Reclaim Democracy!

Archives for October 2010

Wal-Mart Plays the Victim

by

By Phil Mattera 
First published by Dirt Diggers Digest, Sept 23, 2010

In the mid-1990s business groups such as the American Trucking Association – then led by Thomas Donohue, currently head of the U.S. Chamber of Commerce – launched a crusade to ban union corporate campaigns. The effort fizzled out, but now Wal-Mart may be trying something similar to thwart site fights pursued by community groups opposed to the opening of the giant retailer’s stores and distribution centers.

The company is pouncing on a story published in the Wall Street Journal in June reporting that rival grocery chains such as Safeway and SuperValu helped to pay for the services of a firm called Saint Consulting Group, which has worked with community groups around the country in campaigns against Wal-Mart projects. The article also reported that Saint’s fees are sometimes paid by the United Food and Commercial Workers. The UFCW does not hide the fact that it works with community groups opposed to the virulently anti-union Wal-Mart, whose expansion threatens the jobs of UFCW members at unionized competitors. The UFCW confirmed to the Journal that it has funded Saint and insisted it had every right to do so. The newspaper said that the rival chains declined to comment.

In a just-published follow-up article , the Journal reports that Wal-Mart is asking courts to compel its opponents to disclose who is paying their legal bills in various environmental lawsuits challenging the company’s expansion. This could be the first step in an effort to get courts and perhaps friendly legislatures to put restrictions on site fights and their funding. While Wal-Mart claims to be most upset about the involvement of its competitors, the company may try to use this issue to weaken community groups and the UFCW, its long-time nemesis.

It is the height of hypocrisy for Wal-Mart to complain about collusion among its adversaries. The beast from Bentonville has never hesitated to use every trick at its disposal – including the funding of front groups – to advance its expansion efforts. Over the summer it succeeded in getting permission to build a second store in Chicago by using tactics such as creating fake community groups and hiring low-income people to pose as demonstrators supposedly eager to get a Wal-Mart job. The company also pretended to have seriously negotiated with unions on wage rates for the store.

Several years ago, Wal-Mart sought to defuse criticism of its detrimental impact on local businesses by launching an “Opportunity Zone” program that amounted to little more than bribing small firms to back its agenda. In 2006 it came to light that two blogs that appeared to be written by independent supporters of the company were actually created by Wal-Mart’s public relations firm, Edelman. That was in addition to reports that the company was cultivating real bloggers, some of whom were repeating company talking points verbatim.

The amount of money Wal-Mart’s competitors have contributed to site fights probably does not compare to what Wal-Mart has spent itself. Apart from the direct costs of those site battles, the company cultivates political support through direct means such as campaign contributions and is believed to make wide use of indirect means such as giving consulting contracts to relatives of public officials.

State and local governments end up paying for the company’s campaigning through the economic development subsidies (estimated at more than $1.2 billion) they give to Wal-Mart and the forms of tax avoidance (estimated at billions more) that the company arranges for itself.

Wal-Mart may feel that the likes of Safeway and Supervalu are violating some unspoken rule by supporting site fights, but it has broken every rule in the book itself in pursuit of endless expansion. But rather than defending those rivals, the most important thing is to be sure Wal-Mart does not exploit this issue to put shackles on community groups and unions, which are often the only forces working against the company’s quest to take over everything.

Walmart Seeks to Force Disclosure of Opponents’ Funders

by

By Ann Zimmerman and Timothy W. Martin 
First published by the Wall St. Journal, Sept 22, 2010

Wal-mart Stores Inc. is fighting back against a longtime corporate-sabotage campaign undertaken by grocery competitors to slow its growth.

The Bentonville, Ark.-based retailer recently asked judges to require its opponents to disclose who is footing the legal bills in four out of the dozens of California lawsuits against Wal-Mart that have helped delay the company’s expansion.

Lawyers for Wal-Mart want to know if the protracted environmental suits have been funded not by grass-roots activists, as the company long thought, but rather by competitors. “We believe the court and the community have a right to know who is funding the suits,” said Wal-Mart spokesman David Tovar.

Wal-Mart filed the discovery motions after a June article in The Wall Street Journal said grocery competitors Safeway Inc., Supervalu Inc. and Ahold NV secretly funded hundreds of lengthy battles across the country opposing Wal-Mart’s efforts to open supercenters, which sell groceries and general merchandise. In some instances, the grocery chains’ efforts were aided by grocery-worker unions, which fear that Wal-Mart will suppress industry wages and benefits.

The grocers hired Saint Consulting Group, a land-use firm based in Massachusetts, to carry out antidevelopment campaigns against Wal-Mart using political tactics and suits to delay or derail the opening of Wal-Mart stores, the Journal said.

In two of the four California cases involving Wal-Mart, the Journal reviewed internal Saint documents that showed the consulting firm was hired by Safeway to thwart Wal-Mart’s expansion.

In all, Safeway hired Saint to organize more than 30 campaigns against Wal-Mart projects in the state in the past eight years.

One of them resulted in a court decision that made it more difficult to build big-box stores in California, according to Saint internal documents that list the company’s projects, clients and billing numbers.

Safeway, based in Pleasanton, Calif., didn’t return calls seeking comment.

Pat Fox, president of Saint, acknowledged his firm was hired to organize opposition to hundreds of Wal-Mart projects, but he declined to name his clients.

“The work we do helps to level the playing field as regular citizens try to fight back against the world’s largest retailer and the impact of big-box development in their communities,” Mr. Fox said.

Saint maintains that the Journal’s account came from disgruntled company employees who want to harm the firm.

Wal-Mart lawyers estimate that about a third of the company’s stores in California were challenged by local groups prior to 2002, but once it began trying to open supercenters selling groceries, almost every store faced opposition.

Wal-Mart recently combed through dozens of legal cases brought against it. It zeroed in on suits involving the California towns of Merced, Realto, Elk Grove and Galt, all of which claimed that Wal-Mart-based developments violated the California Environmental Quality Act, which requires cities to subject building projects to stringent environmental-impact studies before approving them.

Wal-Mart says it chose these cases because they were at a procedural stage that permitted the filing of discovery motions.

The Journal’s review of Saint documents indicates that Safeway hired Saint to organize opposition in Merced and Elk Grove, though the documents don’t specify whether Saint paid the plaintiffs’ legal fees. The judge handling the Merced case has granted Wal-Mart’s request for discovery.

Wal-Mart has been trying to open a distribution center in Merced for four years. The city has an unemployment rate of about 20%, and the company projects the center would provide about 1,200 jobs with average pay of $17.50 an hour for fulltime workers.

But a group calling itself the Merced Alliance for Responsible Growth is vehemently opposed. In advance of a summer 2009 city council vote on the project, it published a 12-page newspaper with such headlines as “Wal-Mart Jobs Threaten Lives.”

One article, citing a trucking magazine story about Federal Bureau of Investigation prostitution stings at public truck stops, suggested that the distribution center could be a magnet for prostitution, drugs and crime, possibly involving the local high school.

The anti-Wal-Mart newspaper was paid for by Saint using Safeway and union funds, according to two former Saint employees who were interviewed by the Journal.

The Merced Alliance didn’t return calls seeking comment. Saint’s Mr. Fox declined to comment on specific allegations or events.

In 2008, the United Food and Commercial Workers union in California spent $58,000 on the Warn Merced Project, described as a Wal-Mart project in an annual report filed by the union with the U.S. Labor Department.

“Hiring Saint and other organizations…is within our First Amendment rights,” said Jill Cashen, a union spokeswoman.

Merced’s city council approved the distribution center in September 2009. The Merced Alliance for Responsible Growth filed suit 30 days later, claiming that Wal-Mart’s environmental review was flawed. A judge heard oral arguments on the case earlier this month, but hasn’t yet ruled.

The Merced case follows a battle against Wal-Mart in Bakersfield, Calif., earlier in the decade.

A group called Bakersfield Citizens for Local Control consisted of a Saint employee who used an alias and posed as a resident volunteer, several union workers, and a Bakersfield resident who was paid by the plaintiffs’ lawyers who brought the case, according to former Saint employees.

To dissuade the Bakersfield city council from approving one of two shopping centers that were to include Wal-Marts, the group tried to prove that the site was a habitat for the endangered San Joaquin kit fox.

Then, when the city council nonetheless approved the project, Bakersfield Citizens sued, arguing that the two Wal-Marts might force other stores to close.

In 2005, a California appellate court agreed that the potential for blight should be taken into account, overturning the city’s approval of the two shopping-center sites.

But a more extensive environmental impact report concluded that the area could accommodate the Wal-Mart stores. One opened in fall 2009 and the other in March 2010.