Joe Oltmann, founder of conservative activist group FEC United, recently announced the group’s latest offering: The People’s Chamber of Commerce. In addition to paying the annual FEC United membership fee, members can sign up for The People’s Chamber of Commerce and have access to a network of like-minded, patriot businesses, in theory bypassing “big tech” platforms like Amazon or Google, frequent targets of Oltmann’s ire on his podcast, Conservative Daily.
FEC United organizes around three pillars — faith, education and commerce. Danny Bristow, the leader of FEC United’s commerce pillar, explained how The People’s Chamber of Commerce works during a recent appearance on Conservative Daily.
“What’s amazing about the People’s Chamber of Commerce is, not only is it a website that’s going to be supporting small-, medium-, and large-sized businesses here in Colorado, we’re going to support those businesses across the entire country,” said Bristow. “There is a website, peopleschamberofcommerce.com. You can go to that site and you can find the information on there. If you were going to look for a business, on your top right there’s information that will pull up for every single state in the country, and as we get more and more people to join, not only is this a directory of like-minded, patriotic businesses that refuse to close their doors, this is also an area where, in a sense, we’re creating jobs at the same time. There’s an affiliate program. If you have a business that joins, they can become an affiliate. If they get four businesses to join as well, that will cover their membership as an affiliate. They’ll get paid back. It’s an amazing sight to see.”
So-called “affiliate programs” that involve recruiting new members are concerning for consumer protection advocates, who argue that such programs are simply pyramid schemes.
“What’s awesome is the affiliate program; you’ll get 25% off of somebody that joins as a business member,” said Bristow. “So if they join for $500, you as an affiliate can get $125. So if you join as a business yourself, and you’ve paid that $500, you get four other businesses to join and that basically covers your paid membership that you paid yourself.”
Debra Valentine, former general counsel for the Federal Trade Commission, has written extensively about pyramid schemes. In describing how they operate, she notes, “Each investor pays $500 to the promoter and is told to build a ‘downline’ by recruiting three new members, who then each should recruit three more members. The investor is told that he will be paid $150 for each of the three members whom he enlists at the first level. The investor is also promised a $30 commission for each recruit at the next three levels. Thus, the investor should receive commissions for four levels of recruits below him, each of whom must recruit three more members, hence the name — a three by four matrix.”
FEC United runs on a membership model, charging members $60 a year. Oltmann also offers memberships for Conservative Daily, which is a separate venture from FEC United. In a November, 2021 FEC United newsletter, the commerce pillar touted the benefits of multilevel marketing (MLM) sources. According to the newsletter, MLMs are a viable alternative to large companies that do business with China or other ideologically opposed entities.
“Many have good products, in basic categories, for reasonable prices (at least after you’re a member),” states the newsletter. “They have exciting possibilities for building your own small business, and excellent training in how to make a sale. Of course, MLMs also have a bad reputation among many people who tried it at some point and found they would rather crawl across broken glass than do marketing. But if you are receiving this newsletter you probably have more experience marketing than most people, and this might be a time to consider whether you could help people create new supply chains with a good MLM.”
The Consumer Awareness Institute calls MLMs “an unfair and deceptive practice” and notes in a report, “Loss rates are extraordinary – over 99% for all of the MLMs for which I have been able to obtain relevant data. This in itself would not be so bad, except that it is promoted as an ‘income opportunity’ – or even as a ‘business opportunity’ – a misrepresentation in itself.”
While MLMs are legal, pyramid schemes are not, and are considered a Class 1 misdemeanor in Colorado.
According to a spokesperson from the 4th Judicial District Attorney’s Office in Colorado Springs, “Pyramid schemes are addressed under Title 6, Consumer and Commercial Affairs, Unfair or deceptive trade practices. ‘A person engages in deceptive trade practice when, in the course of the person’s business, vocation, or occupation, the person: contrives, prepares, sets up, operates, publicizes by means of advertisements, or promotes any pyramid promotional scheme.’ C.R.S. 61-1-105(1)(q). ‘Promoting a pyramid promotional scheme’ is defined as ‘inducing one or more other persons to become participants, or attempting to so induce, or assisting another in promoting a pyramid promotional scheme by means of references or otherwise.’ C.R.S. 6-1-102(7). ‘Pyramid promotional scheme’ is defined as ‘any program utilizing a pyramid or chain process by which a participant in the program gives a valuable consideration in excess of fifty dollars for the opportunity or right to receive compensation or other things of value in return for inducing other persons to become participants for the purpose of gaining new participants in the program. Ordinary sales of goods or services to persons who are not purchasing in order to participate in such a scheme are not within this definition.’ C.R.S. 6-1-102(9).”
Bristow did not respond to the Colorado Times Recorder’s emailed request for comment, but Oltmann did address it in an episode of Conservative Daily last week.
“[Colorado Times Recorder] sent an email saying because if you become an ambassador for The People’s Chamber of Commerce, you get 25% of the people you bring in, an email saying it’s a pyramid scheme,” said Oltmann. “No it’s not. It’s called an ‘affiliate program,’ and when you go and sign up for that affiliate program, you’re literally becoming an ambassador in your community, and so we’ve also been able to clear that through legal loopholes. I want you to know, I want you to write an article like that, because frankly, the law and policy center and having the lawyers, they should have the ability to create a lawsuit against you. Another lawsuit against you.”
Robert L. FitzPatrick, the author of Ponzinomics, the Untold Story of Multi-Level Marketing, agrees with Oltmann, to an extent. “From what I have reviewed, this scheme is not a pyramid scheme, which is not to say that it is necessarily legal or is not deceptive,” he said in an email. “This scheme you are investigating does not have the multiple levels and so I don’t think qualifies as a pyramid. It makes a misleading promise that if each member recruits just 4 others, their own membership fee becomes ‘free.’ The four new members pay your membership. Those four will need 16 more to get theirs paid. And their 16 new members would need 64 who need — you can see where that is going. The free aspect also diverts people from asking, ‘What is the $500 really for?’ or, ‘Why “$500?’”
FitzPatrick also noted, “I should add that the referral selling scams are based on an illusion of everyone getting their product free, and no one ever having to use their own money. To accept that deception is to not understand the absurdity and impossibility of the referrals continuing and expanding forever. But in this case, I think there is an added diversion of a political belief system. People are paying for a membership in something that barely exists now and is offering no real benefits, but they are led to believe that it will be ‘big’ soon and many benefits will come and, along the way, each new recruit is somehow contributing to a movement for freedom. The rhetoric implies that joining this group is a way to strike back at a system that is described as unfair and oppressive. This is an emotional appeal that diverts from doing due diligence or asking, ‘Who gets the money? How will it be spent? How much does Joe Oltmann make out of this?’”
Oltmann claimed on Conservative Daily that revenue from The People’s Chamber of Commerce will be used to fund the Law and Policy Center that Oltmann has been touting for over a year now as a way for citizens to engage in “lawfare.” Oltmann is also currently a defendant in two separate defamation lawsuits, and is currently using crowdfunding platform Give Send Go to solicit donations for his legal defense.
As always, caveat emptor.