You Can't Cheat an Honest Man - James Walsh [101]
The meeting became a subject of derision in Washington. “The president has had a lot of individuals come up and visit and talk with him at Camp David,” said a White House spokesman, trying to downplay the meeting’s significance. “Robbins is merely the latest on the list.”
Robbins Research International, the guru’s company, was a little coy in its response. A spokeswoman said: “Tony has a consistent policy. Any meetings he conducts, particularly with President Clinton, are private matters. They’re privileged, and he does not provide details.” This, of course, implied that the meetings with Clinton were regular occurrences.
The Camp David meeting was a rite of passage to legitimacy for Robbins, whose background was tarred with allegations that he was just a particularly glib (and, at 6’8”, particularly tall) Ponzi perp.
Robbins, who refers to himself as a “peak-performance consultant,” has often said his life’s work is helping people with “image problems realize their full potential.” He made millions of dollars from selling franchises that marketed his positive-thinking seminars. The business was lucrative; but it brought him legal troubles from disgruntled franchisees. Most of these former business associates made the same—or at least similar—complaint: breach of contract or fraud.
Many individual suits were filed in 1991 and 1992. Some franchisees charged that Robbins violated exclusivity rights given to franchisees in a particular region.
Some of these suits took these complaints a step farther and alleged that Robbins was running a Ponzi scheme. They claimed that Robbins’ California-based holding company was flooding the market with new franchises, effectively guaranteeing that existing franchises would never meet the profit levels originally promised.
In one suit—which eventually settled—Dallas, Texas, franchisee Larry Sergeant charged Robbins with violating his exclusivity rights in northern Texas and running a Ponzi scheme. Sergeant claimed that Robbins’ franchise delivered no goods or services, even though it had taken his $20,000.
According to Sergeant, Robbins set out to make money, not by selling the product in question (video seminars) but by attracting new investors (franchisees). Sergeant claimed that only Robbins could profit from the scheme. He and other investors criticized the video and audio tapes they’d received as “useless sales pitches.”
As a group, they charged that the product not only lacked substance and value, but the franchise plan was doomed to fail since franchisees did not receive the exclusivity promised them, nor any marketing or advertising backing from Robbins Research International. Sergeant told one newspaper:
Tony Robbins has made an art form out of stretching the truth, amplifying things, painting incredibly vivid pictures in three dimensions with you in them—with a smile on your face, your favorite music playing, seeing your favorite colors..... But sooner or later, he (cheats) everybody he does business with. And the thing that scares me is, he may get away with it.
While Robbins never lost a suit at trial, he settled many. By 1993, he had stopped selling franchises for video seminars. Unfortunately for Robbins, federal investigators also wanted a piece of him.
In 1995, Robbins settled charges by the Federal Trade Commission alleging that he had violated federal franchise laws. While denying any wrongdoing, Robbins paid a fine and fees of more than $221,000. He indicated that settlement was simply “the most prudent and efficient way to resolve this dispute with the FTC.”
That was probably true. According to the FTC, Robbins Research International sold franchises that granted the right to run self-help seminars featuring Robbins’ videotapes, Unlimited Power and Power to Influence. The franchises cost between $5,000 and $90,000, depending on the territory they covered.
The FTC alleged that financial information provided by Robbins