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Amid criticisms, Herbalife honored as top business for Latinos

Outside the Herbalife building in Torrance.
Outside the Herbalife building in Torrance.

Critics of Herbalife charge that the LA-based nutritional supplement company uses a pyramid scheme to exploit its overwhelmingly Latino base of salespeople.

But this week, LATINO magazine offered a starkly different opinion, listing the company in its index of the top 100 companies "providing the most opportunities for Latinos."

RELATED: Herbalife investigated by the FTC (Updated)

Herbalife celebrated making the "LATINO 100" with a press release. And spokesman Marco Gonzalez told KPCC that the honor "validates our work of economic empowerment and empowering Latinos." He said Latinos represent 60 to 65 percent of Herbalife's distributors who buy the company product to sell in their community.

But the company's critics argue that distributors end up stuck with product they can't move, and losing money. The Coalition for Humane Immigrant Rights of Los Angeles is among the organizations who have been calling for a federal investigation into Herbalife's business practices.

CHIRLA's policy and advocacy director Joseph Villela said based on the stories of Herbalife distributors, the company offers false financial hopes to working-class Latino immigrants.

"A lot of folks from the immigrant community who may not have legal status see this as an opportunity to drive a Mercedes, to buy a house, and they buy into this idea," Villela said. "And the question is, is that misleading? Do people have a chance to make it there?"

Villela said LATINO magazine was free to honor whomever it wanted, but questioned whether it had considered the allegations against the company.

Herbalife has been on the defensive since billionaire hedge fund manager Bill Ackman made a $1 billion short bet more than a year ago that the company would be shut down by federal regulators for running a pyramid scheme.

Both Herbalife and Ackman have appealed to Latino organizations with donations. CHIRLA, for its part, has not taken any money related to this issue, Villela said.

The financial investment news site ValueWalk questioned whether one of Herbalife's donations helped it make the LATINO 100. It pointed to a document acquired by the New York Times that showed the company had made a donation to the magazine in the last year, along with other Latino-centric organizations such as the Hispanic Chamber of Commerce and Voto Latino.

The company had not been included in the magazine's inaugural LATINO 100 list last year.

Herbalife spokesman Gonzalez said that lists like the LATINO 100 are not "paid advertisements."  Herbalife, he said, was aware that the magazine had been compiling a list and shared information about the company. He said he did not know who contacted who first.

LATINO magazine, a quarterly publication based in Austin, did not respond to a request for comment.

Gonzalez pointed out the LATINO 100 honor comes on the heels of recognizing Herbalife's senior vice president Ibi Fleming in January as one of its top 25 "Corporate Elite" leaders.