Washington GOP Senate nominee promoted 'misleading' multilevel marketing jewelry company

Changed to clarify wording, Oct. 3, 4:50 p.m.

Tiffany Smiley, the Republican nominee for U.S. Senate in Washington, spent years promoting Stella & Dot, a controversial multilevel marketing business that sells jewelry products.

Smiley is challenging incumbent Sen. Patty Murray (D-WA) in the November midterm election. Smiley began working as a Stella & Dot “brand ambassador” in March 2015.

“I was working with women and it inspired me to want to help other women by telling my story,” Smiley recounted in a 2016 blog post on her website. “I was not sure how to tell my story, but I knew I needed a network of women and I also knew I wanted to be stylish and beautiful again. Stella & Dot fit the bill perfectly.”

Smiley spoke at the company’s Hoopla conference in Orlando, Florida, in 2016. In a Facebook post, she noted that she would be telling 3,000 “fellow stylists” who sold the company’s products “my story and how I found my passion again, which is beyond exciting and just a little scary.” Smiley continued to promote and sell jewelry and accessories for Stella & Dot until at least 2017.

According to the company’s website, people can pay $59 or more to become brand ambassadors at various levels for the company and receive a percentage back for all the jewelry and accessories they sell according to a business model known as multilevel marketing.

According to the Federal Trade Commission’s consumer advice website:

Businesses that involve selling products to family and friends and recruiting other people to do the same are called multi-level marketing (MLM), network marketing, or direct marketing businesses. Some MLMs are illegal pyramid schemes. … If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new distributors. Most people who join legitimate MLMs make little or no money. Some of them lose money. In some cases, people believe they’ve joined a legitimate MLM, but it turns out to be an illegal pyramid scheme that steals everything they invest and leaves them deeply in debt.

In 2018 the Financial Times reported that it was often quite difficult for sellers to make a profit selling for Stella & Dot, which is true for most multilevel marketing businesses. Critics have said the company is not upfront about this fact.

Robert FitzPatrick, a consumer advocate who leads the consumer organization Pyramid Scheme Alert, told the outlet that multilevel marketing companies like Stella & Dot make rosy claims about how well their brand ambassadors do, but that these are often “misleading.”

Noting that most people in such schemes end up with a net loss, he said, “It’s an orchestrated sham as a business opportunity. If it is one in 1,000, that’s not an income opportunity, that’s a sham.”

Neither the Smiley campaign nor a Stella & Dot spokesperson immediately responded to American Independent Foundation inquiries for this story.

But Smiley’s campaign site touts her work “with women in business, helping them to shatter barriers, encouraging them to never let life’s challenges stop them from realizing their dreams and full potential.” She promises “to take that same fight and optimistic spirit to help Washington families achieve their American Dreams.”

Recent polls show Murray to be the favorite in the Senate race.

Smiley is not the only current Republican Senate candidate with a history of working to promote controversial multilevel marketing schemes.

Starting in 2012, Georgia Republican Senate nominee Herschel Walker worked as a “partner” and “spokesperson” for Momentis, then a multilevel marketing subsidiary of an energy company called Just Energy. Just Energy was accused by regulators and state governments of deceptive business practices.

During Walker’s time working for Momentis, the company launched “Project Hope,” a “veterans business development program” that specifically targeted military families and veterans.

Published with permission of The American Independent Foundation.