The Multinational Monitor

MAY 1983 - VOLUME 4 - NUMBER 5

N E W S   M O N I T O R

Amway: Selling the "American Way" In Canada

by Walter Davis

"As the war heats up, we may do anything."

That vague threat was issued last November by Richard DeVos, president of the Amway Corporation, after Amway and four of its top executives, including DeVos, had just been charged and indicted with defrauding the Canadian government.

The Michigan-based corporation that sells household items door-to-door is accused of withholding more than $28 million in unpaid customs duties from the Canadian government. Government officials have also filed a separate $147.5 million civil suit alleging "untrue declarations" on invoices.

After refusing to appear in court on April 19, Amway officials have been ordered to appear again on September 9. The Ontario Crown prosecutor's office is seeking extradition of the officers of the company from the U.S.

But Amway believes that its officials would not receive a fair trial in Canada. DeVos has claimed that Amway is a "victim of an anti-American trade war," and is warning that if the Canadian government persists in the trial, Amway would have to "fight off all attacks by those who would do us harm."

Canada is a major source of non-U.S. revenue for Amway, whose name is short for "the American Way." The company treats foreign regulation of its business as an affront. Amway Corporate Communications officer Pete Bennett contends that "the Canadians owe us money because they set duties too high." DeVos has even suggested that the Reagan administration would come to his company's aid if Canada didn't back off.

Other multinationals might have sought quiet deals to avoid direct conflict with the Canadian government. Canadian Revenue Minister Pierre Bussieres, however, has said that that there will be no "secret deal" with Amway.

While Amway executives are drawn into legal tussles, a number of Amway's 100,000 distributors in Canada have thrust into partisan politics, creating a stir in Canada's opposition Progressive Conservative Party.

The party will elect a new leader at a June convention in Ottawa. Eleven candidates are vying to head the party, which currently enjoys an unprecedented 50 percent lead in the Gallup Poll. The internal struggle has been bitter, replete with charges of stacked meetings and "dirty tricks."

Amway may not seriously believe that it will have a decisive role in determining the leader of the Progressive Conservatives, but it may be building a base to act as power brokers in a potentially deadlocked convention. Amway distributors have shown an ability to act as a disciplined group in the high energy direct sales market - and are now applying the lessons to politics.

As recently as the end of November, DeVos had said his company was "not trying to influence politicians in Canada." Yet, in British Columbia, Alberta, and other provinces, national television news reports have shown Amway distributors openly leading groups of Progressive Conservative party members at delegate nominating meetings, often with hand signals or open statements. In Kamloops, British Columbia, two out of six delegates elected were Amway distributors. One had been a party member for just one month, not unlike many other Amway distributors who have been collectively dubbed "ten minute Tories" by traditional party activists.

There has been surprisingly little coverage of the Amway affair in the Canadian print media. This may be partly due to the legal threats made by Amway against the Detroit Free Press for a story charging the company with falsifying warehouse documents and sales receipts for its business in Canada.

Amway boasts a worldwide network of one million distributors in 25 countries with 1981 sales of $1.4 billion. It also owns Mutual Broadcasting System. Amway president Richard DeVos is a strong supporter of conservative and religious causes, serving on the board of the Christian Freedom Foundation and as a sponsor to the Council on a Union-Free Environment. Strong backers of Ronald Reagan in his bid for the White House, Amway executives now appear to have established links with right wing zealots in Canada.

The Progressive Conservatives are riding high in the polls, but they remain a factious, warring party. The right wing of the party is an amalgam of well -organized far-right ideologues, single-issue conservatives, conservative Quebec nationalists, and free market entrepreneurs. The leadership race itself became necessary when a January national convention in Winnipeg, Manitoba, failed to significantly increase support for party leader Joe Clark above 60 percent. The demand for a "leadership review" was most loudly voiced by Member of Parliament John Thompson, who now has emerged as a "free enterprise" spokesman in western Canada.

Intervention by a multinational corporation could anger many elements in the party. On the other hand, Amway appears to have few qualms about doing just that. While Amway distributors in western Canada have recently become more reticent in talking about their political strategy, they remain aggressive and optimistic about their future options in dealing with the Canadian government.

Walter Davis is a researcher with Saskatchewan Cross-Cultural Center.

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