Residents, town officials take closer look at NXIVM’s proposal to build headquarters
Times-Union, July 29, 2003
The architect of an alleged multimillion-dollar pyramid scheme that toppled under dozens of state and federal investigations wants to build a headquarters here for his latest controversial enterprise: a human potential school.
Self-described “scientist, mathematician, philosopher and entrepreneur” Keith Raniere has proposed a 66,900-square-foot complex for rapidly growing southern Saratoga County that would serve as a training center for his company, NXIVM, and its Executive Success Programs.
The programs, founded by Raniere in 1998, instruct people on “how to maximize their potential in all fields of human experience.” Town planning officials are due to meet this week with representatives of NXIVM, pronounced Nexium, to learn more about the project.
One social movements expert warns that the program, dubbed ESP, has cult-like characteristics. And local residents are skeptical about the project and Raniere, whose locally based discount buying service, Consumers Buyline, was forced to close in the early 1990s after investigations by 23 states and two federal agencies alleged it was a pyramid scheme.
“I have heard from several families that Mr. Raniere’s programs have caused them distress, financial hardship and has estranged family members,” said Rick Ross, executive director of the Ross Institute for the Study of Destructive Cults, Controversial Groups and Movements in New Jersey. “There are parallels in which the way ESP operates and what many people would call a destructive cult.”
Neither Raniere or Nancy Salzman, the president of NXIVM, could be reached for comment, but NXIVM’s Web site indicates its 300 coaches and 30 regional executives provide ESP training in the United States and Mexico.
The Halfmoon site would serve as NXIVM’s global headquarters and a prototype for other locations, said engineer Daniel Hershberg, NXIVM’s engineering consultant.
“The goal is to have a facility for members to come and use,” he said. An ESP center has operated for four years at 455 New Karner Road, Albany. Messages left at the office went unanswered.
Salzman told the Planning Board in June that NXIVM’s site would offer intense training sessions from 8 a.m. to 10 p.m. for 100 to 150 people, according to minutes from the meeting.
She called the proposal a “human potential school” that specializes in offering “an education that isn’t provided in traditional schools.”
NXIVM first proposed the project, with a futuristic building design, for Woodin Road in November, said Jeff Williams, planning director. Town officials were unaware of Raniere’s past, but neighbors don’t like what their investigations of ESP and Raniere have turned up.
“Apart from the possible light pollution and increased traffic to an already dangerous intersection, we’re concerned that they are being watched for cult-like activity,” said Gregory Mayo, 37, who lives about 100 yards from the proposed site with his wife and three kids. He and other residents have started a petition opposing the project.
Raniere, 42, is a colorful figure by all accounts. The Brooklyn-born “genius” said in past interviews with the Times Union that he dropped out of high school at age 16 to enter Rensselaer Polytechnic Institute in Troy, where he simultaneously earned undergraduate degrees in math, physics and biology. Raniere garnered local attention in 1988 when he qualified at age 27 for the elite Mega Society — a step above Mensa — by demonstrating an IQ of 178.
Raniere founded Consumers Buyline in 1990. At its height in the early ’90s, he had 250,000 distributors nationwide and 173 direct employees in the region. Raniere ultimately settled with state Attorney General Robert Abrams for $40,000. He also was prohibited from running chained distribution schemes, said Paul Larrabee, spokesman for current Attorney General Eliot Spitzer.
“It was a far-flung pyramid scheme that ultimately collapsed like all pyramid schemes do,” Larrabee said. He declined to discuss current complaints against NXIVM.
Raniere denied the early ’90s pyramid scheme charge and said officials misunderstood the operations of Consumers Buyline, which sold membership in a discount buying club.
He went on to found ESP with Salzman in 1998. The business “advances human potential and ethics through adult education, corporate trainings and a comprehensive personal and professional coaching program,” according to the NXIVM Web site.
But Ross, who owns a copy of the ESP manual, is critical of the programs. He characterized them as a militaristic “pyramid scheme of authority with Raniere at the top.” He said students refer to Raniere as “Vanguard” and celebrate his birthday as an annual event.
“I have signed complaints from all over the world and the ones I have received are very serious — allegations about brainwashing and concerns about the expenses of the courses,” Ross said. “I regard the courses and programs as potentially unsafe and I would not recommend them to anyone.”
Mayo became aware of NXIVM’s designs on July 16, when he came home to find several cars parked near his Stone Quarry Road home. NXIVM officials had held an unauthorized groundbreaking, Planning Board Chairman Steven Watts said.
Hershberg said his clients were simply cleaning debris from the site. Watts dismissed that statement.
“You can’t have a groundbreaking until you have approval for your plan. It’s totally inappropriate,” Watts said. Asked about the project itself, Watts said: “That’s a very difficult site and we’ll be looking at everything.”