GUILT BY ASSOCIATION? NO, GUILT BY DIRTY ROTTEN DEED

In the comment section of our last article, our esteemed colleague Nick De Leeuw of www.RightMichigan.com thought we might be unfairly tarring alleged billionaire Rich DeVos with a tenuous connection to convicted felon John Sims.  I suggested that Nick should follow the links in that article to get the full story.  I then looked it over including the links, and I can see how one might think we've been pronouncing guilt by association.  To really get the full story, a reader needs to follow a couple of links to get the news on how DeVos and other hospital officials raided the Butterworth piggy-bank during the mid-90's and then deterred a federal investigation into that self-dealing.

Consequently, our reference to DeVos in connection to Sims was a bit opaque, especially for our newer readers.  Moreover, seeing that the media never reported this news, and the healthcare rate-payers of River City are still picking up the tab for the looting of the hospital, this story doesn't get told enough.  So we're re-posting below what we first reported on August 11, 2005.

 

THE FIXER, PART III

[Note:  This is the third in a four-part series about Charlie McCallum, a local attorney involved in the transactions that lead to the dissolution of four Grand Rapids institutions:  Autodie, Butterworth Hospital, Amway, and Old Kent Bank.]

THE PIGGY BANK

Charlie McCallum and his wife Lois Temple had a good thing going at Butterworth Hospital.  They were among the select few who had their hands on the cash that flowed through River City’s premier hospital.  Charlie was chairman of the hospital’s board of directors, and when he wasn’t doing that he was the corporate secretary.  And just to make sure that he got at least one big plum out his “public” service, he was Butterworth’s corporate legal counsel.  That gave him control over which law firm got the hospital’s legal work.  Charlie made sure the lion’s share went to his law firm Warner Norcross & Judd L.L.P., where he was managing partner.  And guess who the managing partner assigned the Butterworth account to?

But Charlie got other plums beyond a monopoly on Butterworth’s legal work.  After he assisted Amway-founder Rich DeVos to devour Butterworth in the Spectrum Health merger in the middle ‘90s, he got a big prize.  Charlie was made chairman of Spectrum’s lucrative health care insurance concern, Priority Health.  He held that post until retiring two years ago.

However, Charlie wasn’t above nickel-and-diming the hospital for personal gain either.  Wife Lois was a Butterworth executive assigned to one of its for-profit subsidiaries in the late ‘80s.  That subsidiary was Butterworth Occupational Health Inc.  While Charlie was in charge, the hospital shoveled about a million dollars in cash a year from its reserves into BOH to keep it limping along as a cush sinecure for his wife.  Although Charlie had the hospital book that transfer of funds as an investment (by reflecting BOH as an asset in the hospital reserves), the subsidiary never acquired anything with the capital flowing into it.  Lois and her crew expensed out every dime, especially on salaries.  BOH was actually a cipher as an asset, even though the hospital reserves showed it as a valuable asset worth every dollar of the total of eight million dollars transferred to it during Charlie’s tenure in Butterworth’s boardroom.

A Culture of Self-Dealing

BOH was a worthless chit in the hospital reserves.  But then it had uses other than giving Charlie’s wife a comfortable job.  As told in Part II of this series, BOH was a convenient vehicle for bailing out one of Charlie’s business clients.  It was all part of the self-dealing, especially through land transactions, by those who had power over the hospital’s purse or influence with those who did.  Butterworth Hospital was their piggy bank to fund whatever deals hospital insiders could cobble together to pass the smell test.  As Llody Zwarensteyn, president of the Alliance for Health, had once remarked laconically upon reviewing Charlie’s shenanigans with BOH:  “Butterworth has a culture of self-dealing.”

Charlie and Lois were not the only ones cashing in.  Butterworth doctors also did so.  Frequently their deals involved getting options on land they knew the hospital needed for expansion, or they might form a group to develop property that the hospital would agree to lease.  One notorious doctor who got his bankroll from Butterworth Hospital was Jeffrey Askanazi.  In a very strange deal, Butterworth’s board of director approved an undocumented loan of one million dollars from the hospital reserves to Askanazi, who would then use the funds to open a string of pain clinics north of Grand Rapids.  The idea was that the pain clinics would serve as feeders into the Butterworth health care system in a region where the hospital was not getting many patients.  Everything went south when Askanazi killed a patient in 1996 at one of Butterworth’s affiliates, United Memorial Hospital in Greenville, and the feds began investigating.  Eventually Askanazi was convicted in U.S. district court on Medicare fraud.

However, Butterworth neatly separated itself from Askanazi’s problems.  (Not too difficult when the Grand Rapids Press won’t cover the story because its publisher is serving as chairman of the hospital.)  One broken deal wasn’t going to put an end to Butterworth’s use as a piggy bank by River City’s elite.  Indeed, Charlie was going to help a new bigshot client make Butterworth into a huge piggy bank to help work out that client’s huge financial problems.

DeVos Takes the Reins

In 1993 Amway-founder Rich DeVos replaced Charlie as chairman of Butterworth Health Corporation.  First thing on DeVos’s agenda was to merge Butterworth, the area’s number one hospital, with Blodgett Memorial Medical Center, the area’s number two hospital, into a new organization – i.e., today’s Spectrum Health Corporation.  Doing so would create a combined reserve of nearly one billion dollars under DeVos’s control.  Having control over the merged reserve was crucial to DeVos’s financial well-being, and Charlie put his law firm to work to make that merger happen.

Contrary to the typically fawning local media coverage of DeVos and his late partner Jay Van Andel, their Amway multi-level marketing empire was facing grave financial problems in the early ‘90s.  In fact, Amway never fully recovered and was eventually dismantled, with Charlie’s assistance, several years later.  (See Part IV of “The Fixer”.)  Briefly, the bubble burst for Amway’s Asian affiliates, which were set up as publicly traded companies on the Tokyo stock exchange.  These entities were in many ways proxies for the privately held mother company that DeVos and Van Andel had led everyone to believe was extremely profitable.

However, that was not so.  Amway had to admit that it overstated its revenues every year by 15-25% since its founding.  Indeed, the scandal twenty years ago involving Amway's Canadian subsidiary was not a tax dodge as commonly believed.  Instead it was a scheme to inflate revenues by booking the same sale twice. Anyone familiar with the current corporate scandals that have sunk Enron, Worldcom, Aldephia, and the like understands how this inflated the value of Amway, and by proxy, its Asian affiliates.  Thus, DeVos and Van Andel were facing huge liabilities as the price of the affiliates’ stock crashed to almost nothing.  On top of that the jig was up, at least in North America, on getting new marks to push Amway products.

As a consequence, Amway’s bankers forced the company for the first time in its history to take on an outside director.  By 1993, Amway was in a financial work-out.  But where would the extra cash come from to finance the work-out?  What new pools of capital could DeVos get his hands on?  As it happened, DeVos was chairman of Butterworth while his banker David Wagner was chairman of Blodgett.  Between the two hospitals were $850 million in reserves.  Merge those reserves, bring them under the control of DeVos, and maybe some of that money would find its way into investing in the multitude of real estate projects belonging to RDV Corporation, DeVos’s personal holding company, which in turn could help make Amway’s work-out payments to the bank.  So Charlie had a new mission:  Merge Butterworth and Blodgett hospitals into Spectrum Health Corporation.

Slaying the Dragon … Almost

The biggest dragon Charlie and his law firm had to slay to make the merger happen was the Federal Trade Commission.  Upon receiving notice of the Butterworth-Blodgett merger the FTC threw down the gauntlet:  No more mergers of the major non-profit hospitals in a region.  The FTC had concluded that previous non-profit mergers resulted in increased prices to healthcare consumers.  So in 1995 the agency went to the U.S. district court to request an injunction against the Butterworth-Blodgett merger.  Fortunately for Charlie, a sympathetic judge was assigned to the case, and he bought into the unsubstantiated notion that because Butterworth and Blodgett were non-profit organizations they would lack the ill intent to abuse their monopoly power once merged.  So, Charlie defeated the injunction.

Undeterred, the FTC appealed to the Sixth Circuit Court of Appeals in Cincinnati.  In 1996 the Sixth Circuit ruled against the agency.  So the FTC decided that it would use its own administrative court process to challenge the Butterworth-Blodgett merger.  No more sympathetic judges.  Charlie was faced with a real problem now.  This one he could not solve.  He had no way to stop the FTC's choice to pursue the matter through its own internal process.  But DeVos did.

The FTC was slated to conclude its investigation of the merger and send the case to its administrative court in September 1997.  That led to a flurry of activity involving FTC investigators nationwide.  Eventually they learned of Charlie’s conflicts of interests, the transfer of millions of dollars of hospital reserves to BOH (the subsidiary run by his wife), and the use of BOH to bail out his client Joe Spruit.  FTC investigator Joseph Lipinski consulted with the local U.S. Attorney’s office about these dubious relationships and transactions, and Assistant U.S. Attorney Thomas Gezon reported back to Lipinski that there was “evidence of self-dealing” at Butterworth.  If Lipinski could show how non-profit Butterworth Hospital was already being abused by those entrusted with its operation, he could then show the FTC administrative court that the Butterworth-Blodgett merger would simply create a larger organization to loot.  Thus, the good intent argument that prevailed in the U.S. district court and the Sixth Circuit would be defeated once and for all.

DeVos Buys a Favor

So, DeVos decided to shop for a favor.  As a bigwig in Republican politics, he thought he knew where to go.  In April 1997 DeVos and his wife gave the Republican National Campaign Committee a $1 million contribution, the biggest ever to a political party at that time.  It was more than five times amount that the DeVoses had contributed to the Republican party in the preceding five years.  Since then the DeVoses have not made any further large contributions to the party.  It was one-time event nowhere near any important election.  So what did DeVos get for his money?  The attention of a senator from New Hampshire, Judd Gregg.

Gregg was then serving as the chairman of the U.S. Senate’s Commerce Committee and working on the appropriations bill that would fund the FTC.  In July 1997 Gregg slipped into that appropriations bill at the eleventh hour and without debate a proviso that exempted, with some very slick language, the Butterworth-Blodgett merger from scrutiny by the FTC.  If passed the FTC’s administrative court would be prohibited from hearing the agency’s challenge to the merger.  Lipinski immediately protested Gregg’s heavy-handed maneuver.  Gregg threatened Lipinski that if the FTC made a stink about the proviso he would zero out all funding for the FTC's anti-trust division on the basis that it duplicated the work of the U.S. Justice Department.

That cowed the FTC, and in September 1997 the agency announced that it was dropping all challenges to the Butterworth-Blodgett merger.  DeVos then sent Gregg for the first and only time the maximum campaign contribution allowed by law.  In November 1997 the two hospitals announced their merger as Spectrum Health Corporation with DeVos at the helm.  Charlie then collected his reward as chairman of Spectrum’s Priority Health.  It was a big success for DeVos and Charlie, but there was still a lot of work to be done.  See Part IV for the Fixer’s next assignment.

[Click here for the last installment of "The Fixer". - The Editor]

[Note:  This is the third in a four-part series about Charlie McCallum, a local attorney involved in the transactions that lead to the dissolution of four Grand Rapids institutions:  Autodie, Butterworth Hospital, Amway, and Old Kent Bank.]

THE PIGGY BANK

Charlie McCallum and his wife Lois Temple had a good thing going at Butterworth Hospital.  They were among the select few who had their hands on the cash that flowed through River City’s premier hospital.  Charlie was chairman of the hospital’s board of directors, and when he wasn’t doing that he was the corporate secretary.  And just to make sure that he got at least one big plum out his “public” service, he was Butterworth’s corporate legal counsel.  That gave him control over which law firm got the hospital’s legal work.  Charlie made sure the lion’s share went to his law firm Warner Norcross & Judd L.L.P., where he was managing partner.  And guess who the managing partner assigned the Butterworth account to?

But Charlie got other plums beyond a monopoly on Butterworth’s legal work.  After he assisted Amway-founder Rich DeVos to devour Butterworth in the Spectrum Health merger in the middle ‘90s, he got a big prize.  Charlie was made chairman of Spectrum’s lucrative health care insurance concern, Priority Health.  He held that post until retiring two years ago.

However, Charlie wasn’t above nickel-and-diming the hospital for personal gain either.  Wife Lois was a Butterworth executive assigned to one of its for-profit subsidiaries in the late ‘80s.  That subsidiary was Butterworth Occupational Health Inc.  While Charlie was in charge, the hospital shoveled about a million dollars in cash a year from its reserves into BOH to keep it limping along as a cush sinecure for his wife.  Although Charlie had the hospital book that transfer of funds as an investment (by reflecting BOH as an asset in the hospital reserves), the subsidiary never acquired anything with the capital flowing into it.  Lois and her crew expensed out every dime, especially on salaries.  BOH was actually a cipher as an asset, even though the hospital reserves showed it as a valuable asset worth every dollar of the total of eight million dollars transferred to it during Charlie’s tenure in Butterworth’s boardroom.

A Culture of Self-Dealing

BOH was a worthless chit in the hospital reserves.  But then it had uses other than giving Charlie’s wife a comfortable job.  As told in Part II of this series, BOH was a convenient vehicle for bailing out one of Charlie’s business clients.  It was all part of the self-dealing, especially through land transactions, by those who had power over the hospital’s purse or influence with those who did.  Butterworth Hospital was their piggy bank to fund whatever deals hospital insiders could cobble together to pass the smell test.  As Llody Zwarensteyn, president of the Alliance for Health, had once remarked laconically upon reviewing Charlie’s shenanigans with BOH:  “Butterworth has a culture of self-dealing.”

Charlie and Lois were not the only ones cashing in.  Butterworth doctors also did so.  Frequently their deals involved getting options on land they knew the hospital needed for expansion, or they might form a group to develop property that the hospital would agree to lease.  One notorious doctor who got his bankroll from Butterworth Hospital was Jeffrey Askanazi.  In a very strange deal, Butterworth’s board of director approved an undocumented loan of one million dollars from the hospital reserves to Askanazi, who would then use the funds to open a string of pain clinics north of Grand Rapids.  The idea was that the pain clinics would serve as feeders into the Butterworth health care system in a region where the hospital was not getting many patients.  Everything went south when Askanazi killed a patient in 1996 at one of Butterworth’s affiliates, United Memorial Hospital in Greenville, and the feds began investigating.  Eventually Askanazi was convicted in U.S. district court on Medicare fraud.

However, Butterworth neatly separated itself from Askanazi’s problems.  (Not too difficult when the Grand Rapids Press won’t cover the story because its publisher is serving as chairman of the hospital.)  One broken deal wasn’t going to put an end to Butterworth’s use as a piggy bank by River City’s elite.  Indeed, Charlie was going to help a new bigshot client make Butterworth into a huge piggy bank to help work out that client’s huge financial problems.

DeVos Takes the Reins

In 1993 Amway-founder Rich DeVos replaced Charlie as chairman of Butterworth Health Corporation.  First thing on DeVos’s agenda was to merge Butterworth, the area’s number one hospital, with Blodgett Memorial Medical Center, the area’s number two hospital, into a new organization – i.e., today’s Spectrum Health Corporation.  Doing so would create a combined reserve of nearly one billion dollars under DeVos’s control.  Having control over the merged reserve was crucial to DeVos’s financial well-being, and Charlie put his law firm to work to make that merger happen.

Contrary to the typically fawning local media coverage of DeVos and his late partner Jay Van Andel, their Amway multi-level marketing empire was facing grave financial problems in the early ‘90s.  In fact, Amway never fully recovered and was eventually dismantled, with Charlie’s assistance, several years later.  (See Part IV of “The Fixer”.)  Briefly, the bubble burst for Amway’s Asian affiliates, which were set up as publicly traded companies on the Tokyo stock exchange.  These entities were in many ways proxies for the privately held mother company that DeVos and Van Andel had led everyone to believe was extremely profitable.

However, that was not so.  Amway had to admit that it overstated its revenues every year by 15-25% since its founding.  Indeed, the scandal twenty years ago involving Amway's Canadian subsidiary was not a tax dodge as commonly believed.  Instead it was a scheme to inflate revenues by booking the same sale twice. Anyone familiar with the current corporate scandals that have sunk Enron, Worldcom, Aldephia, and the like understands how this inflated the value of Amway, and by proxy, its Asian affiliates.  Thus, DeVos and Van Andel were facing huge liabilities as the price of the affiliates’ stock crashed to almost nothing.  On top of that the jig was up, at least in North America, on getting new marks to push Amway products.

As a consequence, Amway’s bankers forced the company for the first time in its history to take on an outside director.  By 1993, Amway was in a financial work-out.  But where would the extra cash come from to finance the work-out?  What new pools of capital could DeVos get his hands on?  As it happened, DeVos was chairman of Butterworth while his banker David Wagner was chairman of Blodgett.  Between the two hospitals were $850 million in reserves.  Merge those reserves, bring them under the control of DeVos, and maybe some of that money would find its way into investing in the multitude of real estate projects belonging to RDV Corporation, DeVos’s personal holding company, which in turn could help make Amway’s work-out payments to the bank.  So Charlie had a new mission:  Merge Butterworth and Blodgett hospitals into Spectrum Health Corporation.

Slaying the Dragon … Almost

The biggest dragon Charlie and his law firm had to slay to make the merger happen was the Federal Trade Commission.  Upon receiving notice of the Butterworth-Blodgett merger the FTC threw down the gauntlet:  No more mergers of the major non-profit hospitals in a region.  The FTC had concluded that previous non-profit mergers resulted in increased prices to healthcare consumers.  So in 1995 the agency went to the U.S. district court to request an injunction against the Butterworth-Blodgett merger.  Fortunately for Charlie, a sympathetic judge was assigned to the case, and he bought into the unsubstantiated notion that because Butterworth and Blodgett were non-profit organizations they would lack the ill intent to abuse their monopoly power once merged.  So, Charlie defeated the injunction.

Undeterred, the FTC appealed to the Sixth Circuit Court of Appeals in Cincinnati.  In 1996 the Sixth Circuit ruled against the agency.  So the FTC decided that it would use its own administrative court process to challenge the Butterworth-Blodgett merger.  No more sympathetic judges.  Charlie was faced with a real problem now.  This one he could not solve.  He had no way to stop the FTC's choice to pursue the matter through its own internal process.  But DeVos did.

The FTC was slated to conclude its investigation of the merger and send the case to its administrative court in September 1997.  That led to a flurry of activity involving FTC investigators nationwide.  Eventually they learned of Charlie’s conflicts of interests, the transfer of millions of dollars of hospital reserves to BOH (the subsidiary run by his wife), and the use of BOH to bail out his client Joe Spruit.  FTC investigator Joseph Lipinski consulted with the local U.S. Attorney’s office about these dubious relationships and transactions, and Assistant U.S. Attorney Thomas Gezon reported back to Lipinski that there was “evidence of self-dealing” at Butterworth.  If Lipinski could show how non-profit Butterworth Hospital was already being abused by those entrusted with its operation, he could then show the FTC administrative court that the Butterworth-Blodgett merger would simply create a larger organization to loot.  Thus, the good intent argument that prevailed in the U.S. district court and the Sixth Circuit would be defeated once and for all.

DeVos Buys a Favor

So, DeVos decided to shop for a favor.  As a bigwig in Republican politics, he thought he knew where to go.  In April 1997 DeVos and his wife gave the Republican National Campaign Committee a $1 million contribution, the biggest ever to a political party at that time.  It was more than five times amount that the DeVoses had contributed to the Republican party in the preceding five years.  Since then the DeVoses have not made any further large contributions to the party.  It was one-time event nowhere near any important election.  So what did DeVos get for his money?  The attention of a senator from New Hampshire, Judd Gregg.

Gregg was then serving as the chairman of the U.S. Senate’s Commerce Committee and working on the appropriations bill that would fund the FTC.  In July 1997 Gregg slipped into that appropriations bill at the eleventh hour and without debate a proviso that exempted, with some very slick language, the Butterworth-Blodgett merger from scrutiny by the FTC.  If passed the FTC’s administrative court would be prohibited from hearing the agency’s challenge to the merger.  Lipinski immediately protested Gregg’s heavy-handed maneuver.  Gregg threatened Lipinski that if the FTC made a stink about the proviso he would zero out all funding for the FTC's anti-trust division on the basis that it duplicated the work of the U.S. Justice Department.

That cowed the FTC, and in September 1997 the agency announced that it was dropping all challenges to the Butterworth-Blodgett merger.  DeVos then sent Gregg for the first and only time the maximum campaign contribution allowed by law.  In November 1997 the two hospitals announced their merger as Spectrum Health Corporation with DeVos at the helm.  Charlie then collected his reward as chairman of Spectrum’s Priority Health.  It was a big success for DeVos and Charlie, but there was still a lot of work to be done.  See Part IV for the Fixer’s next assignment.

[Click here for the last installment of "The Fixer". - The Editor]

Comments

[Nick]

Mr. Tingley,

Just on the original topic first... none of this additional material makes any sort of connection between the ATM scheme and the DeVos family. Or you. Or me. Or Santa Claus for that matter.

That was my point... you're just tossing in the name seperated five degrees. Not sure if there's something personal between you and the family or the organization or what the deal is but it's something you obviously feel very passionately about.

As far as this post, a few points.

You can view Richard DeVos' political giving here:

http://www.newsmeat.com/billionaire_political_donations/Richard_DeVos.php

You'll see that he's been a consistent and generous donor for years and years to many candidates and organizations.

But on the broader argument that somehow Richard DeVos needed to and DID coordinate a merger between Butterworth and Blodgett specifically to save Amway by using Spectrum to buy up prime downtown real-estate... where to begin.

First and most obviously, this is quite the scheme for a sick old guy to come up with, mastermind, coordinate, organize and implement. As you're no doubt aware, back in the late 90s, at the same time this nebulous conspiracy was allegedly taking place in the DeVos family back room the poor guy was hooked up to life support machines here and then waiting in Europe for a heart donor and transplant. Something he eventually received. And had to take the time to recover from.

You can read about that here:

http://en.wikipedia.org/wiki/Richard_DeVos

Second, and I guess even a larger point of contention... why on Earth would a grand evil profiteering scheme from a sick old guy who's family owned "all" of the prime real estate in the center city need to go to the trouble of pulling off a giant hospital merger, install himself as some sort of puppet master and cover everything up just to pull off a couple real estate deals?

No matter who headed up the merger, they'd have been looking for property in downtown Grand Rapids and guess who they would probably call one way or the other... RDV Corp. There was absolutely nothing to be gained with these alleged grand machinations. It doesn't even make any sense.

And beyond that, if everything the man does is aimed at extending his fortune and screwing the working man after and only after saving his company and his fortune from some sort of imminent collapse (as you allege) then how on earth do you explain all the charitable giving? The foundations? The gifts? The new Children's Hospital with he and his family pledging and giving TENS of MILLIONS of dollars themselves? The things you never even hear about on the news?

You can check out the extent of Rich DeVos's giving here:

http://foundationcenter.org/cgi-bin/ffindershow.cgi?id=DEVO003

He and his wife have given away over $45 MILLION in 2005 alone. $166 MILLION from 2001 to 2005.

Millions right here in the Grand Rapids area and millions to organizations and efforts completely unconnected to Grand Rapids. That’s a lot of money to be giving away for someone that supposedly has to put together complex schemes dealing with Grand Rapids real estate. As great as GR is, there certainly isn’t NYC kind of money in our real estate, either.

I suppose ultimately folks have to agree to disagree about Amway / Alticor as a business model but that's not what we're discussing here. These conspiracy theories, this one in particular, just don't hold any water.

Don't expect to change your mind, I'm not that naive, but I hope you'll see where another proud Grand Rapidian's coming from and how these accusations sorta look from the outside.

Thanks for taking the time to read.

We now return you to your regularly scheduled Local Area Watch news and commentary.

--Nick

[Grady]

Nick,

Guessing by all the evidence Bill provided, I'm going to side with L.A.W. on this one (the four part series he notes).

The chain of events is well researched and loaded with details and information not found on "pro-DeVos" web sites like you noted. Bill typically notes peoples names (Lipinski at FTC), public groups, involved businesses and corresponding legal documents to support his claims. I give credit that his articles on hot button issues like this aren't just "my feelings on things". It's real data we can sink our teeth into.

By the way, I'm in the legal profession and I can assure you, if any of these people in Bill's article felt they were being lied about or slandered, they could have went after him legally. They have the power and the money to do so. They could have crushed him and ultimately, shut him down. There is a good reason they left him alone. To pursue him was to open a can of worms in the public eye they didn't want opened. All the good, bad and ugly would have come out. Best to let Bill share information on places like this site and laugh him off as a nut case. Or is he?

As for your funny challenge of how can this sick, poor man and his family be bad and still find it in their hearts to give away millions all in the name of charity? It's very easy when you get to use other peoples money to start the gravey train. DeVos and friends get tax breaks galore, insider dealings and have ample money funneled their way through schemes such as this in their arsenal of public deception. When you get cash this way (not the old fashioned way of working for it), there will be ample dollars left to give away. All in the name of charity. Aren't they great? I'm sure the website you provided proves well the DeVos level of "giving". I only wish there was a website that would show his level of "taking" as well.

You can like the man all you want personally, Nick. That's your call. Insider information such as L.A.W. shares shows another side to Mr. Gift Giver Galore. It will be up to people like us to decide what we think as well.

Score please.

Bill, one.

Nick, none.

[The Executive Director]

Hi, Nick.

You say, "These conspiracy theories, this one in particular, just don't hold any water."

Notably you have not shown any factual contention in the article to be incorrect, and you won't. My sources are public records, news reports, and contacts in federal law enforcement. So no, you're not going to change my mind, because I'm on top of my facts. Furthermore, as a businessman for the past twenty years, I understand the implications of those facts far better than DeVos's usual financially-illiterate lefty detractors.

Your entire defense of DeVos rests upon his charitable giving. What you overlook, Nick, is that such giving isn't so charitable if he is getting a financial return from it. When DeVos donates money and realizes income or a capital gain as a consequence of that donation, it is in effect a capital investment. Furthermore, by structuring that investment in the form of a charitable donation, the return on that investment is further enhanced by the extent that the "donation" is tax deductible.

So such "giving" doesn't impress me. When I donate money, it's with no strings attached. I'm not looking to profit on the back end of some deal. Moreover, the amount DeVos has donated over the past five years isn't all that much, assuming Forbes Magazine has his net worth correctly calculated. If so, it's at less than five per cent of his net, or under one per cent a year.

In light of this, if you want to call DeVos's "charity" just smart business, fine. Then that's what the Amway P.R. machine should be calling it too while advising the public of the benefits DeVos expects to accrue from investing in our local public institutions.

To wrap this up, let me be clear, Nick. I am not taking you to task for your loyalty to the DeVoses. I think that's admirable. Nor do I think you're wrong to challenge me. I wish more people would care enough about the subterranean deal-making that goes on this town to speak up about the players one way or another. Plus I like the way you always inject some humor into these things.

However, you are conservative with a good head on shoulders, so I do think you should pay a little closer attention to how many of our local Republican icons are quite happy to exploit their influence over our public institutions for personal gain. (Indeed, what transpired in the Senate to put through the hospital merger should trouble any conservative.) They undercut the political case conservatives need to keep making to the voting public for smaller, more efficient government when they have their hands in the cookie jar.

Regards, Bill

[Suze]

I don't care if you are republican, democrat, libertarian or alien. If you cheat the public, you cheat us all. Charity isn't charity if it isn't given away from the goodness of your heart, not what you are going to get out of it later (tax deduction, avenues to other money, influence and power and so on).

Frankly, the whole situation smells bad. I don't have to dislike the guy to understand that.

[The Executive Director]

Hi, Grady.

Thanks for the thumb's up. You said you are in the legal profession. I appreciate your public comment on this, because I have had to discuss this and other corruption involving the local bigwigs with a number of attorneys here in town who have routinely confirmed the corruption, given me a pat on the back for going public with it, and yet stay resolutely zip-lipped about it themselves. (Of course, this problem isn't just with the attorneys in River City.)

Consequently nothing much changes in River City. Until more of us who are IN THE KNOW speak out about the crap that is going on, it'll keep piling up. It is incredible that the story I reported in this article, as well documented as it, had absolutely no traction with the local media although the Butterworth-Blodgett hospital merger was hardly without controversy here in town. But that's symptomatic of the "Grand Rapids way", in which everyone goes along to get along with the bigwigs.

Regards, Bill

[The Executive Director]

Hi, Suze.

I agree that it doesn't matter which side of aisle you are on to be unhappy with the way Rich DeVos operates. My complaint about DeVos's detractors from the left is that they too often complain about him only because he is a rich businessman, which is no crime. So they then fail to grasp the real corruption behind many of his transactions. Similarly I have a complaint with his supporters on the right, who too often give DeVos a pass because he is on their team.

Regards, Bill

[Bridget Dupont-Tingley]

Hello Nick,

Thanks as always for your input at our site.

Although I concur with Bill on the analysis of The DeVos family, I still respect your position to support him. I remember you helped on his campaign and have personal feelings along with public feelings on this man and his legacy. YOu have every right to support him, but don't discount facts just because they don't fit the "image" or "profile in courage" you have granted him due to being in close proximics to him.

Like it or not, facts are facts. This article has plenty of them.

Hello Grady,

Thanks for picking up on the fact that when our E.D., Bill, posts in-depth articles like this one, he does his homework first. His postings are never knee jerk reactions just because he doesn't like or agree with someone. When you point a finger of blame and ultimate guilt at a public official or even someone in the private arena, one must be careful to get it accurate and right.

The results may not look good to some, but the truth always comes out. We stand behind the research done and the report Bill has provided to our readers.

We appreciate your thoughts and ideas on this piece.

Hello Suze,

You hit a bullseye on that one.

It doesnt' matter about party affiliation, wrong is wrong and right is right. We aren't so partisian in our politics that we are not able to stand back and acknowledge when a wrong is done. Whomever does it.

And yes, charity must be done for the right reasons. Most people do contribute because they know they are helping out someone for the pure good of assisting those less fortunate. We don't do it for the name we get on a building, the praise at a conference, awards for our greatness, write ups in magazines and so on. That's ok, some need those accolades. The rest of us just keep giving quietly even if it's never recognized because it's simply the right thing to do.

Great comments everybody!

Regards All,

Bridget Dupont-Tingley
Editor
Local Area Watch

[Nick]

So that went pretty much exactly as I expected. Just a couple of responses before I go my merry way and agree to disagree.

Right out of the box, thanks for certifying my conservative bona fides, even with a little bit of a backhand. But just to be clear, I never stated that I was defending Rich DeVos because he’s a conservative and I’m a conservative. Never even alluded to it. Politics have nothing to do with this… not one bit.

Now, onto some of the points you raised… and I’m just going to run through a few things here…

Grady--I’m not personally of the opinion that the simple act of Bill writing out a story and dropping in names constitutes “evidence” and a “chain of events” that is “well researched and loaded with details.” If so, where is the actual evidence for statements like “Indeed, the scandal twenty years ago involving Amway’s Canadian subsidiary was not a tax dodge as commonly believed.” When articles like this:

http://query.nytimes.com/gst/fullpage.html?res=9505E0D6143BF934A35751C0A962948260

clearly show that indeed the “scandal” involving Amway’s Canadian tax settlement was just that...a tax settlement. But if you’re really into checking out chains of events that are well researched and loaded with details and information found on other web sites and that drop lots of names, public groups, involved businesses, and corresponding legal documents, definitely check out http://www.911truth.org/. They’ve got similar chains of evidence and causality.

Second, I don’t know when Newsmeat, Wikipedia, and FoundationCenter started qualifying as “pro-DeVos”...if they are it’s certainly news to me. I guess I was under the mistaken impression that Newsmeat simply reported FEC filings, Wikipedia is an Encyclopedia that anyone can edit, and FoundationCenter makes private foundations’ annual IRS filings digitally accessible. Very silly of me, as that’s all obviously very slanted data.

Third, the whole idea that because an individual doesn’t sue or pursue other legal options if they may in fact be slandered means ipso facto that they have something to hide is just silly.

Example: “Grady steals money from nursing homes and hits old ladies on the head when doing it. Grady hasn’t sued me yet, which means he/she has something to hide and doesn’t want all the good, bad, and ugly to come out.” Overall, the argument that is essentially “well if I’m/he’s lying they’d sue me/him” is really pretty lame when thinking about the state of public discourse.

Over the last several years I’ve watched some of the most vicious stuff ever lobbed by folks at people that I know and respect, 99.9999% of it I absolutely know is without a grain of truth. The whole concept that you or I as an individual aren’t really going to be held responsible for whatever poison we might inject into the public arena, unless the person harmed by it feels so injured as to fire up the lawyers and sue, is deeply injurious to the people maligned, discourse in general, and, I would argue, our own hearts as people in relationships with others.

As for the idea that “they have the power and money” to “shut him down,” that’s the sort of paranoia that I can’t quite even wrap my head around. Sorry they’re all up in your head and watching you with their cameras, man. There might be helicopters too. And those creepy spider things like in Minority Report.

Bill, for a factual contention to the article, see one example above. Fundamentally though, it’s pretty difficult to give factual contention when all the “facts” assembled are simply statements you make as an individual. For instance, you state that “DeVos and Van Andel were facing huge liabilities” and “Amway’s bankers forced the company for the first time in its history to take on an outside director,” to pick a couple of “facts” that are provided with absolutely no documentation to back them up, despite your claimed sources. So I’m sorry for not taking you at your word, but your version of events doesn’t jive at all with my review and searches of the events on record, as revealed through about five minutes spent on Google.

Regarding DeVos’ charitable giving, I suggest a review of those IRS filings. DeVos must be a one heck of a smart evil business genius (as opposed to your run of the mill eveil business genius) because following your explanation of his giving, he’s obviously figured out ways to make money off things like the $4+ Million he gave to Ada Christian School, or the $3+ Million he gave to Bethany Christian Services (I hear that since the whole Madonna adoption in Malawi thing there’s big money in orphans), or the $6+ Million he gave to Calvin College, all of these from ‘01-‘05. I’d keep going but the alphabet is pretty long. And that’s only a five year period.

Also, I think you know better than to use a comparison between a Forbes net worth estimate and a snapshot total of DeVos’ giving through his foundation over a five year period as a way to say that he hasn’t given “all that much.” First, there’s the timeline. Five years does not equal the decades that DeVos has been giving. If you’re really into research I’m sure you can find all the foundation filings in the library. Second are the differences between the concepts of net worth, income, cash flow, and all sorts of other things that factor into how much a person might give at any particular time, all concepts that you, as a businessman, are surely very familiar with.

Finally, there hasn’t been much of an explanation given by you as to how it is that DeVos actually benefits from all your alleged subterranean downtown dealing other than something vague involving real estate and, as I said before, Grand Rapids real estate isn’t exactly blowing anyone away with the magnitude of it’s value and size of transactions.

We could go around and around and back and forth on this and how it relates to public policy, economic theory, and community development but when it comes down to it, when I see a person give millions of dollars to projects that bring more people, doctors, business, or other development into the community I think that’s a good thing. To look at that and only see shadowy motives and grand public deception is, in my opinion, a pretty big mistake.

Just saying.

Thanks for letting me respond.

--Nick

[Watching From The Sidelines]

(I'm not a lawyer) but I can't help but wonder if what the guy says above rings true? They could come after him and haven't. I guess it's hard to prove slander and defamation of character with the only evidence being the possible truth. I know if someone was saying these things about me, my family and my network of friends, I wouldn't take it lightly. Then again if they were right about me, it would be hard to fight in the public and keep details quiet that maybe I wouldn't want out.

Nick seems to be of the mind set that all the web site sources he sites “are the gospel truth”. It’s only the sources for the other side that aren’t good enough. I have to imagine not everyone is willing to be identified for turning in information on illegal dealings. Like all media, confidential sources count. I imagine some have been used on this series.

It seems to make sense that just cause The Press and some of our news stations like Wood, Wzzm, etc. won't report on dirty dealings does not mean it is not happening in our town. Some of these stories posted at his site are so interesting they would make for a good HBO series. You know, "Dirty Dealings In A Small Town", “Crooks, Crime & Corruption - a 4 part series”...

Regardless, I like this site and check in couple times a week. Keep doing what others won't.

[The Executive Director]

Nick,

You need to read more closely what I write. For example, I never said that every dime donated by DeVos was for a crass purpose. Also you don't seem to understand the Canadian tax scandal. Amway did not want to pay extra taxes on a double-booking of sales. Although the company wanted the benefit of inflating its revenues, it did not want to tax liability that goes along with that. So the tax scandal was a direct consequence of inflating revenues.

You say, "So I’m sorry for not taking you at your word, but your version of events doesn’t jive at all with my review and searches of the events on record, as revealed through about five minutes spent on Google."

I'm not sure why you're carrying water for the DeVoses, but do you really think your five minutes of internet research stacks up to the thirteen years of research we have done in court records, business filings, media reports, and interviews with public officials and law enforcement?

And plainly you don't know what you're talking about when deny the truth of statements I have made that are no secret at all. Amway's financial problems were public knowledge. The overstatement of profits and the outside director were reported in the news. The Senate proviso ending the FTC investigation of the hospital merger was national news. It's no secret about the big boost in the Amway Grand Plaza's value after the opening of the convention center that quadrupled DeVos's "donation" to to build it (which is still a loser for the taxpayers). It's certainly no secret about the income streams the Amway clans have flowing their way from the operation of the arena and the convention center.

So get on top of your facts, before telling me I don't know what I'm talking about.

You also say, "Over the last several years I’ve watched some of the most vicious stuff ever lobbed by folks at people that I know and respect, 99.9999% of it I absolutely know is without a grain of truth. The whole concept that you or I as an individual aren’t really going to be held responsible for whatever poison we might inject into the public arena, unless the person harmed by it feels so injured as to fire up the lawyers and sue, is deeply injurious to the people maligned, discourse in general, and, I would argue, our own hearts as people in relationships with others."

Now here you need to watch your step, Nick. Be careful of accusing me of making baseless accusations, injecting "poison" into the public arena, and not taking responsibility for what I say and do. You know not of what you speak. I've put my time, money, and reputation where my mouth is and have been repeatedly vilified for it. But that has not and will not deter me. The truth matters.

I have no problem, Nick, with any defense of the DeVoses you want to put forward. But have a care before suggesting I have been reckless with the truth.

Bill

[The Executive Director]

Another thing, Nick.

You indicate you have no patience with "vicious stuff" said of people you respect. What is your take on the back-stabbing of John Smietanka by the DeVoses in his run for Attorney General in 1998? What role did that play in getting an ex-cheerleader instead of a real cop into that office, thus giving Granholm the leg up she needed to win the governor's office in 2002?

Is it possible that the DeVoses tried to sink Smietanka because he was the U.S. Attorney who went after Amway in the Canadian tax scandal? Did the DeVoses ruin the political career of good public servant because he had faithfully executed the duties of his office to their detriment? Did they do it because Smietanka had helped to present the evidence of the Charlevoix Club self-dealing case to the U.S. Attorney's office just when the FTC was looking for such evidence to stop the Butterworth-Blodgett merger?

You see, Nick, this is just one example of the kind of stink that hangs around the DeVoses. Nothing but politics in this instance, so nothing that's unlawful. But it does demonstrate a lack of character that is the true "poison" that has been injected into our local public arena.

Bill

[Nick]

Oh, maybe you're right... I just went back through some of those links again and tracked down photos of Rich DeVos BEFORE he went to England for that heart transplant and AFTER he came back and it's so obvious. The man was body snatched in Europe and replaced with a member of the illuminati!

Don't know how I'd missed it all this time!

But seriously, it's been a trip. I think you and I are likely going to have to agree to disagree on this particular issue. I think you're all wet (soaking) and you think I'm naive. I don't see either one of us moving anytime soon.

But God Bless the United States and freedom of expression.

--Nick

[Bridget Dupont-Tingley, Editor, Local Area Watch]

Hello Nick,

I am disappointed to see that you have become winded after only two rounds of kicking boxing the issues with Bill.

It's an interesting comparision to see your five minute research program to gather additional input via renowed sources like Wickipedia (I'm a little unsure if you were serious that's all the research you really did or not???) versus our esteemed Executive Director Bill's thirteen years of data gathering from personal interviews, FOIA requests, court records, city records, IRS records, police and government feedback, etc.

You can certainly pull back if you feel overwhelmed with the possiblity of not being able to best Bill on this issue after you strip out personal feelings of like or dislike. Bill knows the facts of this family inside & out - the real family - not the angels of mercy portrayed by the media, favorable web sites and places that quote facts based upon what the family gives them to publish.

Since you are not privy to the number of powerful people in law enforcement, government positions, business leaders and more who have approached Bill off the record and admitted to us in private that what he has discovered is the truth, we can afford the luxury of understanding your inability to consider and believe different than what you do now.

There are always going to be people who refuse to see a crime - even if it's committed right in front of them. Look at mothers who say, my baby didn't do it, even though they drove the get-a-way car. Oh well, you can't win them all. Fortunately, we can publish these articles with confidence we are on track with what Bill has gathered for over a decade now. Whether people in this city will believe what we share, is up to them.

Regards,

[The Executive Director]

FYI for L.A.W. readers,

Regarding the idea that Rich DeVos's heart transplant in 1997 prevented him from having any role in the events we have reported, consider the following ...

DeVos was chairman of Butterworth Hospital starting in 1993 and from that position was the prime mover of its merger with Blodgett that was consummated in November 1997. In fact, the merger was the first thing on DeVos's agenda. Since then he has continued on as a board member of the merged entity, Spectrum Health.

When DeVos was allegedly too ill in 1996-97 to be seriously involved in these events, he testified in U.S. District Court in support of the merger, made (what was at the time) a record political contribution to the Republican National Campaign Committee, made a special political contribution to Sen. Judd Gregg (R-NH) of midnight proviso fame, and appeared in public to promote and then celebrate the merger.

Furthermore, by this period of time, DeVos had in place an experienced and trusted team of family members and top managers who could execute his decisions when he was too ill to do so himself and even make decisions on his behalf in accord with the policies he had laid down.

So, we know that DeVos's heart transplant in 1997 didn't stop him from playing an active role in events around that period of time, let alone during his entire stint on the hospital board from 1993 to the present.

Your Executive Director

[The Executive Director]

Hi, Nick.

You wrote, "But seriously, it's been a trip. I think you and I are likely going to have to agree to disagree on this particular issue."

That's OK. We're still comrades in arms on all the important issues.

Regards, Bill