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The Southwestern Company - Part 1: Walks Like a Duck, Quacks Like a Duck, DuckErsun Warnke Salem-News.com Business/Economy Reporter
The group operates a web of companies and employs hundreds of independent contractors who are used to disguise their criminal activities.
(EUGENE, Ore.) - This is a story about The Southwestern Company. It is based on months of observation of Southwestern Company workers, interviews with many workers, and extensive research into the Southwestern Company, the web of companies related to it, its executives and owners, and their campaign contributions and extensive connections to leading Republican politicians.
The Southwestern Company hires independent contractors to go door-to-door selling educational books across the United States, in Oregon, and in Salem. The individuals who sell books for the company, who are mostly college students, stay with host families during the summer, while they are selling books. The Southwestern Company, through various subsidiaries, also does school fundraising, sells natural foods and cook books, and operates an investment company.
The Southwestern Company is and has been engaged in a highly organized criminal operation that includes tax evasion, money laundering, illegal immigration violations, labor law violations, and ruthless exploitation of workers. The mother of a Salem family that has hosted Southwestern Company employees for several years had this to say: “They are all here to make money. They will take whatever they can.”
A Southwestern employee, who worked in Texas for three weeks, told a story of being thrust into a foreign environment. He arrived in Texas with nowhere to stay, and had to go door-to-door, asking people for a room. After three weeks of walking around in the hot sun, begging strangers for their kindness, he was sufficiently traumatized to pack his bags and go home. He said it was the worst experience of his life.
The Southwestern Company tells its independent contractors that they should work 12 hours a day, six days a week. On the seventh day of the week they are required to spend 8 hours in group activities with their fellow workers. The Company provides them with nothing. No housing, no pay, no support. Only rules that they should follow and a script for the products they are supposed to sell.
The Southwestern Company’s rules include taking cold showers in the morning to compensate for sleep deprivation. No cell phones and limited contact with family and friends, in order to maintain focus. No eating meals at their host family’s home, or returning to their temporary home during working hours.
These “rules,” which are illegal to impose on independent contractors, are described by the company as “suggestions.” They are enforced by “team leaders,” who are independent contractors who have already finished a year working for the company, and get a percentage of the sales from their new underlings.
Independent contractors working for the Southwestern Company have no source of income other than the sales they make. If they do not make their sales, they cannot pay their rent, or eat. Since the Southwestern Company makes a point of moving its sales agents away from their homes and isolating them from their family and friends, this provides a powerful incentive to maintain the company’s “recommended” 80 hour working week.
The Southwestern Company was built over decades using an all American workforce, but more recently they have shifted their recruiting to focus on Eastern European countries.
Foreign employees of the Southwestern Company pay for their own tickets to the U.S. and their own Visas. In some cases, their recruiters hold their return tickets until they complete their work duties. The Southwestern Company requires foreign employees to work after their Visas have expired, exposing them to charges for Federal immigration violations. Employees are also required to open their own bank accounts in order to process payments, potentially exposing them to State and Federal money laundering and tax evasion charges.
The Southwestern Company CEO, Henry Bedford, Lives on a multi-acre estate in Franklin, Tennessee, on the outskirts of Nashville. His massive home, surrounded by woods, overlooks a man made private lake.
Spencer Hays, a major owner of the Southwestern Company, is reputed by Forbes to have a net worth of $400 million. He owns a multi-million dollar McMansion in Nashville, along with an apartment at 778 Park Avenue in New York, where units sell for $25 million.
The Southwestern Company operates a web of companies and employs hundreds of independent contractors who are used to disguise their criminal activities. The owners, executives, and former executives of the company, whose collective worth runs into the hundreds of millions of dollars, run even more companies outside of Southwestern’s corporate sphere.
The Southwestern Company donates heavily to the Republican Party. Their executives have given thousands to the likes of John McCain, Mitch McConnell, and Lamar Alexander: some of the most influential Republican politicians of the last two decades.
Former Southwestern Company employees include Jeff Sessions, U.S. Senator from Alabama; Marsha Blackburn, U.S. Congresswoman from Tennessee; Rick Perry, Governor of Texas; and Ken Starr, the infamous “Whitewater Investigator” of Bill Clinton.
The Southwestern Company is headquartered in Nashville, Tennessee. The company started out selling Bibles door-to-door. The connections of their executives and employees to evangelic Christian organizations remain strong. The connections they share are largely the same as those of their Republican politician friends.
In Part 2 of this series, “A RICO Case,” I will lay out the evidence and arguments that demonstrate a widespread and ongoing pattern of racketeering activity by the Southwestern Company that includes multiple levels of tax evasion, money laundering, and false income tax reporting. In addition, I will provide evidence of organized and intentional violations of U.S. immigration laws.
In Part 3 of this series, “Web of Deceit,” I will connect the dots between the dozens of shell companies, political action groups, multi-millionaires, Republican politicians, and evangelical Christian groups that make up the web through which the Southwestern Company asserts its influence and extracts its illegally gained profits.
Editor's note: This story was modified on 24 Feb. 2010 with various changes to meet the needs of a retraction demand from this company. To learn more visit: Retraction: The Southwestern Company - Part 1: Corporate Mafia
Salem-News.com Business/Economy Reporter Ersun Warncke is a native Oregonian. He has a degree in Economics from Portland State University and studied Law at University of Oregon. At a young age, his career spans a wide variety of fields, from fast food, to union labor, to computer programming. He has published works concerning economics, business, government, and media on blogs for several years. He currently works as an independent software designer specializing in web based applications, open source software, and peer-to-peer (P2P) applications.
Ersun describes his writing as being "in the language of the boardroom from the perspective of the shop floor." He adds that "he has no education in journalism other than reading Hunter S. Thompson." But along with life comes the real experience that indeed creates quality writers. Right now, every detail that can help the general public get ahead in life financially, is of paramount importance.
You can write to Ersun at: email@example.com
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