Thanks, cowboy - that was very interesting.
It would appear now that the initial claim that CAP (and/or it's senior management) have a beneficial ownership interest in CardSpike has now been abandoned, judging by the latest Perspectives vid posted above.
The beneficial interest is there, and we could debate the fine points about whether a contractual interest rises to the level of an equity interest or not, and whether it matters at all in terms of the inherent conflicts of interest and in terms of evaluating whether or not Affiliate Media is deceptive in the statements they have made.
For the sake of argument, assume that Cardspike is owned by a company that has entered into a contract with Effective Media Group (EMG) whereby EMG oversees the operation of Cardspike, including the management of the Cardspike affiliate program and in exchange EMG receives substantially all of the income generated by Cardspike. In this case the owners of EMG do not actually own Cardspike, but through contractual arrangements they own essentially all of the revenue of Cardspike. I use the term beneficial ownership interest in the sense that in this situation I would say that EMG and its principles have a beneficial ownership interest in Cardspike. An attorney might say that is not a beneficial ownership interest, but rather a beneficial contractual interest.
The goals of the APCW videos has not been to break the whole story at once. Getting information together for the videos takes time, and if we waited until we had the whole thing mapped out for the videos we would not have started yet. The main reason we started the videos before everything was done is because Gambling 911 broke the story about the relationship, and we've just been trying to lay out background information related to the situation in the videos. Also, we decided to lay the relationship out in pieces so we could get commentary from Lou and Warren about what was being said along the way before the whole story was set forth. We were fairly certain they would engage in deceptive positioning along the way, and we thought it was reasonable to give them some rope to see if they would come clean or hang themselves with their statements. Our goal is transparency, so we would have been happy for them to just come clean. Instead, a careful analysis of what has transpired reveals less than forthright answers.
And in the CAP-Lou Fabiano vid (also posted above) he emphatically reiterates that there is no such ownership interest.
In the absence of new proof to the contrary, that leaves the question of the management of the affiliate program at CardSpike under the microscope.
Here, it looks like some hair-splitting is going on regarding Effective Media Group (EMG).
This appears to be the company involved with CardSpike. I'm not clear on exactly what this relationship was/is yet, but it looks as if EMG was handling the affiliate affairs for CardSpike, which presumably includes the (slow-no) payments to affiliates.
This is where the hairsplitting comes in as far as I can see:
On the one hand, GPWA and APCW have presented the conclusion that since Lou Fabiano and Warren Jolly as senior management at CAP are also principals in EMG they may have been economical with the truth in claiming that none of their CAP/PAP/Affiliate Media or "company personnel" were involved in or profited from CardSpike.
GPWA points to the involvement in EMG of the two top men at CAP, and to the alleged employment of CAP/PAP/ Affiliate Media staffer at the time Greg Powell in the operations of both EMG and through it CardSpike affiliate business matters.
This would indicate that a commercial arrangement between CardSpike and EMG would have beneficial rewards for Lou and Warren as the principals in EMG, thus calling into question their earlier assertions of CAP/personnel non-involvement or profit.
The CAP video which Lou has used to explain his perspective acknowledges his involvement as the principal in EMG, acting in a consulting capacity for CardSpike.
But, he emphasises, EMG is an entirely seperate persona and business entity to CAP/Affiliate Media/PAP, and that his involvement in it is a seperate business venture.
I'm not sure the affiliate community will find this "seperate persona company" rationale easy to swallow, because at the end of the day the top man at CAP (who could be included in the definition of "personnel" of that company) has involvement and presumably reward from this seperate (EMG) company as a result of its commercial relationship with CardSpike.
Without waiting for an explanation of exactly what EMG does for CardSpike, that leaves affiliates with the questions:
Is CAP's rationale acceptable to me?
If not, what now?
How does this effect me?
Does it impact me sufficiently in a business or ethical sense for me to make some practical decisions and what should those be?
It's worth noting that Lou referred specifically in his vid to another rumour floating around that an online casino ownership may be in question - he included a flat denial of that.
Let me try to be very clear here.
As shown by public records Lou and Warren are officers of the Nevada corporation Affiliate Media that owns and operates the CAP and PAP websites.
When the APCW initially requested a statement from Lou and Warren about their relationship with Cardspike the following statement was received on January 6th in an e-mail response made by Warren:
Cardspike is not controlled or managed by CAP, PAP, nor its parent company Affiliate Media, Inc.
CAP, PAP, Affiliate Media, and all of its company personnel have absolutely no ownership interest, no profits interest and no beneficial interest whatsoever in Cardspike.
Any statements to the contrary are untrue and unfair.
The next action of the APCW was to prove through public records that there was a company Effective Media Group in Florida with Lou and Warren listed as the officers.
We asked Lou and Warren to provide us with a statement about the relationship of Effective Media Group with Cardspike. In response they issued the following statement:
Effective Media Group (EMG) is a Florida Corporation with offices in Orlando, FL. It was established by a separate set of share holders then AMI with the express intent of offering consulting services to online merchants, in ALL sectors. Our initial focus was to assist investors and operators of online gaming properties . We launched this business to satisfy the continuous requests from new and existing gaming operators for our consulting assistance and guidance with their affiliate marketing and general online marketing initiatives. In 2009, EMG will be branching out into other markets such as finance and travel to further satisfy clients without the necessary expertise to execute efficient online strategies. Both Lou and Warren maintain individual shares in EMG along with other shareholders.
Clarifications:
1.Affiliate Media Inc. has no shares or monetary influence in this new company whatsoever. It is wholly separate company with a different set of business goals and clients.
2.Effective Media Group, its officers, staff and investors have no direct or indirect ownership in CardSpike.com. EMG operated as performance based consultant ONLY for an offshore investor.
So, how do we interpret this response against the facts we know?
Affiliate Media and Effective Media Group are indeed separate companies and they don't have exactly the same shareholders and officers. According to the public records we examined Effective Media Group only has Warren and Lou as officers and Affiliate Media has one additional person as an officer. So, the statement that Affiliate Media has no shares or monetary interest in Effective Media Group is true, but misleading, since there is a beneficial interest through common ownership.
There is a statement of a relationship with Cardspike, through a performance based consulting arrangement, but little no information about that relationship and the services provided is given. Note that the details given are completely consistent with a shell corporation that passes essentially all of the revenue through to Effective Media Group.
After Affiliate Media issued its second statement, we produced our most recent APCW Perspectives video. In it we documented some aspects of the services Effective Media Group performed for Cardspike. In particular, one of the roles of Effective Media Group is that it ran the Cardspike affiliate program out of its Florida office using an Affiliate Manager that was an employee of Effective Media.
So, just based on what is out in the open now (which is not everything there is to say), it is clear that deceptive statements are being made. How else could Warren say on behalf of Affiliate Media "...company personnel have absolutely ... no beneficial interest whatsoever in Cardspike" when he knows he and Lou are company personnel and that public records show they own the company that operates the Cardspike affiliate program.
But remember, the real issue here is trying to hide and obscure the relationship, whatever its nature, in the context of running an affiliate forum. Having a hidden agenda behind the scenes where you have a vested interest in promoting one program over others is not right. And when the program involved is not treating players and affiliates properly, then the trust that has been broken is, in my opinion, unforgivable.
Michael
But if what you say is true, it would make an interesting story.
