By Kris Hudson 
First published by The Wall St. Journal, December 7, 2006

Over the last year, Lee Scott has appeared on the Rev. Al Sharpton’s radio show, talked about pro-environment policies and given speeches that repeatedly state his organization’s devotion to “working families.”

If Mr. Scott, the chief executive of Wal-Mart Stores Inc., seems like he’s running for office, it’s no accident. For the last 15 months, the Edelman public-relations firm, led by seasoned political operatives, has been directing a campaign it calls “Candidate Wal-Mart.” The goal: Rescue the battered image of the world’s largest retailer.

Edelman’s bipartisan team has been behind the curtain during Wal-Mart’s most visible recent initiatives — and some of its public stumbles. When Wal-Mart decided to sell an array of generic drugs for $4 a prescription, Edelman orchestrated a 49-state rollout, lining up local dignitaries in 79 places for publicity events. The PR giant also organized a grass-roots group called Working Families for Wal-Mart. But it had to scramble when the leader it helped recruit, Andrew Young, made derogatory comments about ethnic shopkeepers and was forced to resign.

Wal-Mart badly needs a boost. Its sales growth has waned in recent years and an effort to reach out to higher-earning shoppers has sputtered, partly because of the company’s beleaguered image. Sales at stores open more than a year fell 0.1% in the four weeks ending Nov. 24 — only the second monthly drop in 27 years. This year Wal-Mart scaled back expansion plans amid pressure from investors and political opposition in New York, Massachusetts, California and elsewhere.

As Edelman and Wal-Mart see it, image is crucial for drawing customers, smoothing the way for new stores in urban areas and beating back legislation that would raise costs. “This is not a public-relations campaign,” says Michael Deaver, a former chief of staff for President Reagan who is now helping to oversee the Wal-Mart account as an Edelman vice chairman. “It’s a win-or-lose campaign. And if you’ve been involved in a presidential campaign, that’s the way you look at things.”

Leslie Dach, a former adviser to Democratic politicians, led the campaign’s first year as an Edelman vice chairman. Now Mr. Dach is a Wal-Marter in full: In July, the retailer hired him as an executive vice president for communications and government relations, reporting directly to Mr. Scott, the CEO.

For years Wal-Mart did little to promote itself as a positive social force, believing its low prices would speak for themselves. But as it mushroomed to become one of the world’s biggest companies — with 6,700 stores and $312 billion in sales last year — it increasingly felt the sting of public criticism and pressure to fight back.

The pressure grew last year when unions started two organizations to hammer Wal-Mart: the Service Employees International Union’s Wal-Mart Watch and WakeUpWalMart.com, funded by the United Food and Commercial Workers union. At Wal-Mart’s annual meeting on June 3, 2005, Mr. Scott said: “Your company is the focus of one of the most well-organized and well-financed corporate campaigns in history…A coalition of unions and others are spending over $25 million this year alone to try to do damage to this company.”

A few weeks later, on June 28, two dozen Wal-Mart executives sat behind tables at a community-college conference center in Bentonville, Ark., Wal-Mart’s hometown. They heard pitches from three PR firms chosen as finalists — Edelman, APCO Worldwide and DCI Group.

War Room of Publicists 
In their “Candidate Wal-Mart” pitch, Messrs. Dach and Deaver of Edelman described a campaign with all the trappings of a U.S. presidential bid. A war room of publicists would respond quickly to attacks or adverse news. Operatives would be assigned to drum up popular support for Wal-Mart via Internet blogs and grass-roots initiatives. Skeptical outside groups, such as environmentalists, would be recruited to team up with Wal-Mart. Edelman won and quickly put its plan into practice, with three dozen staffers working on the account in Washington, D.C., and Bentonville.

Wal-Mart had been mulling the $4-per-prescription program before Edelman’s arrival, but the firm saw it as a chance to promote Wal-Mart as a catalyst for health-care change. In late September, Wal-Mart executives gathered with Florida officials, including Gov. Jeb Bush, to announce the program’s introduction in the Tampa area. That generated national coverage, despite Wal-Mart’s initial statements that it wouldn’t expand the program beyond Tampa until 2007. Then the company rolled it out in rapid-fire succession to 48 other states, declaring that the low-cost pills were so popular it didn’t want to keep people waiting.

The acceleration of the program earned new national coverage, but even more important were local news outlets. The 79 news conferences arranged by Edelman across the country helped the effort win notices from The Dallas Morning News, Vermont ‘s Burlington Free Press and others.

Privately held Edelman is the largest U.S. public relations firm with 2005 revenue of $254 million and clients such as Microsoft Corp. and Pfizer Inc. (Dow Jones & Co., publisher of The Wall Street Journal, has also been a client.) Both Wal-Mart and Edelman decline to disclose Edelman’s fee, but outside estimates put it in the millions of dollars annually.

Mr. Dach, a slightly built 52-year-old, was born and raised in the New York City borough of Queens, son of a homemaker and a small-business owner in Manhattan ‘s garment district. He studied neurobiology at Yale but quickly was drawn to politics, working on the advance teams of Sen. Edward Kennedy and President Carter during their 1980 presidential bids.

He went on to play prominent advisory roles for Democrats in five of the next six presidential campaigns. He prepared Al Gore for debates in 2000 and handled publicity for Democratic efforts in 2004 to keep Ralph Nader off the ballot in several states. In between campaigns, he spent 17 years at Edelman advising clients such as a Fujifilm Corp. division and the Nature Conservancy.

Mr. Dach believes his experience trouble-shooting for political candidates can be applied to the corporate world. “Every crisis is an opportunity,” he said in a recent interview. “The American people understand imperfection. But what they want to see is a company taking responsibility and then moving forward.”

Soon after getting hired by Wal-Mart, Edelman found an opening. In the wake of Hurricane Katrina, Wal-Mart rushed to reopen its stores and speed supplies to the storm-damaged areas. Edelman helped Wal-Mart get coverage for its efforts and spotlighted Jason Jackson, the retailer’s emergency-planning director. Mr. Jackson gave interviews, spoke on a conference call with reporters and gave some a peek into his command center for tracking weather and routing supplies.

After the storm, evacuees and local officials proclaimed in the news that Wal-Mart had outhustled the federal government. Also, Wal-Mart quickly made a $15 million donation to the hurricane-relief fund organized by former Presidents Clinton and Bush. The two ex-presidents praised Wal-Mart’s generosity.

Another early Edelman initiative was Working Families for Wal-Mart, the grass-roots organization. The idea was to allow Wal-Mart’s defenders to strike back against critics without requiring the company’s own PR staff to enter the fray. Wal-Mart provided the group’s funding and Edelman staffed it.

Edelman executive Greg St. Claire played a leading role in recruiting Mr. Young, the former U.S. ambassador to the United Nations, as the group’s chairman, according to people who spoke with Mr. St. Claire. They say Mr. St. Claire told colleagues how Mr. Young had praised Wal-Mart in public comments. Wal-Mart says its diversity department came up with the idea of bringing in Mr. Young. Mr. St. Claire declined to comment and Mr. Young’s office didn’t return phone messages.

Others recruited by Edelman for the group’s 14-member steering committee include Wheelchair Foundation vice president Chris Lewis, the son of entertainer Jerry Lewis, and singer Pat Boone. In its first year, Working Families for Wal-Mart reports amassing 150,000 supporters and assembling steering committees of local dignitaries in six states.

Yet the Working Families group has produced some of Edelman’s worst fumbles, too. Union-backed Wal-Mart Watch swooped in to claim the workingfamiliesforwalmart.com Web address, and posted statements there mocking the company-backed group as artificial. In August of this year, Mr. Young raised a stir when he told an African-American newspaper in California that Jewish, Korean and Arab shopkeepers overcharged inner-city African-Americans for stale food. He had been asked about Wal-Mart’s impact on mom-and-pop businesses. Mr. Young apologized and resigned from Working Families for Wal-Mart.

Faux Pas
In October, bloggers and mainstream media criticized Working Families for Wal-Mart for not disclosing the full identities of two people — one the sister of Edelman’s Mr. St. Claire — whom it enlisted to write a pro-company blog. The two drove an RV around the country and posted happy accounts of the Wal-Mart customers and employees they encountered. Edelman’s chief executive, Richard Edelman, apologized on his own blog for the lack of disclosure.

The faux pas had union groups crowing. “Edelman stumbled badly on the Wal-Mart account, and the fake-blog episode is fast becoming a case study on the importance of PR transparency,” said Wal-Mart Watch spokesman Nu Wexler.

In its pitch for the account, Edelman had warned Wal-Mart that Google results for a “Wal-Mart” search yielded mostly unflattering material, potentially overshadowing the company’s own sites. Edelman sought to balance that equation by funneling positive information about Wal-Mart to bloggers. For example, news that 24,500 people applied for 325 jobs at a new Wal-Mart outside of Chicago made its way onto some blogs.

Edelman has also tried to help Wal-Mart gain some control over the issue of health care. In October 2005, Wal-Mart Watch distributed an internal Wal-Mart document detailing strategies for cutting health-benefit costs by discouraging unhealthy job applicants. In January, Maryland enacted a law targeting Wal-Mart that required large employers to spend certain amounts on health-care benefits for workers in the state. The law spurred similar bills prompted by labor groups in more than two dozen states.

Mr. Dach pushed Mr. Scott to discuss health in a February speech to the National Governors Association. “Everybody was telling Leslie, ‘We can’t do health care now. We don’t want to talk about health care.’ But Leslie just kept at it,” says Mr. Deaver. Mr. Scott took Mr. Dach’s advice, announcing in his Edelman-drafted speech that Wal-Mart would improve health benefits for its workers by such steps as loosening eligibility requirements for part-timers.

Company officials are heartened that none of the bills modeled on Maryland ‘s law survived this year, although that may have more to do with a federal judge’s decision in July to strike down the Maryland law because he said it encroached on federal authority.

In Mr. Scott’s speech at this year’s annual meeting, he used an Edelman-inspired line with political echoes: “This company is committed to working families.” In all, Mr. Scott used the expression “working families” 10 times in that speech, which Edelman wrote, and 11 times in two other talks around the same time. Since Edelman’s hiring, Wal-Mart has issued at least 44 press releases mentioning working families to describe its customers and employees.

Later in the summer, Edelman booked Mr. Scott in several unfamiliar forums, such as Mr. Sharpton’s radio show, where the CEO fielded questions from listeners. In July, Mr. Dach arranged for former Vice President Al Gore to speak about environmental issues and screen his global-warming movie “An Inconvenient Truth” at a quarterly meeting of Wal-Mart employees and environmental groups. Mr. Gore’s camp initially had concerns about Wal-Mart’s sincerity on the issue, but Mr. Dach helped allay them. “Leslie brings some credibility and integrity,” said Roy Neel, Mr. Gore’s chief of staff.

This summer, Wal-Mart decided to bring Mr. Dach in-house. Mr. Dach was already so intimately involved in planning that he sometimes heard of key developments within Wal-Mart prior to the company’s own senior PR staffers, according to people familiar with the situation. Yesterday, Robert McAdam, who has been a top Wal-Mart PR executive since 2000, told colleagues he is leaving the retailer. In an interview, Mr. McAdam said his departure has nothing to do with Mr. Dach’s arrival.

In hiring Mr. Dach, Wal-Mart granted him stock then valued at $3 million and nearly 169,000 options. The retailer allows him to split his time between Bentonville and Washington , D.C., with Washington remaining his primary residence. He also gained oversight of the $1 billion Wal-Mart Foundation, a charitable group. “I’m convinced Wal-Mart is changing and the change is real,” Mr. Dach wrote in an email to friends announcing the move.

© 2006 Wall St. Journal

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Critics question company’s motives

With a combined fortune of more than $90 billion, the Waltons–the immediate heirs of Wal-Mart founder Sam Walton–are the richest family in the world. Five of the country’s ten richest individuals are members of Sam’s immediate family: his wife, Helen, and their three surviving children–Rob, Jim and Alice–as well as his late son John’s widow, Christy (John Walton died in June when his private plane crashed). Until recently, however, they gave away little of their fortune. As Sam Walton explained in his 1992 autobiography, Made in America, he didn’t believe in giving “any undeserving stranger a free ride.” Nor did he believe in being generous with company profits. “We feel very strongly,” he wrote, “that Wal-Mart really is not, and should not be, in the charity business.” Money that Wal-Mart donated to charity, he reasoned, would only come out of the pockets of “either our shareholders or our customers.” (He didn’t mention workers, perhaps a tacit acknowledgment that picking their pockets was just business as usual.)

As for politics, Sam couldn’t stand the stuff. At a 1988 Mother’s Day “toast and roast” honoring Helen Walton, then-Senator Dale Bumpers of Arkansas quipped that waiting for big campaign contributions from the Waltons was like “leaving landing lights on for Amelia Earhart.”

All that has changed. Since Sam died in 1992, both the Bentonville, Arkansas-based company and the family have dramatically escalated their charitable giving, becoming far more influential in the worlds of philanthropy and politics. It is hardly a coincidence that this transformation occurred after Wal-Mart became the nation’s largest private employer and a flytrap for much-deserved criticism. The company is battling numerous employee rights lawsuits in court, the biggest of these being Betty Dukes v. Wal-Mart Stores, a sex-discrimination class action representing 1.6 million women. Communities around the nation, charging that the company is a stingy low-wage employer with an arrogant disregard for local and national laws, are battling to keep Wal-Mart from opening or expanding stores. Several labor unions have made fighting Wal-Mart a top priority. This year two major national organizations, Wal-Mart Watch and Wake Up Wal-Mart, formed to lead a citizens’ movement to pressure the company to change its ways.

The National Committee for Responsive Philanthropy (NCRP), a watchdog group, released a report in September, The Waltons and Wal-Mart: Self-Interested Philanthropy, detailing the recent increase in Wal-Mart and Walton philanthropy and noting its likely relationship to the company’s image problems. Indeed, the increase has been staggering. The Walton Family Foundation (WFF) gave away $106.9 million in 2003–the most recent year for which data are available–twice as much as in 2000. Wal-Mart’s company PAC, now the third-largest corporate PAC and the second-largest corporate donor to the GOP, gave away $2.1 million in 2004, compared with just $100,000 in 1994. The Walton family, too, has greatly increased its political giving; in 2004, for example, Alice donated $2.6 million to the influential Republican PAC Progress for America, which supported the sleazy Swift Boat Veterans for Truth and gave Bush a critical push in the election’s final months. Since 1999 the Wal-Mart Foundation (WMF)–a company-controlled entity with no direct connection to the WFF–has tripled its giving and by the end of this year will have doled out more than $200 million in cash and merchandise, according to spokeswoman Melissa O’Brien.

The company also donated $20 million in cash and merchandise to the Hurricane Katrina relief effort, garnering extensive–and partially justified–praise. To antigovernment zealots like New York Times columnist John Tierney and the wing nuts running the Wall Street Journal editorial page, Wal-Mart’s impressive response to the hurricane showed that the private sector is simply more effective than the government. It is true that when you starve government by draining its resources and electing officials who don’t believe in it, nothing seems to work. But Wal-Mart played a major role in that eviscerating process. Much of Wal-Mart’s philanthropy (as well as that of the Walton family) has been directed toward promoting anti-government politics, whether by lobbying against high taxes for the rich or contributing to Republican candidates, conservative think tanks and efforts to privatize education.

Jeff Krehely, who co-wrote the NCRP report, says that for his organization, such a sharp increase in giving, coupled with the company’s obvious desire to spin itself as a better corporate citizen, “raises red flags. We wonder, What’s the agenda here? What’s happening?” The WMF’s Melissa O’Brien told The Nation that criticisms of the company come from “special-interest groups” and do not influence its giving. She also told the New York Sun that the NCRP report was funded by Target, a charge Krehely calls “ludicrous.” (Dayton Hudson, Target’s former parent company, contributed to the NCRP in the 1990s. In 2000 the company reorganized as the Target Corporation and hasn’t contributed to the watchdog group since.)

Each Walton heir has philanthropic projects of his or her own–Alice, for example, is building a world-class art museum in northwest Arkansas–but the family fortune should be considered as one because most of the money is managed together. The giving is also largely administered together, through the Walton Family Foundation, as well as through close communication among its family members. (At least twice a year, the family meets to talk about how to spend its money.) The Waltons own about 40 percent of Wal-Mart’s stock, making Wal-Mart essentially a family business–highly unusual for a large multinational company. (Both the Wal-Mart Family Foundation and Walton Enterprises–the company that represents the Walton family’s interests–declined to cooperate with this article, or to make any of the notoriously press-shy Waltons available for interviews.)

Philanthropy obscures the often unseemly process by which the money was made–and for Wal-Mart that’s at least part of the point. Stephen Copley, a United Methodist Church pastor who serves on the board of the Arkansas Single Parents Scholarship Fund, a Springdale, Arkansas, charity that has benefited from Walton dollars, says that the program has “an incredible success rate. One lady even got a PhD. [The Walton money] does a tremendous amount of good.” However, he adds, “it’s great to help single parents go to school, but those same single parents might be working for Wal-Mart, and they can’t afford health insurance.” Copley, also head of the Arkansas Interfaith Committee for Worker Justice, is troubled that in his home state, Walton and Wal-Mart generosity “gets great media…they look so good even though in reality their business practices are very bad.”

The Wal-Mart Foundation gives a staggering number of gifts, apparently in order to buy goodwill in as many communities as possible, rather than, as Krehely points out, “giving to sustain organizations.” The WMF’s 2003 IRS 990 form is 2,239 pages long, far longer than that of the Ford Foundation, which has billions more in assets. That’s because most WMF gifts are tiny: thousands or even hundreds of dollars to churches and Lions clubs and Boys and Girls clubs, $500 to the YMCA of Nashville and Middle Tennessee and to the Tulip Trace (Indiana) Girl Scouts Council and so on. Communities where Wal-Mart faced a particular battle over opening a new store–Inglewood, California, or New York City–enjoyed especially generous largesse. Like the flowers and other tokens of courtship from a suitor who later becomes a wife-beater, such gifts are often followed by demands for public subsidies and tax breaks. In this way Wal-Mart is repeating the strategy that has served it so well in Arkansas, where Wal-Mart and the Waltons’ charitable gifts are many and company critics are relatively few. Says Lindsay Brown, president of the Central Arkansas Labor Council, “It’s a hell of a plan, and it works.”

We are supposed to applaud philanthropy–the very word connotes altruism and “giving back”–but Walton and Wal-Mart giving serves as a reminder that philanthropy provides an alternative to taxation, a way for rich people and corporations to decide what to do with their extra money, as opposed to letting the rest of us decide through our elected governments. Since charitable donations are a tax write-off, as Krehely points out, “they are supposed to benefit the public good.” He thinks it is reasonable to ask whether a family’s–or a company’s–philanthropy serves the common good, or at least enough good “to make up for the public revenue that we’re losing.”

Funny he should mention taxes: Wal-Mart and the Waltons have, after all, been notably reluctant to pay them. Not only has the company lobbied for tax breaks in communities all over the nation, the Waltons–the family that former Wal-Mart board member Hillary Clinton has called “the best America has to offer”–have campaigned vigorously against the estate tax. They have donated money to its opponents, Republicans like John Thune of South Dakota and David Vitter of Louisiana, and enlisted one of Washington’s top lobbying firms, Patton Boggs–a leading anti-estate tax lobbyist–to represent their interests.

Chuck Collins of Responsible Wealth, a group of well-off people who strongly favor the estate tax, observes that the Waltons sometimes say the estate tax is not a priority for the family. “That may be true from their perspective,” he says, “but it’s a bit like an elephant saying it’s really not interested in stepping on anthills. When you’re America’s wealthiest family, you are a philanthropic and lobbying heavyweight even on your minor interests.” For instance, Senator Blanche Lincoln of Arkansas, one of a handful of Democrats who draw checks from the Waltons, supports estate-tax repeal (or crippling “reform”). “Senator Lincoln will wax eloquent about the small farmers of Arkansas,” Collins says, “but what’s really on her mind is Walton.”

In addition to campaigning specifically against the estate tax, the Waltons also give money to groups that generally favor tax giveaways to the rich, like Americans for Tax Reform. And the Waltons have already reaped the benefits of tax policies enacted by the conservatives they helped put in office: This year Bush’s dividend tax cut will save the family $51 million, according to Lee Farris, an estate-tax expert with the Boston-based United for a Fair Economy.

The Waltons’ philanthropy–and their hostility to paying their fair share of taxes–also needs to be viewed in the context of tax subsidies Wal-Mart has received for building new stores, which Good Jobs First places at more than $1 billion, an estimate that does not include the many other ways taxpayers subsidize Wal-Mart stores, for instance, through numerous forms of public assistance–Medicaid, Food Stamps, public housing–that often allow workers to subsist on Wal-Mart’s low wages. A report by the House Education and Workforce Committee conservatively places the latter at $420,750 per store; the Wal-Mart Foundation’s per-store charitable giving is just 11 percent of that amount ($47,222).

In addition to spending on Republican candidates, the Waltons have lavished funds on right-wing ideological institutions–organizations that serve the interest of wealthy individuals and lawless antiunion companies like Wal-Mart. From 1998 through 2003 the WFF contributed $25,000 to the Heritage Foundation, $15,000 to the Cato Institute, $125,000 to the Hudson Institute, $155,000 to the Goldwater Institute, $70,000 to the National Right to Work Legal Defense Foundation, $300,000 to the Mackinac Center for Public Policy, $185,000 to the Pacific Research Institute for Public Policy and $350,000 to the Evergreen Freedom Foundation.

Both the family and the company have made education a major funding priority. Many of the WFF’s education gifts have a distinct ideological tilt, emphasizing a “free market” approach to education reform, a vision the late John Walton embraced with particular enthusiasm. The WFF funds advocacy groups promoting conservative school “reform”–otherwise known as privatization–like the Center for Education Reform and the Black Alliance for Educational Options, as well as the actual programs these groups champion: charter schools and voucher programs. (The BAEO did not return calls for this article.)

Among such projects, the Waltons tend to fund the most mind-numbing and cultish, giving in 2003 alone nearly $3 million to Knowledge Is Power (KIPP) schools and millions more to other schools using the KIPP curriculum, which emphasizes regimented recitation rather than critical or creative thinking. Particularly widespread in low-income neighborhoods, such schools seem bent on disciplining and exhorting the poor rather than developing human potential (much like Wal-Mart as a workplace, with its relentless company cheers and dead-end jobs). Several years ago the principal of New York City’s John A. Reisenbach Charter School, which uses the KIPP curriculum and received $118,000 from the Waltons in 2003, told me proudly, as we watched fidgety second graders chant meaningless slogans, “We are getting them ready for business.”

The WFF has become the single largest source of funding for the voucher and charter school movement. Walton funding allows some charter schools to spend more per pupil than “competing” public schools. The ironic result is that while these projects are supposed to demonstrate to the public the wonders of a marketized approach to education, the WFF’s money gives its grantees an advantage over other schools, allowing them to perform better than they would otherwise. “[The Waltons] claim to support competition and the free market,” says Paul Dunphy, a policy analyst for Citizens for Public Schools, a Boston-based coalition, “but actually they are manipulating the market, conferring advantage on their pet projects.”

It’s a fitting paradox, since the Wal-Mart economic model, like almost anything held up as an example of the beauty of the free market, contains so many contradictions (yes, it’s extremely profitable, but look at all those tax subsidies). Because so much Walton and Wal-Mart philanthropy is crudely self-interested, it’s tempting to find an equally crude motive for the Walton family’s interest in education; many Wal-Mart critics have assumed that the Waltons must be planning to reap several more fortunes through for-profit education companies. That’s not completely baseless: John Walton was briefly involved in such a venture. However, he backed out, realizing such profiteering was hurting the credibility of his education reform efforts. And so far, for-profit education is still not a very profitable industry–especially when compared with retail.

The Waltons’ motives for supporting the privatization of education seem–at this writing, anyway–to be ideological, even idealistic, rather than an elaborate backdrop to a new money-making scheme. Like many rich Americans who have helped to finance the far right’s rise to power, they have embraced a worldview in which what’s good for the wealthy is good for everyone else. And greater cultural acceptance of the unfettered market–through an increasing tolerance for privatization of all kinds–will certainly make the world safer for a family business that thrives on weak government and lack of regulation. But it’s also likely that the Waltons, like most right-wingers, sincerely believe that their ideas have the potential to improve people’s lives. Why wouldn’t the Waltons genuinely believe in the free market? Look how well it has served them.

Helen Walton, now 85 and in poor health, is expected to donate almost all of her personal fortune–worth $18 billion–to the WFF upon her death, which, as the NCRP points out, will make that entity the richest foundation in the world. This should disturb progressives, since so much Walton money goes to support conservative causes. Yet although the current direction and political leanings of Walton “philanthropy” are clear, the future is a mystery. As Krehely observes, nothing is known about the politics or interests of Sam Walton’s grandchildren. This matters in a family foundation; this fall the Olin Foundation closed its doors, having spent down its endowment because the older generation did not trust the younger Olins to carry on the family’s right-wing traditions. Since the Waltons don’t say much about their future plans, or about their internal family politics, it’s unclear what lies in store for this–currently–right-wing fortune.

“The Waltons could be an enormous force for good,” says Responsible Wealth’s Chuck Collins. “As the company’s biggest shareholders, they could decide that Wal-Mart could pay a living wage. They could use their charitable dollars not to undermine public education but to boost educational opportunity. They could become major contributors to social good. But they’re not.”

One item in the Walton Family Foundation’s most recent IRS filing shows how uninterested this family is in true social responsibility: a measly $6,000 to something called the Wal-Mart Associates in Need Fund. Contrast that with the millions the family spends promoting right-wing causes, and it becomes painfully clear that the Waltons value conservative ideology far more than they value the human beings who have made them the richest family on earth. Told about these figures, Kathleen MacDonald, a Wal-Mart candy department clerk in Aiken, South Carolina, responded bluntly, “All I have to say about that is, it doesn’t surprise me. Like Bush, they don’t have a clue what working families go through.” MacDonald would like to see The Simple Life do a show about working at Wal-Mart. “I could see Paris Hilton on a register at Christmastime, or stocking shelves,” she says. Or perhaps Alice Walton as a greeter, on her feet all day, thanking us for shopping at Wal-Mart.

© 2005 The Nation

Research support for this article was provided by the Investigative Fund of The Nation Institute. Thanks to Laura Starecheski, who contributed reporting, and to Meleiza Figueroa, a researcher on Robert Greenwald’s film, Wal-Mart: The High Cost of Low Price, who, with the generous consent of her employers, shared her findings.

•  See our huge collection of articles, studies, internal documents and more on Wal-Mart and big box stores.
• Visit our Merchandise Page to see anti-Walmart stickers, buttons, and more.
• Please help support this work — make a tax-deductible donation to Reclaim Democracy today!

Corporation hires former Sierra Club president to polish its image

By Amanda Witherell
First published by the San Francisco Bay Guardian, August 16, 2006

Wal-Mart is bad, right? With more than $312.4 billion in annual sales, it’s the largest retailer in the world, selling its array of products at cheap prices by undercutting competitors, employing sweatshops, wielding its market power to cripple both competitors and suppliers, and flouting national and international health, safety, labor, and environmental standards.

Five of the 10 richest people in the country are from the founding Walton family. But to help the company offer its proclaimed “Every Day Low Prices,” workers are paid an average of $17,530 a year, nearly $2,000 below the poverty level of a family of four. Almost half of the children of those associates are uninsured or on Medicaid. In California alone, that annually costs taxpayers $86 million, according to the New York Times.

So why is San Francisco’s environmentalist wunderkind Adam Werbach — former president of the Sierra Club, board member of the Apollo Clean Energy Alliance, and founder of the activist film company Act Now Productions and the progressive DVD club Ironweed, someone who’s spent the last 17 years working for environmental and social change — now taking a paycheck from Wal-Mart, a corporation that he vilified in a chapter on radical localism in his 1997 book, Act Now, Apologize Later?

Sounds like a turncoat move. “It’s sad. It’s really sad,” said Robert Greenwald, director of Wal-Mart: The High Cost of Low Price, a documentary critical of the corporation’s business practices. When asked if someone like Werbach could really change the way Wal-Mart does business, Greenwald told the Guardian, “No. They’ve bought a bunch of people instead of taking care of their employees. And they bought environmental people because they knew that was the weak link.”

Is the largest corporation in the world trying to clean up a crumbling image with a cadre of well-known environmentalists? Or is it actually taking the nascent and necessary steps to learn a language these progressive thinkers have been speaking for decades? Does a company with the size, scope, and appetite of Wal-Mart even have the ability to pronounce a word like “sustainable”? If Wal-Mart embraces green technologies, starts carrying organic food, and turns conservation into a good old-fashioned American value, will it beat one of its fiercest competitors, the environmental movement, at its own game?

Simple things 
Wal-Mart CEO H. Lee Scott these days sounds like he just got smacked in the face with a copy of 50 Simple Things You Can Do to Save the Earth. His awe over some really tired statistics is almost endearing. Last November, in a speech broadcast to all Wal-Mart facilities he said, “Did you know that a large percent of the 5 billion pounds of pesticides used every year are used on cotton? Those toxins don’t stop at the field but can leach into the waterways and may eventually find their way into animals, food, and children.”

Uh, yeah, ever heard of Silent Spring? Environmentalists have long decried the insidious nature of toxic chemicals. So what’s he going to do about it? Get a rally going? Start a boycott? No, Scott has become the largest purchaser of organic cotton in the world.

It isn’t just cotton. In characteristic Wal-Mart balls-to-the-wall fashion, the retailer has also become the biggest vendor of organic milk, in a market where demand is already 20 percent higher than supply. Grocery divisions are starting to stock sustainably harvested fish and Newman’s Own Organics. The rest of its strategic sustainability plan sounds more progressive than what even a supposedly green city like San Francisco has come up with. Wal-Mart execs have pledged to improve the fuel efficiency of their trucking fleet, the second largest in the country, by 25 percent in three years and double it within 10 years. They plan to reduce energy consumption in stores by 30 percent and are looking at how to replace the remaining 70 percent with renewables. They’ve already constructed two “green” prototype stores in Aurora, Colo., and McKinney , Texas , and plan to invest $500 million annually in technology that can reduce greenhouse gases at existing stores by 20 percent in seven years. They want to go zero waste.

“We intend to reach the point in the near future where there will be no Dumpsters at our stores and no landfills with Wal-Mart throwaways,” Scott said.

That’s huge, a bold flanking maneuver by a known enemy. How can a corporation — that makes its money from consumers throwing out and replacing the items they purchase — “go zero waste” and really mean it? Rebecca Calahan Klein, president of Organic Exchange, the Oakland-based nonprofit trade association that connects Wal-Mart and other retailers such as Patagonia, Organic Essentials, and Nike with cotton farmers all over the world, said her board uses three criteria to determine if a company is serious about going organic: Does it recognize the need for a completely transparent process from field to store? Is it really committed to the concept, rather than jumping on a passing fad? Does it recognize its own power and is it willing to work in new ways and alter its business model?

Klein said that although she’s been skeptical and her board members even more so, Wal-Mart has passed those tests. “I’ve worked with businesses for 20 years. You can tell when someone is not being sincere. They don’t put it in their business strategy. They don’t put their best people on it.”

Who are Wal-Mart’s best people? The roll call includes Werbach and representatives from the Rocky Mountain Institute, World Wildlife Federation, Natural Resources Defense Council, Environmental Defense, and Conservation International. The experts are part of 14 networks functioning like think tanks to work on a range of specific issues that affect nearly every aspect of Wal-Mart’s business — alternative fuels, packaging, chemicals, food and agriculture, textiles, electronics, facilities, internal operations, logistics, forest products, jewelry, seafood, and climate change. They convene regularly to brainstorm ideas, and by many accounts, including those of Klein and Werbach, it seems as though the CEOs and upper-level associates are finally getting what this choir has been preaching for a long time.

Hallelujah
Some choir members have their eyebrows raised and their mouths gaping over this one. Among the people we contacted, including film director Robert Greenwald, former Greenpeace executive director Barbara Dudley, organic and local food advocate Michael Pollan, and Sup. Chris Daly, who appointed Werbach to the San Francisco Public Utilities Commission, the main sentiment seemed to be surprise about the new partnership, with a sigh and — when it came to Wal-Mart’s pledge to help create a sustainable future — a “We’ll see.”

No one seems more surprised than Werbach himself. “I have been anticorporate my whole activist life,” he told the Guardian, sitting in a café in a quaint part of the Bernal Heights neighborhood. “I opposed the Sierra Club giving Honda an award for a hybrid car.”

But Werbach went on to explain how respectfully his ideas have been received, and unlike in the municipal planning morass where good concepts often go to die, Wal-Mart gets things done. “I’ll notice something in a store, and every store in America is changed by the end of the week,” he said, buzzed by the sheer wonder and magnitude of it all. “I’ve yet to find a big idea that they haven’t done,” he said of all the standard improvements environmental organizations have been rapping about for years, such as powering with solar panels, harvesting rainwater for irrigation, and heating with biofuel.

It seems inconceivable that someone like Werbach could be inspired by the likes of Wal-Mart. As a teen, he founded the Sierra Student Coalition, the largest student-run organization in the country, and was mentored by David Brower to become the youngest president ever of the Sierra Club at the age of 23. From 1996 to 1998 he rejuvenated the aging organization, and members still consider him an inspiring, innovative force.

“If our end goal is to change the way Americans think, we need to fund strategic initiatives that move the public’s values,” Werbach said at the Commonwealth Club in 2004. That notable speech, “The Death of Environmentalism,” argued for a new rhetoric and a fresh way of thinking to fight the problems typically considered partisan and environmental, but which affect all citizens no matter what their politics.

Werbach’s work with Wal-Mart puts that ideology into practice. He’s consulting for the corporation’s Environment, Health, and Wellness Program, advising associates on how to improve their lives. He could just tell them to eat organic food and buy compact fluorescent lightbulbs, both of which Wal-Mart now conveniently stocks. The company wins both ways. If it invests in teaching associates better living practices, it won’t have to offer premium health insurance. If it turns down the lights and reconfigures its trucks, it won’t spend so much money on electricity and diesel.

“Yes, Wal-Mart is interested in saving money by reducing energy costs, but who isn’t? That’s Basic Business 101,” said Cameron Burns, spokesperson for the Rocky Mountain Institute, which is advising Wal-Mart on fuel efficiency and green building.

The RMI, founded by conservation guru Amory Lovins, works with companies and corporations, as well as the US military, to improve efficiency and reduce energy use. The institute agreed to work with Wal-Mart after Natural Capitalism, an environmental consulting firm started by Hunter Lovins, turned it down. Paul Sheldon, the senior consultant for Natural Capitalism, said the organization rejected Wal-Mart because it didn’t believe the corporation was serious. “Their whole business model is basically parasitic,” he said. “They bring in goods from outside the area, they pay minimum wages, and they basically destroy local communities everywhere they go.”

In order to become truly sustainable, Wal-Mart would have to change more than just the lightbulbs.

It is. Werbach’s been tasked with changing the way Americans think. “How do you make sustainability something people in America want and care about?” he said — that’s the basic question Wal-Mart is asking. The test pool the company has given him is a field of associates at eight stores, because the people who work there are a lot like the 92 percent of Americans (according to company calculations) who walk through the front doors steering shopping carts. Through workshops and retreats, Werbach is sitting down with associates and asking them what their goals are. Losing weight? Quitting smoking? Spending more time with their families? Those are real-world challenges that Werbach helps them see in a broader context and tackle with a tool set that considers the basic tenets of sustainability. One associate he’s worked with decided to quit eating fast food. That’s great for the arteries, but the action also made him realize he was eating less frozen food, which meant less resources spent for processing, packaging, shipping, and refrigeration. He also spent less time idling in the drive-thru lane, which meant less fuel burned, which saved him money. That’s more sophisticated thinking than even that of the average Trader Joe’s shopper with Amy’s Organic heat-and-serve enchiladas in the cart. “They’re showing me things. I’m not trying to convince them of something,” Werbach said of the associates who wield the tools he gives them in creative ways. He cites the problem of smoking. Yes, it’s a health issue, but associates are telling him it’s an environmental issue too. That’s not something you hear from the typical save-the-trees organization. Smoking is not their problem; saving redwoods is their problem.

If Wal-Mart wants to change the way Americans think about their problems and how to solve them, is the retailer prepared to do the same with its business model? Klein of Organic Exchange thinks so. When her consultations with Wal-Mart began, she told them, “You’re the 800-pound gorilla in the room. It doesn’t work that way in organic. You can’t muscle in and make demands.” Wal-Mart listened and scaled its efforts accordingly, with a five-year commitment to purchase organic cotton and a multiyear approach to growth that is bound to increase. Organic cotton is currently less than 1 percent of the entire market. Klein said to us, “If we can get 10 percent, we will shift every major food source in the world.” She rattled off a list of staples, including soybeans, wheat, legumes, and rice, that are grown in rotation with cotton. They would all have to be organic to preserve the purity of soil that standard requires. The ramifications could be huge, and Wal-Mart has the money and the clout to make it happen. Beyond the demand side of the economic spectrum, Wal-Mart works with more than 60,000 suppliers. “Ninety percent of the impact Wal-Mart can have is on the supply chain,” Scott has said to his executives. It has already experimented with reducing the packaging of one toy product, which resulted in using 230 fewer shipping containers and 356 fewer barrels of oil. Since Wal-Mart has entered the picture, Klein has received phone calls from the largest cotton farmers in the country to discuss a switch from conventional to organic. In addition, she’s noticed chemical companies ramping up their criticism. “One measure of success,” she said, “is how quickly the critics try to discredit what you’re doing,” she said.

Greenwash?
Talk to Wal-Mart’s critics and you’ll find things haven’t been looking too good for the retailer. In December an Oakland jury ordered Wal-Mart to pay $172 million to workers deprived of their half-hour lunch breaks. The largest discrimination lawsuit ever has been filed against Wal-Mart in San Francisco federal court on behalf of 1.6 million women. Growth is trailing that of competitors Target and Costco, and market shares have slipped 30 percent since Scott took the helm in 2000.

Wal-Mart’s internal research has concluded 8 percent of consumers won’t come through its doors for ethical reasons. Web sites, including walmartwatch.com and sprawl-busters.com, patrol the company’s every move and provide advice and resources for kicking it out of your community. Wake Up Wal-Mart launched a 35-city bus tour this month, designed to rally the masses against its foe. Greenwald is distributing free copies of his damning documentary to any associate who requests one. The company has set up a “war room” with former political consultants from the PR group Edelman, hired to counter Greenwald, his film, and the growing wave of protest. Greenwald remains a staunch critic of the retailer and said to us, “We have to look at the overall impact on the country and the world. Workers and families and communities are part of the environment too.” He thinks the recent greening move smacks of greenwashing.

“They’re essentially reaching out to one sliver of an integrated problem. They can turn down the lights and improve their trucks, and those are changes that need to happen, but at the same time they’re beating up workers, abusing sweatshops, and bullying communities,” he said. He may be right. Maybe Wal-Mart is just setting up a “green room.” When contacted by the Guardian, the only person readily available to speak about sustainability was a representative from Edelman.

Barbara Dudley, who was executive director of Greenpeace while Werbach was running the Sierra Club, told us it’s important to remember there isn’t one cohesive environmental movement. Though she criticized Werbach’s latest career move in a recent Grist Magazine commentary, “The Death of Integrity,” written with the Ruckus Society’s John Sellers, she told the Guardian, “People have different approaches. Some think it’s possible to work with a company like Wal-Mart. It’s certainly a positive step. Will it ultimately lead to a sustainable planet? It’s hard to imagine.”

“Can anything built on a model of Wal-Mart be sustainable?” she asked. “My personal answer to that is no.”

In an American culture accustomed to waste, it’s common to slap the term “green” on anything that’s even remotely recycled and forget that “Green Forest Paper Towels” are still pieces of paper to use up and throw out. In Europe sustainability means more than just recycling and wearing organic cotton. The guiding principles of the European Federation of Green Parties include specific labor practices and community development, and while Wal-Mart may be looking through Werbach’s eyes at how to help associates live better lives, it has yet to take a solid stand on these far-reaching issues. But there have been murmurings.

Scott recently pledged to raise wages 6 percent in a third of Wal-Mart’s stores, but he’s offsetting much of that with pay caps for longtime employees. He also promised health care for as little as $23 a month, perhaps in response to the UC Berkeley Labor Research and Education report that revealed that Wal-Mart associates on public programs such as the Women, Infants, and Children federal nutrition program and Medicaid depended on over $1 billion in taxpayer-funded subsidies.

Last week, Wal-Mart announced it would allow labor unions in its Chinese stores, but critics contend this may just be a move to stay in the good graces of the host government. No such concessions have been made in the United States, where a $7-million-dollar private jet equipped with three suited union busters is on hand to fly to the nearest threat of organizing associates.

“If we want sustainable communities, we need to have thriving downtowns. We need people who are paid decent wages and affordable medical care,” said Eric Antebi, a spokesperson from Werbach’s old stomping grounds at the Sierra Club. Considering the corporation’s recent changes, he said, “Everything Wal-Mart has done doesn’t take into account the negative impacts they’ve had.”

Paving the way
In the Bay Area it’s easy to forget about the big-box retail that’s a part of 3,900 other communities in the country. Many San Franciscans get their staples at Rainbow Grocery or Cala Foods, stock up on fresh produce from farmers markets and fruit vendors, and grab what they forgot from the store on the corner. Shoppers who venture to the Oakland Wal-Mart find a recycling bin for used shopping bags by the door and toy Hummers at the store’s sidecar McDonald’s. Despite the hyped environmentalism of the Bay Area, the store is surprisingly void of organic products, and the ones it does carry require a sophisticated scrutiny of the USDA certification and product lineage: Silk Soymilk is owned by Dean Foods, Earth’s Best baby food is a Heinz product, Morningstar Farms and Kashi belong to Kellogg’s. The Organic Consumers Association has enacted a ban against Horizon, which sells about half the organic milk in the country, most of it to Wal-Mart.

“Making organic food inexpensive means buying it from anywhere it can be produced most cheaply — lengthening rather than shortening the food chain, and deepening its dependence on fossil fuels,” wrote Michael Pollan in a May 15 New York Times blog entry, “Wal-Mart Goes Organic.” The author of The Omnivore’s Dilemma argues that the next frontier for conscious eating is one’s own backyard. When asked if there is any way for Wal-Mart to carry organic produce without encouraging feedlots, monocultures, and weakened standards — and still meet the demands of 138 million weekly shoppers — Pollan told us, “I don’t know. They’re saying all the right things, but their past performance surely is reason to be skeptical and vigilant. I’m not sure their stores have the knowledge to source locally — there’s nothing in their DNA to make me think they can do anything but buy industrial organic produce from the least-cost supplier, which will be China. But I’d be delighted to be proven wrong.”

As Amanda Griscom Little reported in Grist Magazine, “Ron McCormick, an executive in Wal-Mart’s produce division, said he plans to purchase a broader variety of produce based on what’s available in each region, rather than insisting on a ‘monoculture’ of produce at stores nationwide. ‘Our whole focus is: How can we reduce food-miles?’”

Wal-Mart seems to have gotten hip to the idea that while asparagus may be cheaper to grow in Argentina, it sure costs a lot to ship it to Maine. It’s started purchasing local produce in 24 states. According to Werbach, peaches now come from 14 suppliers instead of three. “Why? Less transportation costs. It diversifies the risk if one of the suppliers goes out of business. And the food’s fresher,” he told us.

Localism seems like the antithesis of Wal-Mart, but if it really is diversifying its suppliers, encouraging new markets to produce goods where it wants them, and talking to its employees about their own local problems, this could mean a real paradigm shift. “They’re still looking for new ideas,” Werbach said. “How do you make a TV without a box? That you can ship?” Could Wal-Mart eventually reverse the flow of cheap imports it’s spent years encouraging?

“Who better than Wal-Mart,” asked Scott in his 2005 speech to associates, “to make a kilowatt of electricity go twice as far or a gallon of diesel to take our trucks twice the distance? Or three times? Who better than Wal-Mart to stretch our energy and material dollars farther than anyone ever has?” Could these green initiatives and this new vernacular make it easier for Wal-Mart to open its doors in San Francisco?

Last week the Board of Supervisors approved a ballot measure sponsored by Sup. Gerardo Sandoval called the Small Business Protection Act. If passed by voters in November, large chain stores would have to be approved by the Planning Commission — giving critics a chance to mount an opposition campaign — before setting up shop in San Francisco ‘s neighborhood commercial districts. Similar conditional use requirements already exist in western SoMa, Cole Valley, and Divisadero from Haight to Turk. North Beach and the Hayes-Gough neighborhood have outright banned all formula retail. This November the voters will decide if there ever will be a Wal-Mart this side of the Bay Bridge. Consumers will have to remain just as vigilant and savvy about brands and labeling.

The $500 million pledged for greening the stores is still less than one-fifth of one percentage point of Wal-Mart’s total sales last year. Zero waste for the store doesn’t mean zero waste for the consumer. Wal-Mart would have to scale back radically to ever fit a local community like Bernal Heights, where Werbach lives, and he seems OK with that. His awe and enthusiasm for the company’s radical moves are still tempered with caution.

“We have to encourage them when they do good things and hold them accountable when they do bad things,” he said. But he’s still excited about the future. “We’re in new territory,” he said. “I’m learning so much. I’ve never learned so much.”

And the new ideas are coming home. “I’m a public utilities commissioner, and we’re in the process of revamping the sewer,” he said of San Francisco ‘s overtaxed pipes. He visited the Wal-Mart Experimental Supercenter in McKinney, Texas, where the parking lot has a permeable surface comprised of polymers that in addition to leaching out toxins also absorb water rather than send it running off. “It’s something I’d heard about, but I’d never actually seen it,” he said, bringing home the point that Wal-Mart has the money to invest in field-testing new technologies and then integrate ideas that work into its long-term planning. It could become a working model for other cities and corporations. “That’s how San Francisco should be thinking,” he said, before stepping out of the small café onto the cracked pavement to walk a couple blocks up the street to his home.

Ben Bruckman contributed to this report.

© 2006 S.F. Bay Guardian

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By T.A. Frank 
First published in the April, 2006 issue of Washington Monthly

In the late 1940s, when Sam Walton was franchising a Ben Franklin’s variety store in Newport, Ark., he had a simple but momentous idea. Like any retailer, Walton was always looking for deals from suppliers. Typically, though, a retailer who managed to get a bargain from a wholesaler would leave his store prices unchanged and pocket the extra money. Walton, by contrast, realized he could do better by passing on the savings to his customers and earning his profits through volume. This insight would form a cornerstone of Walton’s business strategy when he launched Wal-Mart in 1962.

The quest for low prices came naturally to Walton: He was freakishly cheap. Although he was ranked as the richest man in the United States by the 1980s, he continued, it is said, to have his hair cut by the local barber, a $5 expense that he never supplemented with a tip. (Perhaps he wasn’t satisfied.) Cost-cutting was, as one might also expect, an obsession in the Wal-Mart culture, and Walton was almost as chintzy with his executives as he was with his cashiers. On business trips, everyone, including the boss, flew coach, and hotel rooms were always shared. Even a cup of coffee at the office required a 10-cent contribution to the tin.

But coffee taxes only went so far. Walton understood that a major requirement for keeping costs down was controlling the payroll. As he would write in his 1992 autobiography, with the unique book cover design, Made in America, “No matter how you slice it in the retail business, payroll is one of the most important parts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margin.” Not only did Walton prefer to hire as few people as possible, but he also dreaded paying them more than he had to. Unions were particularly feared, and Walton did everything he could to fight them, almost always successfully.

If such a regimen seems stifling, Walton’s employees nevertheless accepted it. In part, it was because Walton framed his cheapness as a crusade on behalf of the lowly consumer and as a quest for a better life for all Americans. It was also because he lived an outwardly modest life, driving an old truck with his hunting dogs in the back. Mostly, it was because he had charisma. Even when Wal-Mart grew outsized, Walton made a point of keeping in touch with his employees on the ground or, as he termed them, his “associates.” This would often involve flying from store to store — Walton had a pilot’s license — for impromptu visits.

But Walton’s ability to keep his staff happy also relied on a sense of when to let penny-pinching take a backseat to other priorities. In 1985, amid anxiety about trade deficits and the loss of American manufacturing jobs, Walton launched a “Made in America” campaign that committed Wal-Mart to buying American-made products if suppliers could get within 5 percent of the price of a foreign competitor. This may have compromised the bottom line in the short term, but Walton understood the long-term benefit of convincing employees and customers that the company had a conscience as well as a calculator. He also made sure to give his staff a stake in the company. In 1971, he introduced a profit-sharing plan that allowed employees to put a certain percentage of their wages towards the purchase of subsidized Wal-Mart stock. For employees who stuck around, this could mean quite a bit of money. According to a truck driver named Bob Clark, quoted in Walton’s autobiography: “[Walton] said, ‘If you’ll just stay with me for twenty years, I guarantee you’ll have $100,000 in profit sharing’ … Well, last time I checked, I had $707,000 in profit sharing, and I see no reason why it won’t go up again.”

Equally important was Walton’s ability to sell employees on the notion that working at Wal-Mart meant limitless opportunity. Here, from Fortune, is a portrait of Walton at a Saturday-morning meeting in 1989:

[Walton] proposes that whenever customers approach, the associates should look them in the eye, greet them, and ask to help. Sam understands that some associates are shy, but if they do what he suggests, “It would, I’m sure, help you become a leader, it would help your personality develop, you would become more outgoing, and in time you might become manager of that store, you might become a department manager, you might become a district manager, or whatever you choose to be in the company…It will do wonders for you.” He guarantees it.

And things could get downright cultish:

Then, just to make sure, Sam asks the associates to raise their right hands and execute a pledge, keeping in mind that “a promise we make is a promise we keep.” The pledge: “From this day forward, I solemnly promise and declare that every customer that comes within ten feet of me, I will smile, look them in the eye, and greet them, so help me Sam.”

Of course, Wal-Mart’s success relied on more than just charisma and thrift. Technology, in particular, put the company ahead of its competitors. Already by the 1970s, Wal-Mart was using computers to link its stores and warehouses. Sales data allowed Wal-Mart to keep track of specific items and reduce inventory miscalculations. Only years later would Kmart realize how far it had fallen behind. Throughout Walton’s career, a focus on innovation of this sort would make Wal-Mart a consistent leader in efficiency.

When Walton died in 1992, the adjustment to a post-Sam environment proved difficult. Although Wal-Mart executives had emphasized for years that their company depended on a set of principles and habits more than it did on any one person, Walton’s death wound up marking a fateful shift in how the company was perceived.

The first blow fell only months later when “Dateline NBC” produced an exposé on the company’s sourcing practices. Although Wal-Mart’s “Made in America” campaign was still nominally in effect, “Dateline” showed that store-level associates had posted “Made in America” signs over merchandise actually produced in far away sweatshops. This sort of exposure was new to a company that had been a press darling for many years, and Wal-Mart’s stock immediately declined by 3 percent. While the “Dateline” flap was short-lived, Wall Street soon found other reasons to lose faith in the company. Profit margins were declining, yet David Glass, who was Wal-Mart’s CEO at the time, chose to make ambitious investments in distribution, technology, and construction. Such risk-taking, while smart, scared off investors at the time, and, by 1996, Fortune was even mocking the company’s “everyday low stock prices.” It was no longer the feisty little chain out of Bentonville.

But it wasn’t just Wal-Mart’s image that began to change after Walton’s death. It was also the way the company did business. Wal-Mart’s new leaders took to heart one element of the founder’s business philosophy — the importance of reducing costs — but they didn’t show his intuition about the importance of making employees feel as though they had a stake in the company. They were already at a disadvantage as it was. Wal-Mart’s rate of growth was impressive but slower than in its early years — the inevitable result of becoming so big — and this weakened the appeal of such incentives as stock ownership. But character also played a role. The company’s focus on saving money was leading it to make unrealistic demands of local managers, particularly with regard to payroll, and this pressure would eventually lead to serious trouble.

For a while, though, it worked. Between 1997 and 2001, the company’s stock value increased by over 500 percent, rising by 70 percent in 1997 alone. This undoubtedly helped to mollify employees who’d been unhappy with the slump earlier in the decade. Between 1996 and 1999, sales increased by 78 percent while inventory rose only 24 percent, a feat Fortune lauded as “mind-bending.” Today, with $288 billion in annual revenues (more than Switzerland’s GDP) and over $10 billion in profits, Wal-Mart is the world’s largest corporation, according to 2005 Fortune 500 list. It operates over 5,000 stores worldwide and employs over 1.6 million people — 1.3 million in the United States alone.

That growth has been accompanied by two distinct kinds of perceptions among the public. On the one hand, Wal-Mart has been celebrated for its business innovations, which have set a new global standard for efficiency. On the other, it has been condemned for its hard-charging business practices. One of the most prominent attacks came last November, when filmmaker Robert Greenwald released Wal-Mart: The High Cost of Low Price, a documentary that excoriated the company for its approach to unions, independent retailers, outsourcing, and wages and benefits.

Washington, too, has gotten involved. In 2003, in the run up to the primaries, Democrats began to make an issue of Wal-Mart’s wages and benefits. In 2004, Rep. George Miller of California released a report called “Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart.” And last year, organized labor put together two Washington-based groups: Wake Up Wal-Mart, backed by the United Food and Commercial Workers (UFCW), and Wal-Mart Watch, supported by the Service Employees International Union (SEIU). Staffed by prominent veterans from the campaigns of Howard Dean and Wesley Clark, both groups are devoted to keeping the world, and Washington, informed of Wal-Mart’s alleged misdeeds. For many progressives, the fight to change Wal-Mart represents a central organizing challenge for the 21st century.

There’s evidence that the bad press has taken a toll on the company. A 2004 report prepared for Wal-Mart by McKinsey and Co. found that up to 8 percent of Wal-Mart customers no longer shop there because of “negative press they have heard.” For the last two Christmas shopping seasons, the company has reported lower-than-expected sales. And in January, Maryland gave final approval to a “Wal-Mart bill,” requiring large employers to spend at least 8 percent of their payroll on health benefits. Thirty other states are now considering similar bills. Developments of this sort have led the company to form a war room of political PR experts from both parties — including Ronald Reagan’s image-meister Michael Deaver, and Leslie Dach, a media consultant to Bill Clinton — to generate more positive media coverage.

Wal-Mart’s defenders argue that the chain saves lower-income workers billions through its low prices. This is undeniably true, but it’s not a virtue unique to Wal-Mart. The entire sector of discount retailers — from Target to Costco to Best Buy to Home Depot — does much the same thing. Meanwhile, Wal-Mart’s critics tend to focus on the company’s low wages and paltry benefits, or its effect on small towns, or its reliance on outsourcing. But these, too, are by and large sins of the entire discount retail sector. So why pick on Wal-Mart?

The answer is that Wal-Mart really is different. In terms of annual revenue, Wal-Mart is nearly four times the size of The Home Depot, the country’s second largest retailer, and almost twice the size of Target, Costco, and Sears (which includes Kmart) combined. That means the company exerts pressure on the entire sector to imitate its methods — including its treatment of workers. That would be less worrisome if Wal-Mart’s record didn’t stand out within the sector. But there are strong indications that, when it comes to how it treats its employees, Wal-Mart really is worse than the rest. The company finds itself in trouble because, since the death of Sam Walton 14 years ago, something ugly has happened to the way it does business.

Work off the clock
In a comparison of Wal-Mart with its peers, the obvious place to start would be wages and benefits. But neither Wal-Mart, Target, nor Costco make public their median wage, which many economists argue is the most accurate measure of how a company pays its employees. A 2005 study (pdf) by Arindrajit Dube and Steve Wertheim of the University of California’s Berkeley Labor Center, however, sheds some light. Using figures for Wal-Mart released through a sex-discrimination lawsuit, and relying for the rest of the large retail sector on numbers from the March 2005 “Current Population Survey,” the study finds that Wal-Mart pays its hourly workers an average hourly wage of $9.68, while other large retailers average $11.08. (The study adjusts for the fact that Wal-Mart stores tend to be in lower-income areas.) As for health benefits, Dube and Wertheim found that Wal-Mart offers its hourly workers benefits worth 73 cents per hour, while other large retailers offer $1.

The study suggests that Wal-Mart is significantly less generous than other large retailers. In response, Wal-Mart has noted that the Berkeley Labor Center receives 10 percent of its funds from organized labor. The company instead cites a study that it commissioned from the consulting group Global Insight, which found that Wal-Mart’s wages are on par with those of other retailers. But whichever study comes closer to the truth, comparisons between Wal-Mart and the large retail sector as a whole don’t tell the full story. After all, discount retailers like Wal-Mart will inevitably pay less than many other large retailers, and why shouldn’t they? Doing so allows them to offer lower prices. Only by focusing exclusively on other discount retailers like Costco and Target can we meaningfully compare Wal-Mart’s wages and benefits to those of its competitors, but we simply lack the hard data on most other outlets to do this.

But there are myriad other ways that employers can cut costs at the expense of workers. And it’s in these areas that we can gather more satisfactory information to compare Wal-Mart to its competitors. The simplest way to save money is to avoid paying people for all the hours that they’ve worked — a practice called off-the-clock work. Of course, Wal-Mart can’t explicitly force employees to work off-the-clock. But it can set payroll targets that are nearly impossible to achieve without doing just that. As one manager explained to The New York Times in 2002, “You got to hit the payroll budget they set for you, but if you’re over, they discipline you.” Plausible deniability, then, becomes essential. Workers get assigned more work than they can possibly complete on their shifts — while being warned that overtime is out of the question. No intelligent employee would fail to get the message: Finish the job by whatever means necessary. “We worked off the clock pretty much every shift,” one employee told the Times. “The manager said if our jobs were not finished, we had to clock out and finish our jobs so no overtime would show up.”

Wal-Mart insists that these cases are unrepresentative of the company as a whole, and that any enterprise of their size is bound to have a few rogue managers. But the verdicts so far suggest a widespread problem. In 2000, Wal-Mart paid $50 million to settle an off-the-clock suit involving 69,000 Wal-Mart employees in Colorado. Two years later, a federal jury ordered Wal-Mart to pay back wages to 83 workers in Oregon for off-the-clock work. Some 40 similar class actions are pending, and in 2002, The New York Times reported on a “wide-ranging legal battle between Wal-Mart and employees or former employees in 28 states” over off-the-clock work. Last December, a California jury awarded $172 million to thousands of Wal-Mart employees who had been illegally denied lunch breaks.

Free-market advocates who defend the company argue that squeezing workers is an unavoidable reality of the discount retail business. But a look at the annual reports of Wal-Mart and its competitors points up a glaring difference between the companies. Target’s and Costco’s annual reports for 2004-2005 include no cases of off-the-clock work. Wal-Mart’s lists 44 in the last 10 years.

No girls allowed
In 1986, Walton was sensing some pressure to appoint a woman to Wal-Mart’s all-male board. So he offered the job to Arkansas’ first lady, one Hillary Clinton, who accepted. She would later quote Walton’s pitch: “I think I need a woman; would you like to be her?” Today, Wal-Mart’s challenges in the field of gender equality are not so easily addressed. The company keeps its payroll costs down by paying women less than their male counterparts for performing the same work. Evidence also exists that it fails to promote women at the same rate as men.

In 2000, a female employee at a California Wal-Mart who found herself denied promotions filed a sex-discrimination suit. That case now involves nearly two million women, and, in 2004, it was certified by Judge Martin J. Jenkins, of the United States District Court in San Francisco as a class action. Discrimination is a difficult thing to prove, but the figures in the case do not look good. According to numbers compiled in 2003 by the plaintiffs, female store managers average slightly under $90,000 in annual income, while their male counterparts average slightly over $100,000. And while women make up 79 percent of the store’s department heads (an hourly position), only 15.5 percent are store managers. Judge Jenkins offered a strongly-worded assessment of the evidence:

“Plaintiffs present largely uncontested descriptive statistics which show that women working at Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time, that women take longer to enter management positions, and that the higher one looks in the organization the lower the percentage of women.”

Wal-Mart has argued that most of the decisions about hiring and promotion are decentralized. The plaintiffs contend, however, that a company in which headquarters chooses to regulate certain regional minutiae, such as individual store temperatures, also has the capacity to keep an eye on gender issues.

But is Wal-Mart really any different from its competitors when it comes to treating its female employees fairly? An extensive search of cases against Target doesn’t turn up any similar accusations, and while Costco does face a gender discrimination class action, it involves hundreds of women, not millions. Brad Seligman, who is lead counsel on the gender discrimination cases against both Wal-Mart and Costco, stresses that, even accounting for differences in size, Wal-Mart is exceptional. “I’m the first to concede that the Costco case is nowhere in the same league as the Wal-Mart case,” says Seligman. “I’ve done 50 class actions in my time, and Wal-Mart stands out above all of them, both in terms of the depth and pattern of discrimination and in their reaction to the charges.”

We care, but not that much
Few discount retailers make it easy for workers to unionize. But it’s hard to find one that has been more aggressive, brutal, and openly hostile to unions than Wal-Mart. Sam Walton faced his first major union challenge in the 1960s. Two Wal-Marts in Missouri were on the verge of organizing, and Walton called in a lawyer named John Tate to stop them. In 1989, Tate, by then an executive vice president of the company, described the events to Fortune: “I told [Walton], ‘You can approach this one of two ways: hold people down, and pay me or some other lawyer to make it work. Or devote time and attention to proving to people that you care.'” Walton soon followed up with a management seminar called “We Care,” began to call employees “associates,” and introduced a widely-praised profit-sharing plan. Whether satisfaction or fear was at play, no union ever formed.

Since Walton’s death, however, the “hold people down and pay me or some other lawyer to make it work” method appears to have gained favor. In 2000, when workers in a Jacksonville, Texas, meat-cutting department successfully voted to unionize, Wal-Mart announced two weeks later that it would be closing its meat-cutting departments nationwide and switching to pre-cut meat. Four of the employees who voted in favor of the union were fired. (The company claims that the timing was coincidental and that the dismissals were unrelated, but a National Labor Relations Board judge disagreed. Wal-Mart is appealing the case.)

A year ago, employees at a Wal-Mart tire and lube shop thought they had enough votes to unionize, but the company fired one of the likely yes-voters and transferred in six likely no-voters. Again, an administrative judge ruled that Wal-Mart’s conduct had been illegal, but the goal of blocking the union had been achieved.

And in February 2005, the company announced that it would be closing a Wal-Mart in Quebec, one of only two unionized Wal-Marts in North America (the other is also in Quebec). Wal-Mart claimed the store was losing money, but it refused to release numbers.

Wal-Mart’s strong-arm approach is the product of a simple cost-benefit analysis. As Thomas Cochan, a professor at MIT’s Sloan School of Management, explains, “we have a law that is no longer serving its basic objective of providing people with the ability to organize. The incentives are too weak to keep companies from violating the law if they don’t want to comply.” The National Labor Relations Board can order an employer to rehire a terminated employee and to pay back wages, but it can’t impose criminal penalties or punitive damages. This is rather like telling a bank robber that the penalty for a failed heist is being required to return the money to the bank. And Wal-Mart takes full advantage of such laxity. Store managers are equipped with 56-page pamphlets titled “The Manager’s Toolbox to Remaining Union Free,” and representatives from the “People Division” in Bentonville are flown out at a moment’s notice if there are any signs of union activity. According to a 2004 report in The Nation, stores even administer personality tests to applicants to screen out potential union sympathizers.

Although Target and Kmart both take pains to head off workers who might organize a union — Costco, by contrast, has some unionized employees — Wal-Mart still leads the competition. Over the past 10 years, the NLRB or its administrative law judges have determined in at least 11 cases that Wal-Mart or individual Wal-Mart stores were engaging in unfair labor practices to prevent unionization, according to the agency’s website. In that same period, both Target’s and Costco’s records appear to have remained clean. An excerpt from one of the decisions against Wal-Mart gives a sense of the extent of the violations:

The Respondent, Wal-Mart Stores, Inc., its officers, agents, successors, and assigns, shall cease and desist from:

1. Promising to remedy employee concerns in an effort to undermine support for the Union.
2. Removing supervisors from their position in an effort to undermine support for the Union.
3. Engaging in surveillance of the union activities of employees.
4. Coercively interrogating employees concerning the union sympathies and support of other employees.
5. Installing new equipment to remedy employee complaints in order to undermine support for the Union.
6. Transferring employees into the TLE [Tire Lube and Express division] to dilute the support for the Union.
7. Transferring employees into the TLE to remedy employee complaints about inadequate staffing in order to undermine support for the Union.
8. Transferring employees out of the TLE in order to dilute the support for the Union.

The post-Sam era
“Sam would have been proud” is the highest tribute that can be paid at the company Walton left behind. Increasingly, though, it’s also clear that what the writer Barbara Ehrenreich termed the “Cult of Sam” has played a large role in its current woes. Walton, in his day, played a hard game, but he knew when to hold back. Unions were fiercely resisted, but employees were treated respectfully. Wages were low, but people were made to feel they had a stake in the company. Bargaining with suppliers would be tough, but some holds would be barred. Walton’s instincts, in short, helped to keep the company’s foibles in check. Absent Walton, the redeeming features of Wal-Mart began to disappear. What remained were the relentlessness, the chauvinism, and, above all, the cheapness. As so often happens, the leader wasn’t doctrinaire; but the followers are. A Fortune article from 2003 notes how, at Wal-Mart headquarters, “nothing backs up a point better than a quotation from Walton scripture.”

It won’t be easy for Wal-Mart to change its ways. Wake Up Wal-Mart likes to point out that Wal-Mart could raise its average wages by two dollars an hour if it raised prices by only a penny on the dollar. But Wal-Mart is led by people whose lives are devoted to coming up with ways to shave a penny — or a half penny, or a quarter penny — off of a dollar. Wal-Mart’s chief spokesman summed up the difficulty in an interview with The New York Times. Change might be necessary, he admitted, but, “at the same time, we can’t change who we are — we can’t change what makes Wal-Mart Wal-Mart.”

But they may have to. Union-busting, gender discrimination, and off-the-clock work aren’t innovative; they’re illegal. And there are signs that the company is beginning to recognize the need for change. In a message to company managers posted on Wal-Mart’s internal website and published by The New York Times in February, CEO Lee Scott wrote: “If you choose to do the wrong thing… if you choose to take a shortcut on payroll, if you choose to take a shortcut on a raise for someone, you hurt this company. And it’s not unlikely in today’s environment that your shortcut is going to end up on the front page of the newspaper.” With any luck, Wal-Mart will work through its identity crisis and produce a company that’s a model for the industry. With even more luck, Americans will begin a thoughtful debate about balancing our needs as consumers and our needs as producers. Until then, we can focus on getting Wal-Mart employers to abide by the laws we have. In many instances, that alone would be a significant improvement.

T.A. Frank is a writer in Los Angeles.

© 2006 Washington Monthly

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Some pro-Walmart blogs fail to disclose origins of copied text

Michael Barbaro 
First published by the New York Times, March 7, 2006

Brian Pickrell, a blogger, recently posted a note on his Web site attacking state legislation that would force Wal-Mart Stores, Inc. to spend more on employee health insurance. “All across the country, newspaper editorial boards — no great friends of business — are ripping the bills,” he wrote.

It was the kind of pro-Wal-Mart comment the giant retailer might write itself. And, in fact, it did.

Several sentences in Mr. Pickrell’s Jan. 20 posting — and others from different days — are identical to those written by an employee at one of Wal-Mart’s public relations firms and distributed by e-mail to bloggers.

Under assault as never before, Wal-Mart is increasingly looking beyond the mainstream media and working directly with bloggers, feeding them exclusive nuggets of news, suggesting topics for postings and even inviting them to visit its corporate headquarters.

But the strategy raises questions about what bloggers, who pride themselves on independence, should disclose to readers. Wal-Mart, the nation’s largest private employer, has been forthright with bloggers about the origins of its communications, and the company and its public relations firm, Edelman, say they do not compensate the bloggers.

But some bloggers have posted information from Wal-Mart, at times word for word, without revealing where it came from.

Glenn Reynolds, the founder of Instapundit.com, one of the oldest blogs on the Web, said that even in the blogosphere, which is renowned for its lack of rules, a basic tenet applies: “If I reprint something, I say where it came from. A blog is about your voice, it seems to me, not somebody else’s.”

Companies of all stripes are using blogs to help shape public opinion.

Before General Electric announced a major investment in energy-efficient technology last year, company executives first met with major environmental bloggers to build support. Others have reached out to bloggers to promote a product or service, as Microsoft did with its Xbox game system and Cingular Wireless has done in the introduction of a new phone.

What is different about Wal-Mart’s approach to blogging is that rather than promoting a product — something it does quite well, given its $300 billion in annual sales — it is trying to improve its battered image.

Wal-Mart, long criticized for low wages and its health benefits, began working with bloggers in late 2005 “as part of our overall effort to tell our story,” said Mona Williams, a company spokeswoman.

“As more and more Americans go to the Internet to get information from varied, credible, trusted sources, Wal-Mart is committed to participating in that online conversation,” she said.

Copies of e-mail messages that a Wal-Mart representative sent to bloggers were made available to The New York Times by Bob Beller, who runs a blog called Crazy Politico’s Rantings. Mr. Beller, a regular Wal-Mart shopper who frequently defends the retailer on his blog, said the company never asked that the messages be kept private.

In the messages, Wal-Mart promotes positive news about itself, like the high number of job applications it received at a new store in Illinois, and criticizes opponents, noting for example that a rival, Target, raised “zero” money for the Salvation Army in 2005, because it banned red-kettle collectors from stores.

The author of the e-mail messages is a blogger named Marshall Manson, a senior account supervisor at Edelman who writes for conservative Web sites like Human Events Online, which advocates limited government, and Confirm Them, which has pushed for the confirmation of President Bush’s judicial nominees.

In interviews, bloggers said Mr. Manson contacted them after they wrote postings that either endorsed the retailer or challenged its critics.

Mr. Beller, who runs Crazy Politico’s Rantings, for example, said he received an e-mail message from Mr. Manson soon after criticizing the passage of a law in Maryland that requires Wal-Mart to spend 8 percent of its payroll on health care.

Mr. Manson, identifying himself as a “blogger myself” who does “online public affairs for Wal-Mart,” began with a bit of flattery: “Just wanted you to know that your post criticizing Maryland’s Wal-Mart health care bill was noticed here and at the corporate headquarters in Bentonville,” he wrote, referring to the city in Arkansas.

“If you’re interested,” he continued, “I’d like to drop you the occasional update with some newsworthy info about the company and an occasional nugget that you won’t hear about in the M.S.M.” — or mainstream media.

Bloggers who agreed to receive the e-mail messages said they were eager to hear Wal-Mart’s side of the story, which they said they felt had been drowned out by critics, and were tantalized by the promise of exclusive news that might attract more visitors to their Web sites.

“I am always interested in tips to stories,” said one recipient of Mr. Manson’s e-mail messages, Bill Nienhuis, who operates a Web site called PunditGuy.com .

But some bloggers are also defensive about their contacts with Wal-Mart. When they learned that The New York Times was looking at how they were using information from the retailer, several bloggers posted items challenging The Times’s article before it had appeared. One blog, Iowa Voice, run by Mr. Pickrell, pleads for advertisers to buy space on the blog in anticipation of more traffic because of the article.

The e-mail messages Mr. Manson has sent to bloggers are structured like typical blog postings, with a pungent sentence or two introducing a link to a news article or release.

John McAdams, a political science professor at Marquette University who runs the Marquette Warrior blog, recently posted three links about union activity in the same order as he received them from Mr. Manson. Mr. McAdams acknowledged that he worked from Wal-Mart’s links and that he did not disclose his contact with Mr. Manson.

“I usually do not reveal where I get a tip or a lead on a story,” he said, adding that journalists often do not disclose where they get ideas for stories either.

Wal-Mart has warned bloggers against lifting text from the e-mail it sends them. After apparently noticing the practice, Mr. Manson asked them to “resist the urge,” because “I’d be sick if someone ripped you because they noticed a couple of bloggers with nearly identical posts.”

But Mr. Manson has not encouraged bloggers to reveal that they communicate with Wal-Mart or to attribute information to either the retailer or Edelman, Ms. Williams of Wal-Mart said.

To be sure, some bloggers who post material from Mr. Manson’s e-mail do disclose its origins, mentioning Mr. Manson and Wal-Mart by name. But others refer to Mr. Manson as “one reader,” say they received a “heads up” about news from Wal-Mart or disclose nothing at all.

Mr. Pickrell, the 37-year-old who runs Iowa Voice, said he began receiving updates from Wal-Mart in January. Like Mr. Beller, of Crazy Politico, Mr. Pickrell had criticized the Maryland legislature over its health care law before Wal-Mart contacted him.

Since then, he has written at least three postings that contain language identical to sentences in e-mail from Mr. Manson. In one, which Mr. Pickrell attributed to a “reader,” he reported that Wal-Mart was about to announce that a store in Illinois received 25,000 applications for 325 jobs. “That’s a 1.3 percent acceptance rate,” the message read. “Consider this: Harvard University (undergraduate) accepts 11 percent of applicants. The Navy Seals accept 5 percent of applicants.”

Asked in a telephone interview about the resemblance of his postings to Mr. Manson’s, Mr. Pickrell said: “I probably cut and paste a little bit and I should not have,” adding that “I try to write my posting in my own words.”

In an e-mail message sent after the interview, Mr. Pickrell said he received e-mail from many groups, including those opposed to Wal-Mart, which he uses as a starting point to “do my own research on a topic.”

“I draw my own conclusions when I form my opinions,” he said.

Mr. Pickrell, explaining his support for Wal-Mart, said he shops there regularly and is impressed with how his mother-in-law, a Wal-Mart employee, is treated. “They go real out of their way for their people,” he said.

Wal-Mart’s blogging initiative is part of a ballooning public relations campaign developed in consultation with Edelman to help Wal-Mart as two groups, Wal-Mart Watch and Wake Up Wal-Mart, aggressively prod it to change. The groups operate blogs that receive posts from current and former Wal-Mart employees, elected leaders and consumers.

Edelman also helped Wal-Mart develop a political-style war room, staffed by former political operatives, which monitors and responds to the retailer’s critics, and helped create Working Families for Wal-Mart, a new group that is trying to build support for the company in cities across the country.

At Edelman, Mr. Manson, who sends many of the e-mail messages to bloggers, works closely on the Wal-Mart account with Mike Krempasky, a co-founder of RedState.com, a conservative blog. Both are regular bloggers, which in Mr. Manson’s case means he has written critically of individuals and groups Wal-Mart may eventually call on for support.

Before he was hired by Edelman in November, Mr. Manson wrote on the Human Events Online blog that members of the San Francisco city council were “dolts” and “twits” for rejecting a proposed World War II memorial and that every day “the United Nations slides further and further into irrelevance.” After he was hired, Mr. Manson wrote that the career of Senator Lincoln Chafee of Rhode Island was marked by “pointless indecision.”

Wal-Mart declined to make Mr. Manson available for comment. Ms. Williams said “it is not Wal-Mart’s role to monitor the opinions of our consultants or how they express them on their own time.”

In a sign of how eager Wal-Mart is to develop ties to bloggers, the company has invited them to a media conference to be held at its headquarters in April. In e-mail messages, Wal-Mart has polled several bloggers about whether they would make the trip, which the bloggers would have to pay for themselves.

Mr. Reynolds of Instapundit.com said he recently was invited to Wal-Mart’s offices but declined. “Bentonville, Arkansas,” he said, “is not my idea of a fun destination.”

© 2006 N.Y. Times

Related Exhibit: an e-mail invitation to a blogger

From: Manson, Marshall
To: Rob Port
Subject: Want to go to the center of the universe?
Date: Tue, Jan 24, 2006 at 3:29 PM

Rob,

Quick question.

Would you, if the opportunity arose, like to see Wal-Mart from the inside? As in the corporate headquarters in Bentonville, AR?

Unfortunately, we don’t have any funds for travel—but I think I might be able to get your access to the largest company in the world. Tours, briefings, the works. Everything that they would do for a reporter from the New York Times .

I’ve been there, and I can tell you it’s staggering. Just consider this little factoid: every two weeks, the Wal-Mart payroll department direct deposits more than a billion dollars in wages. Yikes.

So – if something like that came up – would you be willing to make a trek to Bentonville and participate? I’d make sure to be there and act as a tour guide.

We’re trying to get a very quick sense of how much interest there might be, so if you’re interested, please let me know as soon as possible (ideally, by tomorrow morning).

Thanks

Marshall
Marshall Manson Edelman
p 202.326.1784, c 703.850.3014
marshall.manson@edelman.com

(Mr. Port shared this communication with WalMartWatch.com)

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