigate the Los Angeles-based company, which sells dietary supplements and weight loss shakes through individual sellers in a multi-level marketing structure.
In a March 2015 memo addressed to then-AG Harris, her staff suggested investigating allegations that the company was “engaging in a number of tactics designed to maximize the number of distributors selling its products, which results in cash flow back to those at the top of the organizational pyramid.”
The documents obtained by The Post corroborate that Harris’s employees acknowledged there was “need for formal investigative authority” to determine whether the company attempted “to skirt around” regulations preventing Herbalife from making “false or misleading representations” about its products or the profits distributors could make.
The memo, written by Supervising Deputy Attorney General Judith Fiorentini and Deputy Attorneys General Sanna Singer and Jinsook Otha, suggested interviewing former distributors, subpoenaing company documents and deploying undercover investigators. It also requested at least two full-time attorneys to investigate the company.
“Conducting an investigation of Herbalife at this juncture will send the message that this office takes continued monitoring and enforcement of its existing judgements very seriously,” the memo reads. “In addition, it will ensure that Herbalife is held accountable for the acts of its distributors.”
Harris did not act upon her staff’s recommendation to investigate — something Bill Ackman tweeted about on X Thursday, suggesting the decision may have been related to her husband’s relationship with the company.
The Pershing Square CEO pointed to the fact that Harris’s husband, Doug Emhoff, was a partner at Venable LLP, a law firm which represented Herbalife during an investigation by the FTC.
Emhoff was Partner-in-Charge of the Los Angeles office. He did not, however, represent Herbalife personally. Harris and Emhoff married in August of 2014, less than a year before the memo was delivered.
“The whole situation is an incredibly damning indictment of how our regulatory enforcement apparatus works,” Ackman wrote.
Ackman, who shorted Herbalife by $1 billion in 2012, has long alleged the company is operating a pyramid scheme, and wrote on Thursday that “it is sad so many with so little have been deceived and bankrupted by Herbalife.”
Activists say Herbalife disproportionately exploits the Hispanic community, where their products are especially popular, by recruiting low-income sellers in an alleged pyramid structure.
Back in 2013, Angelica Salas, executive director of the Coalition for Humane Immigrant Rights of Los Angeles, called on Harris “to help us protect vulnerable, low income Latinos and other minorities from these schemes that have cost people their life saving.”
Ackman took to X to celebrate Herbalife’s stock price dropping by 30% on Thursday, to a 14-year low, after the company posted mixed fourth-quarter results.
“[Herbalife] distributors are generally low income, often undocumented aspiring entrepreneurs pursuing what they are misled to believe is the American Dream,” Ackman said.
He ultimately folded on his bet against Herbalife in 2017, after a standoff with investor Carl Icahn who poured money into the company and became its largest shareholder.
Nonetheless, Ackman described Thursday as “a very good day for my psychological short on Herbalife” and “an even better day for the world to see one of the biggest pyramid schemes fail.”
Herbalife did not respond to The Post’s request for comment, nor did representatives for Vice President Harris . A spokesperson for the California Attorney General’s office declined to comment.
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