Citizenre: Proof by Negation

There's been a lot of talk in the Blogosphere lately about a company called Citizenre, which plans to implement a quasi-new way of marketing solar photovoltaic panels for home owners. The Business plan calls for a rent system in which Citizenre owns the setup, but the buyer pays for the electricity at or below his/her current utility rates, with a guarantee of the same price for the life of the contract. In addition, the company is utilizing a MLM sales force to reach possible customers.

Some have expressed concern that the business model doesn't add up, and that the secretive aura around the company is a sure fire sign of a scam. Rather than go into the details of a business model that I cannot claim to have seen (nor can any of it's critics) I will go into the other arena; evaluating Citizenre as a possible scam. I am well aware that this Company is the cause of a lot of controversy lately, and I invite you to share any comments on this post, but at the same time I urge everyone to read this post in its entirety before typing a single word. Ultimately it will be your choice whether to believe in this company or not, but because you have the privilege of making such a choice, it is also your responsibility to get your information straight first. As Mark Twain once said; "Get your facts first, and then you can distort them as much as you please."

DISCLAIMER: I am a independent direct seller for the Citizenre ReNU system. However, as of this writing, I have not made a cent in this pursuit, nor have any other sales associates up to this point.

The Direct Selling Association is an organization of over 200 companies that that manufacture and distribute goods and services sold directly to consumers. The mission statement of this association is as follows:

"To protect, serve and promote the effectiveness of member companies and the independent business people they represent. To ensure that the marketing by member companies of products and/or the direct sales opportunity is conducted with the highest level of business ethics and service to consumers."

On the DSAs public website there is an extensive page for potential sales people warning against the risks of pyramid schemes and the legality of them. They define a pyramid Scheme as

"Pyramid schemes are illegal scams in which large numbers of people at the bottom of the pyramid pay money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from payments of others who might join later. For example, to join, you might have to pay anywhere from a small investment to thousands of dollars. In this example, $1,000 buys a position in one of the boxes on the bottom level. $500 of your money goes to the person in the box directly above you, and the other $500 goes to the person at the top of the pyramid, the promoter. If all the boxes on the chart fill up with participants, the promoter will collect $16,000, and you and the others on the bottom level will each be $1,000 poorer. When the promoter has been paid off, his box is removed and the second level becomes the top or payoff level. Only then do the two people on the second level begin to profit. To pay off these two, 32 empty boxes are added at the bottom, and the search for new participants continues.

Each time a level rises to the top, a new level must be added to the bottom, each one twice as large as the one before. If enough new participants join, you and the other 15 players in your level may make it to the top. However, in order for you to collect your payoffs, 512 people would have to be recruited, half of them losing $1,000 each.

Of course, the pyramid may collapse long before you reach the top. In order for everyone in a pyramid scheme to profit, there would have to be a never-ending supply of new participants.

In reality, however, the supply of participants is limited, and each new level of participants has less chance of recruiting others and a greater chance of losing money."

In this same page, they make note of a disguised pyramid scheme;

"Some pyramid promoters try to make their schemes look like multilevel marketing methods. Multilevel marketing is a lawful and legitimate business method which uses a network of independent distributors to sell consumer products."

This wolf in sheep's clothing accusation is the one made most often against Citizenre. Certainly, Citizenre is MLM based in its sales method. The DSA presents 3 questions to determine a scam from a legitimate MLM. All three questions are first presented in there entirety. My analysis of Citizenre in regards to these are presented directly after.

1. How much are you required to pay to become a distributor?
   If the startup cost is substantial, be careful! The start-up fee in multilevel companies is generally small (usually for a sales kit sold at or below company cost). These companies want to make it easy and inexpensive for you to start selling. Pyramid schemes, on the other hand, make nearly all of their profit on signing up new recruits. Therefore, the cost to become a distributor is usually high. CAUTION: PYRAMIDS OFTEN DISGUISE ENTRY FEES AS PART OF THE PRICE CHARGED FOR REQUIRED PURCHASES OF TRAINING, COMPUTER SERVICES, PRODUCT INVENTORY, etc. These purchases may not even be expensive or "required," but there will be considerable pressure to "take full advantage of the opportunity."
2. Will the company buy back unsold inventory?
   IF YOU COULD BE STUCK WITH UNSOLD INVENTORY, BEWARE! Legitimate companies which require inventory purchases will usually "buy back" unsold products if you decide to quit the business. Some state laws and the DSA Code of Ethics require buy-backs for at least 90% of your original cost.
3. Are the company's products sold to consumers?
   IF THE ANSWER IS NO (OR NOT MANY), STAY AWAY! This is a key element. Multilevel marketing (like other methods of retailing) depends on selling to consumers and establishing a market. This requires quality products, competitively priced. Pyramid schemes, on the other hand, are not concerned with sales to end users of the product. Profits are made on volume sales to new recruits, who buy the products, not because they are useful or attractively priced, but because they must buy them to participate. Inventory purchases should never be more than you can realistically expect to sell or use yourself.

Response

1. To become an Independent Direct Seller for Citizenre requires not a cent of investment, nor a credit card number, nor a social security number. At this point, there is no way is which Citizenre has the ability to charge me without my consent, and has not asked me for any optional or not optional fees. In addition, no money is payed out to Direct sellers simply for signing up other associates; there is a matching bonus on a downline sale, but for the initial sign up, there is no bonus.
   Citizenre in fact exceeds the criteria that is assigned to legitimate MLMs. It charges nothing, nada, zip, zilch
2. This is entirely a moot point with Citizenre. Being a sales associate does not require purchasing any product.
3. Citizenre leases these systems through sales associates to consumers. Quality products, competitively priced is an understatement, the service is a guaranteed price lock for 25 years, and only a $500-$1000 security deposit is required. The DSA states that profits from pyramids are made by volume sales to new recruits, which is not the case for Citizenre; profits are made by monthly payments on the system.
   
   

So, at this point, we know that Citizenre does not display any of the warning signs of a scam from the prospective sales associates point of view. But some will still argue that they are trying to scam the consumer out of their money. This claim is often associated with a misinterpretation of the security deposit necessary to get a system, saying that the company is going to collect these checks and run. The problem with this accusation is that the customer only hands over the security deposit after a licensed franchisee of Citizenre has come to your home, designed the system, and had it approved by the customer. These franchisees will only begin visiting homes once the manufacturing plant is producing, by which time it will be quite obvious that this is not a scam.

The DSA also has a bit to say for customers that think they might be dealing with a scam, they list four central things to avoid. Once again, my analysis of Citizenre with respect to these items with follow after the entirety of the list.

1. Disparage other products or firms.
2. Confuse you, abuse your trust, or exploit your lack of experience or knowledge.
3. Try to make you cancel a contract made with another salesperson.
4. Falsely tell you they're taking a survey or you've just won a contest

Response

1. Citizenre has never, to my knowledge, attacked a competitor in the photovoltaic field at the corporate level. while some people may have had less than joyful experiences with rogue associates, the people at the top have displayed the utmost civility towards those who attack them. Citizenre presents itself as an alternative for those who cannot afford to purchase photovoltaics as a $40,000 investment that may or may not pay for itself.
2. This is neither performed nor advocated by corporate. In the training resources for being a sales associates, as well as the knowledge base, and repeatedly reiterated on the response forums is the need to maintain integrity and ethics. It is expressly forbidden to market the ReNU as a free product, and any sales associate that misrepresents the company intentionally is subject to reprimand and possibly termination.
3. In my time being a part of the sales associate community, I have not once seen evidence of intentional sales stealing. One of the things important to remember is that money isn't being payed out immediately to associates. As such, this wait serves to weed out many of the people who come simply to try and get rich quick, leaving mostly people who are participating for the proliferation of the solar industry and of green ideals in general. Because of this non-monetary focus, I have seen multiple times in which technological error has resulted in sales being credited to the wrong associate. In all instances, the associate who lost the sale was more pleased that one more person had "joined the solution" than they were upset by there lack of commission.
4. This simply isn't done by Citizenre.

Up to this point I have examined the entity as a whole, but that is not to say that there is not a personal component to this company; There are people at the top, and those people at the top have come under repeated attack, being called liars, cheats and worse. Because of these accusations, and because most scam perpetrators are repeats, I feel it necessary to examine the background of the people involved. What follows is what I have found regarding various top execs in the company. Please keep in mind that this is not guaranteed accurate: I do not hold a job as an investigative journalist or a PI, this is simply what I have found in my search. I will first present the biographical information provided by Citizenre for each of these persons, followed by whatever additional information I have obtained, and any inconsistencies in my research with the official information.

BIOS

David Gregg
CEO and President
Citizenre Bio:

"David Gregg, President and Chief Executive Officer, is a technologist and entrepreneur, who after a near two year investigation of the photovoltaic industry founded The Citizenrē Corporation in September of 2005. Since founding the Company, he has been responsible for the assembly of the Company’s executive team, the development of its financial transactions – most important of which is for the construction of the Company’s large-scale photovoltaic factory, and the general execution of the business plan.

Mr. Gregg’s focus is now shifting to directing and overseeing the pre-construction phase of the plant, the commencement of Research & Development activities, and the acquisition of customers in the residential, commercial, and industrial sectors.

Prior to taking his extended sabbatical, David was a brief partner in Sphere Concepts, LLC a web presence and web applications design house in San Diego, California. From 2001 to 2003, he was Head of Web Services and Content for PacCom Corporation – a multi-million dollar telecommunications company based in Los Angeles, California with electronics distribution and web services divisions. Preceding his role at PacCom, Mr. Gregg held several positions in the entertainment industry including Vice President – Strategic Planning for Extreme Entertainment and Vice President – New Content Development for Prestige, Inc.

David now leverages his experience and know-how in strategic planning, business development, and cross-domain application to bring a whole-picture approach to the PV industry. He is the Company’s principal representative to the industry’s main organizations (SEIA, ASES/ISES, SEPA, ACORE, and IREC), and hopes to impart the Vision of Citizenrē to the industry’s several stakeholders in an effort to make renewable energy a major player in our global energy mix."

My Take:

I Have not seen any information to contradict these claims, and have not found any evidence to show that Mr. Gregg has been involved in anything illicit or illegal pertaining to MLM scams or the like.

Robert Wills
CTO and Executive Vice President
Citizenre Bio:

"Dr. Robert Wills has been involved in the solar industry since 1982. He started as a PV systems installer and soon was distributing and repairing the leading edge inverters of the time (Heart Interface). In the 1990s, Rob founded Advanced Energy and developed many innovative inverter products for the solar market. He is a consultant to several RE companies (Plug Power, Beacon Power, and Southwest WindPower to name a few) on inverter development.

Dr. Wills is a highly experienced photovoltaic systems designer. A partial list of the projects that he has been responsible for includes: a 60 kW system in the Amazon; a 120 kW system (the largest then in Latin America) in Belize; a 120 kW system for the US Air force in Idaho; a 150 kW system for the US Army at the Yuma Proving Ground in Arizona; and grid-connected systems in the US ranging from 250W to 25 kW.

Prior to Dr. Wills’ involvement in the solar industry, he was an Electronics & Instrumentation Engineer for the U.S. Cold Regions Research and Engineering Laboratory, Hanover New Hampshire from 1981 to 1987. And from 1977 to 1980 Rob was a Glaciologist & Electronics Engineer for the Australian Antarctic Research Expedition, Mawson, Antarctica.

Rob comes to us with a B.E. (Electrical) from the University of Melbourne, Australia with first class honors, an M.E. and D.E. (Doctor of Engineering) from the Thayer School of Engineering, Dartmouth College, and is a member of many engineering organizations including the National Electrical Code, Code Making Panel 14 (Articles 690 & 692 - Photovoltaics & Fuel Cells); IEEE Standards Association – IEEE 929/1741/1547 (DER Interconnection); IEEE P1547.3 DER Communications – Chair of the Security Sub-Committee; Underwriter’s Labs STP, UL1741 (Photovoltaic Inverters); and the Advisory Board, Solar Energy International.

The role that Dr. Wills will play at Citizenrē is that of Chief Technology Officer. He will help guide our technology endeavors and will be instrumental in bringing about the realization of our overall vision to transform the global energy market."

My Take:

I have found nothing but corroborating evidence to support this information. There is no indication in any of my research that Robert Wills has been involved in anything nefarious.

Daniel TwoEagles
COO and Executive Vice President
Citizenre Bio:

"As Chief Operating Officer for Systems and Generation, Daniel TwoEagles oversees the development and operations of Citizenre installations. He also directs the development and growth of the franchise footprint to make certain that the franchisee network meets accepted business-development, training, and technical-support standards as well as all local and national compliance requirements.

Daniel TwoEagles has served as Director of Marketing and Sales at Beacon Power Corporation, where he directed the introduction of a new, power-electronics product line for photovoltaic installations. Before his appointment at Beacon Power, he was the Director of Business Development at Advanced Energy, a designer and manufacturer of conditioning, control, and monitoring electronics for the solar and fuel-cell sectors, where he was responsible for strategic planning, marketing, sales, support, and operations management.

Daniel TwoEagles also served as Business Director for Skyline Engineering, a provider of photovoltaic design and installation, a distributor for large-scale inverters and battery systems, and an integrating-commissioning agent for remote hybrid-power systems.

Daniel TwoEagles is a Phi Beta Kappa graduate of Southern Methodist University in Dallas and holds a Master’s degree from the University of Wisconsin in Madison. He is also the recipient of a Rotary Foundation Graduate Fellowship for International Understanding and a veteran of service in the United States Army."

My Take:
Once again, I have found nothing but corroborating evidence for the facts as stated by Citizenre. In addition, I have found multiple references to him as an environmental activist (mostly through articles that recognize his political work for Mike Kaelin, a House Representative for New Hampshire) which only boosts his reputability in my eyes (we are talking about solar after all).

Erika Morgan
Senior Vice President of Communications
Citizenre Bio:

"Erika Morgan is presently Executive Director of the Maine Energy Investment Corporation, a 501c3 nonprofit she founded in 2001 to speed Maine's transition to a post-petroleum economy. MEIC's work in the clean energy technologies of clean "green" power, biodiesel/biofuels and all forms of solar energy rely on the tools of public education, marketing and purchasing aggregations to bring willing clean energy customers more quickly to the clean technology options available to them today. In 2000, Ms. Morgan founded Maine Interfaith Power and Light, Inc., the first of now over-20 "interfaith power and light" programs across the country.

Erika will be transitioning to the Citizenre team over the next months. She is responsible for communications and our organization development. She specifically will be in charge of public relations and the policy work necessary to further the status and impact of renewable energy in our energy market. We are fortunate to have Ms. Erika as a member of our team.

Previous positions held by Erika include Public Policy Manager for the Northeast Energy Efficiency Partnership, Deputy Commissioner for the Maine Dept. of Environmental Protection, Deputy Commissioner of the Massachusetts Division of Energy Resources, and early on in her career, was the Supervisor – Solar Education Section for the Tennessee Valley Authority. Prior to TVA, Ms. Morgan was responsible for all public education in renewable energy for the Maine Audubon Society, including workshops focused on the Society's 1976 headquarters building, the first in Maine to be heated 100% with a solar-wood heating system.

In addition to her work in renewable energy, Ms. Morgan's career has also included lead roles as "change manager" in state governments and as management consultant for such firms as Goodmeasure, Inc., Ford Motor Company and many others. During this practice, she developed a particular focus on the marketing, strategic planning and organizational development challenges facing new environmental and clean energy companies including Constellation New Energy, CT Clean Energy Fund and Endless Energy Corporation. She received her BA (Biological Sciences) from Mount Holyoke College, and a Masters in Public and Private Management at Yale University. She is a contributor and author to several papers, and sits on numerous RE boards."

My Take:
I fear that I'm begining to sound like a brocken record; once again, I find no evidence of anything contrary to what is presented by Citizenre, and no nefarious doings.

Rob Styler
Senior Vice President of Direct Sales
Citizenre Bio:

"Mr. Styler brings a diverse and proven leadership to Citizenre and Powur. An Academic All-American and team captain of both track and cross country at UCSB, Rob went on to serve two years with the Peace Corps in Guatemala, where he was honored with "The Beyond War Award" by the United Nations. Returning to the U.S., Rob began his education in network marketing. Young and idealistic, he joined a small company in San Diego that later became "the fastest growing privately held company in America" for 1996, as ranked by INC Magazine. Equinox opened 400 offices and did $200 million in business in its fourth year and Rob developed into one of their top national trainers.

When Rob uncovered a lack of company ethics, he left and wrote a book about his experience (Spellbound, My Journey through a tangled web of Success). The book helped inspire a federal investigation, where Rob served as the lead witness for the government. Equinox was shut down and fined $50 million for consumer fraud. Rob went on to build several large sales organizations, serve at the highest levels of corporate management and was honored to serve on the board of the Multilevel Marketing International Association. He was also a bilingual consultant for Sheffield Resource Network and helped to structure several international companies. Rob was attracted to Citizenre because of the environmental vision for clean energy.

Mr. Styler is head of our direct sales efforts. It is his responsibility to inform and attract the residential consumer to our REnU program. As part of this effort, Rob is now being charged with ensuring that our sales force is well educated in the areas of PV Technology, Renewable Energy Policy, and the Electric Industry. This is instrumental to our Company and to the development of the Renewable Industry: as a young Company, this is a key concern of ours and we want to ensure that we develop a nationwide network of informed sales associates that help the industry as a whole. It is our Number 1 priority and will take center stage on our direct sales agenda."

My Take:
Here's where it gets interesting, people. Rob Styler, self addmitedly, participated in the multimillion dollar pyramid scam that was equinox, and ascended to the high levels of managment in this program. The problem with the arguments of those who would use this as an accusation against his ethics is what he did afterward. He quit, wrote a book, got published, and gave testimony against Equinox that helped shut them down, as stated above. if you doubt this, go read the book, it's available on amazon. Although I have not been able to find any specific documents proving his Peace Corp work and the UN award, there is also nothing directly controverting these claims.

Well, thats the people at the top. I have found no evidence contradicting any of their biographical claimes, and nothing that leads me to believe that any of these individuals have or are involved in anything less than legal, with the noteable exception of the self vindicating episode of Equinox.

If you've made it this far, I solute you; there were many times in the writing of this article that I was fearful of length, but ultimately, I think it was worth it. None of the research I have done leads me to believe that Citizenre is a scam. Are they ambitious? Certainly. Are they a bit naiive? Perhaps. But are they maliciously trying to squander money from everyone under the sun? Certainly not. Citizenre is secretive, and rightly so; a business with these types of implications needs to be sure of its road before drawing the map. All this secrecy comes with the risk of misunderstanding, however. And people always fear, and sometimes attack, what they cannot understand.