Frank L. VanderSloot

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Frank L. VanderSloot
Melaleuca CEO Frank Vandersloot.JPG
Born(1948-08-14) August 14, 1948 (age 66)
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
Born(1948-08-14) August 14, 1948 (age 66)
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] In 2013, VanderSloot was listed by Business Insider as the wealthiest individual in the state of Idaho, with an estimated net worth of $1.2 billion.[10]

VanderSloot served as a national finance co-chair for Mitt Romney's presidential campaigns in 2008 and 2012.[11][12][13] He contributed $1.1 million and helped to raise between $2 million and $5 million for Romney’s 2012 campaign.[14][15] 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.[16] He was also the primary financier of the American Heritage Charter School in Idaho Falls.[17][18][19]

Early life and education[edit]

VanderSloot was born on August 14, 1948[20][21] to Peter Francis (Frank) VanderSloot (1913–1982) and Margaret May Christensen Sindberg-Woodley VanderSloot (1915–2004).[22] The family lived in Sheridan, Wyoming and Hardin, Montana before moving in 1949 to Cocolalla, Idaho, where they lived on a ranch. The elder VanderSloot worked as a painter for the Northern Pacific Railway.[23][24][25]:57 Frank VanderSloot graduated from Sandpoint High School in 1966.[26] 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][27]

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][25]:58[28][29] He earned an associate’s degree in business at Ricks College in Rexburg, Idaho, and in 1972, graduated from Brigham Young University with a bachelor's degree in business administration.[25]:57[30]

Career[edit]

ADP and Cox[edit]

After graduating from college, VanderSloot worked for 912 years at Automatic Data Processing in three cities. He first worked in sales and marketing before moving to general management and operations.[24][31] He left ADP to work as regional vice president at Cox Communications in Vancouver, Washington.[25]:58[32]

Oil of Melaleuca, Inc.[edit]

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][25]:58[33] VanderSloot said "the company was a mess" when he arrived. 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.[8][25]:58, 60 Half the legacy distributors from Oil of Melaleuca left after Melaleuca, Inc., was formed (below).[1]

Melaleuca, Inc.[edit]

In 1985, VanderSloot founded Melaleuca, Inc.,[25]:58 a multi-level marketing company that sells environmentally friendly[34][35] nutritional supplements, cleaning supplies, and personal-care products,[1][14][36][37] and he has been president and chief executive officer ever since. Melaleuca operates internationally, with U.S. operations centered in Idaho Falls, Idaho,[38] and Knoxville, Tennessee.[39] Customers buy directly from Melaleuca's website[40] or retail locations[41] and "independent marketing executives" receive commissions from Melaleuca for each purchase made by people they refer and by people their customers refer,[25]:60 through seven "referral generations".[42] The company refers to this arrangement as “Consumer Direct Marketing," a term it has trademarked.[43][44][45][46]

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.[47][48] According to a 2004 article by Phyllis Berman, 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."[1] This resulted in "a new policy that reduced payments to those who didn't either bring in new converts or help others do so."[1] As of 2004, the company's revenue had grown at a compound annual rate of 12 percent.[1] The company has large international operations, and 25 percent of its revenue comes from Taiwan, Korea, Japan, Australia, New Zealand, and the United Kingdom.[1] The company reported in 2005 that one in 60 Taiwanese households purchased Melaleuca products monthly.[49] Melaleuca reported gross sales in excess of one billion dollars in 2011 [50] and $1.13 billion in 2012.[51] In Idaho Falls, Melaleuca has a local workforce of about 2,000 employees.[25]:60

VanderSloot established a research and development department that evolved into a 20-person staff, including three PhD chemists.[1][52] The company's current portfolio consists of more than 350 products.[53][54] 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.[41][55]

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 titles change and they make more money.[56]

Melaleuca is a member of the United States Direct Selling Association (DSA),[57] a trade association. In 2008, VanderSloot began a three-year term as one of the eight members of the DSA's board of directors.[58] In December 2009 VanderSloot and his wife contributed $10,000 to the DSA’s political action committee (PAC).[59]

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.[60] 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.”[11][14][37][61][62][63] By September of that year, "officials in both states cleared the company's marketing plan and blamed 'renegade' distributors for any problems."[64] 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."[63] In 1997, the U.S. Food and Drug Administration sent Melaleuca a warning letter for "false and misleading" claims about two of its supplements.[11][37][61][65][66]

Other businesses[edit]

Ranching[edit]

In 1993, VanderSloot founded Riverbend Ranch, which is one of the largest purebred ranches and largest commercial cattle operations in the United States.[3][9][67] The ranch received 21 awards at the Utah State Fair between 1995 and 1997.[68][69][70] The Ranch runs a genetics and breeding program[67] 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.”[71] Riverbend Ranch has operations in three other states,[72] including Fort Ranch Quarter Horses, a horse ranch in Promontory, Utah.[73]

Natural Guardian Land Holdings[edit]

In 1994, VanderSloot created Natural Guardian Limited Partnership (doing business as Natural Guardian, LLC, as of 2011),[74] a holding company that owns or leases approximately 1,500 acres of land in Wolverine Canyon, Bingham County, Idaho.[75]

Broadcasting[edit]

VanderSloot owns Riverbend Communications, a group of radio stations in Eastern Idaho.[76][77] He purchased the company from Bonneville Communications in 2006.[78][79] 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[edit]

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.[80] Kraft had operated the plant since the early 1920s.[81] 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.[82][83] 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.[84] In 1999, the facility netted $278 million in sales. The next year, VanderSloot sold his interest in the company to Suprema Specialties[82][85] after Beatrice broke its lease.[86][87] VanderSloot again promised that employees would keep their jobs.[88] In 2006, the factory, which by then had been renamed as the Blackfoot Cheese Company, was sold to Sartori Foods.[89]

Paving and construction[edit]

VanderSloot was the owner of HighStone (formerly Eagle Rock Construction; RBH Gravel; VIP Construction), an Idaho Falls-based asphalt construction and maintenance company.[90] HighStone’s projects included being the prime contractor on a $421,000 state government contract to repair a stretch of Idaho State Highway 33 in Idaho Falls,[91] as well as work on road repairs in Rexburg.[90] 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.[90]

Net worth[edit]

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.[92] In 2013, VanderSloot was listed by Business Insider as the wealthiest individual in the state of Idaho, with an estimated net worth of $1.2 billion.[10]

Public activity[edit]

Ethics[edit]

VanderSloot has made several public comments supporting strong corporate ethics.[93][94][95][96][97]

United States Chamber of Commerce[edit]

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

Taxation Task Force[edit]

In 1993, VanderSloot served on the Taxation Task Force of the White House Conference on Small Business.[98][99]

Campaign financing[edit]

Mitt Romney for President[edit]

VanderSloot was one of 47 finance co-chairs for Mitt Romney's 2008 presidential campaign and served under eight finance chairs.[100] He also served as a finance co-chair for Romney's 2012.[11][12][13][101] In 2012, VanderSloot’s companies contributed $1.1 million to the Restore Our Future political action committee, which was supporting Romney for President.[14] According to VanderSloot, he raised between $2 million and $5 million for the Romney campaign.[15]

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."[102][103][104][105] VanderSloot made a series of television appearances, in some of which he called for donations to Romney in protest of the list.[15] Around the same time, an individual associated with Democratic Party interests attempted to gain access to personal information about VanderSloot.[106] 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;[103][107] 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.[108]

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.[103][109] VanderSloot had not been audited in the thirty-year period before the Obama campaign listing.[110] 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.[103][111][112][113] Ultimately, the audits found no wrongdoing but VanderSloot paid $80,000 to defend himself during the audit process.[106][114]

A number of commentators expressed disapproval of the campaign's depiction of VanderSloot.[115][116][117][118][119][120][121][122][123] Three op-eds published by the Wall Street Journal criticized the campaign's treatment of VanderSloot and other top Romney donors.[109][124][125] The critiques, two of which were authored by Wall Street Journal contributor Kimberley Strassel, were disputed by television host Rachel Maddow,[126] Lewiston Morning Tribune editor Marty Trillhaase,[127] and David Shere of Media Matters for America[128] but were supported by the editorial page of National Review,[129] Joe Newby of the Spokane Examiner,[130] and Henry Reske of Newsmax.[131] After the election, Mitt Romney described the Obama campaign's treatment of VanderSloot as "a very dangerous and troubling development".[132] Tom McClintock complained about VanderSloot's treatment in a speech on the floor of the United States House of Representatives in May 2013[133] and Marco Rubio separately made a similar statement on the floor of the Senate.[134]

Idaho ballot measures[edit]

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.[135][136] 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.[137][138][139][140][141][142][143]

Idaho political and judicial campaigns[edit]

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.[144][145] VanderSloot has been a major donor to Idaho Republicans,[144][145] 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"[11] 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.[61][146][147][148] The PAC ran ads targeting incumbent Idaho Supreme Court Justice Cathy Silak during her 2000 re-election campaign against challenger Daniel T. Eismann.[147][148] The ads alleged that if Silak were re-elected, same-sex marriage and "partial-birth abortion" could have become legal in Idaho.[149][150]

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.[151] That year, VanderSloot and Melaleuca also donated $7,000 towards Republican Dirk Kempthorne’s 2002 gubernatorial campaign .[152]

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.[153][154] Ads criticizing Herndon also aired on radio stations run by Riverbend Communications, owned by VanderSloot and his wife Belinda.[153]

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.[155][156][157][158] VanderSloot donated $19,000 to the PAC Idaho Citizens for Justice[159] and financed the PAC Citizens for Commonsense Solutions.[160] 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.[156][157]

LGBT issues[edit]

In 1999 VanderSloot sponsored billboards around Idaho asking "Should public television promote the homosexual lifestyle to your children? Think about it!"[161] 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,[11][61][162][163][164] and volunteers used Melaleuca's call center after hours to persuade California voters to support the measure.[165]

In 2006, VanderSloot took out two full-page advertisements in the Idaho Falls Post Register[166][167] criticizing a series of investigative articles[168][169] by journalist Peter Zuckerman in the Post Register concerning incidents of child molestation by a Boy Scout director in the Grand Teton Council.[170] The advertisements caused media controversy for allegedly outing Zuckerman,[8][108][161][171] drawing criticism from television political commentator Rachel Maddow,[172] Glenn Greenwald in Salon magazine,[61] the editorial page of the Boise Weekly,[173] Post Register editor Dean Miller,[171] and Zuckerman himself.[174]

The first advertisement stated that Zuckerman had "declared to the public that he is a homosexual" in an article for Point South, and that the local community and radio station had been "speculating" that Zuckerman's sexual orientation may have motivated him "to attack the scouts and the LDS Church" because of the Scouts' ban on gay scout leaders and the Church's opposition to gay marriage.[166][175] The advertisement stated that "it would be very unfair for anyone to conclude that is what is behind Zuckerman’s motives"; 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."[61] A second advertisement suggested that Zuckerman, as a "gay rights advocate" and "homosexual reporter," had "a personal ax to grind" because of the Scouts' ban on gay scout leaders.[167]

VanderSloot denied that he had outed Zuckerman, saying that he had attempted to defend Zuckerman's motives, and repeating that Zuckerman had previously publicly disclosed his sexual orientation, which was already being discussed in the local community.[164] Post Register editor Dean Miller stated that Zuckerman's sexual orientation had been known only by Zuckerman's family and a few of his close friends and colleagues,[171] and Zuckerman himself also disputed VanderSloot’s contention that the advertisements did not constitute an outing.[161]

VanderSloot has stated that "gay people should have the same freedoms and rights as any other individual,"[176] and that he supports equal rights for gay people, but believes that the definition of marriage is a union between a man and a woman.[177]

Legal action[edit]

On February 17, 2012, columnist Glenn Greenwald of Salon wrote that, over time, VanderSloot had threatened to bring what Greenwald termed "'patently frivolous' lawsuits against his political critics" and had made threats of "expensive defamation actions" against sources (including Forbes, Mother Jones and Salon) who had published critical views of his public statements regarding gay rights and Melaleuca's business practices; he had previously made similar demands of local political blogs in Idaho.[61][178] On her September 28, 2012 show, Rachel Maddow stated that VanderSloot and his attorneys requested that she remove from Web archives a show in which she reported and commented on his alleged outing of Zuckerman; she said that he also objected when she then publicised that request on her show.[126]

In January 2013, VanderSloot filed a defamation lawsuit against Mother Jones magazine, seeking nearly $75,000 in damages, 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.[179][180][181] As of April 2013, the case was in its early stages.[182][183]

In May 2014, VandelSloot filed a defamation lawsuit against former Idaho Falls Post-Register reporter Peter Zuckerman, alleging that he had “knowingly and maliciously publishing false statements depicting VanderSloot in national media as a gay-basher.”[184]

Philanthropy[edit]

Each year since 1992, Melaleuca has organized the Melaleuca Freedom Celebration, in Idaho Falls.[185] The event is the largest Independence Day fireworks display west of the Mississippi.[186][187][188] VanderSloot also put on the two largest fireworks shows in Minnesota history in 2002[189][190] and 2003.[191]

In 2003, VanderSloot founded the Melaleuca Foundation, a private 501(c)(3) non-profit corporation.[192] The Melaleuca Foundation has been a financial contributor to the Santa Lucia Children's Home (Hogar Santa Lucia), an orphanage in Quito, Ecuador.[193] In 2005, VanderSloot flew to Baton Rouge to deliver supplies to shelters after Hurricane Katrina and helped three displaced families with transportation issues.[194] In 2007, VanderSloot's company Melaleuca received the Salvation Army Others Award for helping with relief efforts following Hurricane Katrina.[195]

In February 2012, VanderSloot purchased a property from the Idaho Falls School District 91 for $121,000. He renovated the building on the site, the New Sweden School, which had been listed on the National Register of Historic Places, and is donating the use of the entire parcel to the American Heritage Charter School, whose "most distinctive aspect" is a "patriotic and entrepreneurial curriculum," according to administrators.[17][18][196] VanderSloot is supporting the school.[18][19] The school was inaugurated August 2013.[196]

Awards[edit]

In 1998, VanderSloot received the Idaho Business Leader of the Year award from Idaho State University.[197][198][199] In 2001, he was awarded the Ernst & Young Entrepreneur of the Year Award for the U.S. Northwestern region.[30][46][200] He was inducted into the Idaho Hall of Fame in 2007[201][202] and received the Idaho Hometown Hero medal in 2011.[203][204]

Personal life[edit]

VanderSloot resides in Idaho Falls, Idaho with his wife Belinda VanderSloot (née Boyack),[205] whom he married in 1995.[30] Together they have fourteen children:[30] 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.[206]

References[edit]

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