The Money ‘Flows Up’

Since pay is purely on commission, Mr. Smith, the association lawyer, said that only the best sellers survived and that about 20 percent of recruits left in less than a month.

Matt Ward, a former bookkeeper for several crews, said there were other reasons for the high attrition. “Money in this industry flows up,” Mr. Ward said. “It doesn’t trickle down.”

For about two years starting in 1998, Mr. Ward did bookkeeping for several crews with American Community Services, a company with several hundred sellers that is based in Indiana. It is owned by two of Mr. Ward’s brothers, LeVan and Albert Ellis, who declined to answer questions both over the telephone and sent by certified mail.

Mr. Ward said that while the company should be commended for sticking to its strict antiviolence policies, he left in 2000 after becoming uncomfortable with what he saw while he was keeping the books.

“The sales agents remain almost always in the red while the managers, car handlers and everyone else is in the black almost from the start,” Mr. Ward said between shifts at a restaurant in downtown Washington, where he now waits tables.

Of the more than 400 sales agents whose accounts Mr. Ward said he handled, he estimated that fewer than 40 left the company having made money. The rest spent their earnings on the road or, more often, to cover their daily deductions for room expenses, gas and meals.

This is not a new criticism. In 1987, during the Congressional investigation of the industry, the Senate committee reviewed the records of one company and found that of its 418 sellers, 413 had finished the year in debt to the company, even though the company itself had reported large annual profits.