Gubernatorial candidate Dick DeVos and his dad, Amway co-founder Rich DeVos, have been busy trying to douse the fire Guv Jen lit in Monday's debate regarding the DeVos family's investment in Alterra Health Care, a chain of old-age homes. Jen asked Dick why he hadn't publicly disclosed his interest in Alterra, which collapsed in bankruptcy after several government investigations into charges that its staff was abusing residents. Dick replied that he no longer had any holdings in the defunct company and that when he did he was nothing but a passive investor owning less than one percent of the company's stock.
Immediately after Monday's debate the facts began coming out about the true relationship between the DeVoses and Alterra. Although the DeVoses, including Dick, didn't have direct ownership of a significant number of shares of Alterra, they held bonds convertible into 40% of the company's stock. The Securities & Exchange Commission defines the ownership of such an option as having control over the company. Nevertheless, both DeVos Jr. and Sr. disputed that definition in the media this week insisting that they had no control of Alterra. So let's give them the benefit of the doubt on that one. That still leaves unexplained by the doubletalking duo the fact that the DeVoses appointed four of the directors of Alterra's corporate board who had the right to veto any decision made by the other directors. Plus the chairman of Alterra's board was the same fella who runs RDV Corp., the DeVos family's investment management company.
However, you slice it, Dick wasn't straight with the voters in Monday's debate when he passed off his holdings in Alterra as a tiny fraction of the company's stock. That was an omission of fact that amounted to a lie. The follow-up statements by Dick and his dad are no better. They claim that their family had no control over Alterra to correct the abuses at its old-age homes, because they only had an option to convert their bonds into stock and didn't have actual ownership of it. Well, folks, what is left unsaid by the doubletalking duo is that they chose not to exercise that option to take direct control and stop the abuse that was occurring. Of course, that assumes they even had to exercise it to have effective control of Alterra, and remember their control of four veto-empowered directors plus the chairman of the board.
So these half-truths don't give me a lot of confidence that Dick is telling us everything when he said he never knew about the abuse at Alterra until recently. But maybe that's true. I find it difficult to believe that even a family that made its fortune conning ordinary people into a Ponzi scheme would be so heartless as to make money off of a company whose employees were physically and sexually abusing helpless old men and women suffering dementia. Furthermore, the various state investigations into the abuse at Alterra old-age homes concluded that the knowledge of abuse had not been communicated to corporate headquarters. Yet, that really doesn't let Dick off the hook, because those investigations were wrapped up while the DeVoses held their controlling stake in Alterra -- not afterwards.
So, either Dick hadn't a clue about a MAJOR scandal in Alterra's operations that prompted government investigations in at least four different states or he lied about his knowledge of it because he and his family chose not to act while in the position to do so to fix the scandal. At the very least Dick is a lousy businessman who couldn't keep safe an important investment his family had made (after all, every dime they had in it got flushed in Alterra's bankrupcty). Worse, he is a liar covering up his heartless pursuit of a buck at the expense of abused elders -- and still a lousy businessman because he lost everything anyway.
Either way, it doesn't speak well of Dick's self-proclaimed business acumen to pull Michigan out of its economic funk.