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The Money Machine behind the Fair Trade Curtain

In the movie the Wizard of Oz, Dorothy’s little dog Toto pulls back a curtain to expose the real operator of the great and powerful wizard, a carnival huckster with a flair for theatrics. Take a look at the web site of the “non-profit” Fair Trade Towns USA organization and you will see a group of pleasant looking folks, slick promotional materials and glossy pictures. What you will not see is a physical address and any links to their ownership, financial records or tax reports. Look through any of the charity and non-profit watchdog groups will not find them either. But with some effort it can be found that Fair Trade Towns USA and Fair Trade High Schools Colleges & Universities is the promotional arm of Fair Trade USA. So who is Fair Trade USA? Fair Trade USA is a DBA of TRANSFAIR USA. And who is TRANSFAIR USA? TRANSFAIR USA is an organization that generates the bulk of it’s revenues through it’s certifying of fair trade products.

Since 2007 their tax records and financials show they have generated over $30 million in revenue in fair trade certification fees and have financial accounts in the infamous Cayman Islands. The total income from all sources is just under $46 million dollars. The head of this rapidly growing empire is entrepreneur Paul Rice, a charismatic Yale and Berkeley educated business expert who is transforming a passion for politically instituted social justice into a money making juggernaut. Paul has pocketed $1 million in salary and bonus from this venture alone during the same period. Increasing the fair trade brand beyond the original niche market is well underway. The man is brilliant. He has created a network of “boots on the ground” volunteers, by systematically recruiting those who already have a religious or political predisposition into working for free. An important component of the growth plan includes enlisting church connected faith based volunteers and others to solicit unknowing and unwitting local politicians to allow them to use a city name to officially support fair trade certified products ostensibly to help 3rd world small farmers.

A perfect example of the snooker game is a mail out catalog from Green Mountain Coffee Roasters. The very same corporation that donated $1 Million to Fair Trade Towns USA and also has a series on infomercials going nearly every day to sell their vast line of goodies. These products are not made in La Mesa, are not unique to La Mesa, and are sold through infomercials/catalog/online/ and large retailers in direct competition to the few La Mesa locally owner stores selling the products.

The fact is that Fair Trade Towns USA is a marketing tool for a social justice agenda and several major for-profit corporations. That this will also greatly grow their Chicago labor union style skim off the top product certification scheme at the same time is just good business on their part. Maybe in the future our newest city council member/lawyer will help negotiate for a piece of the action for our city coffers (better than the $6,500 paid to the Catholic Archdiocese of Los Angeles) before giving away the name of La Mesa on one elected officials personal political whim. Figures are not yet posted but 2012 looks to be the biggest $ year ever for TRANSFAIR USA as cities like La Mesa jump headlong on to the bandwagon without realizing they are being taken for a ride.


One comment on “The Money Machine behind the Fair Trade Curtain

  1. Craig S. Maxwel
    November 17, 2012

    Good summary.
    For an full treatment of the mind-set behind this phenomenon, read Thomas Sowell’s, The Vision of the Anointed: Self-Congratulation as the Basis for Social Policy.

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This entry was posted on November 17, 2012 by .
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