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American Morning

Hearings Focusing on Defrauding Elderly Start Today

Aired September 10, 2001 - 09:04   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COLLEEN MCEDWARDS, CNN ANCHOR: Companies accused of defrauding the elderly by selling them anti-aging products, including dietary supplements, are the focus of a hearing today on Capitol Hill. This is news you can really use.

We're going to get details now from CNN congressional correspondent Jon Karl -- Jon?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Colleen, these are no ordinary dietary supplements, but pills that promise essentially to turn back the aging process, promising cures for almost any conceivable malady. One item, one single item that the Senate will be looking into this morning is a pill that promises to cure, among other things, or promises at least to help those that have arthritis, heart disease, high cholesterol, low sex drive, wrinkles, memory loss and more, all from a single pill.

Now, the products like this that promise essentially to miracle cures, of course, are as old as civilization itself, but the senator leading this investigation says that something is different now. He says the marketing efforts are more sophisticated and these practices are far more widespread than in the past.

(BEGIN VIDEO CLIP)

SEN. JOHN BREAUX, (D) LOUISIANA: There's now very sophisticated, 21st century marketing targeted to the most vulnerable population in this country. It is exponentially increased in size and volume and intensity, and I would also suggest and danger to the American public.

(END VIDEO CLIP)

KARL: At center of Senator Breaux's investigation is a familiar name, his name is Glenn Braswell, he is the head of 200-million- dollar-a-year conglomerate that sells dietary supplements. His name is familiar because he was one of those granted a controversial pardon during the last 24 hours of the Clinton administration. That pardon was for a 1983 conviction related to -- for mail fraud related to the sale and marketing of a cure for hair loss.

Now Braswell has been subpoenaed. He is expected to be here at this morning's hearing, but Senator Breaux says that he expects him to take the fifth amendment, not to testify, citing hisself against -- his right against self-incrimination. We have spoken, however, with his lawyer, who says that Braswell will have absolutely no comment until after the hearing.

But there will be somebody testifying here that will be very interesting to listen to, and that is the former chief financial officer of Braswell's companies. Somebody who served for five months in that capacity and was then fired. The Senate committee is saying Mike O'Neill was essentially a whistle-blower who will talk about the intern workings of this company.

Now, we did get a copy of the prepared testimony that O'Niell is expected to give. And I just want to read just one quote from that, one thing that he will say about these products is, quote: "The process that is used to recruit customers is flawed and laden with lies and deception. The products could not possibly deliver on what is promised in the advertised." That testimony, from that whistle- blower, as he is called by the committee, is expected during that hearing, which starts at 10:00.

Back to you, Colleen.

MCEDWARDS: All right, Jonathan Karl, thanks very much.

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