Activist investor Bill Ackman said he hasn’t cut any other deals to pay Herbalife critics after the company attacked him for making one with a whistleblower.
Ackman’s secret pay deal with Giovanni Bohorquez, a former senior executive at Herbalife who has since become a whistleblower, gave Herbalife the chance to make new attacks on its nemesis Thursday.
“Who else has Mr. Ackman or his team of agents and consultants made payments to directly or indirectly, or made future contingency payment offers to?” Herbalife asked in a statement.
Ackman, who has wagered $1 billion the company is a pyramid scheme, agreed to pay Bohorquez’s legal costs, as he has with several other whistleblowers. But Bohorquez is the only one who also gets money if he loses his job, Ackman said.
The deal was exposed in an ABC “Nightline” broadcast also critical of Herbalife distributors’ practices.
Ackman agreed to pay legal costs for whistleblowers because of “Herbalife’s track record of attacking its critics through litigation and other forms of intimidation,” his Pershing Square hedge fund said in a statement.
Bohorquez agreed to go public with his claims last summer, and Ackman said he would replace the whistleblower’s wages if he lost his job.
After he became unemployed four months ago, Bohorquez asked Ackman to pay him $20,000 a month for up to 10 years or until he finds another job. The deal is contingent on Bohorquez telling the truth and looking for work.
“Giovanni is an honest and good man,” said Ackman Thursday. “I would be delighted to serve as a reference for him as he seeks future employment.”
Pershing Square has spent $20 million over the past two years, most of it on research, investigations and legal expenses to provide information to regulators, Ackman said.
Other than giving about $130,000 to community groups to help them identify those who say they’ve been harmed by Herbalife, the hedge fund has not given money to critics or victims of Herbalife.
Herbalife has spent a lot too. Earlier this year, it disclosed that last year it spent $29 million in legal, advisory and “other services” related to Ackman’s battle against it.