A California congresswoman has asked the Federal Trade Commission to investigate Herbalife over allegations that the controversial Los Angeles nutritional supplements company is a pyramid scheme.
“I am troubled by allegations that this company may be harming consumers ¬ especially those from our country’s most vulnerable populations,” Rep. Linda Sanchez (D), wrote in a June 5 letter to FTC Chair Edith Ramirez, a copy of which was obtained by The Post.
FTC Letter From Linda Sanchez on Herbalife by New York Post
Rep. Sanchez — who said she had heard concerns about Herbalife from her constituents and outside groups — is the first lawmaker to request an investigation following activist Bill Ackman’s allegations in December that the company is a pyramid scheme.
Two consumer groups, including The Hispanic Federation, have also done so.
Herbalife denies the allegations. It has said that Hispanics make up about 60 percent of its US distributor base and were the initial focus of its push into nutrition clubs in the US.
A request for an investigation from someone in Congress could carry more weight than ones from consumer groups, said a source close to the FTC.
“If the FTC perceives taking on Herbalife will be a political battle, one of the things they need as regulators is for someone in Congress to have their back,” he said.
Sanchez, the daughter of Mexican immigrants, represents the largely Hispanic 38th district in Los Angeles County. She is on the House Ways and Means Committee and is a co-founder of the Labor and Working Families Caucus.
“We wish Congresswoman Sanchez had reached out to the company before writing to the FTC,” Herbalife said in a statement. If so, the company said, she would have found out that Herbalife has over 2,000 independent distributors living in her district– of whom hundreds are of Hispanic ancestry– and has provided an “excellent income opportunity to individuals regardless of ethnicity.”
Only 12 percent of Herbalife’s approximately 500,000 distributors made any money last year, and the average annual gross payment to that small group was $4,485 each, according to Herbalife disclosures.
The FTC could not be reached for comment.
mcelarier@nypost.com