Frank L. VanderSloot

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Frank L. VanderSloot
Melaleuca CEO Frank Vandersloot.JPG
BornFrank Vandersloot
(1948-08-14) August 14, 1948 (age 64)
Alma materRicks College and Brigham Young University
OccupationEntrepreneur and CEO
Known forCEO of Melaleuca, Inc.
ReligionThe Church of Jesus Christ of Latter-day Saints
 
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Frank L. VanderSloot
Melaleuca CEO Frank Vandersloot.JPG
BornFrank Vandersloot
(1948-08-14) August 14, 1948 (age 64)
Alma materRicks College and Brigham Young University
OccupationEntrepreneur and CEO
Known forCEO of Melaleuca, Inc.
ReligionThe Church of Jesus Christ of Latter-day Saints

Frank L. VanderSloot (born August 14, 1948) is an American entrepreneur, radio network owner, rancher, and political campaign financier. He is the founder and chief executive officer of Melaleuca, Inc.[1][2] His other business interests include Riverbend Ranch[3][4][5] and Riverbend Communications.[6] VanderSloot also serves on the board of directors and executive board of the U.S. Chamber of Commerce.[7][8] In 2011, the Land Report listed him as the nation’s 92nd largest landowner.[9]

VanderSloot served as a national finance co-chair for Mitt Romney's presidential campaigns in 2008 and 2012.[10][11][12] He contributed $1.1 million and helped to raise between $2 million and $5 million for Romney’s 2012 campaign.[13][14] He has been a major financial contributor to Republican campaigns and paid for advertising in opposition to several Idaho Democratic political candidates. His public stances on gay-rights issues generated opposition from journalists, commentators, and gay-rights groups.

VanderSloot sponsors the Melaleuca Freedom Celebration, the largest annual Independence Day fireworks display west of the Mississippi.[15] He was the primary financier of the American Heritage Charter School in Idaho Falls.[16][17][18]

Contents

Early life and education

VanderSloot was born on August 14, 1948[19] to Peter Francis (Frank) VanderSloot (1913–1982) and Margaret May Christensen Sindberg-Woodley VanderSloot (1924–2004). After having resided in Sheridan, Wyoming and Hardin, Montana, his family relocated in 1949 to Cocolalla, Idaho, where VanderSloot was raised on a small ranch owned by his father, who also worked as a painter for the Northern Pacific Railway.[20][21] VanderSloot graduated from Sandpoint High School in 1966. At the age of 16, he converted to The Church of Jesus Christ of Latter-day Saints (LDS), and later served on a two-year LDS mission in the Netherlands.[8][22]

VanderSloot paid for his college education by selling cream from a cow his father had given him, working at a laundromat, selling beef jerky in bars, and teaching Dutch to future missionaries.[8][23] He earned an associate’s degree in business at Ricks College in Rexburg, Idaho, and in 1972, he graduated from Brigham Young University with a bachelor's degree in business administration.[24]

Career

Early

After graduating from college, VanderSloot worked for 9-1/2 years at Automatic Data Processing in three cities, working in sales and marketing, then general management and operations.[21][25] He left ADP to work as regional vice president at Cox Communications in Vancouver, Washington.[26]

Oil of Melaleuca, Inc.

In September 1985, VanderSloot's brother-in-law Roger Ball and Roger's brother Allen Ball offered VanderSloot the helm of Oil of Melaleuca, Inc., a startup multi-level marketing business based in Idaho Falls.[8][27] VanderSloot said "the company was a mess". According to Dan Popkey “A supposed 80 percent corner on the tea tree market turned out to be 5 percent. The FDA came knocking, because salespeople were exaggerating medical claims. A multilevel model that lured people to buy $5,000 in inventory offended VanderSloot's sense of fairness."[8] Oil of Melaleuca failed to achieve significant market share, and the partners shut down the company later in 1985.[2][8]

Melaleuca, Inc.

In 1985, VanderSloot founded Melaleuca, Inc., a multi-level marketing company that sells nutritional supplements, cleaning supplies, and personal-care products,[1][13][28][29] and he has been president and chief executive officer ever since. Melaleuca operates internationally, with U.S. operations centered in Idaho Falls, Idaho, and Knoxville, Tennessee.[30] "Independent marketing executives" receive commissions from Melaleuca for each purchase made by people they refer, and from sales made by their customers and by people their customers refer, through seven "referral generations";[31] customers buy directly from Melaleuca's website[32] or retail locations.[33] The company refers to this arrangement as “Consumer Direct Marketing," a term it has trademarked.[34][35][36][37] Half of the legacy distributors from Oil of Melaleuca left after the new company was formed.[1]

Inc. magazine included Melaleuca on its Inc. 500 list of the fastest-growing private companies in the United States every year from 1990 to 1994 before inducting the company into its Hall of Fame in 1994.[38][39] Melaleuca’s sales flattened in 1998, and VanderSloot "discovered that some senior directors were living off their residuals and doing little in the way of recruitment." This resulted in "a new policy that reduced payments to those who didn't either bring in new converts or help others do so." As of 2004, the company's revenue had subsequently grown at a compound annual rate of 12%,[1] and 25 percent of revenue originated from Taiwan, Korea, Japan, Australia, New Zealand, and the United Kingdom.[1] The company reported in 2005 that one in 60 Taiwanese households purchased its products monthly.[40] Melaleuca reported gross sales in excess of one billion dollars in 2011 [41] and $1.13 billion in 2012.[42]

VanderSloot established a research and development department that evolved into a 20-person staff, including three PhD chemists.[1][43] The company's current portfolio consists of more than 350 products.[44][45] According to Melaleuca, 62.2 percent of the company's monthly sales come from customers who are not and have never been distributors and another 23 percent who were once distributors continue to buy the product for personal use.[33][46]

VanderSloot says that the company has a "business model for those people who want to supplement their income."[2] According to Dan Popkey of the Idaho Statesman, Melaleuca had 800,000 customers for its household and nutritional products as of 2011. Roughly 37 percent were also part of the company's sales force of independent contractors, referred to as “marketing executives," and about 90 percent of the sales force averaged less than $2,100 in annual income from Melaleuca.[8] According to Laura Onstot of the Seattle Weekly News, a 2006 company report stated that the average annual income for 72 percent of Melaleuca's marketing executives was $90. VanderSloot estimates that roughly 190,000 marketing executives "earn a check from Melaleuca each month," 20,000 of whom "make their primary living through the company." As executives recruit, their title changes and they make more money.[47]

Melaleuca is a member of the United States Direct Selling Association (DSA),[48] a trade association. In 2008, VanderSloot began a three-year term as one of the eight members of the DSA's board of directors.[49] In December 2009 VanderSloot and his wife contributed $10,000 to the DSA’s political action committee (PAC).[50]

Between 1991 and 1997, Melaleuca was investigated by Michigan regulators, the Idaho attorney general's office, and the U.S. Food and Drug Administration for various marketing violations. In 1991 Melaleuca received a cease-and-desist order for violating Michigan’s anti–pyramid scheme laws.[51] In 1992, Melaleuca signed a consent decree with the states of Michigan and Idaho agreeing to "not engage in the marketing and promotion of an illegal pyramid.”[10][13][29][52][53][54] Subsequently, according to Adam Yeomans of the Orlando Sentinel, "officials in both states cleared the company's marketing plan and blamed 'renegade' distributors for any problems."[55] In its voluntary agreement, the Idaho Attorney General found the company's policies and product catalog did not violate Idaho law, but that "certain independent marketing executives of Melaleuca... failed to comply with certain policies of Melaleuca, and that the actions of these independent marketing executives are in violation of Idaho law."[54] In 1997, the U.S. Food and Drug Administration sent Melaleuca a warning letter for "false and misleading" claims about two of its supplements.[10][29][52][56][57]

Other businesses

Ranching

In 1993, VanderSloot founded Riverbend Ranch, which became one of the largest purebred ranches and largest commercial cattle operations in the United States.[3][9][58] The ranch received 21 awards at the Utah State Fair between 1995 and 1997.[59][60][61] The Ranch runs a genetics and breeding program[58] and hosts the world's second-largest Angus bull sale.[4] According to ranch general manager David Brown, VanderSloot established its mission as “providing ranchers in the Intermountain West with the best genetics at an affordable price.”[62] Riverbend Ranch also owns Fort Ranch Quarter Horses, a horse ranch in Promontory, Utah.[63]

Natural Guardian Land Holdings

In 1994, VanderSloot created Natural Guardian Limited Partnership (doing business as Natural Guardian, LLC, as of 2011),[64] a holding company that owns or leases approximately 1,500 acres of land in Wolverine Canyon, Bingham County, Idaho.[65]

Broadcasting

VanderSloot owns Riverbend Communications, a group of radio stations in Eastern Idaho. He purchased the company from Bonneville Communications in 2006. Riverbend Communications operates KLCE Classy 97, KCVI Kbear 101, KTHK 105.5 The Hawk, KFTZ Z103, KBLI News-Talk AM 690 - 1260, and KBLY AM 1260.[6]

Snake River Cheese factory

In 1994, VanderSloot was approached by two dairy farmers with a plea to invest in the Snake River Cheese factory in Blackfoot, Idaho, after Kraft Foods had announced a decision to close it. Kraft had operated the plant since the early 1920s.[66] In response, VanderSloot bought a $1 million interest in the plant, and an investment company assumed control, but the operation closed anyway within six months. VanderSloot then paid off a $2 million debt the company owed to the dairymen, staffed the plant with his own personnel and supplemented the milking herd with two thousand head of cattle.[67][68] He promised that all five hundred people whose jobs depended on the plant would remain employed and leased the plant to Beatrice Cheese, a subsidiary of ConAgra.[69] In 1999, the facility netted $278 million in sales. The next year, VanderSloot sold his interest in the company to Suprema Specialties[67][70] after Beatrice broke its lease.[71][72] VanderSloot again promised that employees would keep their jobs.[73] In 2006, the factory, which by then had been renamed as the Blackfoot Cheese Company, was sold to Sartori Foods.[74]

Paving and construction

VanderSloot was the owner of HighStone (formerly Eagle Rock Construction; RBH Gravel; VIP Construction), an Idaho Falls-based asphalt construction and maintenance company.[75] HighStone’s projects included a $421,000 state government contract to repair a stretch of Idaho State Highway 33 in Idaho Falls,[76] as well as work on road repairs in Rexburg.[75] In September 2011, HighStone merged with DePatco, a family-owned heavy construction company in St. Anthony, Idaho. The merger created eastern Idaho's largest locally owned construction company.[75]

Net worth and influence

VanderSloot does not publicly disclose his personal worth;[8]' however, in 2004, Forbes magazine estimated that Melaleuca was worth $1.4 billion and that Vandersloot's share of the company (55 percent of the voting stock and 44 percent of the nonvoting stock), was worth $700 million.[1][8] According to Dan Popkey of the Idaho Statesman, the company's value had grown to between $3.2 billion and $3.9 billion by 2011, and Vandersloot's net worth was estimated at more than $1 billion.[8] In 2012, The Land Report listed VanderSloot as the 92nd largest landowner in the United States.[77]

Public activity

United States Chamber of Commerce

VanderSloot is on the board of directors and executive board of the United States Chamber of Commerce.[7][8]

Taxation Task Force

In 1993, VanderSloot served on the Taxation Task Force of the White House Conference on Small Business.[78]

Campaign financing

Mitt Romney for President

VanderSloot was a national finance co-chair for Mitt Romney's presidential campaigns in 2008 and 2012.[10][11][12][79] In 2012, VanderSloot’s companies contributed $1.1 million to the Restore Our Future political action committee, which was supporting Romney for President.[13] According to VanderSloot, he raised between $2 million and $5 million for the Romney campaign.[14]

On April 20, 2012, a website operated by Barack Obama’s presidential campaign included VanderSloot on a list of eight major donors to Romney’s campaign whom it described as having "questionable and troubling records on various issues." The site said VanderSloot was "litigious, combative, and a bitter foe of the gay rights movement."[80][81][82][83] VanderSloot made a series of appearances on the Fox News Channel and other networks in which he called for donations to Romney in protest of the list.[14] VanderSloot accused the Obama campaign of targeting him unfairly and said that he went through "living hell" as a result. He told Fox News host Bill O’Reilly that Melaleuca had lost about two hundred customers in the first two weeks after the Obama website's reference to him;[81][84] Two days later he told the Idaho Statesman that “unbelievable” and “unexpected” national support in the intervening period was turning out to be good for business.[85]

In July 2012, VanderSloot said he was the subject of two new federal audits, one by the Internal Revenue Service and the other by the U.S. Department of Labor.[81][86] VanderSloot said that the timing of the audits was curious and questionable, claiming that he received notice of the IRS audit two months after he was "singled out by the Obama campaign." He noted that he did not think that the President was directly behind the audits.[81][87][88][89]

Three op-eds published by the Wall Street Journal criticized the campaign's treatment of VanderSloot and other top Romney donors.[86][90][91] The critiques, two of which were authored by Wall Street Journal contributor Kimberley Strassel, were disputed by television host Rachel Maddow,[92] Lewiston Morning Tribune editor Marty Trillhaase,[93] and David Shere of Media Matters for America.[94]

Idaho ballot measures

Vandersloot was the primary financial supporter of United Families Idaho Action Fund, a PAC that supported a successful anti-same-sex marriage constitutional amendment (House Joint Resolution 2) in Idaho 2006.[95][96] Melaleuca was the top contributor to the PAC fund, giving $6,827 while Vandersloot and his wife contributed an additional $2,000.

VanderSloot spent $1.3 million in 2012 to sponsor television commercials and other advertising in favor of Propositions 1, 2, and 3, ballot referenda supporting education changes introduced and championed by Idaho public school supervisor Tom Luna in 2011. The three-part educational package, consisting of an eight-year $180 million program limiting teachers’ collective bargaining rights, requiring online classes and mandating laptops for ninth-graders, was approved by the Idaho Legislature and was backed by Governor C.L. "Butch" Otter. An initiative campaign placed the approval of the laws on the ballot, and they were defeated in a statewide vote.[97][98][99][100][101][102][103]

Idaho political and judicial campaigns

According to Dan Popkey of the Idaho Statesman and Roger Plothow and Marty Trillhaase of the Idaho Falls Post Register, VanderSloot supported Idaho Democrat Larry EchoHawk’s 1994 gubernatorial campaign[8] and endorsed Democrat Jackie Groves Twilegar for Idaho state controller in 2006.[104][105] VanderSloot has been a major donor to Idaho Republicans,[104][105] according to Popkey, who described him as the state's "most boisterous conservative financier”[8] and by America Online’s Eamon Murphy, who called him "perhaps the single most influential campaign donor"[10] in the state of Idaho.

VanderSloot spent more than $100,000 on independent advertising on three winning judicial campaigns, two for Idaho Supreme Court and one for district judge in Bonneville County.[8] VanderSloot and Melaleuca were financial supporters of the PAC Concerned Citizens for Family Values.[52][106][107][108] The PAC ran ads targeting incumbent Idaho Supreme Court Justice Cathy Silak during her 2000 re-election campaign against challenger Daniel T. Eismann.[107][108] The ads alleged that if Silak were re-elected, same-sex marriage and "partial-birth abortion" could have become legal in Idaho.[109][110]

In 2002, VanderSloot and Melaleuca contributed more than $50,000 opposing the election bid of Democrat Keith Roark, a former Blaine County prosecutor, for Idaho Attorney General. The contributions included a $35,000 donation to Roark’s Republican opponent, Lawrence Wasden, and a $16,500 donation to Concerned Citizens for Family Values, an organization run by VanderSloot, to pay for attack ads against Roark in Eastern Idaho.[111] That year, VanderSloot and Melaleuca also donated $7,000 towards Republican Dirk Kempthorne’s 2002 gubernatorial campaign .[112]

In 2006 VanderSloot and his wife Belinda donated nearly $16,000 through the PAC Citizens for Truth and Justice, and via direct payments for ads opposing the reelection of Idaho 7th District Court Judge James Herndon, a Democrat, in a three-way race against challengers Darren Simpson and DaLon Esplin.[113][114] Ads criticizing Herndon also aired on radio stations run by Riverbend Communications, owned by VanderSloot and his wife Belinda.[113]

In 2010 VanderSloot funded two PACs that launched last-minute ads against Idaho 2nd District Judge John Bradbury, a Democrat, during his electoral run for state Supreme Court against Republican incumbent Justice Roger Burdick.[115][116][117][118] VanderSloot donated $19,000 to the PAC Idaho Citizens for Justice[119] and financed the PAC Citizens for Commonsense Solutions.[120] Idaho Secretary of State Ben Ysursa announced that the PACs were fined $1,900 collectively for failing to appoint a certified treasurer prior to accepting contributions from VanderSloot and for failing to disclose large expenditures for its ads before the election, as required by law.[116][117]

LGBT issues

VanderSloot's stances on certain issues of interest to the gay community have drawn criticism from journalists, commentators, and gay-rights advocates.[13][52][92][121][122][123][124][125]

In 1999 VanderSloot sponsored billboards around Idaho asking "Should public television promote the homosexual lifestyle to your children? Think about it!”[121] in reference to It's Elementary, a 1999 PBS documentary exploring how four schools dealt with homosexuality.[1] VanderSloot's wife Belinda donated $100,000 to the Proposition 8 initiative to rescind gay marriage in California,[10][52][123][126][127] and volunteers used Melaleuca's call center after hours to persuade California voters to support the measure.[128] VanderSloot's efforts and his wife's donation drew criticism from the Human Rights Campaign.[123]

In 2006, VanderSloot issued two critical statements[129][130] regarding a series of investigative articles[131][132] by journalist Peter Zuckerman in the Idaho Falls Post Register about incidents of child molestation by a Boy Scout director in the Grand Teton Council.[133] VanderSloot took out two full-page advertisements in the Post Register in which he challenged aspects of Zuckerman's stories and devoted several paragraphs to establishing that Zuckerman was gay.[8][85][121][122] One of the advertisements stated that "Much has been said on a local radio station and throughout the community, speculating that the Boy Scout’s position of not letting gay men be Scout Leaders, and the LDS Church’s position that marriage should be between a man and a woman may have caused Zuckerman to attack the scouts and the LDS Church through his journalism. We think it would be very unfair for anyone to conclude that is what is behind Zuckerman’s motives."[129][134] An analysis by Glenn Greenwald in Salon asserted that "the ad absurdly sought to repudiate the very 'speculation' about Zuckerman which it had just amplified."[52] A local Idaho Falls news source quoted VanderSloot's response to Greenwald: "Contrary to what Glenn Greenwald suggests, we defended Peter Zuckerman and his motives. Anyone would have to intentionally twist the truth into a pretzel in order to suggest we either outed Peter or bashed him for being gay. We did the opposite."[127]

Part of another advertisement said that:

One strange aspect of the original story, last year, was that the Post Register had assigned a gay-rights advocate, Peter Zuckerman, to be the ‘investigative reporter’ on the story. There is nothing wrong with having homosexual reporters, but since the Boy Scouts’ policy of not allowing homosexual men to be scout leaders has produced so much anger against the scouts from the homosexual community, it seems that if the Post Register had wanted a fair and balanced story on the Boy Scouts, they would have assigned a reporter who did not have a personal ax to grind.[130]

Various sources said that VanderSloot's advertisement outed Zuckerman, including television host and political commentator Rachel Maddow[124] Glenn Greenwald in Salon magazine,[52] the editorial page of the Boise Weekly,[135] Post Register editor Dean Miller[122] and Zuckerman.[136] VanderSloot denied the charge, saying that had attempted to defend Zuckerman's motives, that Zuckerman had already posted his sexual orientation on a public website, and that a local radio show and the community had been discussing the fact;[127] Post Register editor Dean Miller reported that Zuckerman's sexual orientation had been known only by Zuckerman's family and a few of his close friends and colleagues,[122] and in a May 2012 TV interview, Zuckerman disputed VanderSloot’s contention that Vandersloot's actions did not constitute outing.[121]

VanderSloot has stated that "gay people should have the same freedoms and rights as any other individual."[137] and that he supports equal rights for gays, but believes that the definition of marriage is a union between a man and a woman.[138]

Defamation lawsuit threats

According to Rachel Maddow, the National Journal. the Electronic Frontier Foundation, and the online magazine Salon, VanderSloot has threatened defamation lawsuits, copyright infringement and similar legal action against critics and outlets that have published critical views, including Maddow, Forbes magazine, lawyer Glenn Greenwald, Mother Jones magazine, and Idaho independent journalist Jody May-Chang.[52][92][124][127][139][140][141]

In January 2013, Vandersloot filed a defamation lawsuit, seeking nearly $75,000 in damages, against Mother Jones magazine, alleging that the magazine depicted him as a "gay-basher" in a February 2012 article titled "Pyramid-like Company Ponies Up $1 Million for Mitt Romney" and in two tweets promoting the article. At the time, the magazine's co-editor-in-chief, Monika Bauerlein, responded that Mother Jones stood by its reporting and that she had not received official notification of the lawsuit.[142][143][144]

Philanthropy

Each year since 1992, Melaleuca has organized the Melaleuca Freedom Celebration, in Idaho Falls.[145] The event is the largest Independence Day fireworks display west of the Mississippi.[146][147][148] VanderSloot also put on the largest fireworks show in Minnesota history in 2002.[149][150]

In 2003, VanderSloot founded the Melaleuca Foundation, a private 501(c)(3) non-profit corporation.[151] The Melaleuca Foundation has been a financial contributor to the Santa Lucia Children's Home (Hogar Santa Lucia), an orphanage in Quito, Ecuador.[152] In 2005, VanderSloot flew to Baton Rouge to deliver supplies to shelters after Hurricane Katrina and helped three displaced families with transportation issues.[153] In 2007, VanderSloot's company Melaleuca received the Salvation Army Others Award for helping with relief efforts following Hurricane Katrina.[154]

In 2012, it was announced that VanderSloot would be funding, via the VanderSloot Foundation,[155] the new American Heritage Charter School, a K-12 charter school scheduled to open in Idaho Falls in 2013.[16][17][18] The school, described as “a patriotic choice for parents” with a focus on “individual freedoms and free market economics,” is modeled after the North Valley Academy in Gooding Idaho, and bases its curriculum on the Core Knowledge Program established by E.D. Hirsch.

Awards

In 1998, VanderSloot received the Idaho Business Leader of the Year award from Idaho State University.[156][157][158] In 2001, he was awarded the Ernst & Young Entrepreneur of the Year Award for the U.S. Northwestern region.[24][37][159] He was inducted into the Idaho Hall of Fame in 2007[160][161] and received the Idaho Hometown Hero medal in 2011.[162][163]

Personal life

Vandersloot resides in Idaho Falls, Idaho with his wife Belinda VanderSloot (née Boyock),[164] whom he married in 1995.[24] Together they have fourteen children:[24] six from Frank VanderSloot’s two prior marriages, and eight from Belinda VanderSloot’s first marriage.[8] VanderSloot was previously married to Kathleen VanderSloot (née Zundel) and to Vivian VanderSloot, his second wife.[165]

See also

References

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