Ackman Promised Former Herbalife Employer $3.6 Million To Become Whistleblower

Tyler Durden's picture

"I will pursue Herbalife to the end of the earth," is the threat Bill Ackman made and the hedge fund manager acknowledges spending more than $20 million in a lobbying and media campaign against the health product company. But on the heels of his non-front-running non-insider-trading transactions in the Allergan deal, details about the Herbalife whistleblower's "deal" raise more questions about ethics. Giovanni Bohorquez has now been named as Ackman's inside-man and the $3.6 million secret deal he will receive for spilling inside information about Herbalife's actions is raising significant questions about conflicts of interest. Having flatly denied being paid, "I'm not getting any benefit," during an on-camera ABC interview, ABC now reveals that Ackman agreed to the deal after Bohorquez balked at going public because he feared his disclosures could make it difficult for him to find work at an executive level.
It seems $3.6 million promptly relieved any fears of not being able to get a job
.

 

Via ABC News,

In his year-long campaign against the embattled Herbalife company, Wall Street hedge fund manager Bill Ackman secretly promised a disgruntled former company executive as much as $3.6 million over 10 years if he lost his job after providing information to government investigators and the media.

 

...

 

“It was the right thing to do,” Ackman told ABC News.

 

...

 

The agreement between Ackman and the former executive, Giovanni Bohorquez, was signed in June 2013 but required both sides to keep it confidential.

 

Two months later, the New York Times published a critical article about an alleged problem in 2011 at an Herbalife manufacturing plant based on internal documents provided by a person described only as a “former employee, who was granted anonymity out of fear of retribution from the company.”

 

Herbalife says the former employee is Bohorquez and that any alleged manufacturing problems were quickly and safely resolved.

But the story just gets more and more dirty...

In December, after extensive discussions with his attorney, Bohorquez agreed to be interviewed on camera by ABC News for a report about his experience inside the Herbalife executive offices.

 

During the on-camera interview, which Ackman’s public relations team helped to arrange and which Bohorquez’s attorney attended, Bohorquez flatly denied he was being paid anything by Ackman or receiving any benefit other than his travel expenses and lawyers’ fees and legal costs.

 

“I’m not getting a benefit,” he said.

 

Asked last week why he did not disclose the additional arrangement with Ackman during the interview, Bohorquez said his answers were truthful because he had not invoked the provisions at the time and so had not yet collected any money.

 

“I didn’t tell you because I was not looking at using it,” he said.

 

His lawyer, Stephen D. Alexander, said ABC News did not ask “the right questions” and should have assumed there was more to the indemnification arrangement for Ackman to cover legal costs than Bohorquez said.

Ackman's side of the story stinks too...

Ackman said he thought Bohorquez and his lawyer had disclosed the deal.

 

“He should disclose it, absolutely. Absolutely,” said Ackman.

 

But Ackman’s own public relations team also failed to reveal the secret arrangement prior to the interview.

 

...

 

Ackman said he agreed to the deal after Bohorquez balked at going public because he feared his disclosures could make it difficult for him to find work at an executive level.

 

“Giovanni could not afford to take the company on. We thought his story was important,” Ackman told ABC News. “Being a whistleblower is a very dangerous thing to do if you want to get a job."

Taken together, the total value to Bohorquez over 10 years could be as much $3.61 million.

Of course, the question is - how much is Carl Icahn willing to pay another employee to say it's all lies... or perhaps pay someone at Allergan to spill their guts?

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Duude's picture

The question not ought be did Ackman pay him, but can his statements be proven true. 

Occident Mortal's picture

This is pure Jordan Belfort style pump and dump manipulation the only difference being this is on the short side.

Divided States of America's picture

As expected....a goyim makes 3.6mn while his master reaps 36bn.

that jbag ackman basically made his entire years of gains in 2 dirty trades...Short Herbalife and Long Allergan calls.

 

 

Battleaxe's picture

This Ackman guy is a real Jackass. Send him to Guantanamo.

aVileRat's picture

Maybe I'm just a stupid rat, but getting a RICO and someone to flip is the only way you can hope to beat HLF. HLF IS a ponzi, on par with Oakmont for both how they have aligned they key gatekeepers on the payables fraud in addition to how they will bribe off lower end corporate employees to ensure product dumping never gets out of hand on third-market sites like ebay or craiglist.

Not sure why a ZOG wingnut will cheer on Snowden flipping his jump drive for a 22 million book deal but Gringo Jose flipping for 3.9MM for a private investigator (PSQ) doing FBI legwork on a RICO is such a bad thing.

Or whatever: lets go heap more praise on Putin who clearly never runs a black/off-grid political prison nor uses black ops PMC's to protect his oligarch buddy interests in proxy states.

 

 

toys for tits's picture

HLF is less of a ponzi than Prepaid Legal Services, which Ackman used to promote.  

At least with HLF you have a product, which may be of some benefit.

centerline's picture

Pull up a chair.  The show is really going to get interesting when they all start eating each other.

Blazed's picture

@knukles,

Too much inbreeding.

pods's picture

The poor moneychanger is upset because he lost out?

Anyone that has ever been in a place where shit is actually made knows that problems are a part of life. Big fucking deal.

So the company kept it private?  Fine, slam them.  But lets not pretend that in the actual real world that everything happens how the marketing people make you think it does.

There is a reason they say never watch sausage being made if you want to eat it.

If there was actual hiding of information that needed to be disclosed, whack them all you want.

But some pissed off moneychanger on the warpath because he didn't make his killing does not even register on my Give a Fuck-o-Meter.

Sorry. 

pods

Quus Ant's picture

What you say makes sense in a sensical world, but what if that isn't where we live?  Imagine a world..... where truth only comes to light when differing moneyed interests collide and an uncalloused palm is adequately greased....  The SEC, the DOJ and the PIG don't whack members of the club..... and heroes come at a premium.

Now, who's up for sausage?

larryj's picture

Ackman, just another rich prick using his money to gain influence.  They all do it.

Bosch's picture

And you would too, if you had it. 

q99x2's picture

Save him from his tortured life. Arrest him.

knukles's picture

Turn him over to Billy Graham and Harry's Reed ...
Give the man some learnin' he'll think was from Hell 

Squid Viscous's picture

Not sure why but I have this overwhelming urge to bitch slap this Ackman guy

Bosch's picture

For me, it is the eyebrows.  Not sure why either. 

eddiebe's picture

The fish rots from the head.

pupdog1's picture

There is a reason that Moby Dick is a classic.

Comte d'herblay's picture

I'm missing the point here. 

If the whistleblower is not enriched to the point of never having to apply for another job, why would he blow the whistle?

Right now, my GF is going thru the agony of having not paid tribute to the phrase:   "If you shoot at the king, you must be certain to kill the king".

They can't fire her ----for a while at least----but little by little they are exacting upon her the 'death of a thousand small cuts' and she must leave her 12 yr career if she has any hopes of being the exemplary employee she was for 10 yrs.

THIS, after being trained for a week in what to do if you see something detrimental to the corporation that is being done by your supervisors.

Duude above is right.  Can the statements be proven true.

Otherwise this piece seems like it's sympathetic the corporation rather than the one who discloses material shenanigans.  Shame, Tyler.

NoDebt's picture

This piece is NOT sympathetic to the corporation.  Herbalife is a Ponzi scheme and everyone knows it, yes even on ZH.  But Ackman, so far, has been the only person crazy enough to think that being right is the same as having a bullet proof vest (and has generally had his head handed to him on that bet).  

I have no idea how this is going to turn out, but I know that Ackman's actions in this matter have NOTHING to do with ridding the world of a corporate ponzi scheme 'for the greater good'.

centerline's picture

Exactly.  In fact, it just demonstrates how the world really works from the perspective of Wall Street.  Ackman just got his tit caught in the wringer.

At some point these guys are going to turn on each other in a big way.  Wall Street versus corporations versus politicians.  Is bound to happen as the system unwinds.  That is when it really gets interesting.

The Tylers are doing a good job of showing us stuff like this because it is the logical progression towards the "scam" of the millenia being exposed.

Seize Mars's picture

Comte d'herblay
Lawyer up dude, fast. Just go into a labor lawyer and throw all the cards on the table. You bet your ass her managers are. I've been there, it's miserable. But it's always ok to do the right thing.

buzzsaw99's picture

a little bribe never hurt anyone

NoDebt's picture

Gimme $3.6MM and I'll say whatever you want me to.

buzzsaw99's picture

damned straight and i'll say it two trading days before your puts expire. ;)

thatthingcanfly's picture

I sure hope there are some invisible sarc tags here.

I hope I'm not the last Boy Scout who is offended by the thought of accepting cash in exchange for testimony.

Comte d'herblay's picture

There is nothing wrong with accepting cash for CORROBORATING testimony.  If there is "no reasonable doubt" proof, cash is fine. Nothing immoral, reprehensible, or unethical about it.

I wouldn't blow any whistle unless I have been paid so that I never have to work again. Otherwise, i'd be cutting my own throat.

You need to rethink this. And I'm an Eagle. 

thatthingcanfly's picture

I understand your point; but I do not agree with your conclusion that there is "Nothing immoral, reprehensible, or unethical about it."

It seems to me that financial rewards for providing testimony - direct, indirect, corroborating, whatever - sets up a fertile breeding ground for manipulation and dishonesty. While we are all different in our abilities to resist temptation, part of living an honest life is removing oneself from situations and circumstances where one might be tempted in the first place. Inserting myself in this example, I can imagine, with the promise of $3.6 MM, skewing my corroborating testimony in a manner that would benefit Mr. Ackman - subconsciously perhaps. To guard against that, I would refuse any money.

And becoming a whistle-blower is understood to be a risky venture, one that should only be taken as a last recourse, realizing that you might lose everything. So that argument is worthless.

I have rethought it though. Haven't changed my mind.

put_peter's picture

Wouldn't it be nice to but this Ackman guy behind the bars for life?

buzzsaw99's picture

members of the tribe don't do the jail thing

Stanley Kubrick's picture

An old mentor told me ages ago,

"Don't be disappointed when people sell you out -  what will disappoint you is just how low the price is".

So, what's the moral of the story? 

If you're gonna be a lyin' fucjktard, might as well be a $3M lyin fuckltard?  Sounds like this guy would make a beautiful congressman, don't it?

What a cesspool these fucks live in.

 

Colonel Klink's picture

I wish Ackman and I-con would just have a duel.  Put it on pay per view.  I'd pay to watch one of them die.

Divided States of America's picture

JEW-F-C pay per view

Headline fights:

Icahn vs Ackman

Bernanke vs Greenspan

Bill of Rights's picture

Georgia doing it the right way...

 

http://www.foxnews.com/politics/2014/04/23/georgia-governor-to-sign-bill-expanding-gun-rights/

 

Georgia Gov. Nathan Deal is expected to sign legislation Wednesday expanding gun rights in the state.

The bill, described by the  National Rifle Association’s lobbying arm as "the most comprehensive pro-gun reform legislation introduced in recent state history," expands the scope of public places where licensed owners are allowed to carry firearms. 

The bill makes several changes to state law. It allows those with a license to carry to bring a gun into a bar without restriction and into some government buildings that don't have certain security measures. It also allows religious leaders to decide whether it's OK for a person with a carry license to bring a gun into their place of worship.

Colonel Klink's picture

Wouldn't have thought it but looks like Georgia may be on my list now of places to live.

pods's picture

My question about this is why are we negotiating expanding rights we already have?

That is playing on THEIR ballfield.  I understand the pragmatism of all of this, but it still irks me to no end.

Who carries a gun should be up to the OWNER of the property in question, not the government.

And don't get me started on LICENSING for exercising rights.

WTF?  

Permit=Permission.

When I was under my parents' authority I asked PERMISSION to do certain things.  

Just reinforces the "rights come from government" meme and gets under my skin.

pods

Zerozen's picture

Not that I'm anti-gun or anything, but dudes carrying concealed weapons in bars strikes me as a bit weird. Guns and alcohol don't mix.

Cthonic's picture

Tell that to your friendly off-duty cop.

Colonel Klink's picture

Laws for thee, not for me.

youngman's picture

are bribes taxable...is that considered income....or just a gift.....lol

PlusTic's picture

real surprise, look at this guy, do you expect any less than this behavior?  i wouldn't mind 5 mins with him inside the cage for an mma "workout"...it would be hilarious hearing him cry and beg for me to stop popping his ligaments ;)

knukles's picture

Slugs are ligament deprived

SanfordandSon's picture

I would rather see him living next door to Bernie and enjoying his showers and spa time...

tradewithdave's picture

In terms of Blazing Saddles... Ethics are the new "Badges!"

kenezen's picture

A real lack of class1

kenezen's picture

A real lack of class!

Eastwood's picture

As another ZH commentor succintly said months ago "ahhh, American business".

Rising Sun's picture

Ackman is a fucking cartoon!!!!!!!!!