For years, BusinessWeek published an annual feature on the United States top paid executives. It was a way to track which companies are excelling and who is a rising star in the corporate world. But in 1986, few anticipated that any Coca-Cola executives would make the list.
The previous year had been disastrous for the soda brand. They'd pinned their hopes on New Coke, a flavor that flopped so hard the corporation walked back its release.
After less than three months, the executives behind the decision had been lucky to keep their jobs.
Surprisingly, nobody at Coca-Cola got fired for the debacle. Instead, BusinessWeek reported the company's president, Donald Akio, netted a bonus were three point five million dollars, and Chairman Roberto Goizueta lucked out to his bonus was six point four million dollars. Today, that's the equivalent of more than eight million and 15 million dollars, respectively.
By all appearances, they were being rewarded for the failure, or maybe because everything had gone according to plan.
Welcome to Conspiracy Theories, a Spotify original from past every Monday and Wednesday, we dig into the complicated stories behind the world's most controversial events and search for the truth. Carter Roy. And I'm Molly Brandenberg.
And neither of us are conspiracy theorists, but we are open minded, skeptical and curious. Don't get us wrong.
Sometimes the official version is the truth, but sometimes it's not.
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This is our last episode on the Cola Wars. For a century, Pepsi and Coca-Cola have been locked in a competition to become the best selling soda in the United States. Their battles have been fought on supermarket shelves, television commercials and in real flesh and blood.
Last time we covered the history of PepsiCo and Coca-Cola, we explored some questionable parts of each company's past, including Coca Cola's use of cocaine, Pepsi's role in a Chilean coup, and the infamous New Coke debacle in 1985.
Today, we'll discuss three conspiracy theories, each hinging on the idea that the release wasn't a blunder at all. Instead, Coca-Cola might have designed New Coke to fail in order to manipulate their consumers or to secretly add high fructose corn syrup and salt to their recipe, or even to cover up an international cocaine smuggling endeavor.
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When it looked like Pepsi was poised to win, Coke executives made a desperate gambit. They changed the recipe for their signature product and released New Coke. On April twenty third, 1985, the new brew proved disastrous. Customers complained about its sweet taste, which was too similar to Pepsi's, and their anger and frustration ballooned into a PR disaster.
On July 11th, only 79 days after the New Coke debut, Coca-Cola executives reversed course. They rereleased the original version of their soda. Then they cross their fingers and hope they could mitigate some of the damage that New Coke had done there.
Worry quickly dissolved. Original Coca Cola rebounded spectacularly. It generated more revenue than it had before a new coke's release. Somehow, Coca Coca-Cola was back on track to win the Cola Wars.
It was a surprisingly positive outcome to one of the biggest corporate fiascos in history.
Coca-Cola executives couldn't have resolved the New Coke debacle better if they planned it that way. And maybe they did.
Which brings us to conspiracy theory.
Number one, Coca-Cola designed a new Coke specifically to fail. They wanted their customers to miss the original soda and demanded come back. Then they got rich on the wave of nostalgia that greeted the original flavor. The theory makes sense.
If you take a look at Coca Cola's branding for half a century, they'd advertise themselves as an iconic American beverage. Even during World War Two, they encouraged customers to drink coke while celebrating the, quote, American way of life.
This was even clearer in the motto they debuted in 1969. It's the real thing.
In other words, if Coca-Cola tampered with their formula, it would make the soda less real and it would be like serving a pizza for Thanksgiving.
Sure, it might taste better than Turkey, but it's a violation of tradition.
Customers didn't just drink coke because of its flavor. It was an institution. And if someone tampered with it, the people would reject the upstart no matter how good it tasted. And that's exactly what happened during launch parties across the nation, vicious Coca-Cola fans rip New Coke apart.
Now, that can be a normal response. If you like a product and it changes, it's natural to have a knee jerk negative reaction. Think of the feedback social media outlets get with just one new or altered feature.
Sure, but customers weren't just complaining that they didn't like the taste. They argued that Coca-Cola had violated their corporate values. During an interview with a reporter, one unidentified man said, I'm very disappointed.
I think we've lost the American tradition of negative media coverage began pretty much as soon as New Coke launched. Johnny Carson, David Letterman and Tom Brokaw all instantly pilloried the flavor, which was especially strange since New Coke consistently won taste tests.
It sold well soon after its launch to apparently the average American love the beverage. So it seemed like overkill for news outlets to double down on their critiques. It was almost like someone was planting negative stories.
The most bizarre behavior, though, came from Coke's executives. It was like they were completely underwhelmed by New Coke. At a press conference, a reporter asked the company's CEO, Roberto Goizueta, to describe the sodas taste.
He answered, I would say it is smoother, rounder, bolder. It has a more harmonious flavor.
Not a great answer, which is odd because you'd think Coke's PR team would have coached him on what to say. When you're launching a new beverage, you have to expect someone will ask you how it tastes.
But Goizueta seemed totally unprepared for the question, like he didn't really want to convince anyone that New Coke tasted good. It was almost like Coca-Cola design New Coke to fail, specifically to drum up more publicity and demand for the original recipe.
And Coca-Cola had good reason to expect their customers would react in this way. After all, it's not like this was the first time consumers rejected a. Supposedly new and improved product at some point in the 1960s, a Pepsi owned snack food called Fritos adjusted its recipe. The shift was pretty small. They probably figured nobody would notice. Not only did customers notice, they stopped buying Fritos until the corporation adopted the original recipe.
Again, the same thing happened with another Pepsi snack product in 1971. Around that time, they fiddled with their onion flavored Funyuns to remove a potentially harmful artificial dye.
The problem was, without the ingredient, the product looked wrong. The color was too bright. So to achieve Bunyan's standard golden brown shade, factory workers added extra sugar and fried them longer to caramelize their outside.
Frito-Lay figured nobody would pick up on the change. The dye didn't impact the flavor, so Fenians wouldn't taste different without it. And the snacks looked the same. Thanks to the sugar and the extra time in the fryer.
But sales began to plummet almost as soon as the company implemented the alterations. Customers call to say that their Funyuns tasted burnt. The corporation couldn't just change the recipe and hope nobody would notice.
But those cases are different from New Coke in a few key ways, for one, Pepsi never advertised the changes to the Fritos or Funyuns recipes. They relied on the hope that customers wouldn't realize the snacks had changed and they were wrong.
More importantly, though, Fritos and Funyuns weren't flagship products. Most people don't even realize Pepsi owns them. If they flop, they won't hurt their parent company's reputation that badly. Whereas original flavor Coke was the face of the Coca-Cola Corporation, it was synonymous with America and even Santa Claus. If New Coke had failed and Coke Classic it never recovered, it would have been devastating.
So if the New Coke debacle was planned, it represented an enormous gamble that said, the biggest bets always get the biggest rewards.
I just don't see the executives taking such a huge swing when they could try to boost sales through more traditional means, which is why on a scale of one to 10, I have to give conspiracy theory number one, a five. I'll admit it's pretty suspicious that the infamous blunder worked out so well with Coke executives getting bonuses after what should have been an embarrassing mistake. But there's no hard evidence to say the entire incident wasn't just a lucky accident.
I agree with that score. It's pretty odd that Coca-Cola could make the wrong decision every step of the way and still come out on top. But I can't see them trying to trick customers into rejecting a flagship product just to boost sales. But if they needed a distraction, on the other hand, the New Coke debacle might be just the thing to draw public attention away from other activities. Coca-Cola didn't want the public to notice, and some conspiracy theorists suggest that's just what happened in 1985.
Coming up, we'll talk about the changes to Coca-Cola recipe, you discover their practices, seek their advice, and let yourself become more vulnerable than ever before.
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Coca Cola's recipe is referred to internally as Merchandise seven X. That's because it uses seven flavorings, not counting sugar. Coca leaves and other base ingredients. Seven X has been around since John Doc Pemberton first invented the beverage in 1886 based on Pemberton's notes.
We know that seven X consists of alcohol, orange oil, lemon oil, nutmeg oil, coriander, cinnamon and neroli, otherwise known as orange blossom oil. Coke executives insist that there are other additives in the soda that give it its distinct flavor. But as to what those additives are, it's a corporate secret.
However, there is one recent addition that we do know about high fructose corn syrup.
Until the 1980s, Coca-Cola largely avoided alternative sweeteners. Sugar provided all the sweetness the soda needed.
But it's clear why Coke would want to switch. Generally speaking, high fructose corn syrup is cheaper than sugar.
On the other hand, the corporation had a lot of good reasons not to make the swap. High fructose corn syrup has been linked to obesity, liver disease, diabetes and colon cancer.
If health conscious customers in the 1980s knew that Coca-Cola was going to start using corn syrup, they might stop buying the soda. This change would offset whatever money the companies saved by using cheaper sweeteners.
But if the brand could discontinue their sugar usage without their customers realizing, well, that's where things get interesting.
Clearly, we've learned that customers are excellent at noticing slight changes to products flavors. If Coca-Cola wanted to switch to high fructose corn syrup without tipping anyone off, they'd need some kind of buffer, some way to pull classic Coke off the shelves just long enough that people would forget its exact flavor and wouldn't notice the slight alteration when it came back.
Well, that's the crux of conspiracy theory. No two executives released New Coke as a distraction between Coca Cola with sugar and Coca Cola with high fructose corn syrup when they rereleased Coke Classic people are so grateful to have it back, they didn't even notice that it tasted a little different.
The evidence for this theory mostly boils down to timing. We know that in 1985, when original Coca-Cola returned to the shelves, some of their plants cut sugar entirely using 100 percent corn syrup. And the corporation insists that they never fiddled with a recipe prior to that point.
In 2011, Coca-Cola published a short booklet on their corporate history that even says, quote, In 1985, the formula for Coca-Cola is changed for the first time in ninety years.
So if Coke didn't switch to high fructose corn syrup before April 1985 and the soda was loaded with it after that point, the swap must have happened during New Coke's release.
And assuming this was the plan, it worked perfectly. Coke Classics rerelease was greeted with celebration, not an outcry about high fructose corn syrup.
That's all pretty compelling. But there are a couple of problems with this theory. First and foremost, it hinges on the idea that Coke didn't use high fructose corn syrup before April 1985. And that's simply not true.
It's not clear exactly when the soda giant switched to corn syrup, and that makes sense.
Drawing attention to a recipe change might alienate customers, but as near as we can tell, in 1980, Coca-Cola was using a 50 50 blend of sugar and high fructose corn syrup. That's five years before New Coke debuted.
Beyond that, some Coke bottlers made the shift to 100 percent corn syrup in late 1980 for a full six months before the company publicly announced that New Coke was coming.
Furthermore, it doesn't make much sense that Coca-Cola would throw away 34 million dollars to distract customers from high fructose corn syrup. After all, they never hid the fact that the soda contained the new sweetener. Any concerned customer could have looked at the ingredient label and realized that sugar had been removed. Fair enough, but then there's the booklet published, the one that said the recipe wasn't changed for 99 years. It feels like a weird claim to make if they actually tinkered with the formula before then.
I'm going to chalk that up to savvy advertising, according to the Corn Refiners Association, which oversees the manufacture of high fructose corn syrup. Most people can't taste the difference between sugar and high fructose corn syrup. If Coca-Cola, corn syrup and sugar as roughly equivalent, they might argue that they could swap the two without actually changing anything that would impact flavor.
It's also possible that Coke didn't count the swap as an actual change to the recipe because it didn't alter seven acts. After all, they'd already made other alterations, like removing cocaine from the coca leaves within those 99 years.
Coca-Cola has always branded itself as traditional and classic. It helps their party line to downplay tweaks to the recipe, especially controversial changes like the switch to possibly carcinogenic additives. But the facts just don't support the claim that they released a new soda flavor to cover up the adoption of corn syrup, which happened five years before the New Coke launch. That's why I'm giving conspiracy theory number two a one out of 10.
I agree there's no way to make this timeline makes sense. But we still have to mention that there's another variation on this idea, one that's not about sugar, but salt.
We'll call this conspiracy theory number two and a half. It claims Coca-Cola released New Coke to alter their recipe, but they added more salt, not high fructose corn syrup.
In a 2009 speech, pediatric endocrinologist Robert Lustig discussed what he called the Coca-Cola conspiracy.
According to Lustig, New Coke didn't just contain more sugar than the classic recipe. It also had more salt. But most customers couldn't taste the difference because the sweeteners masked the sailing undertones.
You may wonder why Coca-Cola would add unnecessary salt that doesn't impact flavor.
A Lustig thinks the answer lies in human biology. When you consume salt, even if you can't taste it, you get dehydrated and crave fluids. And if you've got an extra large soda in front of you, you're going to drink a lot more than you would otherwise to quench that thirst.
In other words, Coca-Cola intentionally up New Coke salt content to trick consumers into drinking more of it.
And even though they eventually discontinued the flavor, the original recipe also has a high salt content. Lustig asserts that a can of original Coca-Cola has 55 milligrams of sodium, the equivalent of drinking a pizza.
His core idea that added salt makes people thirstier is true. But Lustick got a lot of the other facts wrong. For example, according to the USDA, one slice of pepperoni pizza has somewhere between 650 to 750 milligrams of sodium, depending on the brand. And a slice of cheese has between 500 and 700 milligrams. That's roughly ten times more than the 55 milligrams.
Lustig claimed Lustig was even wrong about a can of Coke having. Fifty five milligrams of sodium. A single can only has 45 milligrams of sodium. So a can of Coca-Cola won't give you anywhere near the salt content of a whole pizza.
Thanks to errors like these, critics complain that Lustig jumped to conclusions using bad data. It appears he also exaggerated the health risks associated with additives like sugar. In short, there's no reason to treat Lustig as an authority on Coca-Cola or dieting. That's why I'm giving conspiracy theory number two and a half a one out of 10.
I'll also give it a one. Soda manufacturers are experts at making products that taste good and appeal to their consumers. But that's common knowledge, not evidence of a nefarious plot. That said, it's still possible that the soda giant changed their formula during the New Coke experiment. Their alteration could have been so controversial and even illegal that they'd be willing to spend thirty four million dollars hiding the evidence, something like the use of a controlled substance.
It's no secret that the original Coca-Cola formula included cocaine. However, many loyal Coke drinkers might be surprised to learn that even today the soda brand. And as part of the international drug trade, they have a formal exemption from the DEA to ensure their participation in the cocaine industry is all above board.
At least that's the official story. But some people allege the actual soda contained trace amounts of cocaine well into the 1980s, and Coke fans all over the world were unknowingly drugged. Coming up, Coca Cola's relationship with cocaine. If you are tuning in, chances are you've got quite the imagination for the dark, dangerous and deceitful, call for podcasts, but not so cool for your safety. For peace of mind, consider ADT as the leader in home security.
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Alcohol volume one on one roof. Copyright twenty twenty one. Campari America. New York. New York. Now back to the story. In the fall of 2016, workers at a Coca-Cola factory in southern France received a package from Costa Rica. It was supposed to contain orange juice. Instead, they opened the crate to reveal 800 pounds of cocaine.
The authorities investigated and soon determined that the plant workers weren't involved in drug smuggling. It was deemed a mistake. Somehow, illegal smugglers had accidentally shipped their product to the factory, which is a pretty big error. That delivery was worth about 56 million dollars. It's unlikely that a drug lord would be that careless with her product. On the other hand, maybe the shipment wasn't a mistake at all. After all, Coca-Cola is technically involved in the international cocaine trade.
That brings us to conspiracy theory. Number three, Coca-Cola still included cocaine in their secret recipe four decades after they officially stopped using it. New Coke's release was a cover so the corporation could remove the illicit drug without drawing attention to themselves.
This theory is centered on the fact that Coca-Cola uses coca leaves. To this day. Potent coca leaves are a controlled substance in the United States. However, the soda manufacturer is exempt from this restriction, which is a point of controversy for some consumers.
There are other valid uses for coca leaves in products that don't get you high. Peruvian growers use coca to produce teas, flowers and candies, none of which are legal in the U.S. unless they're cocaine ised.
Well, that's especially ironic given that Coca-Cola doesn't import ised leaves. Growers in Peru and Bolivia shipped potent coca to the United States.
Then the step company in Maywood, New Jersey, removes the cocaine components.
The Steppin Company is the only corporation in the United States with legal permission to import coca leaves, and they process tons of them per year.
Their process creates two byproducts cocaine, coca leaves, which they sell to Coca Cola and cocaine. Some of the controlled substance is distributed to hospitals. Anesthesiologists use medical grade cocaine as a painkiller for certain surgical procedures on the nose and eyes.
In fact, that seems to be why the step company was originally established at the time. They were called Maywood Chemical Works, and they apparently imported coca to make medicine from it. When Coca Cola offered to buy their useless, decolonized coca leaves, the deal must have seemed too good to be true. It was a way to make a little extra cash on a byproduct they'd otherwise throw away.
But then something changed. It's hard to say when exactly, but at some point Coca-Cola became a bigger part of the company's business model. It might have been because medical researchers developed new painkillers that weren't as addictive or risky as cocaine, or it could have been a result of Coca Cola's continual growth. Whatever the reason, Coke needed more coca leaves than the step and company was producing.
The problem was legally the step, and company was only allowed to import enough coca to meet the medicinal demand. They weren't permitted to make more cocaine than they could sell.
The solution was as surprising as the arrangement itself. Coca Cola got the law changed. New legislation ensured that the step and company could do cocaine, ice, more leaves and in the process create excess cocaine. Whatever cocaine they couldn't sell, they'd have to destroy under strict federal oversight.
It's hard to say how much of the stimulant they end up producing only to throw out. Stepan is notoriously secretive about their operations, but we do know that in the 1980s they reportedly created hundreds of tons of cocaine every year.
And it's hard to believe they're selling anywhere near that much, which means today they're more in the coca leaf business than the cocaine business.
That just goes to show how much influence Coca Cola has over the step and company and their relationship goes beyond coca importing. In the 1960s, Step in Coke collaborated to request another exemption. This time they got federal permission to grow coca in the United States.
In 1965, they cultivated over 100 plants on the Hawaiian island of Kauai, but they didn't get very far into their horticultural enterprise. A fungus infected the crop before anyone could harvest the valuable coca leaves.
After that, Coca-Cola didn't try to grow their own coca again that we know of. But the fact that they attempted the endeavor at all speaks volumes, as does the step and company's collaboration with them.
Remember, around that time, the processing facility was already producing more cocaine than they could ever use, and Coke convinced them to grow even more.
Sounds like the soda manufacturer is calling the shots in that relationship. Granted that both parties remain notoriously secretive about their collaborations, there might even be more going on behind the scenes.
Maybe step passes some cocaine along to the company along with the cocaine ised coca leaves. And perhaps until the 1980s, Coca Cola still put cocaine in their soda, even though it had officially been narcotic free since 1929.
That date is notable because cocaine became illegal in the United States in 1914, which means there was a 15 year period when the soda contained an outlawed ingredient.
It's not clear how they got away with it. It's possible the cocaine was so diluted, Coca Cola was exempt from the law, or maybe the authorities were willing to look the other way for an American corporation.
After all, in the 1910s, Coke donated a million dollars to Atlanta's Emory University, organized blood drives for the troops fighting World War One and helped hundreds of thousands of stores net a profit. The U.S. needed to stay on Coca Cola's good side.
Whatever the reason, we know the beverage included cocaine even after it was banned. Now, picture this, maybe the soda never went completely cocaine free. They claimed that they'd remove the drug in nineteen twenty nine for PR reasons, but they already knew they could distribute cocaine without consequence, so they continued to include it secretly.
After all, the stimulant gave Coca Cola customers a pleasant buzz. Maybe it even got some people addicted to the beverage. That's one way to create brand loyalty.
But in 1970, things started to heat up. That's when U.S. President Richard Nixon signed the Controlled Substances Act and launched the war on drugs.
He proposed mandatory minimum prison sentences for possessing or selling narcotics and other illicit drugs and founded the Drug Enforcement Administration or the DEA, which meant Coca-Cola had to watch their backs.
Things got even worse during the Reagan era. In 1980, nearly 500000 Americans were arrested on drug possession charges, and the number only increased over the next quarter century.
The message was clear when it came to controlled substances like cocaine. The federal government wasn't messing around.
The cocaine trade was just too risky, and Coke's executives wanted to remove it from their soda. But they worried that somehow customers would be able to taste the difference, just like they had with Funyuns and Fritos.
Best case scenario, they would stop using cocaine and their sales would go down. Worst case, the altered flavor would have triggered an investigation and a drug bust. So to minimize the chances that anyone would notice, they pulled Coca-Cola off the market for three months after New Coke ran its course, they released a cocaine free product and no one was the wiser.
Unsurprisingly, there's no evidence whatsoever to back up any of this, as near as we can tell. The rumors began in 1985 after Coca Cola announced they'd return classic Coke to the shelves. It seems that customers were trying to make sense of the whole New Coke fiasco, and some of them settled on a cocaine cover up story.
Plus, it seems really unlikely that Coca-Cola would secretly slip controlled substances into their soda. For one thing, they'd lose money.
In the mid 1980s, a liter of coke caused 99 cents, but it's alleged cocaine content would have netted nineteen dollars on the street. So Coca Cola would have been selling the drug for roughly a 20th of its value.
Hardly a shrewd moneymaking strategy, especially because Coke doesn't own the coca leaves they import. They have to buy them from the step and company. Now it's possible that step and sold coke, the cocaine at a deep discount since they'd have to destroy it otherwise.
But it's hard to imagine why the chemical manufacturer would agree to that deal. After all, the company is subject to strict government regulations and they'd have to go to great lengths to hide a sale that doesn't benefit them.
Such an arrangement would also be highly risky for Coca-Cola, and not only because the company might get busted. Soda may not be healthy exactly, but it's generally considered safe, meaning children, elderly people and sick people all drink it. In theory, they'd be at risk of an overdose if the beverage contained a secret stimulant ingredients. But there's no evidence that anyone has ever had an adverse reaction to Coke's alleged cocaine. If people were getting drugged against their knowledge, you'd think we'd have heard of something at some point.
And on top of that, there's no real benefit to secretly putting cocaine in soda. Even the suggestion that the company could get customers addicted doesn't hold up. Less than half a percent of Americans meet the criteria for cocaine use disorder, despite over 14 percent having tried it. And given how low Coca Cola's cocaine concentration would have to be, it seems even less likely that a person could accidentally develop a dependence from drinking soda. That's why I'm giving conspiracy theory number three, a one out of 10.
Coca-Cola doesn't have any motivation to drug their beverage, and that's a big risk to take with no reward.
I mostly agree with you, but I do think the relationship with the step and company merits more examination. While I'm not convinced the facility is ferrying cocaine to soda manufacturers. I think there could be something going on there, which is why I'm giving this theory a three out of 10.
All three of the theories we discussed today seem pretty unlikely when you examine the evidence, and yet rumors and allegations continue to swirl around the New Coke debacle and the cola wars.
Generally, that may be because the official story is so wild and peppered with scandals. Coca-Cola used to contain cocaine. They essentially cooperated with Nazi Germany during World War Two. And Pepsi has been directly tied to a CIA assisted coup in Chile. Given the bad behavior we know about, it only makes sense that some people wonder what other outrageous things have gone on.
If there's one takeaway from all this, it's that corporations can be ruthless when it comes to chasing market dominance, and we can only expect to hear more rumors and allegations in the coming years because the cola wars are heating up again.
You may not hear about them as much these days because soda simply isn't sexy anymore. Today's consumers are more concerned with health and wellness. They don't want to chug beverages full of sugar, high fructose corn syrup and artificial preservatives.
So cola manufacturers fight their wars by proxy cans of Starbucks iced frappuccino. Sabra hummus and naked juice are all Pepsi products. And even if you don't drink Coca-Cola, you're consuming their products whenever you enjoy smart water, honesty and minute maid juice.
In other words, the cola wars aren't over. They've been driven underground. So next time you pick up a snack food or juice, check out the label to see who's really selling your favorite treat. Otherwise, you may become an unwilling soldier in a battle between soda giants. Thanks for tuning into conspiracy theories, we'll be back next time with a new episode, you can find all episodes of conspiracy theories and all other Spotify originals from Sparkasse for free on Spotify.
Until then, remember, the truth isn't always the best story, and the official story isn't always the truth. Conspiracy Theories is a Spotify original from podcast. It is executive produced by Max Cutler, Sound Design by Dick Schroder with production assistance by Ron Shapiro, Carly Madden and Travis Clark. This episode of Conspiracy Theories was written by Angela Jorgensen with writing assistants by Mackenzie Moore and Ali Whicker. Fact checking by Onya Barely and research by Bradley Klein. Conspiracy Theories Stars Molly Brandenberg and Carter Roy.