When Sen. Ed Markey urged federal regulators in January to investigate a weight loss company, he thought he was heading off a pyramid scheme. It turns out that he’d put himself in the middle of an ugly war between Wall Street billionaires — one in which community groups and big-name politicians were a means to a lucrative payday.

The New York Times dove deep yesterday into the battle over Herbalife, a nutrition marketing company that’s at the center of a pitched battle between some notable Wall Street investors. Herbalife sells vitamins and shakes through a network of independent distributors. Those distributors make money by selling product, and by recruiting new distributors to join the Herbalife network and work under them.

William Ackman , head of the hedge fund Pershing Square Capital Management, decided that the Herbalife model is a pyramid scheme. If federal financial regulators agreed, the company’s stock would become worthless. So Ackman placed a large bet — reports have put its value around $1 billion — on a drop in Herbalife’s stock price. He then launched a campaign to put regulatory pressure on the company, pressure that would cripple the firm, and make his own bet on its stock pay off. Other notable investors, including Carl Icahn and a fund tied to George Soros, became convinced that the company’s model was legitimate, and placed large bets against Ackman.

The Times details the wide-ranging network of community groups, lobbyists, and politicians Ackman’s campaign enlisted. It reached California, Nevada, Illinois, New York, and Connecticut. Ackman’s campaign hired local lobbyists and communications firms, who would then pressure local politicians to demand that state and federal regulators look into the alleged pyramid scheme. The Times found form letters mailed by a host of local activists, some of whom had received funding from Ackman. It found other community leaders who didn’t recall signing letters about Herbalife. The effort was long on noise, but noticeably short on victims of the alleged pyramid scheme.

Locally, the Times found, Ackman enlisted Larry Rasky and the Dewey Square Group. According to the Globe, Rasky convinced Boston City Councilor Tito Jackson to demand an FTC investigation into Herbalife. Dewey Square handled outreach to black and Hispanic community leaders. The firm doesn’t come off well in the Times piece. At one point, Herbalife began funding a counter-offensive, trying to buy the support of minority community groups to employ against Ackman. After pocketing $30,000 from Herbalife, the United States Hispanic Leadership Institute asked for a matching sum from Ackman’s consultants, in exchange for a commitment to stay out of the fight altogether. A consultant at Dewey advised an Ackman lawyer to pay the price, writing, “I think it would be worthwhile to keep them neutral.”

Markey receives especially rough treatment in the Times piece. By the time that Markey wrote his January letter to the FTC and the SEC, urging the agencies to investigate Herbalife’s business model, the fight between Ackman and Herbalife had been raging in public for a long time. The Wall Street Journal and Bloomberg had reported extensively on the back and forth, and the enormous sums at stake. Ackman has never sought to hide his financial interest in Herbalife’s collapse. He’d convinced a California congresswoman to write a critical letter to federal regulators in June, but that letter had failed to advance any federal action, or to tamp down the company’s stock price. So, with hundreds of millions of dollars in paper losses hanging over him, Ackman got Markey to write his letter.

Markey’s letter didn’t contain much new information. It didn’t spur any new action, because the SEC had already been investigating Herbalife for a year — since they took a meeting with Ackman and his lawyers. But Markey’s letter did throw a public cloud over Herbalife, which created a stock selloff that Ackman benefitted from financially.

In today’s Globe, Markey says he was acting as a “consumer advocate” when he pressured federal regulators over Herbalife, and says he was unaware that Ackman had a financial stake in the federal investigation’s outcome. However, both Markey’s spokeswoman and Ackman himself tell the Globe that the senator’s staff knew about the investor’s bet on the company. Ackman tells the Globe it was the first thing he told Markey’s staff when they met late last year.

–PAUL MCMORROW  

BEACON HILL

The Massachusetts House approves legislation allowing the sale of alcoholic beverages at 10 a.m. on Sundays, two hours earlier than allowed under current law, State House News reports. Not all liquor store owners are fond of the idea.

An outside law firm will defend the state against lawsuits brought by medical marijuana firms, after Attorney General Martha Coakley aired complaints about the marijuana licensing process on the gubernatorial trail.

The Patrick administration offered a forceful defense of its handling of the marijuana licensing process — though the 18-page letter fails to answer some crucial questions posed by Rep. Jeffrey Sanchez, House chairman of the Joint Committee on Public Health.

More than half of the workers in the state’s Department of Transitional Assistance have reached retirement age, raising the prospect of a mass exodus.

MUNICIPAL MATTERS

It’s not like they were hoarding 200 animals or anything in a Lynnfield house — only 199.

Keller@Large says the argument that later hours for bars in Boston is a “quality of life” issue is actually anything but.

A Patriot Ledger reporter catches Quincy DPW workers burning boxes of city records, but a spokesman for Mayor Thomas Koch tells the paper the records were old and the city got the approval from the Secretary of State to burn them rather than shred to save money.

Amherst is up in arms over how “Blarney Blowout” consumed first responder resources of police, firefighters, and ambulances for the better part of a day.

Amesbury ‘s new mayor will use tax increment financing more aggressively.

Paul McMorrow says the suburbs, too, must rethink their relationship to cars if they are to grow healthily.

Boston will accelerate its bike lane construction program.

NATIONAL POLITICS/WASHINGTON

On a 97-0 vote, the Senate passes legislation overhauling how the Defense Department will handle sexual assault cases, Time reports.

Colorado made $3.5 million from marijuana taxes and fees in January, USA Today reports.

President Obama will do anything to get young people to sign up for health insurance. Anything now includes sitting between two ferns with Zach Galifianakis.

The New York Times details Chris Christie‘s takeover of the Port Authority.

The Supreme Court rules that the federal government can’t claim abandoned railroad rightsof way, throwing a cloud over thousands of miles of recreational rail trails.

ELECTIONS

In a CommonWealth Voices piece, Lawrence DiCara questions whether state campaign finance laws are still relevant in the age of “dark money.”

Young Republicans at the CPAC conference want the party establishment to drop their preoccupation with social issues. Slate’s David Weigel compiles a CPAC speech containing nothing but applause lines from this year’s conference.

BUSINESS/ECONOMY

A survey of nonprofits finds about half are planning to add jobs in the upcoming year while only about 7 percent plan to cut back.

A Wellesley College professor says she’s being red-baited as part of a campaign of attack against efforts to raise the minimum wage.

EDUCATION

Nearly 60 percent of the administrators and teachers will keep their jobs at the struggling New Bedford High School despite the superintendent’s turnaround plan that called for replacing at least 50 percent of the staff.

The Fall River School Committee votes to fine its school bus contractor $25,000 for leaving a child unattended on a van. The contractor was allowed to bid on the upcoming contract.

With  another possible winter stormon tap this week, many Western Mass. schools are all out of snow days.

Former Senate president Tom Birmingham explains his career shift to Citizen Schools.

TRANSPORTATION

An MBTA Green Line train bound for Riverside derails between the Kenmore and Fenway stations, WBUR reports.

Public transportation use hits a 57-year high.

ENERGY/ENVIRONMENT

Gov. Deval Patrick says after meeting with protesters that he’ll forward letters to federal officials from critics of the Pilgrim nuclear power plant in Plymouth and says he’s on record as opposing the plant’s continued operation.

State environmental officials said the soon-to-be-closed landfill in Fall River does not pose a public health threat from contamination but says the site and some abutting land must be capped.

CRIMINAL JUSTICE/PUBLIC SAFETY

Police will double their presence at this year’s Boston Marathon.

Former Lawrence mayor William Lantigua is subpoenaed in the trial of his former chief of staff, Leonard Degnan, the Eagle-Tribune reports.

Los Angeles considers a risk-based release system for prisoners, Governing reports.

MEDIA

The Upshot is the New York Times replacement for Nate Silver‘s FiveThirtyEight.

The American Journalism Review takes a look at some hyperlocal sites launched by former Patch employees.

The Selling of the President and Fatal Vision author Joe McGinniss dies at age 71 in Worcester, the Telegram & Gazette reports.

Gawker editor John Cook bolts for the new journalism network bankrolled by eBay billionaire Pierre Omidyar, and featuring Glenn Greenwald and Matt Taibbi. Taibbi explains the recent boom in boldface journalism startups thusly: “You’ve got this widespread mistrust of media organizations, and the feeling, from people on both sides, that the networks are in the tank for one political party or another. I think people are more willing to trust individuals than they are organizations.”