Reclaim Democracy!

Ballot Initiatives Hijacked by Corporations

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By Jeffrey Kaplan and Jeff Milchen 
March 7, 2004

Think of corporate influence peddlers and you might envision distant figures working the halls of Congress and state capitols. But more and more, they roam city halls, municipal offices and even local shopping malls attempting to snuff the growing trend of communities setting limits on corporate activities. Regardless of location, the goal of the corporate lawyers and lobbyists remains the same: to use the enormous wealth of their employers to get what they want. And they’re willing to seize the initiative — the ballot initiative, theoretically the purest form of democracy — to accomplish their goals.

California evidenced this trend on March 2 elections, when several communities faced corporate attempts to spend their way to victory on ballot initiatives.

Wal-Mart — the world’s largest corporation and soon to become the nation’s largest corporate investor in political candidates for federal offices — wasn’t pleased with a decision last year by officials in Contra Costa County (east of San Francisco Bay). The County recently joined a growing number of communities nationwide to pass laws limiting the size of enormous new “supercenters” that sell groceries as well as general merchandise. Wal-Mart used company funds to hire a corps of signature gatherers and placed an initiative on the ballot to rescind the law. In a slap in the face to its workers, Wal-Mart paid these political operatives $10 per hour — $2 more than its typical store employees. Wal-Mart’s million-dollar public relations campaign tripled spending by opponents and persuaded voters to overturn the ordinance (the company was aided by the poor construction of the law).

But big money doesn’t win every time. On the same day, voters rejected attempts by CropLife America and Pacific Lumber to translate their economic power into political victories.

CropLife, a political creation of corporations such as Monsanto, Dow and DuPont, funded a failed campaign to defeat a Mendocino County citizen initiative that would ban growing genetically manipulated crops or animals within the county. Winning 57% of votes cast, Measure H made Mendocino the first county in the nation to pass such a ban despite the industry opponents spending more than $600,000 – a county record that exceeded $54 in expenditure for each “no” vote.

Meanwhile, just north of Mendocino, executives at Pacific Lumber Company (a division of giant Maxxam Inc.) were upset with Humboldt County district attorney Paul Gallegos, who sued Pacific last year for allegedly lying about plans to log giant redwoods trees on steep slopes. Gallegos filed the suit after the logging caused extensive flooding and damage to local farmland. Pacific spent about $250,000 to run a ballot initiative to oust Gallegos from his job, but failed decisively. Even political opponents of the district attorney balked at allowing a transnational corporation to terminate a fraud case by eliminating its accuser.

But Pacific isn’t done yet — it’s emulating Nike’s failed 2003 attempt to claim a constitutional right to lie. The company has filed a countersuit claiming an obscure anti-trust provision – the “Noerr-Penington Doctrine” — effectively gives corporations the legal right to lie to government officials.

Though money doesn’t necessarily buy a win, we should question why corporations are permitted to use corporate funds to influence any democratic processes in the first place. Despite occasional setbacks, corporations have steadily seized more power over our laws and public institutions, thanks to decades of systematic efforts that have reshaped the law to fit corporate agendas rather than citizens’ interests.

Back in 1971, a corporate lawyer named Lewis Powell wrote a telling memo to the U.S. Chamber of Commerce. He asserted that big business should seek power through “careful long-range planning and implementation” and that power “must be used aggressively and with determination, without embarrassment.” Powell specified that “The judiciary may be the most important instrument for social, economic and political change.”

A month later Richard Nixon appointed Powell to the United States Supreme Court. Powell went on to write the opinion in First National Bank of Boston v. Bellotti, a 1978 decision that created a First Amendment “right” for corporations to influence ballot initiatives and other political campaigns. As one writer commented at the time in the American Bar Association Journal, the Court had constructed a “monster, like Dr. Frankenstein’s creation” that was likely to trample over democracy. The Bellottidecision is one major reason why corporations now dominate national politics and why companies like Wal-Mart can impose the will of corporate executives on communities around the country.

Undermining democracy can be lucrative for corporations but costly for the rest of us. In the case of Wal-Mart, its legendary low wages don’t impact only workers — many employees end up requiring public assistance despite having jobs, while better-paying competitors are driven out of business. According to a recent University of Southern California study, the spread of Wal-Mart supercenters in southern California could result in $1.4 billion in wage and benefit losses annually.

Citizens still win a few battles against corporate interests. But winning the larger struggle — one to determine whether it’s citizens or corporations that will control the future of our communities and country — will depend on changing the rules of engagement.

As Contra Costa county Supervisor Jon Gioia stated, it’s about local citizens having the right to make the laws in their own communities, “not Wal-Mart executives in Bentonville, Arkansas .”

Milchen directs ReclaimDemocracy.org. Kaplan is an organizer of the group’s San Francisco bay area chapter (email: JLKaplan”@”concentric.net to learn more) We soon will begin gathering support for a constitutional amendment to revoke corporate claims to Bill of Rights protections. 

Editor’s note: Unknown to us at the time of publication, another California community, San Marcos (near San Diego) overturned a city council decision via referendum, negating the approval of second a Wal-Mart in the city.

Wal-Mart Negotiates Its Own Fine for Alleged Child Labor Law Violations

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Company admits no guilt as part of deal

By Donald Mckenzie
Published by The New York Times, February 12, 2005

Editor’s note: Imagine if street criminals received two weeks notice before police began investigating a crime in which they were the primary suspect. And imagine the suspect could plea-bargain away 24 charges against them by paying a fine equal to the amount of money they make in less than 18 seconds — and it was tax-deductible.

That’s the impact of the fine described in this article on Wal-Mart, based on their 2004 annual report which declared $256 billion in revenue last year. The violations in question here are quite minor — especially in comparison to many other offenses by Wal-Mart stores — but if the Bush Department of Labor is seeking to encourage law-breaking , it’s sending the right signal.

Among the bizarre pieces of this story is the Department of Labor recalling a press release in which it referenced one specific harm from the violations — a teenager injured by using a chainsaw — and reissuing a release cleansed of the incident. Why? Wal-Mart was given the right to approve all official public statements on the case!

Update 1: On Feb. 18, 2005, the Labor Department announced it would investigate the propriety of this deal after U.S. Rep. George Miller made the complaints.

Update 2: On Jan. 18, 2006, Rep. George Miller informed us, “I am happy to report that, after much public scrutiny and controversy, DOL notified me today that it has allowed the agreement to expire. Hopefully this shameful episode will stop the Department from making other sweetheart deals in the future.”

Wal-Mart Stores, the nation’s largest retailer, has agreed to pay $135,540 to settle federal charges that it violated child labor laws in Connecticut, Arkansas and New Hampshire.

Labor Department officials said most of the 24 violations covered by the settlement involved workers under age 18 operating dangerous machinery, including cardboard balers and chain saws. In the agreement, Wal-Mart denied any wrongdoing.

Department officials said that one of the violations was in New Hampshire, three were in Arkansas and 20 were in Connecticut, where the investigation began in 2001. One violation involved a youth who injured his thumb while using a chain saw to cut Christmas trees.

The Labor Department and Wal-Mart signed the agreement on Jan. 6, but made no public announcement. The department disclosed the settlement yesterday after a reporter questioned officials about concerns raised by several department employees that the agreement gave Wal-Mart special favors.

The agreement states, “Compliance with the child labor laws and regulations will be an important factor in evaluating the performance of managers.”

A provision also promises to give Wal-Mart 15 days’ notice before the Labor Department investigates any other “wage and hour” accusations, like failure to pay minimum wage or overtime.

That provision drew criticism yesterday from Representative George Miller of California, the senior Democrat on the House Education and Workforce Committee. (Editor’s note: His office subsequently analyzed the agreement and issued this report detailing its irregular nature). It also prompted complaints from some Labor Department investigators who spoke on the condition of anonymity for fear of retaliation.

“With child labor cases involving the use of hazardous machinery, why give 15 days’ notice before we can do an investigation?” asked a district office supervisor who has worked in the wage and hour division for nearly 20 years. “What’s the rationale?”

Victoria Lipnic, assistant labor secretary for employment standards, called the settlement typical, saying that giving Wal-Mart notice before conducting investigations would encourage the company to correct the problems sooner.

The department employees also said the agreement was unusual because the department had never announced it.

Department officials said they were preparing a news release and were waiting for Wal-Mart to pay the $135,540 before making the settlement public.

In the settlement, Wal-Mart agreed not to employ any worker under age 14 and agreed to prohibit any employee under 18 from operating cardboard balers. It also agreed to post a notice on each cardboard baler saying that minors may not use or touch the balers. Wal-Mart also agreed to train new store managers about compliance with child labor laws and to provide more training to current managers on the subject.

“We worked with the Department of Labor to strengthen our training and compliance programs,” said Gus Whitcomb, a spokesman for Wal-Mart, which is based in Bentonville, Ark. “Again, our focus is to be 100 percent compliant with all applicable laws.”

Wal-Mart has faced previous child labor charges. In March 2000, Maine fined the company $205,650 for violations of child labor laws in every one of the 20 stores in the state. In January 2004, a weeklong internal audit of 128 stores found 1,371 instances in which minors apparently worked too late at night, worked during school hours or worked too many hours in a day. Company officials said the audit was faulty and had incorrectly found that some youths had worked on school days when, in fact, those days were holidays.

Under the new agreement, the Labor Department did not waive its right to conduct future investigations. Still, several department officials suggested that the provision for 15 days’ notice might give Wal-Mart an opportunity to hide violations.

John R. Fraser, the government’s top wage official under the first President Bush and President Bill Clinton, said the advance-notice provision was unusually expansive.

“Giving the company 15 days’ notice of any investigation is very unusual,” Mr. Fraser said. “The language appears to go beyond child labor allegations and cover all wage and hour allegations. It appears to put Wal-Mart in a privileged position that to my knowledge no other employer has.”

Ms. Lipnic countered, “We usually call employers before we go to investigate,” and said there was “nothing uncommon or unprecedented about that.”

Several federal employees voiced concern about a Jan. 10 e-mail message sent by the director of the Little Rock, Ark., office for the Labor Department’s wage and hour division after the settlement was reached, that said, “Wage & Hour will not open an investigation of Wal-Mart without first notifying Wal-Mart’s main office and allowing them an opportunity to look at the alleged violations and, if valid, correct the problem.”

But Cynthia Watson, the division’s Southwest regional director, said advance notice would speed compliance. “We are seeking to centralize the points of contact in order to get the people involved to resolve the issue,” Ms. Watson said.

Addendum: Tuesday, Feb. 15, 2005. Victoria Lipnic, assistant labor secretary for employment standards, claims the advance notice applied only to complaints alleging child labor violations and not all wage/time violations.

© 2005 The New York Times

Wal-Mart Moves Into Banking and Financial Services

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By Wendy Zellner
Published by Business Week Jan 27, 2005
Editor’s note: We have nothing to do with Wal-Mart financial services. Please do not contact us with questions for Wal-Mart!

Wal-Mart Stores didn’t get to be the world’s biggest retailer by giving up easily. So despite being twice thwarted by lawmakers in its efforts to buy a bank, it has quietly but tenaciously expanded its foothold in financial services.

In its latest move, announced on Jan. 21, the retailing giant is introducing a no-fee Wal-Mart Discover credit card that offers 1% cash back, which it will launch with GE Consumer Finance in March.

This relentless push into financial services is starting to send shivers through the banking industry. Few believe Wal-Mart will stop with basic services as it applies its low-price, high-volume formula to yet another business category. And while other companies, from Nordstrom to General Motors, have bank and thrift charters or hybrid Federal Deposit Insurance Corp.-insured industrial loan companies (ILCs) in tow, no one trips alarms like Wal-Mart.

ON THE MOVE

Many community bankers are convinced the behemoth won’t rest until it has obtained full banking powers. “It’s not a question of if Wal-Mart is going to be a bank, it’s a question of when,” says D. Anthony Plath, a finance professor at the University of North Carolina at Charlotte who occasionally enjoys play games that pay real money.

Clearly, Wal-Mart is on the move. Over the past three years, the giant has steadily built alliances with financial-service providers, such as MoneyGram International and SunTrust Banks, enabling it to offer services such as bargain-price money orders and wire transfers. It has bank branches operated by partners in nearly 1,000 of its massive supercenters.

And it has stepped up the pace. SunTrust is experimenting with nearly 45 in-store bank branches co-branded as “Wal-Mart Money Center by SunTrust,” with plans to expand to about 100 of them by early 2006.

UNDERSERVED CLIENTELE

Already, Wal-Mart customers are reaping the benefit. They can cash payroll checks for just $3, transfer money to Mexico for $9.46, and buy a money order for 46¢. Some competitors charge twice as much. Many are mostly high-margin, highly fragmented businesses in which the poor and immigrants are sometimes at the mercy of unscrupulous operators.

“Traditionally, nonbank vendors of financial services have charged an arm and a leg,” says David Robertson, publisher of The Nilson Report , a newsletter about credit and debit cards. Adds Gary Stibel of New England Consulting Group in Westport, Conn.: “Wal-Mart is giving people in lower-income brackets opportunities in financial services they never had before.”

Financial services could open a rich new vein of profits for Wal-Mart as it seeks to remain a growth company. By one rival’s estimate, the market for services that Wal-Mart already offers is worth about $5 billion a year in fees, leaving plenty of room for it to slash prices while making a profit. As it has with other goods, Wal-Mart will slowly “collapse the price umbrella,” squeezing check cashers and wire-transfer leader Western Union Financial Services, predicts Robert Markey Jr., consultant Bain & Co.’s director for financial services.

SOME CLOSED DOORS

For the time being, though, the basic services it offers represent little more than a rounding error for the $287 billion goliath. Wal-Mart doesn’t break out results for the unit, lumping them into the company’s “other income,” which totaled $2.1 billion in the first three quarters of the last fiscal year. That was up 31% but amounted to just 1% of total revenues.

Still, there’s huge growth potential. Says banking consultant Bert Ely of Ely & Co. in Alexandria, Va.: “They’re developing, in customers’ minds, a link between Wal-Mart and going to the bank. That has powerful long-term implications.”

Not all financial-service suppliers are willing to ride this tiger. Jane Thompson, president of Wal-Mart Financial Services, concedes that “some of the leaders in the industry don’t want to hurt their margins and don’t want to work with us.”

But MoneyGram, with a market share of around 1% in global money transfers, is a distant No. 2 to Western Union, which has 12%. For such players, Wal-Mart promises huge volumes of business through its 3,100 U.S. stores and more than 100 million customer visits a week. As the underdog, MoneyGram was already cost-conscious and focused on growth, not on protecting margins — a perfect partner for Wal-Mart, says MoneyGram Vice-President Daniel O’Malley. And it can’t hurt to learn how Wal-Mart does business, notes SunTrust Executive Vice-President Christopher Holmes, especially if Wal-Mart achieves full-fledged banking status.

END-AROUND?

Could Wal-Mart really become a bank? First, it would have to take on current prohibitions on combining banking and commerce. The laws were designed to prevent a big player such as Wal-Mart from denying credit to competitors or shifting losses from its retail business to an insured bank.

But many expect Wal-Mart to overcome those rules. Ronald Ence, vice-president of Independent Community Bankers of America, says Wal-Mart lobbied last year to expand the banklike powers of the ILCs. A bill that passed the House, but not the Senate, in 2004 would have allowed unlimited interstate banking, but only for those with at least 85% of their business in financial services.

Wal-Mart denies any such lobbying. It tried to buy a savings bank in Oklahoma in 1999, only to be blocked by the Gramm-Leach-Bliley Act, which overhauled federal banking law. And the California legislature halted Wal-Mart’s plan in 2002 to buy a small ILC.

THE SEARS EXPERIENCE

Yet if Wal-Mart were to gain full banking status, it would be able to offer everything from checking and savings accounts to mortgages, car loans, and even small-business loans at prices that rivals could be hard put to match, let alone beat. “There’s no question, they want to have a nationwide financial-services network. If they do, there’s no doubt in my mind they’ll be able to do to community banks the same thing they’ve done to the local grocery store and the local hardware store and the local clothing store,” says the community banker group’s Ence.

Wal-Mart insists its financial plans don’t depend on owning a bank or a thrift. “Our strategy is what you see,” says Wal-Mart’s Thompson, who was once executive vice-president of Sears Roebuck’s credit business. The services Wal-Mart offers are aimed squarely at its core, lower-income customers and employees. Many are among the estimated 56 million American adults don’t have a bank account. “Helping the underserved customer gets right at what we like to be known for,” says Thompson, who joined Wal-Mart in May, 2002.

More important than the unit’s profits, she says, is that these services bring customers into stores more often. She seems to have learned from Sears’ ill-fated 1980s effort to create a financial supermarket with its Allstate insurance, Dean Witter brokerage, and Coldwell Banker Real Estate units. Sears lost focus on its core business and found that many customers didn’t want to buy mutual funds or insurance from the same place that sold them appliances. “My whole thing is about starting with the customer,” says Thompson, who joined Sears in 1988 and took over its credit operation in 1993.

NO DAMAGE YET.

Even though Wal-Mart may be following a gradual approach to avoid Sears’ mistakes, it occasionally hints at bigger ambitions. On its Web site, Wal-Mart describes itself as “a trusted name in financial services.” In stores, it’s slapping its powerful brand on the money centers operating there.

So far, big rivals say Wal-Mart isn’t hurting them. 7-Eleven, which offers check-cashing, money orders, and the like through 1,000 electronic store kiosks, says it’s focused on convenience, not offering the lowest price. Likewise, Eric Norrington, a spokesman for Ace Cash Express, the nation’s biggest check-cashing chain, says Wal-Mart hasn’t affected his company’s pricing or growth. “Wal-Mart has validated the importance of this market segment. That’s attention we welcome,” he says.

But as toy retailers, grocers, and even jewelers have painfully discovered, complacency in the face of Wal-Mart can be suicidal. Given the behemoth’s long interest in the financial arena, technological savvy, cheap capital, and instant national reach, small and midsize banks, in particular, are right to be paranoid. Even big ones should be wary. “The mistake would be to stick your head in the sand and try to convince yourself that Wal-Mart is not a factor,” says Bain’s Markey.

For no matter what the obstacles, Wal-Mart seems determined to be a force in finance.

© 2005 Business Week

Why Privatizing Social Security Would Weaken Our Republic

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By Benjamin Barber 
First published by the LA Times, January 27, 2005

Social Security privatization has been vigorously challenged on both economic and technical grounds. It has been said again and again that privatization increases risk for prospective retirees without solving the long-term Social Security financing shortfall (if there actually is one). It has been argued that privatization is merely a scheme to divert money from the Social Security trust fund for speculative stock market investments. And it has been noted that it creates new costs (portfolio management, government oversight) without being able to guarantee workers future retirement benefits.

Yet the most profound cost of privatization has been wholly ignored: the systemic cost to our public way of life. By turning a public social insurance and pension policy into a private bet in which personal and private decisions determine who does well and who does badly, we do irreparable harm to our democratic “common ground.” After all, one of this nation’s greatest public goods has been its promise to give every working family a guarantee of support at retirement, or in case of disability or death. This promise, offered to all citizens, wipes away all the distorting traces of class, race and gender that often play out so dismayingly in the private realm. You cannot simply take justice out of the public realm and put it into the private realm without fundamentally weakening the democracy on which the very possibility of justice depends.

Conservatives ought to recognize even more quickly than liberals that privatization – whether of education, housing or Social Security – makes us less of a public. It diminishes the republic – the res publica, or public things that define our commonweal. It turns the common “we” into a collection of private “me’s.” It opts for market Darwinism, in which smart investors prosper but others lose, rather than social justice as its organizing principle. It demeans the “us” by turning “us” into “it” – the big, bad, faceless government bureaucracy. And it privileges the private and individual by appealing to market liberty, as if people could really be free one by one or as consumers alone.

Private market liberty is not political liberty; it is only personal choice. It may generate private benefits (“I want an SUV!” or “Give me 100 shares of EBay!”) but offers nothing for the common good (a fuel conservation policy, for instance). It is as citizens that we pay our Social Security taxes, and it should be as citizens that we enjoy the fruits of our labor.

Yet privatization tries to convince us that the consumer is simply another, more efficient, form of the citizen. The citizen who votes with her dollars rather than her ballots. But dollars don’t deliberate. They don’t seek common ground. They are not bearers of empathy and imagination. As education consumers in Chicago or Washington, we can select the “best schools” for our children, but as citizens we need public schools that help make us all public citizens. As consumers in Los Angeles, we can choose among hundreds of automobile models, but only as citizens can we make the choices that create a public transportation system serving all.

Privatization is a kind of reverse social contract: It dissolves the bonds that tie us together. The social contract takes us out of the state of nature; it asks us to give up a part of our private liberty to do whatever we want in order to secure common liberty for all. Privatization puts us back in the state of nature where we possess the natural power to get whatever we can but lose the common power to secure everything to which we have a natural right.

Private choices rest on individual power and skills and on personal luck. Public choices rest on civic rights and common responsibilities. With privatization, this administration is trying to seduce us back into the state of nature, where the strong dominate the weak and anarchy ultimately dominates the strong and the weak, undermining security for both. Under these conditions, Thomas Hobbes reminds us, we are perfectly free to do as we choose, but as a consequence we live lives that are “solitary, poor, nasty, brutish, and short.” Not an ideal recipe for social security.

The Social Security entitlement should not be toyed with and altered in accord with today’s economic fashions. It is an emblem of civic membership and a reflection of the benefits that come with the responsibilities of citizenship.

For us as individuals, privatizing Social Security is probably a bad bet on technical grounds. But for us as citizens, it is a certain disaster. As prospective retirees and private consumers we may want to argue about it, but as citizens, if we care about our democratic republic, we are bound to condemn it.

Benjamin R. Barber, a professor of political science at the University of Maryland, is the author of “Jihad vs. McWorld” (Ballantine, 1996) and other books.

© 2005 Los Angeles Times

U.S. Baby Death Rates Exceeds Cuba, Beijing

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More attention must be paid to the subtle tragedy of U.S. health care

By Nicholas Kristof 

First published by the New York Times, Jan 12, 2005

Here’s a wrenching fact: If the U.S. had an infant mortality rate as good as Cuba’s, we would save an additional 2,212 American babies a year.
Yes, Cuba’s. Babies are less likely to survive in America, with a health care system that we think is the best in the world, than in impoverished and autocratic Cuba. According to the latest C.I.A. World Factbook, Cuba is one of 41 countries that have better infant mortality rates than the U.S.Here’s a wrenching fact: If the U.S. had an infant mortality rate as good as Cuba’s, we would save an additional 2,212 American babies a year.

Even more troubling, the rate in the U.S. has worsened recently.

In every year since 1958, America’s infant mortality rate improved, or at least held steady. But in 2002, it got worse: 7 babies died for each thousand live births, while that rate was 6.8 deaths the year before.

Those numbers, buried in a recent report from the Centers for Disease Control and Prevention, didn’t get much attention. But they are part of a pattern of recent statistics dribbling out of the federal government suggesting that for those on the bottom in America, life in our new Gilded Age is getting crueler.

“America’s children are at greater risk than they’ve been in for at least a decade,” said Dr. Irwin Redlener, associate dean at the Mailman School of Public Health at Columbia University and president of the Children’s Health Fund. “The rising rate of infant mortality is an early warning that we’re headed in the wrong direction, with no relief in sight.”

It’s too early to know just what to make of the increase in infant mortality in 2002 for American babies. Reliable data for 2003 and 2004 are not out yet. Sandy Smith of the Centers for Disease Control says that the statisticians are pretty sure there was not a further deterioration in 2003, but that it’s too soon to know whether there was an improvement or just a leveling off at the higher rate.

Singapore has the best infant mortality rate in the world: 2.3 babies die before the age of 1 for every 1,000 live births. Sweden, Japan and Iceland all have a rate that is less than half of ours.

If we had a rate as good as Singapore’s, we would save 18,900 babies each year. Or to put it another way, our policy failures in Iraq may be killing Americans at a rate of about 800 a year, but our health care failures at home are resulting in incomparably more deaths – of infants. And their mothers, because women are 70 percent more likely to die in childbirth in America than in Europe.

Of course, deaths in maternity wards occur one by one, and don’t generate the national attention, grief and alarm of an explosion in Falluja or a tsunami in Sri Lanka. But they are far more frequent: every day, on average, 77 babies die in the U.S. and one woman dies in childbirth.

Bolstering public health isn’t as dramatic as spending $300 million for a single F/A-22 Raptor fighter jet, but it can be a far more efficient way of protecting Americans.

For example, during World War II, the employment boom meant that many poor Americans enjoyed regular health care for the first time. So even though 405,000 Americans died in the war, life expectancy in the U.S. actually increased between 1940 and 1945, rising three years for whites and five years for blacks.

True, infant mortality and many other American health problems are largely intertwined with poverty, and experience suggests that neither the left nor the right has easy solutions for intractable poverty. But some of the steps the government is now taking or talking about – like cutting back further on entitlements, particularly those giving children access to health care – would aggravate the situation. Last year, a study by the Institute of Medicine, a branch of the National Academy of Sciences, estimated that the lack of health insurance coverage causes 18,000 unnecessary deaths a year.

As readers know, I complain regularly about the Chinese government’s brutality in imprisoning dissidents, Christians and, lately, Zhao Yan, a New York Times colleague in Beijing. Yet for all their ruthlessness, China’s dictators have managed to drive down the infant mortality rate in Beijing to 4.6 per thousand; in contrast, New York City’s rate is 6.5.

We should celebrate this freedom that we enjoy in America – by complaining about and working to address pockets of poverty and failures in our health care system. It’s simply unacceptable that the average baby is less likely to survive in the U.S. than in Beijing or Havana.

© 2005 New York Times

Court Upholds Superstore Ban in Turlock, CA

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By John Holland 
First published by the Modesto Bee, Dec 22, 2004

TURLOCK – A Stanislaus County Superior Court judge has upheld a city ordinance that kept Wal-Mart from building a supercenter near Fulkerth Road.

Judge Roger Beauchesne rejected Wal-Mart’s claim that the ban illegally interfered with retail competition.

The judge said the stated goals of the nearly year-old ban – preventing traffic jams and protecting neighborhood grocers – were “reasonably related to the public welfare.”

The nine-page ruling was delivered to the city and Wal-Mart on Monday.

“It’s very encouraging,” Mayor Curt Andre said Tuesday. “This is about being able to be responsive to the voters and the values of the community.”

Wal-Mart spokesman Peter Kanelos said the chain’s management had not decided whether to appeal the ruling. It resulted from a lawsuit filed by the company in February, a month after the City Council approved the ban on a 5-0 vote.

“We strongly believe that the impact of this ordinance will be to limit consumer choice,” Kanelos said.

He noted that a federal judge had yet to rule on a parallel lawsuit charging that the ban violated Wal-Mart’s right to conduct commerce under the U.S. Constitution.

Wal-Mart, which has had a 125,000-square-foot store on Fulkerth since 1993, proposed last year to build a 225,000-square-foot supercenter nearby. The larger store would have combined the department store selections of a conventional Wal-Mart with a full-service grocery section.

Backers cite congestion, blight
Backers of the ban said the proposed store would worsen congestion as customers made frequent crosstown trips to buy groceries. Backers also said the store could lead to the closure of supermarkets that anchor small shopping centers around the city – a change that could bring “blight” to the neighborhoods.

The debate was among the fiercest in Turlock in recent years, drawing overflow crowds to Planning Commission and council meetings last year.

“The main issue I had against Wal-Mart was that they were trying to force their way into a city that didn’t want them,” Jacqueline Hollcraft, a Turlock homemaker, said Tuesday. “If a city wants them, that’s fine for that city.”

Some opponents brought up the nationwide debate over Wal-Mart wages and benefits – are they adequate?

People who opposed Turlock’s ban said city shoppers would lose out on Wal-Mart bargains, and the city would lose out on sales tax.

“I think there was a great opportunity to get an enormous amount of sales tax to go to their budget, which they are in dire need of,” Bob Santo, a retired sales representative for the American Automobile Association, said Tuesday. “I also think (Wal-Mart) employs a lot of people.”

Wal-Mart, the world’s largest retailer, has more than 1,200 supercenters but only recently brought the concept to California. One of the stores opened in Stockton in October, to little protest. Lodi voters last month rejected a measure that would have hindered plans for a store there.

Officials in Oakdale and Riverbank have talked about the impacts that supercenters might have, though no such stores have been proposed in those cities. On Monday, the Oakdale City Council passed new rules regulating “big-box” stores.

The Turlock ordinance bans most new or expanding discount stores that exceed 100,000 square feet and devote at least 5 percent of the space to groceries and other nontaxable items.

The ordinance exempts membership stores, such as the new Costco Wholesale near Monte Vista Avenue, on the grounds that their customers shop infrequently and buy in bulk, and therefore do not jam traffic.

Wal-Mart claimed that the ordinance singled out the retailer and violates state law by using zoning powers to regulate business competition.

According to the lawsuit, Turlock officials at first welcomed a supercenter but then moved to ban it after meeting with executives from competing grocery chains and a leader in the grocery workers union.

Judge sees legitimate concern
City officials said such meetings are a proper way of hearing the views of constituents.

Beauchesne cited appellate rulings in other cases in concluding that the ban is valid. He acknowledged that it will affect grocery competition, but said Turlock officials had “a legitimate concern for blight, traffic congestion and its resulting air pollution.”

“The fact that the ordinance does or will have an incidental effect on competition is irrelevant so long as there is otherwise a valid purpose in enacting the ordinance,” the judge wrote.

Wal-Mart argued that the ban forces residents to go to multiple stores for groceries and other items, thus producing more traffic and air pollution than if they did one-stop shopping at a supercenter.

Under state law, the lawsuit stated, these environmental effects had to be studied before the council could enact the ban.

City officials said no environmental study was needed, because the ordinance was simply a means of carrying out land-use policies outlined in the Turlock general plan, which had its own environmental review.

Beauchesne agreed.

The council so far has authorized $130,000 in payment to the Oakland law firm defending the city against the Wal-Mart lawsuits. The expense spurred protests from some residents, but Andre said the money is being well-spent.

© 2004 Modesto Bee

Update, April 2006: A California appeals court upheld this ruling after an appeal by Wal-Mart.

For those seeking to learn more about legal tools for controlling the impacts of chains, we suggest visiting NewRules.org. To learn about community alliances to support community-based business, see AMIBA.net.

Index of articles and studies on Wal-Mart and big box stores