Bill Ackman calls himself an activist investor.

Most of the time, this means Ackman uses Pershing Square Capital Management, the New York-based hedge fund he leads, to get control of companies, install CEOs who cut jobs and other expenses until the books balance, then sell the recovering companies for big profits.

He’s not perfect at it. He failed to turn around Target and Canadian Pacific Railroad despite massive layoffs, and he forced out 40,000 employees at J.C. Penney only to have things get worse. But he’s obviously been right a lot considering his hedge fund is one of the most profitable on Wall Street and earned a cool billion off the 2009 Wall Street dustup.

But when it comes to Herbalife, a 35-year-old, California-based company that makes weight loss drinks, vitamins, sports drinks and a line of skin products, he is a very different kind of activist. He wants to use investments and, more importantly, pressure from state and federal regulatory agencies not to fix the company but to shut it down.

On Dec. 19, 2012, Ackman announced he had spent $1 billion to short Herbalife’s stock. The stock fell 10 percent in six seconds, which eventually led to circuit breakers being triggered and a temporary trading halt.

The next day, he presented what is known as a “public short.” That’s when an investor not only shorts a stock but publicly explains why. Over 3 ½ hours In a Manhattan conference room, Ackman plodded through a 342-unit slide show that described Herbalife not as a legal multilevel marketing firm – which means distributors receive income for both sales and recruiting other distributors – but as a Ponzi scheme that cheated poor and uninformed investors out of their hard-earned money. 

He called it the “best-managed pyramid scheme in the history of the world.” He made plain his goal was not to reform the company but to drive its stock price to zero. He said he wouldn’t even take his share of profits from the deal – he would donate them to charity rather than benefit from what he called “blood money.” And he said he would not stop until the company was out of business.

Since then, he has spent another $300 million to $400 million to destroy Herbalife. He has hired lobbyists to “alert communities” where Herbalife use is highest – such as Latinos – to the “dangers” posed. He has tracked down former Herbalife employees and distributors trying to dig up dirt. He has taken out ads, set up websites, searched high and low for “victims” and even solicited nonprofits to join in the crusade.

Even Carl Icahn, nobody’s idea of a Wall Street softie, was put off by the behavior. “I’ve really sort of had it with this Ackman guy,” said Icahn, who started buying Herbalife stock the day Ackman announced he was shorting it. He said he couldn’t figure out if Ackman “was the most sanctimonious guy I ever met in my life or the most arrogant.”

He approached at least 15 members, urging them to take action against Herbalife. He convinced Democrati Ed Markey, now in the Senate from Massachusetts but then a member of the House, to write a letter to the Federal Trade Commission and Securities and Exchange Commission, urging inquiries of Herbalife. Markey would later say he didn’t know when he signed the letters that Ackman was behind the request or that Ackman had a short position in the company.

Ackman also convinced Rep. Linda Sanchez, D-Calif., to write the Federal Trade Commission and demand an investigation. Only, when he told dinner companions about this accomplishment, Sanchez had not officially sent the letter. Dates were changed. Misunderstandings were cleared up. But the fact remains he had the letter on his cell phone before it went out. How did that happen?

Ackman’s problem, to this day, is that not many people can be found who are all that upset with Herbalife. The company actually sweetened its buyback policy at one point to encourage any dissatisfied distributors to cash out. The rate of buybacks went down.

A few people were found – as in fewer than five – who had issues with a side business operated by some distributors that sold sales leads to new distributors. But that was closed years ago. And there are legal questions about the structure of these businesses, but the Federal Trade Commission is working to resolve those questions, and they affect not just Herbalife but the entire $34.5 billion multilevel marketing industry.

But there are two issues here worth considering.

One is that Bill Ackman is trying to destroy a company. That company has $5 billion in sales and 8,000 employees who go to work each day believing they are part of a legal, ethical business. He claims the company is “one of the great frauds of all time” and its CEO was “running a criminal enterprise.” But until he can find victims, this should not give him the privilege of putting 8,000 people out of work.

Herbalife has spent almost $90 million already to fend off his attacks and can expect to spend millions more. Not many companies can keep that up. At some point, he will win by attrition.

The other is that at least two members of Congress agreed to help Ackman. They agreed to write letters on his behalf to federal regulatory agencies to harass a business because he wanted it destroyed. Markey says he did not understand the circumstances or he wouldn’t have signed. That’s sort of good.

Better is to not harass businesses just because a busybody billionaire who can’t even produce a victim doesn’t like their business models.

Even better is for members of Congress not to let private citizens direct the agendas of regulatory agencies for their personal profit.

McNicoll is a conservative columnist and freelance writer based in Alexandria, Va. He is a former senior writer for The Heritage Foundation and former director of communications for the House Committee on Oversight and Government Reform.