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Ackman vs. Herbalife: HLF Spends 10x in Washington Lobbying

Stocks in this article: HLF

Herbalife meanwhile spent $1.34 million on lobbying in 2013, according to OpenSecrets, including $950,000 from the company's lobbying group Herbalife International of America. The company also has spent lobbying money with Downey McGrath Group, Ogilvy Government Relations, the Podesta Group, Glover Park Group and International Business-Government Counsellors.

In addition to lobbying money, Herbalife's political action committee has generally increased its spending on elected officials. The PAC donated $61,478 to elected officials in 2011, $51,993 in 2012 and $106.600 in 2013.

Herbalife's PAC has been active in making direct contributions to legislators such as Sen. Orrin Hatch (R., Neb.) and Rep. Xavier Becerra (D., Ca.) who have shown support for the company's domestic and international businesses. Rep. Becerra asked that the Congressional Hispanic Caucus not sign on to a caucus-backed letter to the FTC. The company's PAC also been a donor to senators and members of Congress on committees that oversee the Federal Trade Commission and the Food and Drug Administration. Herbalife sells health and nutrition products that fall under the purview of both agencies.

Pershing Square and particularly Bill Ackman have also made political contributions. OpenSecrets data shows that Ackman has donated the maximum amount annually to the DSCC since 2007. Ackman also donated $20,000.00 to the Repbulican Senatorial Committee (NSRC) in 2012 and $75,800.00 to the Romney Victory Fund during the presidential election cycle of 2012.

In a recent article, The New York Times noted that Ackman's $32,400.00 donation to the Democratic Senatorial Campaign Committee (DSCC) came on April 30, the same day that Sen. Edward J. Markey (D., Mass.) won a primary to fill a Senate seat vacated by the appointment of John F. Kerry as Secretary of State. The gift came before Markey's recent calls for the FTC and SEC to look into Herbalife. Both the Senator and hedge fund deny any connection.

In June, the DSCC donated $45,400 to Markey's campaign, less than 1% of the over $10 million the campaign spent.

Pershing Square sought meetings with Edward Markey's staff, as the Senator investigated claims from his constituents that they have lost money with Herbalife. Bill Ackman and Pershing Square General Counsel David Klafter met with Markey's staff of Oct. 2, 2013 for less than an hour; however, Ackman has never directly met with Markey, a source familiar with the meetings said.

Herbalife also appears interested in meeting with Markey, now that the Senator is lobbying for a closer look at the company's business practices. "We received the letter from Senator Markey this morning and look forward to an opportunity to introduce the company to him and address his concerns at his earliest convenience." Herbalife said in a statement to The New York Times.

Ramping Up

Maybe the spending and political flash points are just getting started. In 2014, races across the country will decide whether or not Democrats hold onto their Senate majority, or whether they can wrestle control of the House of Representatives from Republicans. 

Pershing, however, doesn't make donations in exchange for political favors, or as a means to influence its Herbalife position, a source familiar with the fund said.

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