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Date Published Newsource
Wal-Mart faces big fines amid bribery charges
April 23, 2012

Bribery, Cover-Up Alleged at Walmart Mexico

Apr. 22, 2012

Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle



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Wal-Mart, others, claim AG's lawsuit is a class action Dec 3, 2009 By JOHN O'BRIEN,
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Is Wal-Mart recovery-proof? Dec 3, 2009 By Joe Light,
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Sustainability Consortium clarifies goals, Walmart relationship Dec 2, 2009 By Anne Marie Mohan,,
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Another Wal-Mart "Shoplifting" Nightmare Dec 1, 2009 By Al Norman,
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Wal-Mart Rivals Safety of U.S. Government Dec 1, 2009 By David MacDougall,
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Wal Mart Cyber Monday Becomes Cyber Week Dec 1, 2009 Daily News and Trends
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Wal-Mart faces big fines amid bribery charges


April 23, 2012

Allegations that Wal-Mart Stores Inc. covered up the findings of an internal probe that proved its Mexican subsidiary bribed officials in that country could have huge implications for the world's biggest retailer and its executives.

The alleged bribery scheme was revealed by The New York Times, which reported that Wal-Mart failed to notify law enforcement after the company's investigators found evidence of millions of dollars in bribes given to Mexican officials in exchange for getting building permits faster and other favors to help it aggressively expand in the region.

Two Democratic U.S. congressmen Elijah Cummings and Henry Waxman said on Monday that they were launching an investigation into the matter, and they sent a letter to CEO Mike Duke asking for a meeting. And The Washington Post reported late Monday that the U.S. Department of Justice has been conducting a criminal probe of the allegations since December, citing people familiar with the matter.

If Wal-Mart is found to have violated the Foreign Corrupt Practices Act, which forbids paying bribes to foreign officials, the company could face fines of hundreds of millions of dollars. Top Wal-Mart executives could lose their jobs - or worse, go to jail. And the retailer could suffer a public relations nightmare if a lengthy investigation ensues.

"Unlike prior bad PR stories in recent years, this will be a material distraction for Wal-Mart on multiple fronts," said Charles Grom, a retail analyst at Deutsche Bank.

The Times reported on Saturday that a former company executive in 2005 told Wal-Mart top brass about a bribery campaign that was used to help the retailer expand in Mexico. The paper said Wal-Mart officials launched an investigation into its Wal-Mart de Mexico subsidiary, but shut down the probe despite a report by its lead investigator that Mexican and U.S. laws likely were violated.

In December, Wal-Mart said in a filing with the Securities and Exchange Commission that it had begun an investigation into an overseas operation related to its compliance with the foreign corrupt practices law. Over the weekend, the company revealed that it had met with officials from the SEC and the Justice Department to discuss the company's ongoing investigation. But, according to the Times, Wal-Mart only did so after being informed that the paper was looking into the allegations.

"We are committed to getting to the bottom of this matter," Dave Tovar, a Wal-Mart spokesman, said in a statement.

The Justice Department and the SEC declined to comment for this story. But legal experts say if there is a government investigation into the bribery allegations, the results could vary widely. In recent probes into corporations- and their executives - the penalties for violating the foreign corruption law have ranged from big fines for the companies to jail time for the executives.

In February, for instance, Albert "Jack" Stanley, a former KBR Inc. CEO got a 2 1/2 year prison sentence for his role in a scheme to bribe Nigerian government officials in return for $6 billion in engineering and construction contracts. KBR, an engineering and construction firm, was a Halliburton subsidiary at the time of the bribes.

And in March, medical device maker Biomet Inc. agreed to pay $22.7 million to settle U.S. criminal and civil allegations that it bribed government-employed doctors in Argentina, Brazil and China for more than eight years to win business with hospitals.

Experts say a government probe into Wal-Mart's alleged bribery campaign would look at whether the company had adequate controls in place to prevent bribery, whether there was adequate training to discourage the practice before the violations occurred, and how high up any alleged cover-up took place.

If the government finds that Wal-Mart or its executives were negligent, the company could face fines and top executives could lose their jobs. But if it's determined that there was a cover-up that involved actions such as falsifying records, there could be criminal charges.

Mexico's federal government, however, indicated late Monday that it would not be investigating the matter. It said it had no jurisdiction in the case because the report only referred to the involvement of Mexican state and city officials.

Eduardo Castro-Wright, who was head of Wal-Mart de Mexico at the time of the alleged bribes and, could face criminal charges, experts say. According to the New York Times, he was the driving force behind the bribery.

Duke, Wal-Mart's CEO who was over the company's international division at the time of the investigation, could also face intense scrutiny, experts say. As could H. Lee Scott Jr., who was CEO at the time of the allegations and remains on Wal-Mart's board.

According to the Times story, Scott rebuked internal investigators at one meeting for being overly aggressive. Shortly after, according to the paper, the company turned over the investigation to the general counsel for Wal-Mart de Mexico, who himself was alleged to have authorized bribes. He exonerated his fellow executives, according to the Times story.

Kevin Abikoff, chairman of the anti-corruption and internal investigations practice group at law firm Hughes Hubbard & Reed, said that the government will decide whether to file criminal charges against the company and its executives based on whether they tried to cover-up the allegations, including destruction of records or accounting irregularities.

Abikoff said the government is usually more lenient when a company discloses wrong-doing rather than when it tries to cover up the violations.

"The government can't tolerate that behavior," he said. "It's usually the cover-up that kills."

Either way, the allegations could be a headache for Wal-Mart. It comes at a time when the Bentonville, Ark.-based company has been focused on expanding internationally as sales have slowed in the U.S.

Wal-Mart's international business, which had a 15.2 percent increase last year, has had the fastest growth compared to its Wal-Mart U.S. business and Sam's Club division. In particular, Mexico, which it entered in 1991, has been a strong market: Wal-Mart de Mexico is now Wal-Mart's largest subsidiary, and one out of every five Wal-Mart stores is now in Mexico.

If there is a lengthy government investigation, it could increase the monitoring of its businesses in other regions like China and Brazil, which could hamper its international growth. Additionally, any penalties would be a financial pain for Wal-Mart, which recently reversed more than two years of sales declines at its namesake U.S. business.

"This is going to be a major distraction for Wal-Mart," said Leonard Baynes, professor at business law at St. John's University.


Bribery, Cover-Up Alleged at Walmart Mexico

NEW YORK — Walmart Mexico paid out millions of dollars in bribes to Mexican officials to facilitate the company’s rapid expansion there, according to a New York Times report.

The payments could violate the Foreign Corrupt Practices Act, the report stated.

Eduardo Castro-Wright, who led Wal-Mart’s Mexico operations until early 2005 and later ran the company’s U.S. division, was the “driving force” behind “years of bribery” in which more than $24 million was paid to local officials in Mexico, the article claimed.

Wal-Mart had looked into the allegations, and its lead investigator concluded that there was “reasonable suspicion to believe that Mexican and USA laws have been violated,” the New York Times reported. The article claims that top Wal-Mart officials then basically swept the matter under the carpet and shut down the investigation, and did not notify authorities until after they had learned of the Times’ reporting.

Both Castro-Wright, who is scheduled to retire as Wal-Mart vice chairman in July, and H. Lee Scott, who was chief executive of Wal-Mart Stores at the time, declined to comment to the Times.

In a statement provided to SN, David Tovar, vice president of corporate communications, Wal-Mart, said the company launched an investigation into FCPA compliance last fall through the audit committee of its board of directors.

“We take compliance with the U.S. Foreign Corrupt Practices Act very seriously and are committed to having a strong and effective global anti-corruption program in every country in which we operate,” Tovar said. “We will not tolerate noncompliance with FCPA anywhere or at any level of the company.

“Many of the alleged activities in The New York Times article are more than six years old. If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.”


Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle
Confronted with evidence of widespread corruption in Mexico, top Wal-Mart executives focused more on damage control than on rooting out wrongdoing, an examination by The New York Times found.

MEXICO CITY — In September 2005, a senior Wal-Mart lawyer received an alarming e-mail from a former executive at the company’s largest foreign subsidiary, Wal-Mart de Mexico. In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country.

The former executive gave names, dates and bribe amounts. He knew so much, he explained, because for years he had been the lawyer in charge of obtaining construction permits for Wal-Mart de Mexico.

Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark. In a confidential report to his superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent, summed up their initial findings this way: “There is reasonable suspicion to believe that Mexican and USA laws have been violated.”

The lead investigator recommended that Wal-Mart expand the investigation.

Instead, an examination by The New York Times found, Wal-Mart’s leaders shut it down.

Neither American nor Mexican law enforcement officials were notified. None of Wal-Mart de Mexico’s leaders were disciplined. Indeed, its chief executive, Eduardo Castro-Wright, identified by the former executive as the driving force behind years of bribery, was promoted to vice chairman of Wal-Mart in 2008. Until this article, the allegations and Wal-Mart’s investigation had never been publicly disclosed.

But The Times’s examination uncovered a prolonged struggle at the highest levels of Wal-Mart, a struggle that pitted the company’s much publicized commitment to the highest moral and ethical standards against its relentless pursuit of growth.

Under fire from labor critics, worried about press leaks and facing a sagging stock price, Wal-Mart’s leaders recognized that the allegations could have devastating consequences, documents and interviews show. Wal-Mart de Mexico was the company’s brightest success story, pitched to investors as a model for future growth. (Today, one in five Wal-Mart stores is in Mexico.) Confronted with evidence of corruption in Mexico, top Wal-Mart executives focused more on damage control than on rooting out wrongdoing.

In one meeting where the bribery case was discussed, H. Lee Scott Jr., then Wal-Mart’s chief executive, rebuked internal investigators for being overly aggressive. Days later, records show, Wal-Mart’s top lawyer arranged to ship the internal investigators’ files on the case to Mexico City. Primary responsibility for the investigation was then given to the general counsel of Wal-Mart de Mexico — a remarkable choice since the same general counsel was alleged to have authorized bribes.

The general counsel promptly exonerated his fellow Wal-Mart de Mexico executives.

When Wal-Mart’s director of corporate investigations — a former top F.B.I. official — read the general counsel’s report, his appraisal was scathing. “Truly lacking,” he wrote in an e-mail to his boss.

The report was nonetheless accepted by Wal-Mart’s leaders as the last word on the matter.

In December, after learning of The Times’s reporting in Mexico, Wal-Mart informed the Justice Department that it had begun an internal investigation into possible violations of the Foreign Corrupt Practices Act, a federal law that makes it a crime for American corporations and their subsidiaries to bribe foreign officials. Wal-Mart said the company had learned of possible problems with how it obtained permits, but stressed that the issues were limited to “discrete” cases.

“We do not believe that these matters will have a material adverse effect on our business,” the company said in a filing with the Securities and Exchange Commission.

But The Times’s examination found credible evidence that bribery played a persistent and significant role in Wal-Mart’s rapid growth in Mexico, where Wal-Mart now employs 209,000 people, making it the country’s largest private employer.

A Wal-Mart spokesman confirmed that the company’s Mexico operations — and its handling of the 2005 case — were now a major focus of its inquiry.

“If these allegations are true, it is not a reflection of who we are or what we stand for,” the spokesman, David W. Tovar, said. “We are deeply concerned by these allegations and are working aggressively to determine what happened.”

In the meantime, Mr. Tovar said, Wal-Mart is taking steps in Mexico to strengthen compliance with the Foreign Corrupt Practices Act. “We do not and will not tolerate noncompliance with F.C.P.A. anywhere or at any level of the company,” he said.

The Times laid out this article’s findings to Wal-Mart weeks ago. The company said it shared the findings with many of the executives named here, including Mr. Scott, now on Wal-Mart’s board, and Mr. Castro-Wright, who is retiring in July. Both men declined to comment, Mr. Tovar said.

The Times obtained hundreds of internal company documents tracing the evolution of Wal-Mart’s 2005 Mexico investigation. The documents show Wal-Mart’s leadership immediately recognized the seriousness of the allegations. Working in secrecy, a small group of executives, including several current members of Wal-Mart’s senior management, kept close tabs on the inquiry.

Michael T. Duke, Wal-Mart’s current chief executive, was also kept informed. At the time, Mr. Duke had just been put in charge of Wal-Mart International, making him responsible for all foreign subsidiaries. “You’ll want to read this,” a top Wal-Mart lawyer wrote in an Oct. 15, 2005, e-mail to Mr. Duke that gave a detailed description of the former executive’s allegations.

The Times examination included more than 15 hours of interviews with the former executive, Sergio Cicero Zapata, who resigned from Wal-Mart de Mexico in 2004 after nearly a decade in the company’s real estate department.

In the interviews, Mr. Cicero recounted how he had helped organize years of payoffs. He described personally dispatching two trusted outside lawyers to deliver envelopes of cash to government officials. They targeted mayors and city council members, obscure urban planners, low-level bureaucrats who issued permits — anyone with the power to thwart Wal-Mart’s growth. The bribes, he said, bought zoning approvals, reductions in environmental impact fees and the allegiance of neighborhood leaders.

He called it working “the dark side of the moon.”

The Times also reviewed thousands of government documents related to permit requests for stores across Mexico. The examination found many instances where permits were given within weeks or even days of Wal-Mart de Mexico’s payments to the two lawyers. Again and again, The Times found, legal and bureaucratic obstacles melted away after payments were made.

The Times conducted extensive interviews with participants in Wal-Mart’s investigation. They spoke on the condition that they not be identified discussing matters Wal-Mart has long shielded. These people said the investigation left little doubt Mr. Cicero’s allegations were credible. (“Not even a close call,” one person said.)

But, they said, the more investigators corroborated his assertions, the more resistance they encountered inside Wal-Mart. Some of it came from powerful executives implicated in the corruption, records and interviews show. Other top executives voiced concern about the possible legal and reputational harm.

In the end, people involved in the investigation said, Wal-Mart’s leaders found a bloodlessly bureaucratic way to bury the matter. But in handing the investigation off to one of its main targets, they disregarded the advice of one of Wal-Mart’s top lawyers, the same lawyer first contacted by Mr. Cicero.

“The wisdom of assigning any investigative role to management of the business unit being investigated escapes me,” Maritza I. Munich, then general counsel of Wal-Mart International, wrote in an e-mail to top Wal-Mart executives.

The investigation, she urged, should be completed using “professional, independent investigative resources.”

The Allegations Emerge

On Sept. 21, 2005, Mr. Cicero sent an e-mail to Ms. Munich telling her he had information about “irregularities” authorized “by the highest levels” at Wal-Mart de Mexico. “I hope to meet you soon,” he wrote.

Ms. Munich was familiar with the challenges of avoiding corruption in Latin America. Before joining Wal-Mart in 2003, she had spent 12 years in Mexico and elsewhere in Latin America as a lawyer for Procter & Gamble.

At Wal-Mart in 2004, she pushed the board to adopt a strict anticorruption policy that prohibited all employees from “offering anything of value to a government official on behalf of Wal-Mart.” It required every employee to report the first sign of corruption, and it bound Wal-Mart’s agents to the same exacting standards.

Ms. Munich reacted quickly to Mr. Cicero’s e-mail. Within days, she hired Juan Francisco Torres-Landa, a prominent Harvard-trained lawyer in Mexico City, to debrief Mr. Cicero. The two men met three times in October 2005, with Ms. Munich flying in from Bentonville for the third debriefing.

During hours of questioning, Mr. Torres-Landa’s notes show, Mr. Cicero described how Wal-Mart de Mexico had perfected the art of bribery, then hidden it all with fraudulent accounting. Mr. Cicero implicated many of Wal-Mart de Mexico’s leaders, including its board chairman, its general counsel, its chief auditor and its top real estate executive.

But the person most responsible, he told Mr. Torres-Landa, was the company’s ambitious chief executive, Eduardo Castro-Wright, a native of Ecuador who was recruited from Honeywell in 2001 to become Wal-Mart’s chief operating officer in Mexico.

Mr. Cicero said that while bribes were occasionally paid before Mr. Castro-Wright’s arrival, their use soared after Mr. Castro-Wright ascended to the top job in 2002. Mr. Cicero described how Wal-Mart de Mexico’s leaders had set “very aggressive growth goals,” which required opening new stores “in record times.” Wal-Mart de Mexico executives, he said, were under pressure to do “whatever was necessary” to obtain permits.

In an interview with The Times, Mr. Cicero said Mr. Castro-Wright had encouraged the payments for a specific strategic purpose. The idea, he said, was to build hundreds of new stores so fast that competitors would not have time to react. Bribes, he explained, accelerated growth. They got zoning maps changed. They made environmental objections vanish. Permits that typically took months to process magically materialized in days. “What we were buying was time,” he said.

Wal-Mart de Mexico’s stunning growth made Mr. Castro-Wright a rising star in Bentonville. In early 2005, when he was promoted to a senior position in the United States, Mr. Duke would cite his “outstanding results” in Mexico.

Mr. Cicero’s allegations were all the more startling because he implicated himself. He spent hours explaining to Mr. Torres-Landa the mechanics of how he had helped funnel bribes through trusted fixers, known as “gestores.”

Gestores (pronounced hes-TORE-ehs) are a fixture in Mexico’s byzantine bureaucracies, and some are entirely legitimate. Ordinary citizens routinely pay gestores to stand in line for them at the driver’s license office. Companies hire them as quasi-lobbyists to get things done as painlessly as possible.

But often gestores play starring roles in Mexico’s endless loop of public corruption scandals. They operate in the shadows, dangling payoffs to officials of every rank. It was this type of gestor that Wal-Mart de Mexico deployed, Mr. Cicero said.

Mr. Cicero told Mr. Torres-Landa it was his job to recruit the gestores. He worked closely with them, sharing strategies on whom to bribe. He also approved Wal-Mart de Mexico’s payments to the gestores. Each payment covered the bribe and the gestor’s fee, typically 6 percent of the bribe.

It was all carefully monitored through a system of secret codes known only to a handful of Wal-Mart de Mexico executives.

The gestores submitted invoices with brief, vaguely worded descriptions of their services. But the real story, Mr. Cicero said, was told in codes written on the invoices. The codes identified the specific “irregular act” performed, Mr. Cicero explained to Mr. Torres-Landa. One code, for example, indicated a bribe to speed up a permit. Others described bribes to obtain confidential information or eliminate fines.

Each month, Mr. Castro-Wright and other top Wal-Mart de Mexico executives “received a detailed schedule of all of the payments performed,” he said, according to the lawyer’s notes. Wal-Mart de Mexico then “purified” the bribes in accounting records as simple legal fees.

They also took care to keep Bentonville in the dark. “Dirty clothes are washed at home,” Mr. Cicero said.

Mr. Torres-Landa explored Mr. Cicero’s motives for coming forward.

Mr. Cicero said he resigned in September 2004 because he felt underappreciated. He described the “pressure and stress” of participating in years of corruption, of contending with “greedy” officials who jacked up bribe demands.

As he told The Times, “I thought I deserved a medal at least.”

The breaking point came in early 2004, when he was passed over for the job of general counsel of Wal-Mart de Mexico. This snub, Mr. Torres-Landa wrote, “generated significant anger with respect to the lack of recognition for his work.” Mr. Cicero said he began to assemble a record of bribes he had helped orchestrate to “protect him in case of any complaint or investigation,” Mr. Torres-Landa wrote.

“We did not detect on his part any express statement about wishing to sell the information,” the lawyer added.

According to people involved in Wal-Mart’s investigation, Mr. Cicero’s account of criminality at the top of Wal-Mart’s most important foreign subsidiary was impossible to dismiss. He had clearly been in a position to witness the events he described. Nor was this the first indication of corruption at Wal-Mart de Mexico under Mr. Castro-Wright. A confidential investigation, conducted for Wal-Mart in 2003 by Kroll Inc., a leading investigation firm, discovered that Wal-Mart de Mexico had systematically increased its sales by helping favored high-volume customers evade sales taxes.

A draft of Kroll’s report, obtained by The Times, concluded that top Wal-Mart de Mexico executives had failed to enforce their own anticorruption policies, ignored internal audits that raised red flags and even disregarded local press accounts asserting that Wal-Mart de Mexico was “carrying out a tax fraud.” (The company ultimately paid $34.3 million in back taxes.)

Wal-Mart then asked Kroll to evaluate Wal-Mart de Mexico’s internal audit and antifraud units. Kroll wrote another report that branded the units “ineffective.” Many employees accused of wrongdoing were not even questioned; some “received a promotion shortly after the suspicions of fraudulent activities had surfaced.”

None of these findings, though, had slowed Mr. Castro-Wright’s rise.

Just days before Mr. Cicero’s first debriefing, Mr. Castro-Wright was promoted again. He was put in charge of all Wal-Mart stores in the United States, one of the most prominent jobs in the company. He also joined Wal-Mart’s executive committee, the company’s inner sanctum of leadership.

The Initial Response

Ms. Munich sent detailed memos describing Mr. Cicero’s debriefings to Wal-Mart’s senior management. These executives, records show, included Thomas A. Mars, Wal-Mart’s general counsel and a former director of the Arkansas State Police; Thomas D. Hyde, Wal-Mart’s executive vice president and corporate secretary; Michael Fung, Wal-Mart’s top internal auditor; Craig Herkert, the chief executive for Wal-Mart’s operations in Latin America; and Lee Stucky, a confidant of Lee Scott’s and chief administrative officer of Wal-Mart International.

Wal-Mart typically hired outside law firms to lead internal investigations into allegations of significant wrongdoing. It did so earlier in 2005, for example, when Thomas M. Coughlin, then vice chairman of Wal-Mart, was accused of padding his expense accounts and misappropriating Wal-Mart gift cards.

At first, Wal-Mart took the same approach with Mr. Cicero’s allegations. It turned to Willkie Farr & Gallagher, a law firm with extensive experience in Foreign Corrupt Practices Act cases.

The firm’s “investigation work plan” called for tracing all payments to anyone who had helped Wal-Mart de Mexico obtain permits for the previous five years. The firm said it would scrutinize “any and all payments” to government officials and interview every person who might know about payoffs, including “implicated members” of Wal-Mart de Mexico’s board.

In short, Willkie Farr recommended the kind of independent, spare-no-expense investigation major corporations routinely undertake when confronted with allegations of serious wrongdoing by top executives.

Wal-Mart’s leaders rejected this approach. Instead, records show, they decided Wal-Mart’s lawyers would supervise a far more limited “preliminary inquiry” by in-house investigators.

The inquiry, a confidential memo explained, would take two weeks, not the four months Willkie Farr proposed. Rather than examining years of permits, the team would look at a few specific stores. Interviews would be done “only when absolutely essential to establishing the bona fides” of Mr. Cicero. However, if the inquiry found a “likelihood” that laws had been violated, the company would then consider conducting a “full investigation.”

The decision gave Wal-Mart’s senior management direct control over the investigation. It also meant new responsibility for the company’s tiny and troubled Corporate Investigations unit.

The unit was ill-equipped to take on a major corruption investigation, let alone one in Mexico. It had fewer than 70 employees, and most were assigned to chasing shoplifting rings and corrupt vendors. Just four people were specifically dedicated to investigating corporate fraud, a number Joseph R. Lewis, Wal-Mart’s director of corporate investigations, described in a confidential memo as “wholly inadequate for an organization the size of Wal-Mart.”

But Mr. Lewis and his boss, Kenneth H. Senser, vice president for global security, aviation and travel, were working to strengthen the unit. Months before Mr. Cicero surfaced, they won approval to hire four “special investigators” who, according to their job descriptions, would be assigned the “most significant and complex fraud matters.” Mr. Scott, the chief executive, also agreed that Corporate Investigations would handle all allegations of misconduct by senior executives.

And yet in the fall of 2005, as Wal-Mart began to grapple with Mr. Cicero’s allegations, two cases called into question Corporate Investigations’ independence and role.

In October, Wal-Mart’s vice chairman, John B. Menzer, intervened in an internal investigation into a senior vice president who reported to him. According to internal records, Mr. Menzer told Mr. Senser he did not want Corporate Investigations to handle the case “due to concerns about the impact such an investigation would have.” One of the senior vice president’s subordinates, he said, “would be better suited to conduct this inquiry.” Soon after, records show, the subordinate cleared his boss.

The other case involved the president of Wal-Mart Puerto Rico. A whistle-blower had accused the president and other executives of mistreating employees. Although Corporate Investigations was supposed to investigate all allegations against senior executives, the president had instead assigned an underling to look into the complaints — but to steer clear of those against him.

Ms. Munich objected. In an e-mail to Wal-Mart executives, she complained that the investigation was “at the direction of the same company officer who is the target of several of the allegations.”

“We are in need of clear guidelines about how to handle these issues going forward,” she warned.

The Inquiry Begins

Ronald Halter, one of Wal-Mart’s new “special investigators,” was assigned to lead the preliminary inquiry into Mr. Cicero’s allegations. Mr. Halter had been with Wal-Mart only a few months, but he was a seasoned criminal investigator. He had spent 21 years in the F.B.I., and he spoke Spanish.

He also had help. Bob Ainley, a senior auditor, was sent to Mexico along with several Spanish-speaking auditors.

On Nov. 12, 2005, Mr. Halter’s team got to work at Wal-Mart de Mexico’s corporate headquarters in Mexico City. The team gained access to a database of Wal-Mart de Mexico payments and began searching the payment description field for the word “gestoria.”

By day’s end, they had found 441 gestor payments. Each was a potential bribe, and yet they had searched back only to 2003.

Mr. Cicero had said his main gestores were Pablo Alegria Con Alonso and Jose Manuel Aguirre Juarez, obscure Mexico City lawyers with small practices who were friends of his from law school.

Sure enough, Mr. Halter’s team found that nearly half the payments were to Mr. Alegria and Mr. Aguirre. These two lawyers alone, records showed, had received $8.5 million in payments. Records showed Wal-Mart de Mexico routinely paid its gestores tens of thousands of dollars per permit. (In interviews, both lawyers declined to discuss the corruption allegations, citing confidentiality agreements with Wal-Mart.)

“One very interesting postscript,” Mr. Halter wrote in an e-mail to his boss, Mr. Lewis. “All payments to these individuals and all large sums of $ paid out of this account stopped abruptly in 2005.” Mr. Halter said the “only thing we can find” that changed was that Mr. Castro-Wright left Wal-Mart de Mexico for the United States.

Mr. Halter’s team confirmed detail after detail from Mr. Cicero’s debriefings. Mr. Cicero had given specifics — names, dates, bribe amounts — for several new stores. In almost every case, investigators found documents confirming major elements of his account. And just as Mr. Cicero had described, investigators found mysterious codes at the bottom of invoices from the gestores.

“The documentation didn’t look anything like what you would find in legitimate billing records from a legitimate law firm,” a person involved in the investigation said in an interview.

Mr. Lewis sent a terse progress report to his boss, Mr. Senser: “FYI. It is not looking good.”

Hours later, Mr. Halter’s team found clear confirmation that Mr. Castro-Wright and other top executives at Wal-Mart de Mexico were well aware of the gestor payments.

In March 2004, the team discovered, the executives had been sent an internal Wal-Mart de Mexico audit that raised red flags about the gestor payments. The audit documented how Wal-Mart de Mexico’s two primary gestores had been paid millions to make “facilitating payments” for new store permits all over Mexico.

The audit did not delve into how the money had been used to “facilitate” permits. But it showed the payments rising rapidly, roughly in line with Wal-Mart de Mexico’s accelerating growth. The audit recommended notifying Bentonville of the payments.

The recommendation, records showed, was removed by Wal-Mart de Mexico’s chief auditor, whom Mr. Cicero had identified as one of the executives who knew about the bribes. The author of the gestor audit, meanwhile, “was fired not long after the audit was completed,” Mr. Halter wrote.

Mr. Ainley arranged to meet the fired auditor at his hotel. The auditor described other examples of Wal-Mart de Mexico’s leaders withholding from Bentonville information about suspect payments to government officials.

The auditor singled out José Luis Rodríguezmacedo Rivera, the general counsel of Wal-Mart de Mexico.

Mr. Rodríguezmacedo, he said, took “significant information out” of an audit of Wal-Mart de Mexico’s compliance with the Foreign Corrupt Practices Act. The original audit had described how Wal-Mart de Mexico gave gift cards to government officials in towns where it was building stores. “These were only given out until the construction was complete,” Mr. Ainley wrote. “At which time the payments ceased.”

These details were scrubbed from the final version sent to Bentonville.

Investigators were struck by Mr. Castro-Wright’s response to the gestor audit. It had been shown to him immediately, Wal-Mart de Mexico’s chief auditor had told them. Yet rather than expressing alarm, he had appeared worried about becoming too dependent on too few gestores. In an e-mail, Mr. Rodríguezmacedo told Mr. Cicero to write up a plan to “diversify” the gestores used to “facilitate” permits.

“Eduardo Castro wants us to implement this plan as soon as possible,” he wrote.

Mr. Cicero did as directed. The plan, which authorized paying gestores up to $280,000 to “facilitate” a single permit, was approved with a minor change. Mr. Rodríguezmacedo did not want the plan to mention “gestores.” He wanted them called “external service providers.”

Mr. Halter’s team made one last discovery — a finding that suggested the corruption might be far more extensive than even Mr. Cicero had described.

In going through Wal-Mart de Mexico’s database of payments, investigators noticed the company was making hefty “contributions” and “donations” directly to governments all over Mexico — nearly $16 million in all since 2003.

“Some of the payments descriptions indicate that the donation is being made for the issuance of a license,” Mr. Ainley wrote in one report back to Bentonville.

They also found a document in which a Wal-Mart de Mexico real estate executive had openly acknowledged that “these payments were performed to facilitate obtaining the licenses or permits” for new stores. Sometimes, Mr. Cicero told The Times, donations were used hand-in-hand with gestor payments to get permits.

Deflecting Blame

When Mr. Halter’s team was ready to interview executives at Wal-Mart de Mexico, the first target was Mr. Rodríguezmacedo.

Before joining Wal-Mart de Mexico in January 2004, Mr. Rodríguezmacedo had been a lawyer for Citigroup in Mexico. Urbane and smooth, with impeccable English, he quickly won fans in Bentonville. When Wal-Mart invited executives from its foreign subsidiaries for several days of discussion about the fine points of the Foreign Corrupt Practices Act, Mr. Rodríguezmacedo was asked to lead one of the sessions.

It was called “Overcoming Challenges in Government Dealings.”

Yet Mr. Cicero had identified him as a participant in the bribery scheme. In his debriefings, Mr. Cicero described how Mr. Rodríguezmacedo had passed along specific payoff instructions from Mr. Castro-Wright. In an interview with The Times, Mr. Cicero said he and Mr. Rodríguezmacedo had discussed the use of gestores shortly after Mr. Rodríguezmacedo was hired. “He said, ‘Don’t worry. Keep it on its way.’ ”

Mr. Rodríguezmacedo declined to comment; on Friday Wal-Mart disclosed that he had been reassigned and is no longer Wal-Mart de Mexico’s general counsel.

Mr. Halter’s team hoped Mr. Rodríguezmacedo would shed light on how two outside lawyers came to be paid $8.5 million to “facilitate” permits. Mr. Rodríguezmacedo responded with evasive hostility, records and interviews show. When investigators asked him for the gestores’ billing records, he said he did not have time to track them down. They got similar receptions from other executives.

Only after investigators complained to higher authorities were the executives more forthcoming. Led by Mr. Rodríguezmacedo, they responded with an attack on Mr. Cicero’s credibility.

The gestor audit, they told investigators, had raised doubts about Mr. Cicero, since he had approved most of the payments. They began to suspect he was somehow benefiting, so they asked Kroll to investigate. It was then, they asserted, that Kroll discovered Mr. Cicero’s wife was a law partner of one of the gestores.

Mr. Cicero was fired, they said, because he had failed to disclose that fact. They produced a copy of a “preliminary” report from Kroll and e-mails showing the undisclosed conflict had been reported to Bentonville.

Based on this behavior, Mr. Rodríguezmacedo argued, the gestor payments were in all likelihood a “ruse” by Mr. Cicero to defraud Wal-Mart de Mexico. Mr. Cicero and the gestores, he contended, probably kept every last peso of the “facilitating payments.”

Simply put, bribes could not have been paid if the money was stolen first.

It was an argument that gave Wal-Mart ample justification to end the inquiry. But investigators were skeptical, records and interviews show.

Even if Mr. Rodríguezmacedo’s account were true, it did not explain why Wal-Mart de Mexico’s executives had authorized gestor payments in the first place, or why they made “donations” to get permits, or why they rewrote audits to keep Bentonville in the dark.

Investigators also wondered why a trained lawyer who had gotten away with stealing a small fortune from Wal-Mart would now deliberately draw the company’s full attention by implicating himself in a series of fictional bribes. And if Wal-Mart de Mexico’s executives truly believed they had been victimized, why hadn’t they taken legal action against Mr. Cicero, much less reported the “theft” to Bentonville?

There was another problem: Documents contradicted most of the executives’ assertions about Mr. Cicero.

Records showed Mr. Cicero had not been fired, but had resigned with severance benefits and a $25,000 bonus. In fact, in a 2004 e-mail to Ms. Munich, Mr. Rodríguezmacedo himself described how he had “negotiated” Mr. Cicero’s “departure.” The same e-mail said Mr. Cicero had not even been confronted about the supposed undisclosed conflict involving his wife. (Mr. Cicero flatly denied that his wife had ever worked with either gestor.) The e-mail also assured Ms. Munich there was no hint of financial wrongdoing. “We see it merely as an undisclosed conflict of interest,” Mr. Rodríguezmacedo wrote.

There were other discrepancies.

Mr. Rodríguezmacedo said the company had stopped using gestores after Mr. Cicero’s departure. Yet even as Mr. Cicero was being debriefed in October 2005, Wal-Mart de Mexico real estate executives made a request to pay a gestor $14,000 to get a construction permit, records showed.

The persistent questions and document requests from Mr. Halter’s team provoked a backlash from Wal-Mart de Mexico’s executives. After a week of work, records and interviews show, Mr. Halter and other members of the team were summoned by Eduardo F. Solórzano Morales, then chief executive of Wal-Mart de Mexico.

Mr. Solórzano angrily chastised the investigators for being too secretive and accusatory. He took offense that his executives were being told at the start of interviews that they had the right not to answer questions — as if they were being read their rights.

“It was like, ‘You shut up. I’m going to talk,’ ” a person said of Mr. Solórzano. “It was, ‘This is my home, my backyard. You are out of here.’ ”

Mr. Lewis viewed the complaints as an effort to sidetrack his investigators. “I find this ludicrous and a copout for the larger concerns about what has been going on,” he wrote.

Nevertheless, Mr. Herkert, the chief executive for Latin America, was notified about the complaints. Three days later, he and his boss, Mr. Duke, flew to Mexico City. The trip had been long-planned — Mr. Duke toured several stores — but they also reassured Wal-Mart de Mexico’s unhappy executives.

They arrived just as the investigators wrapped up their work and left.

A Push to Dig Deeper

Wal-Mart’s leaders had agreed to consider a full investigation if the preliminary inquiry found Mr. Cicero’s allegations credible.

Back in Bentonville, Mr. Halter and Mr. Ainley wrote confidential reports to Wal-Mart’s top executives in December 2005 laying out all the evidence that corroborated Mr. Cicero — the hundreds of gestor payments, the mystery codes, the rewritten audits, the evasive responses from Wal-Mart de Mexico executives, the donations for permits, the evidence gestores were still being used.

“There is reasonable suspicion,” Mr. Halter concluded, “to believe that Mexican and USA laws have been violated.” There was simply “no defendable explanation” for the millions of dollars in gestor payments, he wrote.

Mr. Halter submitted an “action plan” for a deeper investigation that would plumb the depths of corruption and culpability at Wal-Mart de Mexico.

Among other things, he urged “that all efforts be concentrated on the reconstruction of Cicero’s computer history.”

Mr. Cicero, meanwhile, was still offering help. In November, when Mr. Halter’s team was in Mexico, Mr. Cicero offered his services as a paid consultant. In December, he wrote to Ms. Munich. He volunteered to share specifics on still more stores, and he promised to show her documents. “I hope you visit again,” he wrote.

Mr. Halter proposed a thorough investigation of the two main gestores. He had not tried to interview them in Mexico for fear of his safety. (“I do not want to expose myself on what I consider to be an unrealistic attempt to get Mexican lawyers to admit to criminal activity,” he had explained to his bosses.) Now Mr. Halter wanted Wal-Mart to hire private investigators to interview and monitor both gestores.

He also envisioned a round of adversarial interviews with Wal-Mart de Mexico’s senior executives. He and his investigators argued that it was time to take the politically sensitive step of questioning Mr. Castro-Wright about his role in the gestor payments.

By January 2006, the case had reached a critical juncture. Wal-Mart’s leaders were again weighing whether to approve a full investigation that would inevitably focus on a star executive already being publicly discussed as a potential successor to Mr. Scott.

Wal-Mart’s ethics policy offered clear direction. “Never cover up or ignore an ethics problem,” the policy states. And some who were involved in the investigation argued that it was time to take a stand against signs of rising corruption in Wal-Mart’s global operations. Each year the company received hundreds of internal reports of bribery and fraud, records showed. In Asia alone, there had been 90 reports of bribery just in the previous 18 months.

The situation was bad enough that Wal-Mart’s top procurement executives were summoned to Bentonville that winter for a dressing down. Mr. Menzer, Wal-Mart’s vice chairman, warned them that corruption was creating an unacceptable risk, particularly given the government’s stepped-up enforcement of the Foreign Corrupt Practices Act. “Times have changed,” he said.

As if to underscore the problem, Wal-Mart’s leaders were confronted with new corruption allegations at Wal-Mart de Mexico even as they pondered Mr. Halter’s action plan. In January, Mr. Scott, Mr. Duke and Wal-Mart’s chairman, S. Robson Walton, received an anonymous e-mail saying Wal-Mart de Mexico’s top real estate executives were receiving kickbacks from construction companies. “Please you must do something,” the e-mail implored.

Yet at the same time, records and interviews show, there were misgivings about the budding reach and power of Corporate Investigations.

In less than a year, Mr. Lewis’s beefed-up team had doubled its caseload, to roughly 400 cases a year. Some executives grumbled that Mr. Lewis acted as if he still worked for the F.B.I., where he had once supervised major investigations. They accused him and his investigators of being overbearing, disruptive and naïve about the moral ambiguities of doing business abroad. They argued that Corporate Investigations should focus more on quietly “neutralizing” problems than on turning corrupt employees over to law enforcement.

Wal-Mart’s leaders had just witnessed the downside of that approach: in early 2005, the company went to the F.B.I. with evidence that the disgraced former vice chairman, Mr. Coughlin, had embezzled hundreds of thousands of dollars. The decision produced months of embarrassing publicity, especially when Mr. Coughlin claimed he had used the money to pay off union spies for Wal-Mart.

Meanwhile, Wal-Mart de Mexico executives were continuing to complain to Bentonville about the investigation. The protests “just never let up,” a person involved in the case said.

Another person familiar with the thinking of those overseeing the investigation said Wal-Mart would have reacted “like a chicken on a June bug” had the allegations concerned the United States. But some executives saw Mexico as a country where bribery was embedded in the business culture. It simply did not merit the same response.

“It’s a Mexican issue; it’s better to let it be a Mexican response,” the person said, describing the thinking of Wal-Mart executives.

In the midst of this debate, Ms. Munich submitted her resignation, effective Feb. 1, 2006. In one of her final acts, she drafted a memo that argued for expanding the Mexico investigation and giving equal respect to Mexican and United States laws.

“The bribery of government officials,” she noted dryly, “is a criminal offense in Mexico.”

She also warned against allowing implicated executives to interfere with the investigation. Wal-Mart de Mexico’s executives had already tried to insert themselves in the case. Just before Christmas, records show, Mr. Solórzano, the Wal-Mart de Mexico chief executive, held a video conference with Mr. Mars, Mr. Senser and Mr. Stucky to discuss his team’s “hypothesis” that Mr. Cicero had stolen gestor payments.

“Given the serious nature of the allegations, and the need to preserve the integrity of the investigation,” Ms. Munich wrote, “it would seem more prudent to develop a follow-up plan of action, independent of Walmex management participation.”

The Chief Weighs In

Mr. Scott called a meeting for Feb. 3, 2006, to discuss revamping Wal-Mart’s internal investigations and to resolve the question of what to do about Mr. Cicero’s allegations.

In the days before the meeting, records show, Mr. Senser ordered his staff to compile data showing the effectiveness of Corporate Investigations. He assembled statistics showing that the unit had referred relatively few cases to law enforcement agencies. He circulated copies of an e-mail in which Mr. Rodríguezmacedo said he had been treated “very respectfully and cordially” by Mr. Senser’s investigators.

Along with Mr. Scott, the meeting included Mr. Hyde, Mr. Mars and Mr. Stucky, records show. The meeting brought the grievances against Corporate Investigations into the open. Mr. Senser described the complaints in Mr. Lewis’s performance evaluation, completed shortly after the meeting. Wal-Mart’s leaders viewed Mr. Lewis’s investigators as “overly aggressive,” he wrote. They did not care for Mr. Lewis’s “law enforcement approach,” and the fact that Mr. Scott convened a meeting to express these concerns only underscored “the importance placed on these topics by senior executives.”

By meeting’s end, Mr. Senser had been ordered to work with Mr. Mars and others to develop a “modified protocol” for internal investigations.

Mr. Scott said he wanted it done fast, and within 24 hours Mr. Senser produced a new protocol, a highly bureaucratic process that gave senior Wal-Mart executives — including executives at the business units being investigated — more control over internal investigations. The policy included multiple “case reviews.” It also required senior executives to conduct a “cost-benefit analysis” before signing off on a full-blown investigation.

Under the new protocol, Mr. Lewis and his team would only investigate “significant” allegations, like those involving potential crimes or top executives. Lesser allegations would be left to the affected business unit to investigate.

“This captures it, I think,” Mr. Hyde wrote when Mr. Senser sent him the new protocol.

Four days after Mr. Scott’s meeting, with the new protocol drafted, Wal-Mart’s leaders began to transfer control of the bribery investigation to one of its earliest targets, Mr. Rodríguezmacedo.

Mr. Mars first sent Mr. Halter’s report to Mr. Rodríguezmacedo. Then he arranged to ship Mr. Halter’s investigative files to him as well. In an e-mail, he sought Mr. Senser’s advice on how to send the files in “a secure manner.”

Mr. Senser recommended FedEx. “There is very good control on those shipments, and while governments do compromise them if they are looking for something in particular, there is no reason for them to think that this shipment is out of the ordinary,” he wrote.

“The key,” he added, “is being careful about how you communicate the details of the shipment to José Luis.” He advised Mr. Mars to use encrypted e-mail.

Wal-Mart’s spokesman, Mr. Tovar, said the company could not discuss Mr. Scott’s meeting or the decision to transfer the case to Mr. Rodríguezmacedo. “At this point,” he said, “we don’t have a full explanation of what happened. Unfortunately, we realize that until the investigation is concluded, there will be some unanswered questions.”

Wal-Mart’s leaders, however, had clear guidance about the propriety of letting a target of an investigation run it.

On the same day Mr. Senser was putting the finishing touches on the new investigations protocol, Wal-Mart’s ethics office sent him a booklet of “best practices” for internal investigations. It had been put together by lawyers and executives who supervised investigations at Fortune 500 companies.

“Investigations should be conducted by individuals who do not have any vested interest in the potential outcomes of the investigation,” it said.

The transfer appeared to violate even the “modified protocol” for investigations. Under the new protocol, Corporate Investigations was still supposed to handle “significant” allegations — including those involving potential crimes and senior executives. When Mr. Senser asked his deputies to list all investigations that met this threshold, they came up with 31 cases.

At the top of the list: Mexico.

After the meeting with Mr. Scott, Mr. Senser had told Mr. Lewis in his performance evaluation that his “highest priority” should be to eliminate “the perceptions that investigators are being too aggressive.” He wanted Mr. Lewis to “earn the trust of” his “clients” — Wal-Mart’s leaders. He wanted him to head off “adversarial interactions.”

Mr. Senser now applied the same advice to himself.


Even as Mr. Halter’s files were being shipped to Mr. Rodríguezmacedo, Mr. Stucky made plans to fly to Mexico with other executives involved in the bribery investigation. The trip, he wrote, was “for the purpose of re-establishing activities related to the certain compliance matters we’ve been discussing.” Mr. Stucky invited Mr. Senser along.

“It is better if we do not make this trip to Mexico City,” Mr. Senser replied. His investigators, he wrote, would simply be “a resource” if needed.

Ten days after Mr. Stucky flew to Mexico, an article about Wal-Mart appeared in The Times. It focused on “the increasingly important role of one man: Eduardo Castro-Wright.” The article said Mr. Castro-Wright was a “popular figure” inside Wal-Mart because he made Wal-Mart de Mexico one of the company’s “most profitable units.”

Wall Street analysts, it said, viewed him as a “very strong candidate” to succeed Mr. Scott.

Case Closed

For those who had investigated Mr. Cicero’s allegations, the preliminary inquiry had been just that — preliminary. In memos and meetings, they had argued that their findings clearly justified a full-blown investigation. Mr. Castro-Wright’s precise role had yet to be determined. Mr. Halter had never been permitted to question him, nor had Mr. Castro-Wright’s computer files been examined, records and interviews show.

At the very least, a complete investigation would take months.

Mr. Rodríguezmacedo, the man now in charge, saw it differently. He wrapped up the case in a few weeks, with little additional investigation.

“There is no evidence or clear indication,” his report concluded, “of bribes paid to Mexican government authorities with the purpose of wrongfully securing any licenses or permits.”

That conclusion, his report explained, was largely based on the denials of his fellow executives. Not one “mentioned having ordered or given bribes to government authorities,” he wrote.

His report, six pages long, neglected to note that he had been implicated in the same criminal conduct.

That was not the only omission. While his report conceded that Wal-Mart de Mexico executives had authorized years of payments to gestores, it never explained what these executives expected the gestores to do with the millions of dollars they received to “facilitate” permits.

He was also silent on the evidence that Wal-Mart de Mexico had doled out donations to get permits. Nor did he address evidence that he and other executives had suppressed or rewritten audits that would have alerted Bentonville to improper payments.

Instead, the bulk of Mr. Rodríguezmacedo’s report attacked the integrity of his accuser.

Mr. Cicero, he wrote, made Wal-Mart de Mexico’s executives think they would “run the risk of having permits denied if the gestores were not used.” But this was merely a ruse: In all likelihood, he argued, Wal-Mart de Mexico paid millions for “services never rendered.” The gestores simply pocketed the money, he suggested, and Mr. Cicero “may have benefited,” too.

But he offered no direct proof. Indeed, as his report made clear, it was less an allegation than a hypothesis built on two highly circumstantial pillars.

First, he said he had consulted with Jesús Zamora-Pierce, a “prestigious independent counsel” who had written books on fraud. Mr. Zamora, he wrote, “feels the conduct displayed by Sergio Cicero is typical of someone engaging in fraud. It is not uncommon in Mexico for lawyers to recommend the use of gestores to facilitate permit obtainment, when in reality it is nothing more than a means of engaging in fraud.”

Second, he said he had done a statistical analysis that found Wal-Mart de Mexico won permits even faster after Mr. Cicero left. The validity of his analysis was impossible to assess; he did not include his statistics in the report.

In building a case against Mr. Cicero, Mr. Rodríguezmacedo’s report included several false statements. He described Mr. Cicero’s “dismissal” when records showed he had resigned. He also wrote that Kroll’s investigation of Mr. Cicero concluded that he “had a considerable increase in his standard of living during the time in which payments were made to the gestores.” Kroll’s report made no such assertion, people involved in the investigation said.

His report promised a series of corrective steps aimed at putting the entire matter to rest. Wal-Mart de Mexico would no longer use gestores. There would be a renewed commitment to Wal-Mart’s anticorruption policy. He did not recommend any disciplinary action against his colleagues.

There was, however, one person he hoped to punish. Wal-Mart de Mexico, he wrote, would scour Mr. Cicero’s records and determine “if any legal action may be taken against him.”

Mr. Rodríguezmacedo submitted a draft of his report to Bentonville. In an e-mail, Mr. Lewis told his superiors that he found the report “lacking.” It was not clear what evidence supported the report’s conclusions, he wrote. “More importantly,” he wrote, “if one agrees that Sergio defrauded the company and I am one of them, the question becomes, how was he able to get away with almost $10 million and why was nothing done after it was discovered?”

Mr. Rodríguezmacedo responded by adding a paragraph to the end of his report: They had decided not to pursue “criminal actions” against Mr. Cicero because “we did not have strong case.”

“At the risk of being cynical,” Mr. Lewis wrote in response, “that report is exactly the same as the previous which I indicated was truly lacking.”

But it was enough for Wal-Mart. Mr. Rodríguezmacedo was told by executives in Bentonville on May 10, 2006, to put his report “into final form, thus concluding this investigation.”

No one told Mr. Cicero. All he knew was that after months of e-mails, phone calls and meetings, Wal-Mart’s interest seemed to suddenly fade. His phone calls and e-mails went unanswered.

“I thought nobody cares about this,” he said. “So I left it behind.”

Alejandra Xanic von Bertrab and James C. McKinley Jr. contributed reporting from Mexico City.


The Era of Big Box Retail Dominance Is Coming to an End
March 30, 2012
David Welch Chris Burritt Lauren Coleman-Lochner

When Best Buy Co. (BBY) said yesterday it was closing 50 big stores and opening 100 smaller ones, the world’s largest electronics retailer was adjusting to reality: The era of big-box retail dominance is coming to an end.

The new mantra is small box. While Best Buy, Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) are still opening large stores, all are putting increasing emphasis on smaller ones. Best Buy plans to double the number of its smaller Best Buy Mobile stores by 2016. Wal-Mart is building as many as 100 small-format stores this year, while Target is opening five CityTarget locations.

After 50 years of putting mom and pops out of business, big-box retail is having a mid-life crisis. A slow economy has hurt same-store sales, narrowing margins at big stores. Meanwhile, consumers, armed with price-comparison technology, are visiting more stores seeking deals or exclusive merchandise rather than making one-stop, fill-the-cart excursions.

“We’re undergoing a seismic shift,” said Natalie Berg, an analyst with Planet Retail in London. “People are still cutting back. People are buying more products online so there is a real case for downsizing stores.”

Big-box retailers essentially come in two flavors: so- called category killers such as Best Buy that focus on one type of merchandise, and discounters like Wal-Mart and Target, which sell a broader range of goods.

Declining Sales

Since the recession, big-box retailers have struggled. Until its third fiscal quarter last year, Wal-Mart had posted eight consecutive quarters of declining sales at stores open more than 12 months. Best Buy posted five straight quarters of profit decline before reporting a $2.6 billion loss on March 29, while analysts forecast declining same-store sales and profit for Target this year.

Since June 2009, when the recession officially ended, Wal- Mart shares have advanced 26 percent and Best Buy has dropped 28 percent, both trailing the 39 percent gain for the 32-company Standard & Poor’s 500 Retailing Index. Target shares gained 48 percent in that time.

Big-box retail was born in 1962. That’s the year that Wal- Mart, K-Mart and Target all opened their first large discount stores. As they grew, the new big boxes began offering broad selection and low prices to a growing population of suburbanites who had left the cities in their new cars, searching for their piece of the American Dream.

Big boxes boomed in the go-go 1990s. Fueled by an inflated stock market and loose credit, Americans expanded farther into the suburbs and filled their new homes with appliances and consumer goods, said John Lupo, a retired Wal-Mart executive who now sits on the board of AB Electrolux. The housing boom propelled the big-box retailers into the new millennium. Then came the crash and consumers pulled back.

Conspiring Forces

Other forces are conspiring against the big-box model. Baby Boomers no longer have kids at home and don’t need to stock up on food and packaged goods. Their kids are marrying later and delaying having their own children, meaning fewer are buying houses that need to be updated and furnished.

“Right now you have a trough in the need for big-box retail,” said Bryan Gildenberg, an analyst with the Cambridge, Massachusetts-based research firm Kantar Retail.

Hence the rush to open smaller stores. By 2016, Richfield, Minnesota-based Best Buy plans to have as many as 800 Mobile Stores, up from 305 now. It’s part of Chief Executive Officer Brian Dunn’s plan to generate revenue from warranties, accessories and connections between phones, tablets and other electronics.

The increasing emphasis on smaller stores still leaves room for big stores, according to Dunn.

Anytime, Anywhere

“We see those stores as an important part of a network in conjunction with our small-box stores, our online capabilities and our on-phone capabilities that allow customers to reach us anytime, anywhere, anyhow they choose,” he said in a telephone interview. “While I don’t see this as a decline of the big boxes, the multi-channel approach that we are taking will require less square footage.”

Wal-Mart, which is based in Bentonville, Arkansas, is also sticking with big stores. While the company aims to add at least three times as many Neighborhood Markets as in 2011, it plans to add up to 150 supercenters, compared with 122 last year.

“The supercenter is still what works best for us,” said Deisha Galberth Barnett, a Wal-Mart spokeswoman. “We will continue to work to grow the presence of supercenters.”

Shoppers’ stampede online is also hurting big-box chains. The biggest beneficiary of that shift is Amazon.com Inc. (AMZN), which is grabbing market share from Wal-Mart, Best Buy and Target.

Online Purchases

“The biggest challenge for big boxes is increasing consumer confidence in making online purchases,” said Matt Arnold, an analyst at Edward Jones & Co. in Des Peres, Missouri, who rates Best Buy and Wal-Mart as buys. “Best Buy is arguably more exposed than the Wal-Marts of the world that are heavy in the food, apparel and consumables category. In the case of consumer electronics, it comes down to price.”

If Best Buy and its big-box ilk are to survive, they’ll have to evolve and do a better job of integrating their brick- and-mortar locations with their Web stores, Arnold said.

“While big-box retailers are struggling, they aren’t going away,” Arnold said in a telephone interview. “They are shifting to smaller formats and investing in online retailing.”

To contact the reporters on this story: David Welch in Detroit at dwelch12@bloomberg.net; Chris Burritt in Greensboro at cburritt@bloomberg.net; Lauren Coleman-Lochner in New York at llochner@bloomberg.net


Are Walmart's Chinese Factories as Bad as Apple's?
Our fiction-free investigation finds that in many cases, the company's auditors are asleep on the job.

By Andy Kroll

On a warm, sticky winter morning, I waited nervously in a parking lot in Foshan, a city in southeastern China's smog-choked Pearl River delta, for a man I'd never met. His name was Mr. Ou, and he ran the sprawling factory in front of me, a jumble of offices, low-slung buildings, and warehouses. Though the factory was teeming with workers, a Subaru SUV and BMW coupe were the only cars in the lot. Drab, gray worker dormitories loomed nearby, and between them ran a dusty road that led to the factory. At last a young man emerged from an office building. He motioned for me to follow him in.

I settled onto a plush leather couch and absorbed the decor. Framed awards and certificates covered the walls. A shopping-cart-size wooden frog stood sentry in the center of the room. Ping golf clubs leaned against one wall; a Rolling Stones commemorative electric guitar gathered dust behind a chair. And there were grills: a small kettle grill on a desk, a brushed-steel gas grill on the far side of the room, grills stacked atop other grills. This was Mr. Ou's trade: supplying Western retailers with the cooking apparatus of patio parties and Fourth of July bashes.

The young man closed the door. He took the chair to my right, lit a cigarette, and met my stare as if to say, Let's get on with it. Only then did I realize I was not talking to an assistant.

Mr. Ou had the good looks of a judge on one of those breathless Chinese talent shows. He wore a tailored blazer, an expensive-looking watch, polished leather shoes, and colorful striped socks. He asked why I'd come to China, why I cared about his factory. An American consultant, I said, had suggested I tour his operation, Foshan Juniu Metal Manufacturing, because Mr. Ou was part of a hallmark sustainability program launched by the company I had come to China to investigate—Walmart.

In October 2005, Walmart announced plans to transform itself into one of the greenest corporations in the world. Then-CEO Lee Scott called sustainability "essential to our future success as a retailer." The company has been especially vocal about shrinking its environmental footprint in China, its manufacturing hub. But do the facts on the ground match Walmart's rhetoric? This was the question that had brought me to Mr. Ou.

Mr. Ou dragged on his cigarette, mulling my questions. "Okay," he finally said. "I will tell you what you want to know."

He was 33 years old and came from a manufacturing family. His parents ran a factory making packaging for barbecue grills and then, in 1994, began producing the grills themselves. By 2004, when Mr. Ou took over from his parents, Walmart was a major customer. In 2008, Mr. Ou signed his operation up as one of 200 plants whose energy efficiency Walmart would seek to increase by 20 percent.

An energy efficiency consultant who also works with Walmart (and requested anonymity; I'll call him Martin) echoed those observations. He said there was overwhelming support for Walmart to succeed in China, given the ripple effect that would have in Chinese commerce. Yet 2011, he told me, was widely seen as a disappointing year. "The word on the street in China is: 'Where is Walmart?'" he said. "Because we haven't seen them continue to move forward in 2011."

Martin brought up a major Walmart supplier, a network of factories making name-brand products. (He asked that I not reveal the brand, but it's a household name.) Like Mr. Ou once did, this supplier submitted scorecards on energy and water use to Walmart. The retailer's response: silence. Martin said the supplier admitted to him that the data was "total crap," but it never heard from Walmart one way or another. Martin summed up the supplier's attitude toward Walmart scorecards like this: "Walmart sets a new target, everybody gets all excited, runs around for six months, and then everything kind of slows down and the wheels fall off."

Eight months after my first conversation with Terry Foecke, I caught up with him again in Minnesota. Seeing little appetite from Walmart to expand the factory efficiency program, he'd ditched it to start his own energy consulting business. Foecke sounded more befuddled than bitter—he'd always seen Walmart's factory project as a small but important first step. "It was key that they expand the program—that's what we put on the table" in the beginning, he said. "Until they're willing to do that, it's not quite greenwashing, but it's very close."

Mr. Ou witnessed the demise of Foecke's program firsthand. When I reconnected with him last winter, he said Walmart had stopped asking him for reports on Juniu's energy usage. No one told him why. As far as he could tell, Walmart had canceled the program. Mr. Ou said he'd not lost his appetite for energy efficiency but admitted it was more difficult to make progress without Walmart's pressure and expertise. "I spent a lot of time and energy," he said. "It really is a pity that Walmart stopped the program." (Walmart says it's still finishing the pilot phase of the program.)

If there is any silver lining to Walmart's wavering on sustainability in China, it's that other major retailers have made significant progress. Foecke's current clients include IKEA and Levi's, companies that he said took a different approach to suppliers, building more durable relationships. It wasn't a perfect model—IKEA has issues with shadow factories, too—but he was allowed to walk into factories, suggest changes, and speed up the sustainability process.

Foecke still credits Walmart for nudging other companies, and he told me he would work with them again. But he remained somewhat discouraged by what he'd seen. "I really do think they're very distracted by the weakening economy, and they don't want to spend any money on anything right now," he told me.

The NRDC's Greer said Walmart's partners had every right to be critical of the company. "I would say we, the environmental community, have been enormously patient...We've not only been patiently waiting, we've been actively helping." She went on, "At this point, we don't see that they're trying." When Walmart fell short on her Chinese mill program as part of its goal to cut 20 million metric tons of greenhouse gas emissions from its supply chain, she says, "I thought, 'There they go again.' It breeds cynicism. Is this just a PR effort, or is this something they're serious about?"


The insane wealth of Walmart’s founding family
Just six members of Walmart's Walton clan are worth as much as the bottom 30 percent of all Americans

There’s been a constant stream of headlines about the widening gap between rich and poor for months now, but this is pretty remarkable: Just six members of the Walton family, heirs to the Walmart fortune, possess wealth equal to that of the entire bottom 30 percent of Americans.

That’s according to a new analysis by Sylvia Allegretto, a labor economist at the University of California at Berkeley’s Center on Wage and Employment Dynamics.

The calculation is based on data from 2007, the most recent round of the Federal Reserve Board’s Survey of Consumer Finances, which measures the net worth of Americans. (The extensive survey is performed once every three years, and the 2010 edition is expected to be released next year.)

Allegretto then compared those numbers to the net worth of the six members of the Walton clan as reported on the Forbes 400 list in 2007. They are all children or children-in-law of the founders of Walmart. Their total net worth that year: $69.7 billion.

That’s equal to the wealth of the poorest 30 percent of all Americans, according to Allegretto’s calculations.

One of those Waltons, by the way, is Alice, whose effort to create a world-class museum in Arkansas by purchasing hundreds of millions of dollars of art was recently profiled in the New Yorker. More information on the other Waltons is available at Forbes.


Wal-Mart is Larger than Norway: Exposing the Myth of Capital Competition
December 2011
By Christopher Petrella

Any epoch of capitalism allegedly premised on competition is visible only from the rearview mirror. It is a leftist truism that in the process of competition, capitalism destroys competition. Competition, therefore, is transformed into its opposite: monopoly. Capitalism no longer survives by enlarging competition, but rather through its reduction.

The supreme outcome of the contemporary globalization of monopoly capital has been an amplification of world exploitation, poverty rates, wealth disparities, and food insecurities. Since the mid-1970s the rate of world growth has stalled by nearly 70%. And one consequence of decelerating rates of growth has been a turn to financialization since about 1980 by giant firms unable to find sufficient high return investment outlets in production. Large corporations gradually began to rely on speculative investments made possible by highly leveraged assets and as a result have fomented financial crises of unfathomable proportions at a time when state systems everywhere are increasingly subject to the vagaries of the “market” and are forced to subsidize the failures of corporate capitalism through taxpayer sponsored “bailouts.” Leaders at national, regional, and municipal levels have begun to ameliorate the resulting fiscal crises by disinvesting in social services and creating more regressive tax systems, thereby intensifying the effective level of exploitation. Hence, the internationalization of monopoly capital, rather than contributing to the stabilization of global systems, is aggrandizing crises in both the scarcely indistinct private and public sectors.

Inequality, in all its repugnance, has become deeper and more entrenched. Today the richest 2% of adult individuals own more than half of global wealth, with the richest 1% accounting for 40% of total global assets. Although the gap in per capita income between the richest and poorest regions of the world fell from 15:1 to 13:1during the golden age of Keynesianism, it increased by 19:1 by 2002. And from 1970 to 2009 the per capita GDP of developing countries (excluding China) averaged a mere 6.3% of the per capita GDP of the G8 countries (the United States, Japan, Germany, France, the United Kingdom, Italy, Canada, and Russia).

The opening decade of the twenty-first century has seen surges of food crises, with hundreds of millions of people chronically food-deprived, in an era of rising food prices and widespread speculation. In a report released last week by The World Hunger Organization 17.2 million U.S. households were food insecure in 2010, the highest level on record, as the Great Recession continues to wreak havoc on families across the country. On a global scale, the World Bank reports that over half the global population lives on less than $2.50 per day and over 800 million people go hungry daily. And according to UNICEF nearly 8 million human beings died in 2010 because they were simply too poor to stay alive. Meanwhile, the U.N. reported in 2005 that the richest 500 people in the world earned more than the poorest 416 million. According to the same report the richest 350 people in the world own assets commensurable to more than 50% of the world’s population. And finally, according to a 1998 UN Development Report the wealthiest 15 people on the planet have assets that exceed the total annual income equal to the poorest 98% of those living on the African continent.

The transcendent irony of the internationalization of monopoly capital is that this entire thrust toward monopolistic multinational-corporate development has been justified at every turn by a neoliberal ideology rooted in the vaulted rhetoric of “free market” competition. Claims like these are specious to the point of logical cruelty.

For example, if Wal-Mart were a country— according to a June, 2011 Report issued by Business Insider— its revenues would exceed the GDP Norway, the 25th largest economy in the world. In less than three minutes Business Insider debunks the mythology of free-market ideologues: Yahoo is bigger than Mongolia, Visa is bigger than Zimbabwe, Nike is bigger than Paraguay, McDonalds is bigger than Latvia, Amazon.com is bigger than Kenya, Apple is bigger than Ecuador, Ford is bigger than Morocco, Bank of America is bigger than Vietnam, General Electric is bigger than New Zealand, Chevron is bigger than the Czech Republic, and Exxon- Mobil is bigger than Thailand. The monopolization of big business is endemic to capitalism. And the monopolization of capitalism produces corporatism. And corporatism bastardizes any prospect of establishing accessible and accountable democratic institutions and practices.

Take, for instance, the unrivaled monopolization of the U.S. financial sector. In 1990, the ten largest domestic financial institutions held only 10% of total financial assets. Today they own 70%. (Former U.S. Secretary of Labor asks “how else could we explain their apparent coordination on charging debit card fees?”) The largest five U.S. banks now hold $11 trillion in assets. Big banks ought to be partitioned (or destroyed). Perhaps we could learn from the Sherman Antitrust Act of 1890, a piece of legislation designed not only to encourage economic efficiency by reducing the market power of economic giants like railroads companies but also to thwart companies from becoming so large that their political power would undermine the democratic process.

The “capitalist” aspiration is ultimately one of irreducible self-annihilation. Corporate capitalists consecrate and condemn competition in the same breath and in so doing mistake mirrors for windows, growth for progress, and competition for contradiction.

This article was published at NationofChange at: http://www.nationofchange.org/wal-mart-larger-norway-exposing-myth-capital-competition-1322835390. All rights are reserved

Wal-Mart ramps up ballot threats to speed new stores

In a push to expand across California without interference, Wal-Mart is increasingly taking advantage of the state’s initiative system to threaten elected officials with costly special elections and to avoid environmental lawsuits.

The Arkansas-based retailer has hired paid signature gatherers to circulate petitions to build new superstores or repeal local restrictions on big-box stores. Once 15 percent of eligible voters sign the petitions, state election law puts cash-strapped cities in a bind: City councils must either approve the Wal-Mart-drafted measure without changes or put it to a special election. 

As local officials grapple with whether to spend tens of thousands or even millions of taxpayer dollars on such an election, Wal-Mart urges cities to approve the petition outright rather than send it to voters. 

While most development projects don’t attract much controversy, Wal-Mart has become a lightning rod almost everywhere it goes in California. Backers of organized labor have demonized the company for opposing unions and paying low wages, while other critics say its superstores cripple local businesses and increase sprawl.

Now, Wal-Mart’s use of the initiative process has angered elected officials who say the company’s political strategy effectively holds them hostage.

“They circumvented the system and blackmailed the town,” said Rick Roelle, a councilman in Apple Valley, where Wal-Mart pushed through a superstore proposal in April. “We’ve had controversial projects, but we were never bullied like Wal-Mart.”

Wal-Mart and its supporters argue that the strategy helps speed up development that can boost employment and tax revenue, as well as low-price shopping. The initiative process, according to the company, pressures cities only because it shows the strong community support for Wal-Mart. 

“The initiative process was an opportunity that allowed voters to voice their support for the benefits that Wal-Mart would bring their community, including jobs, affordable groceries, increased tax revenue, and infrastructure improvements,” Wal-Mart spokeswoman Delia Garcia said in a statement. 

The company has employed the same well-honed strategy across the state, from the Central Valley agricultural community of Kerman to the Silicon Valley suburb of Milpitas to the High Desert town of Apple Valley, where the main street has a special crosswalk button for horse riders.

Wal-Mart has ramped up the campaign in the last year, pushing through four new superstore projects and fighting big-box regulations in San Diego. The company spent $2 million on the effort, paying election lawyers, campaign consultants and public relations firms.

Wal-Mart often rallies a crowd of supporters at city council meetings to back up its position. Pastor Ray Smith, president of a group called Pastors on Point, asked his followers to support Wal-Mart in San Diego. He spoke passionately against an ordinance imposing new regulations on superstores, saying other stores don’t hire enough African Americans. 

At one city meeting, he called on a group of young people to stand and told the city council, “You want to stop the violence? We need jobs.”

Wal-Mart paid Smith’s church to bus supporters to council meetings and shuttle young people who gathered signatures for a ballot initiative petition against the regulations. Wal-Mart’s local political committee also reported paying $13,400 in salary and consultant payments to Smith directly, in addition to $5,500 labeled “van/bus rental.” 

Smith said the campaign filings were incorrect. “They did rent our buses … but I was never a consultant for them,” he said.

Wal-Mart uses the ballot initiative process in part to shield its superstores from lawsuits under the California Environmental Quality Act. The landmark 1970 law requires state and local agencies to review and mitigate the environmental and traffic impacts of development projects. Lawyers often sue Wal-Mart, contending that the review didn’t go far enough.

The company has found a loophole: Once it switches to a ballot initiative, the law doesn’t apply.

Other companies occasionally pursue ballot initiatives on development projects. But Wal-Mart is the main player, and California is the main battleground. 

Wal-Mart’s successful strategy raises questions about whether California’s communities – dogged by economic woes – can afford an aggressive use of the state’s system of direct democracy. Other interest groups could use the same strategy to pressure elected officials, as medical marijuana advocates recently did to defeat pot club regulations in San Diego.

This year, four cities approved Wal-Mart’s initiative petition without an election. One of them, San Diego, repealed its own superstore regulations in the face of an election that could have cost $3.4 million. Only Menifee in Riverside County held a special election, costing taxpayers $79,000. Wal-Mart spent nearly $400,000 there − and won handily.

The strategy violates the spirit, if not the letter, of state environmental law, said Richard Frank, former California chief deputy attorney general for legal affairs.

“It is disturbing because it appears to be a fairly overt circumvention of the CEQA process,” said Frank, now director of the California Environmental Law & Policy Center at the UC Davis School of Law.

Wal-Mart argues that it closely adheres to California’s extensive regulations. The strategy is necessary, it says, to avoid spurious lawsuits targeting the company for political reasons. The retailer points out that it goes much of the way through a lengthy planning process, allowing for an environmental impact report and public input, before heading to the ballot box.

“In many places around the state,” Garcia said, “we often obtain store approvals but are subjected to special interests that attempt to use political and legal challenges to unfairly delay a store’s construction.”

Ironically, since the 1990s, activists often have used ballot initiatives to block Wal-Mart stores.

Wal-Mart turned that strategy on its head when it began proposing its own initiatives. The company suffered a sobering, nationally publicized loss in Inglewood in 2004. The company spent more than $1 million on a ballot measure to open a superstore there. Unions fought back, and voters shot it down. 

But Wal-Mart hasn’t lost in California since.

In 2007, Wal-Mart used the initiative process to force Long Beach to repeal an ordinance banning certain superstores that sell groceries. The council, facing tough budgetary times, decided the city couldn’t afford an election, giving in to the company. In 2009, Wal-Mart defeated a big-box ban in Salinas the same way.

Last year, city councils approved Wal-Mart superstore initiatives without an election in the small Gold Country city of Sonora and the Mojave Desert military base community of Ridgecrest. This year, with five victories, has been Wal-Mart’s busiest. 

Wal-Mart continues to see a big opportunity for growth in California. The company already has 212 stores and employs 67,525 people in the state.

Proposals start with planning commissions

On the road to a superstore ballot initiative, Wal-Mart starts out following the normal process: The local planning commission reviews the company’s detailed plans to address traffic and environmental impacts. Once the planning commission approves the project, lawyers working for environmental or other anti-Wal-Mart interests often challenge the decision, setting the stage for a lawsuit.

But before the city council gets a chance to weigh in, Wal-Mart pulls its proposal and starts circulating an initiative petition detailing the same project.

To Wal-Mart’s supporters, the planning commission’s public hearings and stamp of approval provide sufficient oversight. Some planning experts, however, argue that the city council’s review is an important part of the process. Councils normally can make their approval of big development projects conditional on certain changes, like requiring developers to widen a road for additional traffic or help pay for a nearby public park.

In Fresno County, Kerman Councilman Doug Wilcox, for example, wanted to weigh in on whether students at a nearby school were sufficiently protected from increased Wal-Mart traffic. The company’s strategy didn’t give him the opportunity.

“The strong-arm tactics and the way that they did it just left a bad taste in my mouth,” Wilcox said.

The city manager, on the other hand, argued in a strongly worded report to city council that the project had been rigorously reviewed, exceeded standards and would provide hundreds of thousands of dollars in tax revenue. The report opposed holding a special election, which it said, “could be viewed as simply a tactic to delay the project and reject the will of the citizens of Kerman.”

Other city officials blame Wal-Mart’s tactics on the handful of lawyers who routinely sue over big-box projects using the California Environmental Quality Act. They believe the lawyers are abusing the environmental regulations and blocking economic growth with frivolous lawsuits.

The lawyers maintain their claims have merit, pointing to court victories against Wal-Mart and settlements under which the company agreed to make environmental improvements. 

Wal-Mart points to a news report by the Wall Street Journal last year that Safeway Inc. hired Massachusetts-based The Saint Consulting Group to run anti-Wal-Mart efforts throughout California. A Saint spokesman said the firm never sued Wal-Mart directly but declined to say whether Saint financially backed lawsuits. Wal-Mart tried to determine whether Saint was behind any California lawsuits, but hasn’t been able to identify any cases.

Either way, the legal wrangling takes time, and to Wal-Mart and its supporters, the initiative strategy is an effective and legitimate way to cut through such delays.

“I’m upset that there’s circumstances in California that would make it necessary to do that,” said Apple Valley Mayor Scott Nassif. “They’ve got a target on their back, apparently, so that’s just the reality of things.”

For each initiative, Wal-Mart creates and funds a political committee with the city’s name, like it did with Apple Valley Consumers for Choice. The company relies on a stable of prominent firms to handle legal filings and communications strategies.

The company looks for a local resident to formally propose the initiative. Attila Csikos offered to be that person in Menifee, a recently incorporated city whose growth has been driven by master planned communities. Csikos said he likes Wal-Mart’s low prices and supports the initiative process.

“It should be up to the will of the people, not the regulations of a city council,” he said.

Wal-Mart’s petitions, which can run longer than 60 pages, create special development rules for a specific area allowing for a superstore. They include language that bars appeals for future administrative approvals.

National Petition Management, which often handles Wal-Mart’s signature drives, works fast. In Milpitas, near San Jose, Councilwoman Althea Polanski was impressed that Wal-Mart garnered 6,000 signatures in 16 days. The county registrar found that 3,745 signatures were valid, more than 15 percent of Milpitas’ 24,000 registered voters.

“That speaks very, very clearly to me that a majority of the people in this city want an expanded Wal-Mart,” Polanski said at an April council meeting.

If the petition is signed by 10 percent of registered voters, it can go on the next regularly scheduled ballot. Fifteen percent triggers a special election that must be held between 88 and 103 days later, which can be much more costly. In Milpitas, it would have cost $436,000.

The only other option is to approve the initiative as Wal-Mart wrote it.

Councilwoman Debbie Giordano originally supported Wal-Mart but was alarmed by the initiative strategy. She worried it could be used by other activists to open marijuana dispensaries.

“I think that’s a dangerous formula for government,” Giordano said. “What does that say? Go use your money and your power, go get the signatures, and then we’re going to force you to do whatever.”

Giordano’s fear already has been realized in San Diego. On the heels of a successful Wal-Mart effort there, a group of medical marijuana supporters brought a ballot initiative to repeal regulations on pot clubs. Putting it on the next ballot would have cost up to $841,000. The council repealed its own marijuana ordinance, as council members bemoaned the costs of an election. 

Money plays critical role

Sometimes, council members ask Wal-Mart to pay for the election. This year in the Bay Area city of Pittsburg, for example, another developer offered to pay for the election costs of its ballot initiative. But Wal-Mart always declines.

“We are not embarrassed by our decision to move to an initiative and to allow the electorate to overwhelmingly weigh in, but we are not prepared to cover any costs for an election,” Wal-Mart spokesman Aaron Rios said at an Apple Valley Town Council meeting in April.

Rios pointed out the council could avoid an election by approving the petition and asked his supporters in the audience if they supported that, eliciting a cheer.

Apple Valley Mayor pro tem Barb Stanton, a Tea Party Patriot member who told the audience “most all of us love Wal-Mart,” was surprised to hear the company wouldn’t pay.

“It’s your initiative, your process, and to bend us over for 180 − excuse me that term, but I mean, come on, $180,000 is a lot of money, and it’s just wrong,” Stanton said to Rios. “I’m fully in favor of going to the ballot, but at your cost.”

“And again,” Rios responded, “we’re not prepared to accept that cost.”

In the end, the council voted to approve Wal-Mart’s petition outright. Councils in Milpitas and Kerman did the same thing.

Wal-Mart’s Rios had urged the Menifee City Council to avoid a vote as well. But a split council opted to pay for a special election. Wal-Mart spent $397,000 on its political effort there. There was no official opposition. About 11,000 people voted, and Wal-Mart won 76 percent of the vote.

Cory Briggs and Brett Jolley, the same lawyers who challenged Wal-Mart’s projects, are now suing Apple Valley, Menifee, Milpitas and Sonora over the company’s use of the initiative process. 

“It’s allowing a very small percentage of registered voters to essentially hijack the local land use process,” Jolley said. “A concept that is designed to allow the citizenry to have the ultimate say in legislative matters is really now being abused to keep the citizenry out of the process altogether.” 

Jolley, who doesn’t disclose who finances his lawsuits, represents community groups like the Milpitas Coalition for a Better Community. Briggs, who represents a group called Citizens for Responsible Equitable Environmental Development, or CREED-21, said he works on a contingency basis.

Wal-Mart handles legal costs for the cities, as required by a provision in the superstore petitions.

n San Diego, Wal-Mart’s initiative battle was not over a specific superstore, but rather an ordinance requiring an economic impact study for new big-box stores. The regulation was favored by unions and strongly opposed by Wal-Mart.

Wal-Mart drafted a petition to repeal the ordinance. It needed signatures from 5 percent of registered voters to force a special election.

In all, Wal-Mart spent more than $1 million on campaign consultants, mailings and advertising on the political effort in San Diego. National Petition Management collected nearly 54,000 signatures in 18 days, forcing either a repeal or a special election that could have cost taxpayers up to $3.4 million.

In February, council members – including Todd Gloria, the ordinance’s main proponent – overwhelmingly voted to repeal the big-box regulations. With the city facing a budget deficit, Gloria said he had to worry about keeping libraries open, not spending on special elections.

“We had our hands tied,” Gloria said. 


Women launch new legal salvo against Wal-Mart
October 27, 2011

SAN FRANCISCO, Oct 27 (Reuters) - Women pursuing discrimination claims against Wal-Mart filed a reformulated lawsuit before a San Francisco federal court on Thursday, alleging the world's largest retailer treats its female workers in California unfairly.

The revised lawsuit follows a reversal by the U.S. Supreme Court in June of a decision by the 9th Circuit Court of Appeals, which had upheld a 2004 certification of a nationwide class of up to 1.5 million current and former Wal-Mart workers.

The Supreme Court had split, 5-4, on whether the female employees, in different jobs and with different supervisors at 3,400 stores, had enough in common to be lumped together in a single class-action lawsuit. The majority concluded that the plaintiffs had not met the threshold to justify their certification as a class under Rule 23(a)(2) of the Federal Rules of Civil Procedure, which demands a showing of "questions of law or fact common to the class."

In the revised lawsuit, the plaintiffs narrowed their proposed class along geographic lines. The plaintiffs' complaint seeks certification for a class that has suffered discrimination as current or former Wal-Mart employees in California.

Wal-Mart attorney Theodore Boutrous Jr. said the plaintiffs' arguments still rely on the same theories that the Supreme Court rejected. "These lawyers seem more intent on alleging classes for their publicity value than their legal virtue," Boutrous said in a statement.

The revised complaint requests certification of injunctive and monetary relief classes under different provisions of the federal rules. Certification for a class seeking injunctive relief is sought under Rule 23(b)(2), whereas certification for those seeking monetary relief is sought under Rule 23(b)(3). In their prior complaints, certification was sought jointly under both rules. The complaint estimates that there are more than 45,000 women in each of the injunctive and monetary classes.

In its decision in June, the Supreme Court held unanimously that the appeals court had erroneously upheld certification of the plaintiffs' claims for monetary relief in the form of back pay under Rule 23(b)(2).

The Supreme Court found that the rule provides the basis for certification "only when a single injunction or declaratory judgment would provide relief to each member of the class." In the case of back pay, the court explained, each member of the class "would be entitled to an individualized award of monetary damages." As a result, the court concluded that certification under Rule 23(b)(2) was inappropriate.

The case, in U.S. District Court, Northern District of California, is Betty Dukes et al v. Wal-Mart Stores Inc, 01-2252.

For the plaintiffs: Brad Seligman and Jocelyn Larkin of the Impact Fund and Joseph Sellers, Christine Webber and Jenny Yang of Cohen Milstein Sellers & Toll.

For Wal-Mart: Frederick Brown, Mark Perry, Michele Maryott, Rachel Brass, Theane Kapur and Theodore Boutrous of Gibson Dunn & Crutcher.

(Reporting by Dan Levine and Poornima Gupta; additional reporting by Rebecca Hamilton in New York)


Wal-Mart Cuts Some Health Care Benefits

Citing rising costs, Wal-Mart, the nation’s largest private employer, told its employees this week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company’s health insurance plans.

In addition, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered.

This is a big shift from just a few years ago when Wal-Mart expanded coverage for employees and their families after facing criticism because so many of its 1.4 million workers could not afford or did not qualify for coverage — rendering many of them eligible for Medicaid.

Under pressure from states saddled with rising Medicaid costs and from labor unions and community groups, Wal-Mart had agreed to offer part-time employees, even those averaging less than 24 hours a week, health care insurance after a year on the job, shaving a year off the eligibility requirement. Wal-Mart also said that it was offering health plans that cost its employees about $250 a year for family coverage.

At the time, the moves were considered a departure from some of its major rivals and large employers, more than half of whom offer no company-sponsored health plan for part-time workers.

On Thursday, the company would not say what percentage of its work force was part time or worked fewer than 24 hours a week. Greg Rossiter, a Wal-Mart spokesman, said the decision to deny coverage to new part-time employees resulted from the company’s revamping of its health care offerings in light of rising costs.

“Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different,” Mr. Rossiter said. “We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

The company said the changes were not a result of the new federal health care law. But the higher rates along with steep spikes in premiums for other plans this year are likely to stoke the national debate over the year-old legislation that has pitted President Obama and Democrats against Republicans opposed to the changes. Challenges to the law by several states are now before the Supreme Court.

These moves are also occurring in a postrecession period when Wal-Mart has been struggling to regain its footing after months of disappointing or flat sales. And with unemployment still hovering around 9 percent, employers may feel less compelled to offer expansive benefits to people desperate for work.

Nationwide, employer-sponsored health premiums are up 9 percent, and increases of 5 percent or more are predicted for next year, with workers shouldering higher burdens on premiums and deductibles.

In 2009, Wal-Mart said 52 percent of its employees obtained health coverage through it, but on Thursday it declined to give the percentage.

Documents on Wal-Mart’s health and other benefit offerings were obtained by The New York Times from the Organization United for Respect at Walmart, a union-backed group of Wal-Mart employees that is seeking to pressure the company to improve wages and benefits.

In Wal-Mart’s 2012 health offerings, premiums will increase for some plans by more than 40 percent, although many of their workers pay relatively low premiums in comparison to more generous plans offered by other employers. But many Wal-Mart employees complain that their low premiums are accompanied by high deductibles that sometimes exceed 20 percent of their annual pay.

Wal-Mart’s new health offerings will require many employees who smoke to pay a significant penalty. They will be required to pay an extra $10 to $90 each pay period — $260 to $2,340 a year — if they want health coverage.

Several other large employers have begun charging higher premiums to employees who smoke, according to Mercer, a benefits consulting firm. Among the largest employers, about 28 percent vary their premiums based on tobacco use.

Mr. Rossiter defended the penalty for smokers, saying, “Tobacco users generally consume about 25 percent more health care services than nontobacco users.”

In its health care brochures, Wal-Mart told its employees that diseases caused by tobacco result in $96 billion in extra health care costs nationwide. And it noted that some other prominent companies, including Home Depot, Macy’s and PepsiCo, charge smokers more as part of their health plans.

“I won’t be able to afford the insurance,” she said. “And I really can’t go without insurance because I have a heart problem.”

Dan Schlademan, director of Making Change at Walmart, a union-backed campaign, condemned the changes.

“No wonder people are protesting in the streets,” he said. “This is another example of corporations putting profits ahead of what’s good for everyday Americans. It’s outrageous and damaging to many hard-working families that the biggest corporation in America is increasing health care costs for many employees by 40 percent.”

Wal-Mart says that its health care plans are affordable and competitive compared with those of its competitors. “We are proud to be among a few companies that continue to offer an affordable associate-only medical option for about a dollar per day or $15 per pay period,” Mr. Rossiter said. He noted that many companies offer health plans that start at $75 a week or more for each two-week pay period.

Companies frequently do not offer coverage to part-time workers. About 42 percent of large employers offer benefits to part-time employers, according to the 2011 survey by the Kaiser Family Foundation, which tracks changes in benefits. And some of Wal-Mart’s competitors, like Home Depot, do not offer their part-time workers the same health plans they offer full-time workers. Instead, those employees can enroll in plans that sharply limit the amount of coverage.

Wal-Mart also significantly reduced the amount of money it contributes to the savings accounts workers can use to pay for medical bills that are not covered under their plan. Last year, the company put $1,000 into accounts for families but it will cut the amount by half for next year to just $500. Companies typically put more money into these accounts as a way of encouraging employees to choose these plans, which cost employers less than traditional policies.

While Wal-Mart defends its decision to reduce these contributions, few companies have made similar cuts, according to Mercer. Companies are continuing to try to do what they can to encourage employees to enroll in these plans, said Beth Umland, who oversees the company’s benefits research.

Barbara Collins, a sales associate at the Wal-Mart in Placerville, Calif., said that the premiums for the H.M.O. plan for herself and her 5-year-old son would rise to $18 every two weeks from $10. Her big concern, she said, was that her deductible would jump to $5,000 a year, from $1,000 — a daunting amount considering she earns $19,000 a year. “I don’t know how I’ll be able to afford it if I go to a doctor or to physical therapy,” she said.

Walmart Warehouse Under Investigation By California Labor Officials

10/14/2011 2:36 pm Updated: 12/14/2011

WASHINGTON -- Investigators in California have discovered numerous labor law violations at a massive warehouse handling Walmart goods, according to state officials.

At the warehouse in Riverside County, Calif., operated by Walmart contractor Schneider Logistics, inspectors with the state labor department found that two of the temporary staffing agencies who supply manual labor have not been keeping track of how much money workers are owed.

One firm, Impact Logistics, Inc., was issued a $499,000 fine for not providing itemized wage statements to the workers who unload and load products at the facility. The company was also issued a warning for failing to maintain time records, and another staffing agency, Premier Warehousing Ventures, was issued a similar warning. There are around 200 workers at the warehouse.

A spokesman for Impact Logistics said in a statement that the company is cooperating with the investigation. "It is our utmost goal to be one hundred percent complaint with the state's laws concerning wage requirements for employees, and we consider our people to be our company's greatest asset."

Jim Pittman, chief operating officer of Premier, said the company plans on proving that it was actually in full compliance with the law. "My employees mean the world to me," Pittman said. "It is our intent to abide by all of the labor laws whether it be in California or the other states we work in."

None of the workers in the warehouse are employed directly by Walmart, but labor department officials said the products inside were bound for Walmart stores. Dan Fogleman, a Walmart spokesman, said the company has reached out to Schneider to assess the situation.

"This facility is run by a third party, and this is an issue involving some of their subcontractors," Fogleman said. "Although we're not involved in this matter, the contracts we have in place with third parties require that they follow the law, and that’s something we fully expect."

State Labor Commissioner Julie A. Su told HuffPost that many workers were not given proper pay stubs, and it appears that some may not have been paid for all the time they worked. Although many workers have already been interviewed on-site and off, she said the agency will be carrying out a fuller investigation in the coming weeks.

Su added that the layers of subcontracting in warehouse work can make it difficult to enforce labor law.

"Certainly that’s one of the challenges," she said. "Warehouses are one example of the ever-increasing contracting out of labor. It's difficult for enforcement, and in many instances it's a deliberate effort to avoid compliance."

Wage and safety complaints are not uncommon in American warehouses. The Morning Call recently chronicled the sweatshop-like conditions for workers toiling in an Amazon distribution center in Pennsylvania. Workers there said the supervisors refused to open bay doors citing the possibility of employee theft, and the warehouse grew so hot on some days that ambulances waited outside at the ready to treat workers for heat exhaustion.

Schneider, the Walmart contractor, was not cited in the California inspection, since the workers are employed directly by the labor staffing agencies and not by the warehouse company.

A Schneider spokeswoman told HuffPost in a statement that the company has cooperated with the investigation: "We expect the agencies we work with to comply with all California and federal labor laws. We believe that we are in full compliance with applicable laws and regulations. We expect our vendors to fulfill their responsibilities as well."

The Riverside facility is one in a massive network of warehouses in California's Inland Empire region. Many of the facilities receive clothing, electronics and other dry goods coming from China that are bound for retail stores throughout the United States. Some of the country's biggest retailers use warehouses in the area, but workers in the warehouses are often employed through layers of subcontracting, blurring the lines of accountability.

Sheheryar Kaoosji, research and policy director at the worker advocacy group Warehouse Workers United, told HuffPost that the allegations against the temp companies operating in the Riverside facility are common in Inland Empire warehouses. He said the mostly Latino workers are often hired on a temporary basis and end up earning around the minimum wage.

Temp workers are more vulnerable to alleged abuses than direct hires, he said, and many of them are paid according to a confusing piece-rate schedule.

"Workers don't know how much they're being paid -- they're not showed on their paychecks," Kaoosji said. "Five or six years ago, there was a higher percentage of direct hires. That's been slowly eroding. Every year there are more people employed through the agency."

In addition to the Riverside facility, Schneider Logistics operates an extensive Walmart distribution center outside Chicago, Ill. Earlier this year, workers at that facility filed a class-action lawsuit against Schneider accusing the company of violating labor laws.

At the time, Robert Hines, who has worked on a temporary basis in Chicago-area warehouses for years, told HuffPost that he wasn't compensated for what was often grueling work in the Schneider-operated facility.

"I noticed after a couple of weeks that my checks didn't match my hours," said Hines, who claims he was shorted on overtime as well. "People are breaking their backs, trying to feed their families and be right."

Citing the California case, Su said that without proper pay stubs it can be impossible for a worker to know whether or not he's been paid appropriately.

"In this industry and others like it, this example makes it very clear that the failure to provide a wage statement is part and parcel of an effort to exploit workers," she said.


Disgruntled Employees March on Wal-Mart

Oct. 12, 2011

A group of Wal-Mart Stores employees seeking better wages and working conditions marched on the retailer's headquarters but said it was turned away without meeting with company officials.

BENTONVILLE, Ark. — A group of Wal-Mart Stores employees seeking better wages and working conditions marched on the retailer's headquarters Wednesday but said it was turned away without meeting with company officials.

Around 100 members of Organization United for Respect at Walmart (OUR Walmart) said they assembled so as to "offer solutions for improving the company's ailing U.S. store operations," on the same day of the company's annual investor conference.

The group, which formed a year ago, previously gathered at Wal-Mart's annual meeting in June where it met with a company representative. A spokesperson for the company was not immediately available for comment Wednesday.


China detains Walmart store managers
By Rahul Jacob In Hong Kong

October 10, 2011

Walmart, the US retailer, has been ordered to close seven stores in south-western China after police detained a number of store managers following allegations that employees labelled ordinary pork as organic.
The company would not say how many of its store managers in the city of Chongqing had been detained but said it was co-operating with an investigation by the Chongqing Administration of Industry and Commerce.

“We believe the closure has come about as a result of the recent investigation in some of our stores in
Chongqing” due to the alllegations of mislabelled pork, Walmart said in a statement. The stores are to remain closed for 14 days and would allow it time “to focus on implementing corrective actions.”
Paul French, an analyst at Access Asia, a marketing consultancy in Shanghai, said large retailers in China have been in trouble before for mislabelling food products, particularly for selling food after its sell-by date. But this was the first instance he knew of where a product was passed off as organic when it was not, he said.
Following a scandal earlier this year involving a
toxic additive fed to pigs in China, labelling a meat as organic would be a way of boosting sales, he said.
“The problem in China is we have no central [organic] certification authorities,” Mr French said. “£1000 in an envelope will get you the certificate you need.”
Huang Bo, head of the industry and commerce bureau, said Walmart had been punished 21 times in Chongqing since 2006 for violations such as false advertising and mislabelling products. In the latest episode, Walmart was fined Rmb2.69m ($423,548), according to Xinhua, the official Chinese news agency. The company declined to comment on the fine.
The company said it had sent staff to the south-western Chinese city several days ago to work with the authorities.
Late last month, China’s Ministry of Agriculture said it had arrested nearly 1,000 people involved in the manufacture and sale of the illegal additive. China’s largest meat processing company earlier this year was found to have sold pigs that had been fed the toxic additive clenbuterol hydrochloride.
In January, Walmart and
Carrefour were fined for overcharging on promotional items. After Walmart was found to have misstated prices on promotional items at three stores, it pledged to refund consumers five times the difference between the price on the promotional label and the price at the cash register if the incident was repeated.
Walmart’s annual sales in China are just $7.5bn – a fraction of its global revenues of $420bn – but are growing at a double-digit pace. The company has encountered difficulty translating the potential of the market into financial reward, making its first profit in China in 2008, 12 years after entering the country.
The company has also had to deal with personnel changes. In May, Walmart’s
chief financial officer and chief operating officer in China both resigned, citing personal reasons. The company declined to comment further on the abrupt resignations.

Copyright The Financial Times Limited 2011. You may share using our article tools.


by Dan Bacher
Wednesday Aug 17th, 2011 11:13 AM

In a August 16th news release from Wal-Mart corporate headquarters in Bentonville, Arkansas, the Walton Family Foundation announced investments totaling more than $71.8 million awarded to various environmental initiatives in 2010, with over $36 million alone handed over to Marine Conservation grantees including Ocean Conservancy, Conservation International Foundation, Marine Stewardship Council, World Wildlife Fund and Environmental Defense Fund (EDF).

The Recreational Fishing Alliance (RFA), a national grassroots recreational fishing organization, on August 17 slammed the Walton Family Foundation's contribution of $36 million to ocean privatization efforts through "catch shares" programs and the creation of so-called "marine protected areas."

The foundation, set up by the family who founded Wal-Mart, announced this week "its efforts to help fund the demise of both the recreational and commercial fishing industry while also working to ensure that the next generation of sportsmen will have less access to coastal fish stocks than at any point in U.S. history," according to a news release from RFA.

In a August 16th news release from Wal-Mart corporate headquarters in Bentonville, Arkansas, the Walton Family Foundation announced "investments" totaling more than $71.8 million awarded to various environmental initiatives in 2010. The foundation handed over $36 million alone to Marine Conservation grantees including Ocean Conservancy, Conservation International Foundation, Marine Stewardship Council, World Wildlife Fund and Environmental Defense Fund (EDF).

The five top grantees were: Conservation International, $18,640,917; the Nature Conservancy,$9,305,449; Environmental Defense Fund
$7,086,054; the Marine Stewardship Council, $4,500,000; and the Ocean Conservancy, $3,757,768 ((http://www.prnewswire.com/news-releases/walton-family-foundation-invests-718-million-in-environmental-initiatives-in-2010-127835788.html).

Critics of Wal-Mart, the largest retailer in the world, have blasted the company for decades for being able to sell its products at cheap prices only by employing sweatshops, undercutting competitors, wielding its market power to cripple both competitors and suppliers, and flouting national and international health, safety, labor, and environmental standards. Anti-corporate globalization opponents have long regarded Wal-Mart as a virtual "Darth Vader" of retailers, as documented in the film, "The High Price of Low Cost." (http://www.youtube.com/watch?v=uJMYZwL8sPA).

Greenwashing Wal-Mart's image

However, in 2006 the retail giant hired Adam Werbach, former Sierra Club president, to "polish" its image (http://reclaimdemocracy.org/walmart/2006/green_greenwashing.php). This latest release is apparently part of a carefully orchestrated campaign to greenwash its image - and extend control over public trust resources.

According to the release, the Walton Family Foundation "focuses on globally important marine areas and works with grantees and other partners to create networks of effectively managed protected areas that conserve key biological features, and ensure the sustainable utilization of marine resources - especially fisheries - in a way that benefits both nature and people."

"We focus our work in the United States' primary river systems and in some of the world's most ecologically significant marine areas," said Scott Burns, director of the foundation's Environment Focus Area and the former director of marine conservation at the World Wildlife Fund. "It's important to us to protect and conserve natural resources while also recognizing the roles these waters play in the livelihoods of those who live nearby."

The RFA countered that these specially managed areas of coastal waters are also referred to as "marine protected areas" or "marine reserves," and the end result is denied angler access, of little or no benefit to the very people whom Wal-Mart claims to benefit.

Marine protected areas without real protection

"A quick visit to the Ocean Conservancy website should be telling enough for anglers interested in learning where Wal-Mart's profits are being spent," said RFA executive director Jim Donofrio. "These folks are pushing hard to complete California's network of exclusionary zones throughout the entire length of coastline, and they've made it very clear that they would like to see the West Coast version of the Marine Life Protection Act (MLPA) extended into other coastal U.S. waters."

Grassroots environmentalists, fishermen, California Indian Tribes, civil liberties activists and environmental justice advocates have criticized Governor Arnold Schwarzenegger's Marine Life Protection Act (MLPA) Initiative, privately funded by the shadowy Resources Legacy Fund Foundation, for its numerous conflicts of interest, institutional racism and the violation of numerous state, federal and international laws.

The so-called "marine protected areas" established under the MLPA Initiative fail to protect the ocean from oil drilling and spills, water pollution, wave and wind energy projects, military testing, corporate aquaculture, habitat destruction and all other human impacts upon the ocean other than fishing and gathering. In an extreme case of corporate greenwashing, Catherine Reheis-Boyd, the president of the Western States Petroleum Association, served as chair of the MLPA Blue Ribbon Task Force that created these questionable "marine protected areas."

The release also said that targeted marine protected areas moving forward include Indonesia, Colombia, Costa Rica, Ecuador, Panama, the Gulf of California and the Gulf of Mexico. It will be interesting to see if these marine protected areas, like California's MLPA Initiative, will disrespect and fail to acknowledge the sovereign gathering rights of the indigenous people of these countries and regions.

Will these marine protected areas be like the one imposed by the Mexican government that denied members of the Cucapa Tribe the right to fish in the Colorado River Delta, spurring the Zapatistas (EZLN) and the Tribe to set up a "peace camp" from February to May 2007 to affirm their sovereign rights? (http://www.counterpunch.org/bacher04212007.html)

Donofrio said of Ocean Conservancy in particular, "Here's an organization which has publicly opposed creation of artificial reefs used by Wal-Mart's tackle buyers, in some cases openly advocating for their removal, yet the Walton family is handing over tons of money for support."

Wal-Mart boycott follows Safeway boycott

"Shopping for fishing equipment at Wal-Mart is contributing directly to the demise of our sport, it's supporting lost fishing opportunities and decreased coastal access for all Americans," Donofrio said. "I hope all RFA members across the country will remember that when it's time to gear up, but I would also wonder if perhaps our industry can help spread the message and support our local tackle shops by also pulling product off Wal-Mart's shelves."

RFA in April announced its support of a national boycott of the Safeway Supermarket chain, including Genuardi's in New Jersey, Pennsylvania and Delaware, because of that corporation's support for California's widely-contested MLPA initiative.

"Apparently Safeway has gotten some bad advice from the people in the ocean protection racket, a community to which the California-based mega-corporation is now donating profits," said Jim Martin, West Coast Regional Director of the RFA. "Safeway says it is supporting groups that make a difference like the Food Marketing Institute's Sustainable Seafood Working Group, the Conservation Alliance for Seafood Solutions and the World Wildlife Fund's Aquaculture Dialogues, but it's little more than corporate greenwashing."

Donofrio believes it's time that Wal-Mart was added to the angler boycott list as well.

"The Walton family created this huge corporate entity that has threatened the vibrancy of our local retail outlets, and now they're essentially doing the same thing with our fishing communities," Donofrio said.

"Much like Safeway has done with their financial investment in the environmental business community, Wal-Mart apparently prefers customers buy farm-raised fish and seafood caught by foreign countries outside of U.S. waters, while denying individual anglers the ability to head down to the ocean to score a few fish for their own table," noted Donofrio.

Foundation pushes catch shares program

The Walton Family Foundation is also working "to create economic incentives for ocean conservation," while candidly pledging their support for "projects that reverse the incentives to fish unsustainably that exist in 'open access fisheries' by creating catch share programs," according to the official news release.

A broad coalition of commercial and recreational fishing, consumer and environmental groups is opposing the catch shares programs being pushed by NOAA Administrator Jane Lubchenco, a former vice-chair of the Board of Directors of Environmental Defense, because these programs amount to the privatization of public trust resources by concentrating fisheries in the hands of a few corporate hands. Wherever catch shares have been introduced, local fishing communities, fish populations and the environment have been devastated.

"A catch share, also known as an individual fishing quota, is a transferable voucher that gives individuals or businesses the ability to access a fixed percentage of the total authorized catch of a particular species," according to Food and Water Watch. "Fishery management systems based on catch shares turn a public resource into private property and have lead to socioeconomic and environmental problems. Contrary to arguments by catch share proponents – namely large commercial fishing interests – this management system has exacerbated unsustainable fishing practices."

“Fish are a public resource," explained Wenonah Hauter, Food & Water Watch Executive Director. "Unfortunately, private investment groups and even some public interest groups have shamelessly and publicly compared access to fish to the stock market and are treating it like an investment that can be bought and sold for personal profit. They’re aiming to model the fishing business after big agribusiness on land, with giant commercial operations controlling the market.” (http://www.fishnewseu.com/latest-news/world/6013-food-a-water-watch-launches-campaign-against-catch-shares.html)

Donofrio emphasized, "Our local outfitters and tackle shops along the coast have had to face an immense challenge by going up against Wal-Mart's purchasing power during the last decade, but now that the Walton family is so up front about their opposition to open access fisheries, it's hard for me to believe that any sportsmen would ever be interested in shopping there again."

"California anglers have been outraged to learn that money they spend at a Safeway grocery store might end up in the hands of anti-fishing groups like the EDF and the Ocean Conservancy, so I hope more anglers will join the national boycott by sending a message to Wal-Mart as well as Safeway," Martin added.

Sam and Helen Walton launched their "modest retail business in 1962" with the guiding principle of helping "increase opportunity and improve the lives of others along the way," according to the Walton Family Foundation website. It is that principle the foundation says, that makes them "more focused than ever on sustaining the Walton's timeless small-town values and deep commitment to making life better for individuals and communities alike."

RFA said grassroots efforts to combat the corporate anti-fishing, pro-privatization agenda are more than just an uphill climb.

"The EDF catch share coffers are already filled to the top, while Pew Charitable Trusts has billions in reserve," Donofrio said. "When you add another $36 million annual commitment from the Walton family each year, I can't see how our local efforts can get anywhere unless the national manufacturers step up and openly denounce this corporate takeover once and for all."

"The individual anglers and local business owners are being denied opportunity, and I hope the federal trade representatives are willing to get onboard with their support of real small-town values," Donofrio said, adding that Ocean Conservancy and EDF combined received more than $10 million in Walton Family Foundation grants in 2010.

EDF: RFA is 'just wrong'

Tom Lalley, communications director for the Oceans Program, Environmental Defense Fund, responded to RFA's release by claiming, "RFA’s contention that the contribution in question was made by Wal-Mart is just wrong."

"The contribution was made by the Walton Family Fund and not Wal-Mart," he told http://www.fishnewseu.com. "These are two different entities. There is no connection between the two other than the fact that the fund’s money comes from private holdings of the same Waltons who started and managed Wal-Mart, but none of the money comes from the existing company. So it was the family, and specifically the family’s foundation, that made a contribution for sustainable fishing and ocean conservation, and not the store."

"That's B.S.," Martin said, responding to Lalley's statement. "The foundation money is Wal-Mart money sheltered from taxation to push the Walton's family agenda."

"Mr. Lalley is putting a false spin on this issue," added Donofio. "The fact is that the Walton family's money comes from the profits on the Wal-Mart stores that they founded. The Waltons are still in the top management tier of the company."

Commercial fishermen join recreational anglers in denouncing Wal-Mart and Walton Family Foundation

Zeke Grader, executive director of the Pacific Coast Federation of Fishermen's Associations (PCFFA), praised the RFA for criticizing the Walton Family's contributions to ocean privatization efforts and welcomed the organization's call for a Wal-Mart boycott.

"Wal-Mart is wrong on this issue, just as it has been in the past on labor and community issues," said Grader. "The privatization of public trust resources is the antithesis of conservation."

"I've been boycotting Wal-Mart for decades and it's absolutely great that recreational and commercial fishermen are together on this," noted Grader.

It is worth noting that Conservation International and the Nature Conservancy, the two top recipients of Walton Family Foundation funds, are known throughout the world for their top-down "environmental" programs that run roughshod over local communities to achieve their corporate greenwashing goals.

The Nature Conservancy in California is a strong backer of state and federal plans to build a peripheral canal or tunnel to export more Sacramento-San Joaquin River Delta water to corporate agribusiness and southern California water agencies. Canal opponents, including recreational anglers, commercial fishermen, Delta residents, family farmers and California Indian Tribes, believe the construction of the canal would result in the extinction of Central Valley steelhead, Sacramento River chinook salmon, Delta smelt, longfin smelt and other imperiled fish populations.

About the Recreational Fishing Alliance:

The Recreational Fishing Alliance is a national, grassroots political action organization representing recreational fishermen and the recreational fishing industry on marine fisheries issues. The RFA Mission is to safeguard the rights of saltwater anglers, protect marine, boat and tackle industry jobs, and ensure the long-term sustainability of our Nation's saltwater fisheries. For more information, call 888-JOIN-RFA or visit http://www.joinrfa.org.

MLPA Initiative Background:

The Marine Life Protection Act (MLPA) is a law, signed by Governor Gray Davis in 1999, designed to create a network of marine protected areas off the California Coast. However, Governor Arnold Schwarzenegger in 2004 created the privately-funded MLPA "Initiative" to "implement" the law, effectively eviscerating the MLPA.

The "marine protected areas" created under the MLPA Initiative fail to protect the ocean from oil spills and drilling, water pollution, military testing, wave and wind energy projects, corporate aquaculture and all other uses of the ocean other than fishing and gathering.

The MLPA Blue Ribbon Task Forces that oversaw the implementation of "marine protected areas" included a big oil lobbyist, marina developer, real estate executive and other individuals with numerous conflicts of interest. Catherine Reheis Boyd, the president of the Western States Petroleum Association who is pushing for new oil drilling off the California coast, served as the chair of the MLPA Blue Ribbon Task Force for the South Coast.

The MLPA Initiative operated through a controversial private/public "partnership funded by the shadowy Resources Legacy Fund Foundation. The Schwarzenegger administration, under intense criticism by grassroots environmentalists, fishermen and Tribal members, authorized the implementation of marine protected areas under the initiative through a Memorandum of Understanding (MOU) between the foundation and the California Department of Fish and Game (DFG).

Tribal members, fishermen, grassroots environmentalists, human rights advocates and civil liberties activists have slammed the MLPA Initiative for the violation of numerous state, federal and international laws. Critics charge that the initiative, privatized by Governor Arnold Schwarzenegger in 2004, has violated the Bagley-Keene Open Meetings Act, Brown Act, California Administrative Procedures Act, American Indian Religious Freedom Act and UN Declaration on the Rights of Indigenous Peoples.

MLPA and state officials refused to appoint any tribal scientists to the MLPA Science Advisory Team (SAT), in spite of the fact that the Yurok Tribe alone has a Fisheries Department with over 70 staff members during the peak fishing season, including many scientists. The MLPA Blue Ribbon Task Force also didn't include any tribal representatives until 2010 when one was finally appointed to the panel.

Wal-Mart may be losing price edge: analyst
Morgan Stanley starts Wal-Mart at equal weight, Target at overweight
Jun 27, 2011  By Andria Cheng, MarketWatch 

NEW YORK (MarketWatch) — Walmart U.S., seeking to reverse eight straight quarters of negative same-store sales, has retooled its marketing message to tout “everyday low prices,” brought back product assortment and placed products in the center of busy aisles to drive demand.

But those initiatives may not be enough to fix the biggest unit of the world’s largest retailer Wal-Mart Stores Inc., according to Morgan Stanley analyst Mark Wiltamuth, who started coverage of the company with an equal-weight rating. He started the retailer’s smaller rival Target Corp. with an overweight rating. Read story about Wal-Mart’s annual shareholders meeting in June.

Walmart’s “bigger problem: many consumers no longer think Walmart has the lowest prices,” Wiltamuth said.

Three-fifths of the shoppers think that compared to a couple of years ago, Walmart’s prices, while still better than most stores, are no longer the lowest, according to Wiltamuth’s May survey of 1,513 consumers, 1,149 of which had shopped at Walmart in the previous three months.

The survey showed only one in four shoppers believe Walmart’s everyday prices are “significantly lower” than grocery stores, a perception that’s key to driving sales, with about a quarter thinking the company’s prices are “at parity” with supermarket prices and 3% thinking that Walmart’s prices are even higher, the analyst said, adding grocery represents more than half of the company’s total sales.

“Merely having prices that are viewed as slightly lower is not good enough,” Wiltamuth said, adding the percentage of shoppers who buy more at Walmart increased to 44% from 23% when they think the retailer’s prices are “significantly” lower instead of “slightly” lower than grocery stores.

Walmart’s pricing lead over the grocers has narrowed to 15% to 20% lower from as much as 30% lower when he did his 2008 grocery pricing surveys, the analyst said.


“The strength of Walmart’s low price image is closely tied to customer spending,” he said. “Walmart may have to start reducing prices to stimulate its sales.”

He forecast same-store sales at Walmart U.S., 73% of the Bentonville, Ark.-based company’s profit, to continue to decline for the rest of the year. Reversing it won’t come easy even if Walmart starts to lower prices, the analyst said.

While two-thirds of the chain’s categories, including food and health items, are posting positive comparable sales, “the discretionary categories that have yet to turn are more dependent on the low income shopper who is struggling the most,” he said.

Any move on the part of Walmart to lower its prices to widen its discount price gap may in turn have negative implications for supermarket chains Safeway Inc. and Supervalu Inc. and Kroger Co., the analyst said. He has an underweight rating on Safeway SWY -0.72%  and Supervalu SVU -0.81%  and rates Kroger KR +0.26%  equal weight.

Wal-Mart WMT +0.14%  shares were up 0.7% in midday trading. Target TGT +1.34%  was up 1.2%

Outside of the U.S., Wiltamuth said he expects profit margin at Wal-Mart’s international unit, about 21% of the corporate earnings, will be hurt as the company converts Brazil and other parts of Latin America to its “everyday low prices” strategy, instead of using pricing changes such as promotions and sales. The company’s recent purchases including South Africa’s Massmart also may dilute profit in the near term. Read story on Wal-Mart pitching ‘everyday low prices’ strategy overseas.

On the other hand, the analyst gave a nod to the company’s Sam’s Club wholesale membership club chain, about 6% of its profit.

“While it is often ignored by investors, it is the eighth largest retailer in the U.S. and we estimate it is sixth largest food retailer by sales,” he said.

Sam’s Club, whose shoppers have average household income of $75,000 to $80,000 compared to in the low $40,000s for Walmart U.S., has also benefited from the recovery of upper-income consumers while its initiatives such as E-values that give personalized discounts to members also proved successful, according to the analyst.

Target’s overweight rating

For Target, Wiltamuth’s rating in part depends on the company’s growth opportunity as it prepares to enter the Canadian market.

While the Minneapolis-based retailer is in an investment phase for its Canadian entry, once it begins operations there in 2013, he expects Canada alone would add 54 cents a share to Target profit by 2016.

“We expect Target’s home, softline, and seasonal goods to fare well against a weak department store offering and other retailers who are more focused on hard goods” in Canada, he noted.

In the U.S., while shoppers also are pressured by macroeconomic concerns, Target’s moves to add fresh foods through its PFresh initiatives and the offer of 5% discounts through the use of its namesake credit and debit cards could each add 1 to 2 percentage points to same-store sales this year, he said.

Target’s shares also are cheap, having dropped 15% this year, compared with the 7% increase of the S&P, he said.

“In our view, investors are overly focused on near-term (per-share profit) and the uncertainty surrounding the magnitude of Canada startup dilution,” he said.

Andria Cheng is a MarketWatch reporter based in New York.


A Giant Fix
Jun 27, 2011 12:00 PM, By JON SPRINGER
With shoppers and stores still struggling, Wal-Mart goes back to the basics

Here We Grow Again

Wal-Mart's return to positive comp territory will be related to a return to new store building, including a new small format (Walmart Express) and a revamped grocery store, rechristened Walmart Market, the company promised. At the same time, it has cut back on the Supercenter renovation program that marked Project Impact.

Simon said moderated Supercenter growth since 2007 has negatively affected comp sales since those stores tend to perform best in their second, third and fourth years. The company since fiscal 2007 reduced new square footage growth to 1.5% last year — from around 8% in past years — as it focused more on remodels. Net new supercenters opened in the same period fell from 277 in fiscal 2007 to 135 in fiscal 2010.

Wal-Mart is looking to build as many as 200 new stores next year — its most since 2007, which will invigorate comps after they join the base after one year of operation, Simon projected.

Around 180 Walmart Market grocery stores have been approved by the retailer's real estate committee, which could grow the current fleet from 185 stores (155 Neighborhood Market and 30 Amigo stores in Puerto Rico) to 300 stores by 2013. The pipeline also includes 15 to 20 new small stores known as Walmart Express. These 15,000-square-foot units promise a more convenient shopping option — and appear to be the company's answer to a call for such a vehicle voiced by observers at this time a year ago.

“The Express store to me looks like the kind of place that if I were Walgreens, CVS or Wawa, I'd be looking at pretty closely,” Richard George, a professor of food marketing at St. Josephs University, Philadelphia, told SN. “I think what they're trying to do is a convenience store without the convenience-store pricing, and that could be interesting.”

These options can support growth by being faster to develop and build than supercenters, and easier to move into denser urban markets where Wal-Mart has yet to penetrate. The Market format — grown only gradually since its founding in 1998 — is now also delivering the same kind of returns as the Supercenter, Simon said. It appears to some observers to be finally realized in full.

“The Neighborhood Market is the best I've seen it. It looks like a fully functioning supermarket. You look at that concept and say, ‘Yes, I could open 500 of them,’” Marcotte said. “It's not a concept store anymore, it's a working model. Is it an exciting store? Not particularly, but it works. It's perfectly adequate in terms of addressing people's needs. I see it being fully competitive with other supermarket chains.”

In the meantime, Simon said he has substantially scaled down the company's Supercenter remodel program, admitting the renovations under Project Impact were more expensive and disruptive than the struggling retailer could tolerate. With scheduled Project Impact renovations on hold, a new remodeling program reduces the duration of each renovation from 18 weeks for Project Impact to five weeks, mainly by “eliminating the massive adjacencies and macro space changes that were in Project Impact,” Simon said — primarily moving pharmacies and pet departments.

Funds saved by this approach will help pay for new builds, he added.

The company in the meantime is making a bet on technology becoming a growth vehicle. Simon noted that even Wal-Mart's Express stores will support the “site-to-store” initiative allowing shoppers to buy anything Wal-Mart sells online and pick the item up at a local store — a program that could serve to eliminate the downside of less room for general merchandise at the smaller vehicles. The company also this year made an estimated $300 million purchase of the Silicon Valley start-up Kosmix, with the idea of using its aggregation of social media data for e-commerce.

These and other efforts underway at Wal-Mart are to be supported by a new commitment to everyday low cost, Simon said, noting that Wal-Mart's massive size gives it opportunity to leverage sales like no competitor.

“Our numbers are so big that, for example, if we can remove just one second from a transaction through a process change at the register, that's $30 million,” Simon said. “And if you think about that, we have lots of seconds. We have lots of half-seconds. And we're working on those things every single day to be more productive.”

It's this kind of return to the basics that has some convinced that Wal-Mart can overcome its same-store sales woes even as its shoppers confront ever more skillful competitors and continued economic challenges. Simon said Wal-Mart could see positive comps again by year-end.

“I'm not ready to write off Wal-Mart,” said George. “Their mission has always been fix things and make them better. And I think they've got a strategy to do that.”


Sen. Barbara Boxer wants the Federal Trade Commission to investigate whether Walmart is giving consumers as much as it should when they use gift receipts to return items.

The California Democrats says she should know soon whether the FTC will take a look.

A probe by CBS stations KOVR in Sacramento and KYW in Philadelphia found that Walmart customers returning items using gift receipts weren't always getting back the full amount originally paid for the items.

KOVR investigative reporter Kurtis Ming filled "Early Show" viewers in last week on the stations' work, which used hidden cameras.

In some cases, the refunds were much less than the original prices.

CBS News spent $106.85 at Walmart, but the gift receipts returned $62.32. The total loss was $44.53.

Sally Greenberg, executive director of the National Consumers League, told CBS News, "I think it's reprehensible. ... Consumers are cynical enough about company policy. This just adds to their sense of mistrust and disappointment."

The retail giant blamed the problem on confusion among some of its cashiers, resulting in their not following company policy.

Lorenzo Lopez, a Walmart spokesperson, provided CBS News with a video statement in which he says, "It's our expectation to refund the original purchase price when returning an item with a gift receipt."

Following the investigation, Walmart says, it issued a memo to its more than 3,800 stores nationwide to make sure all employees know that consumers with gift receipts should receive a full refund for the original amount paid.

It's also worth noting -- not all store items have the same return policies. So, Ming added, "You've got to be clear on the rules before you buy that next gift."


Union Effort Turns Its Focus to Target
May 23, 2011
By Steve Greenhouse - New York Times

In the world of big-box discounters, Target enjoys a reputation as a model corporate citizen that sells the latest in cheap chic. That’s a sharp contrast to the image of Wal-Mart, the world’s largest retailer, which labor unions have pilloried for years, accusing it of providing skimpy wages and benefits and skirting various labor laws.

But the arrows are about to come flying at Target’s famous bull’s-eye logo. The nation’s largest union for retail workers has embarked on its first broad campaign to unionize Target workers.

The union, the United Food and Commercial Workers, is trying to organize 5,000 workers at 27 Target stores in the New York City area. A majority of workers at the Target store in Valley Stream, N.Y., have already signed cards supporting unionization, and a government-supervised election there on June 17 will be the first time in more than two decades that Target workers will vote on whether to join a union.

“A lot of people are going to be shocked that Target workers would consider unionizing because of its very good image and because it’s known as such a fantastic philanthropic organization,” said Burt Flickinger, a retailing consultant who has worked on projects for both the union and Target suppliers.

The union decided to focus on Target after employees in Valley Stream, on Long Island, asked for help in unionizing. Echoing longstanding complaints by some Wal-Mart workers, the store’s employees complained that many of them earned too little to support a family or afford health insurance, forcing some to rely on food stamps and Medicaid for their children.

“What we want from Target is simply this: we need a living wage where we can get by,” said Sonia Williams, a logistics employee in Valley Stream who said she earns $11.71 an hour, plus a $1-an-hour night differential.

Target says its wages are competitive and its employees do not need a union.

Interviews with 10 of the store’s employees suggest that an important issue behind the unionization drive is frustration about being assigned too few hours of work, sometimes just one or two days a week.

Retailers are increasingly assigning such short workweeks as they seek to build an extensive roster of workers to fill their ever-changing scheduling needs. But some Target workers say that means they are offered too few hours to qualify for the company’s health plan.

Ms. Williams, who receives $200 a month in food stamps to help her and her 18-year-old son, complained that she was often assigned just three days of work each week, down from full time when she started nearly nine years ago.

So far, the union’s organizing efforts have not turned belligerent as it hopes to convince Target employees that it wants to work with the company, not hurt it. In contrast, the union has never been shy about attacking Wal-Mart — hurling invective, organizing protests and lobbying officials to block the retailer’s plans to expand in New York, Chicago and other cities unless it agrees to improve wages and benefits.

Union officials assert that Target’s wages and benefits are only slightly better than Wal-Mart’s.

Jim Rowader, Target’s vice president for employee and labor relations, said the company provided “great benefits, flexible scheduling and great career opportunities for workers in all stages of life.”

He said Target emphasized building trust between managers and employees. “When you talk about bringing a union into that mix, certainly based on the culture we have and the one we’re trying to build, we don’t think a union or any third party will improve on anything,” he said.

None of Target’s 1,755 stores in the United States are unionized, nor are any of Wal-Mart’s 4,420 American stores. The union has tried over the last decade to unionize Wal-Marts in Minnesota and Las Vegas and a Target in Minnesota, but fierce antiunion campaigns by the retailers deflated the efforts before they even came to a vote.

Mr. Flickinger said unions had been loath to undertake large-scale organizing drives against retailers, like the new one against Target in New York, because of obstacles like high employee turnover, the fear of some workers that they would be fired for supporting a union and the aggressive opposition by many companies toward unionization.

But Mr. Flickinger said the recession and retailers’ increasing use of part-time workers had improved the climate for organizing even though union membership had been sliding and unions were on the defensive nationwide. “Unions feel it might be the best of times for organizing in retail because many workers can’t afford the health benefits and many can’t even afford to shop in the stores where they work,” he said.

Patrick J. O’Neill, the union’s organizing director, said it was vital to try to unionize big-box stores. “Retail is a major employer in our economy,” he said. “If we don’t want the middle class to go away, we’ve got to do something about improving the wages and benefits for retail workers.”

About 12 percent of all American workers are unionized, but just 4.7 percent of retail workers are in unions. Kroger is the retailer with the most unionized workers: 200,000.

While the organizing drive is going full tilt in Valley Stream, the United Food and Commercial Workers has just started reaching out to employees at the other New York-area Targets. It is distributing fliers, asking workers to sign pro-union cards, and lining up support from community groups.

Tashawna Green, a stock clerk in Valley Stream, said a union was needed to help increase her pay, $8 an hour after one year there, and her hours, often six to 17 hours a week.

“I just feel that a union is going to help us,” she said. “If they ask for better hours, they get better hours. If they ask for respect, they get respect.”

Like many of her co-workers, Ms. Green, 21, a native of Jamaica, hails from the Caribbean, where unions are generally more popular than in the United States.

Ms. Green, the mother of a 5-year-old, said she would like to work four or five days a week, but is often assigned two days and then earns just $120 for the week. “It’s very hard to support yourself on that,” she said. “Sometimes I have to borrow money from people. I’m lucky that I’m able to stay with an aunt who understands. I try my best to pay her rent of $200 a month.”

Ms. Green said it was maddening that although many employees were desperate to work more hours, managers ask them whether they have any friends who are looking for jobs. Several workers said they were perplexed that the store hired 13 new workers in recent weeks.

Target defended its compensation and scheduling practices.

“The wages and benefits provided at the store are at or, frankly, above the market for comparable retail jobs, union or nonunion,” Mr. Rowader said. He said the store’s overall payroll hours had not declined, although individuals might be working fewer hours.

In campaigning against the union, Target is also distributing fliers. One says: “Like any other failing business the union needs to increase revenue to stay in business. Taking dues from new members is the only way for them to get more money.”

Betsy Wilson, who earns $10.50 an hour after working in Valley Stream for two years erecting merchandise displays, opposes having a union — and the dues payments that would come along with one. “Basically if you do your job, you won’t have any problems,” she said.

John Budd, a professor of human resources at the University of Minnesota, said the public’s ambivalence about unions could play a big role in the outcome of the Target unionization effort.

The workers’ call for higher wages may win little support, he said. “But the public may be much more sympathetic when someone is working just 10 hours a week and is asking for more hours.”


Is the Wal-Mart Way the American Way?
Dollars and Sense
March-April 2011
Web edition
Martin J. Bennett

"We need to uphold the law, we need to apply the law and we need to allow this project to move forward. I believe that not to do so would be un-American." So stated Rohnert Park (Sonoma County, California) City Councilwoman Amy Breeze last year when the council voted to approve a controversial Wal-Mart supercenter-despite a year long campaign against the project by a broad coalition of labor, environmental, and community organizations.

The Living Wage Coalition of Sonoma County challenges Ms. Breeze's definition of Americanism. Though we respect her point of view, we think she is dead wrong. Wal-Mart, we believe, has betrayed fundamental American values. As the largest retailer and private employer in America, no other company has such a profound impact upon our economy and labor markets. It is time for Wal-Mart to change, or face a growing opposition to its plan to build at least one supercenter in every county of California.

There is no better authority on the American economy and American values than our 32nd President, Franklin D. Roosevelt. Roosevelt proposed an 'Economic Bill of Rights' in 1944 that would guarantee all Americans "an American standard of living higher than ever known." Roosevelt believed that all Americans, according to Stanford historian David Kennedy, regardless of race, religion, or gender, were "entitled to a job, a living wage, decent housing, adequate medical care, a good education" as well as social insurance such as old age pensions, and unemployment and disability benefits. FDR's Economic Bill of Rights, also known as the 'Second Bill of Rights,'

asserted that every business should operate in a marketplace free from unfair competition and monopoly control.

Let's compare FDR's vision with Wal-Mart's business practices and ask these questions: What are America's values? What economic rights are all Americans entitled to?

The President proclaimed in 1933, "No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level-I mean the wages of a decent living."

Does Wal-Mart meet the "living wage" test? A typical full-time Wal-Mart worker in 2009 earned $11.75 an hour according to the company. This wage level is well below a self-sufficiency or living wage for Sonoma County which the Insight Center for Community and Economic Development in 2009 set at $14.90 an hour, a rate that will enable two parents working full-time to support two children and to pay for housing, food, health care, transportation, and childcare.

FDR's vision embraced "the right of every family to a decent home."

Yet, according to the Center for Housing Policy, in 2009 a family in Sonoma County needed to earn $98,112 a year to afford the median priced home of $322,000. However, the annual family income of two parents working full-time at Wal-Mart is $41,548, or just 42% of the income needed to afford the median-priced home. In fact, the income of the typical Wal-Mart family is so low as to qualify for the Department of Housing and Urban Development Section 8 rent subsidies.

Isn't earning an income sufficient to purchase a home or to afford the rent the bedrock of American values?

Roosevelt's Bill of Rights included "the right to adequate medical care and the opportunity to achieve and enjoy good health." Yet the Kaiser Family Foundation reported that in 2009 less than 50% of Wal-Mart employees and their children received health benefits. In comparison, Raley's, Safeway, and Costco in Northern California provide health care benefits to 80% of their employees. Who picks up the tab when uninsured Wal-Mart employees fall ill?

A UC Berkeley Center for Labor Research and Education 2004 study found that uninsured Wal-Mart employees in California relied on programs like Medi-Cal and Healthy Families at an annual cost of $32 million to the taxpayer. Moreover, Wal-Mart employees who lack medical insurance also rely on hospital emergency rooms and public clinics. According to the New American Foundation, in 2006 the state of California and all its counties spent $1.8 billion annually to provide uncompensated care to 1.3 million uninsured adults. What are real American values in this sorry state of affairs?

Roosevelt claimed that all Americans should receive "protection from the economic fears of old age, sickness, accident, and unemployment."

Yet Wal-Mart does not offer employees a retirement program that guarantees a fixed monthly income. After one year on the job, Wal-Mart's employees receive a 401K with employer profit-sharing contributions. Due to low pay, unpredictable shift assignments, and the demanding workload, more than 50% of Wal-Mart employees quit in their first year, so only a minority of workers are employed long enough to become eligible for the 401K.

Roosevelt was a strong supporter of organized labor and stated that the federal government must protect the "fundamental individual right of a worker to associate himself with other workers and to bargain collectively with his employer." He championed the passage of the National Labor Relations Action in 1935 that guaranteed the right of all workers to form a union and to bargain for better pay, benefits, and working conditions. Roosevelt declared, "If I were a worker in a factory, the first thing I would do is to join the union."

But not one Wal-Mart in the United States is unionized. Human Rights Watch, in a 2007 report, decried Wal-Mart's legal and illegal union-busting tactics and claimed that "the retail giant stands out for the sheer magnitude and aggressiveness of its antiunion apparatus and actions" and "based on our research we conclude that the cumulative effect of Wal-Mart's panoply of anti-union tactics, is to deprive its workers of their internationally recognized right to organize."

To add injury to insult, Wal-Mart managers and supervisors cut labor costs by refusing to comply with labor protections such as the Fair Labor and Standards Act of 1938. In 2008, the company settled 63 federal and state class-action lawsuits charging that Wal-Mart violated wage and hour laws, failing to pay its workers for overtime and off the clock work and denying workers meal and rest breaks.

Wal-Mart agreed to pay at least $352 million and up to $640 million to present and former employees.

The company also faces the largest class action suit in history on behalf of 1.6 million past and present female employees for wage discrimination and promotion gender-bias. So how does Wal-Mart's record of union busting, disregard for federal labor law, and systematic discrimination against women square with basic American values?

Finally, Roosevelt emphasized in his Economic Bill of Rights that all businesses had the right "to trade in an atmosphere of freedom from unfair competition and domination by monopolies." A recent Retail Forward report found that for every super center that opens in a major metropolitan area, two existing supermarkets will close. UC Irvine economist David Neumark concluded in a 2007 study that for every new job created by Wal-Mart in a county, 1.5 jobs are lost elsewhere as existing retailers and grocers lose market share or shut down -and remember that according to the New York University Brennan Center in 2007, the average wage of a Wal-Mart employee was 26% less than other large merchandise stores and 18% less than large grocery stores.

'Always lower prices' is a consequence of Wal-Mart's relentless quest to drive down labor rates. The Wal-Mart way is based upon poverty-wage jobs and destroying local business, particularly union and nonunion grocers that pay a living wage and provide comprehensive benefits. Is this the American way?

Good jobs and career mobility, equal opportunity and nondiscrimination, fair competition and corporate accountability, and respect for worker's rights are fundamental American values. Wal-Mart needs to live-up to these values-and it can afford to do so.

Wal-Mart's global sales surpassed $400 billion, and profits were

$13.4 billion in 2008. According to Forbes magazine, the combined wealth of Wal-Mart founder Sam Walton's four children, who hold 40% of the company stock, was more than $84 billion in 2010-an amount greater than the combined annual income of the bottom 40% of Americans, or about 120 million people.

So what's it going to be: Wal-Mart's brand of naked greed or the values of Roosevelt and his Economic Bill of Rights? What's really "un-American," Councilwoman Breeze?

Martin J. Bennett teaches American history at Santa Rosa Junior College and serves as Co-Chair of the Living Wage Coalition of Sonoma County. For more about the anti-Wal-Mart superstore campaign in Sonoma, click here (http://www.livingwagesonoma.org)



UC Berkeley Labor Center
April 2011

SCENARIOS-Wal-Mart sex discrimination case at US top court
James Vicini
March 29, 2011

(Reuters) - The largest class-action sex-discrimination lawsuit ever is being argued before the U.S. Supreme Court on Tuesday, pitting Wal-Mart Stores Inc (WMT.N) against female employees who seek billions of dollars.

The justices will decide whether the small group of women who began the case 10 years ago can represent a huge nationwide class that may include millions of current and former employees who accuse the world's largest retailer of discrimination.

However, the nation's high court will not be deciding whether Wal-Mart engaged in intentional sex discrimination in pay and promotions at 3,400 U.S. stores since the end of 1998.

An eventual Supreme Court ruling, expected by late June, is likely to uphold or undo the class certification, a decision that could determine whether the lawsuit proceeds to trial.

Here are some scenarios of what could happen next:


In a defeat for Wal-Mart, the case would go back to the federal judge in San Francisco, who has already proposed a two-stage trial.

In the first stage, a judge or a jury would decide whether Wal-Mart should be found liable for a pattern of intentional sex discrimination.

The second phase would decide possible remedies such as punitive damages; back pay, which makes up the difference between actual pay and the amount if there had been no discrimination; and injunctive relief, such as requiring Wal-Mart to change its pay and promotion systems.

Alexandra Lahav, a University of Connecticut law professor, wrote in a recent law review article that the case does not threaten a ruinous verdict for Wal-Mart.

Wal-Mart's attorney, Theodore Boutrous, has told the Supreme Court in legal documents the class involved potentially millions of women with claims for billions of dollars in back pay and possible punitive damages.

Attorneys for the women did not give a total figure, but said individual claims for back pay would be small, an average of $1,100 per year for hourly workers.

Chris Graja, an Argus Research analyst who follows Wal-Mart, has said the case will keep the retailer in the spotlight.

The lawsuit "remains a major financial risk for Wal-Mart but we believe the potential expenses have been well reported on Wall Street and in the media," he wrote in a February report when Wal-Mart issued its fourth-quarter results.

"The company continues to contest the claims and the legal proceedings related to those claims very aggressively. The recent settlement of another group of suits suggests that the company is well aware of the importance of being a good citizen and trying to look forward," Graja said.

R.J. Hottovy, equity analyst at the Chicago-based Morningstar Inc investment research company, said Wal-Mart has plenty of cash if it needed to make a payout.

"It would take a seismic ruling against the company to have an impact on the valuation," he said. "When you're dealing with the largest company out there, a lawsuit would have to be one of the larger payouts to really have a material impact on the fundamentals of the business."

He calculated that even in the unlikely event that there is eventually a $25 billion award against Wal-Mart, that would not dramatically affect Morningstar's valuation of the firm.



The Supreme Court could reverse the appeals court's ruling and send the case back with instructions to decertify the class, as Wal-Mart has requested.

But the case would not be over. Individual plaintiffs who brought the lawsuit, such as Betty Dukes, a Wal-Mart greeter at a store in Pittsburg, California, could pursue their claims.

Depending on how the court rules, the plaintiffs might be allowed to collectively pursue their claims for an injunction changing employment practices, but not for money damages.

Or the court could rule the case was wrongly certified as a class action under a provision mainly used in lawsuits seeking relief such as an injunction. The court could tell the judge to consider if it can be certified under another part of the law dealing mainly with money damages.


Lurking in the background is a possible settlement.

Boutrous, the attorney arguing Wal-Mart's case, declined to speculate on a possible settlement if the company loses before the Supreme Court. An attorney for the plaintiffs also declined comment on any settlement.

Asked if there could be a deal, equity analyst Hottovy said, "That's always a possibility, especially in a case like this where instead of dragging it out over a long period of time it may be in Wal-Mart's favor to propose a settlement."

Wal-Mart's corporate supporters have said huge class-action lawsuits put inappropriate pressure on defendants to settle.

But attorneys for the female employees disagreed. "With over $400 billion in sales and $14 billion in profits last year, that is an argument that could not be credibly made," they said in a brief filed with the court last year. (Additional reporting by Jessica Wohl in Chicago, Editing by John Whitesides


It’s Wal-Mart, not Costco: North Auburn development battleground sold to retailing giant
March 28, 2011
By Gus Thomson, Auburn Journal Staff Writer

It’s a Wal-Mart, after all.

In an end-game that an opponent of a big-box store on North Auburn’s 18.5-acre site said Monday was disappointing but not unexpected, Bohemia Properties has sold the much-fought-over property to Wal-Mart.

While the project still faces a potential court battle, the $10 million purchase by the Benton, Ark.-based retailing giant signals an end to debate over whether a Costco or a Wal-Mart – or some other big-box retailer – would land the prime piece of real estate near Luther Road and Highway 49.

Steve Cavolt, Bohemia spokesman, said that it came down to Wal-Mart meeting Bohemia managing partner Jim Conkey’s terms and conditions for a sale.

“But it was between Costco and Wal-Mart,” Cavolt said. “Both were right there.”

The transaction was recorded Jan. 29 with the Placer County Clerk-Recorder-Registrar’s Office but only acknowledged Monday. Cavolt said the sale wasn’t made public partly because of a potential lawsuit by the Alliance for the Protection of the Auburn Community Environment (APACE) group and because of business reasons.

Victoria Connolly, a nearby resident to the Bohemia site and one of the APACE leaders, said the fight is continuing, with the group intending to appeal the project in court.

“APACE is disappointed to hear this news however, it supports what we have been saying all along, that this was going to be a Wal-Mart supercenter,” Connolly said. “It reveals that Mr. Conkey has spent years trying to deceive the community about this project by saying that it was going to be something else, such as Costco. It is still our intent to fight this project and the significant impact it would have on the Auburn community.

Cavolt said Conkey has been insistent that the agreement include language indicating Wal-Mart would try to hire local contractors on the construction project. The estimated construction cost is about $30 million.

During the Bohemia project approval process before the Placer County Planning Commission and Board of Supervisors, Conkey received support from the Placer County Contractors Association, hard-hit by the construction downturn.

Opponents such as activist Dale Smith have been critical of the Wal-Mart project on several fronts, including its use of out-of-area contractors in other communities and the congestion and safety problems they said a big-box store would create on Highway 49 and other roads.

Cavolt said an agreement that could mean local jobs for contractors was a big factor in Conkey’s decision-making process.

“Basically what it boiled down to was that they would try to get local contractors jobs on the project,” Cavolt said. “Jim Conkey was definitely in favor promoting local subs. The Wal-Mart is going to create 350 jobs for the Auburn area and hundreds of jobs for contractors and he was definitely trying to promote that.”

A Wal-Mart spokesman couldn’t be reached for comment but with a court case still in front of the project, timing on a construction start and opening date would likely be difficult to determine at this time.

During the lengthy approval process, no representatives from either Costco or Wal-Mart came forward to talk about a project Cavolt said was intentionally not going to identify a potential site owner. Cavolt said that past experience forced him to not identify either store because if an agreement fell through, he would have to start the process over again.

Instead, Cavolt secured a use permit and environmental documentation from the county for a generic, 155,000 square-foot building and gas station.

“Yes, it’s a Wal-Mart,” Cavolt said Tuesday, confirming sale information the county now has on file. “It was a personal business decision on Jim Conkey’s part. They met his terms so they the deal on his property.”



Project site developed during World War II as the Cal-Ida Lumber Mill, producing crates for fruits and vegetables


Cal-Ida sold to the DeGeorgio Corp. in 1969


Mill bought by Bohemia Lumber Co. in 1978


Lumber mill operations shut down


All structures had been demolished on property


Environmental documents approved for home-improvement center, retail-office buildings and a 150-unit apartment complex on a site that included what is now the 10-acre Plaza shopping center. Option to build not exercised and expired in 1991.


Wal-Mart store proposed on 18-acre Bohemia site. Project approved by Planning Commission but appeal by neighbors upheld by Board of Supervisors and project denied.


Auburn-Bowman Community Plan changes site’s designation from industrial to commercial


Revised Wal-Mart plan submitted that eliminated auto center and Canal Street as secondary access. Board and Planning Commission OK’d project but after a lawsuit, plans withdrawn.


Planning Commission considers plan to rezone land for 114-home subdivision. But application withdrawn after 2007 housing market crash


New plan submitted for 155,000 square-foot retail building with fueling station

May 2010

Bohemia developer Jim Conkey proposes to change project description to allow emergency-pedestrian access only at Canal Street

June 2010

Wal-Mart-Costco-type store on Bohemia site supported on 4-1 vote by North Auburn Municipal Advisory Council

July 2010

With Planning Department support, the Placer County Planning Commission votes 6-1 to approve clearances to build the planned 155,000-square-foot store

July 2010

Alliance for the Protection of the Auburn Community Environment files an appeal to the Board of Supervisors on the Planning Commission decision

Sept. 2010

Placer County supervisors give their support to the Bohemia development, clearing the way for a court battle over a possible Costco or Wal-Mart in North Auburn

December 29, 2010

Bohemia Properties sells the 18-acre site to Wal-Mart

March 28, 2011

Bohemia Properties confirms North Auburn site has been sold to Wal-Mart


Source: Placer County Planning Department, Journal files


Low, low prices: Target beats Wal-Mart
By Parija Kavilanz,

Wal-Mart's slogan may be "Save Money. Live Better," but rival Target is challenging it by offering even lower prices on everyday products.

Two recent price comparisons of grocery and household goods revealed that Target's prices are lower than at No. 1 retailer Wal-Mart.

Craig Johnson, president of retail consulting firm Customer Growth Partners, compared 35 brand-name items sold at Wal-Mart and Target stores in New York, Indiana and North Carolina. They consisted of 22 common grocery goods such as milk, cereal and rice; 10 general merchandise products such as clothing and home furnishings; and three health and beauty items.

Target's shopping cart rang in at $269.13 (pre-tax), a hair lower than the $271.07 charged at Wal-Mart.

"For the first time in four years, our price comparisons between the two has shown that Target has a slight edge over Wal-Mart," said Johnson. A smaller study by Kantar Retail found similar results.

Wal-Mart typically maintains a 2% to 4% price advantage over Target. But in January, Johnson noticed that some products were cheaper at Target.

That has continued into February, he said.

If you factor in additional discounts offered to Target's Redcard customers, the savings gap widens more considerably between the two discounters.

Said Johnson, "When you add the Redcard's 5% discount, the price gap widens to 5.7%."

Not all Target customers are Redcard holders. Target declined to say how many customers are members. However, 7.4% of Target's total sales in the fourth quarter were Redcard transactions, said Target spokeswoman Molly Koenst.

Wal-Mart does not offer a similar program.

"This is a real win for consumers given the huge increase in gas prices lately," said Johnson. "Consumers have little control over gas prices but they do have control over what they buy and where they shop."

Targeting Wal-Mart: Target's undercutting of Wal-Mart's prices didn't happen overnight, said Johnson.

"Target stepped up its game during the recession," he said. "The company caught up with Wal-Mart on making its supply chain more efficient so it could bring down prices on items people frequently buy."

Groceries are big traffic generators, and Wal-Mart still dominates Target there. About half the items that Wal-Mart sells are groceries.

Johnson estimates that 15% to 20% of Target's merchandise are groceries. Koenst declined to confirm those numbers but said 16% of Target's sales in 2009 were food and pet supply purchases.

Chewing over the numbers: Kantar surveys just one Wal-Mart and one Target store in Massachusetts and found Target's prices in January were about 2.8% lower than Wal-Mart's.

Among the goods that Kantar compared, cheaper health and beauty items, and particularly smoking cessation gum, helped Target beat Wal-Mart.

But in groceries and household goods such as light bulbs, trash bags and detergent, Kantar found Wal-Mart still boasted better prices than its rival.

Wal-Mart spokesman David Tovar said, "We are absolutely committed to offering our customers low prices every day. If customers find a lower advertised price, we'll match it every time."

"I think Target can maintain its edge in the near term," said Johnson at Customer Growth. "But remember, Target isn't beating Wal-Mart on all items but it is on those that really matter to consumers."


Wal-Mart’s Massmart Antitrust Hearings Delayed by Tribunal

March 22, 2011
By Renee Bonorchis

(Updates with union comment from third paragraph.)

March 22 (Bloomberg) -- South Africa’s Competition Tribunal postponed all hearings into Wal-Mart Stores Inc.’s bid to buy control of Massmart Holdings Ltd. until May after unions said a planned partial delay would harm their case.

The tribunal had agreed earlier with the unions and the government to hold talks on factual evidence this week and delay hearings with economists until May. The deal was meant to allow governmental departments to gather more information about the world’s largest retailer’s 16.5 billion-rand ($2.4 billion) bid for control of Massmart. Unions later objected to having some hearings this week.

“We felt it would be harshly prejudicial to our position,” said Michael Bride, deputy director for global strategies at the North American United Food and Commercial Workers International Union, in a phone interview from Pretoria today. It would be “much fairer” for hearings to take place after all documents are submitted, Bride said.

Wal-Mart offered in September to buy 51 percent of Massmart as it chases international expansion to make up for a U.S. slowdown. The bid has been opposed by unions concerned about jobs and local manufacturing, while the government told the court that the proposed purchase raised “very significant public interest issues, and might not be capable of being justified.”

Massmart fell as much as 2 percent to 131.02 rand in Johannesburg trading after news of the delay. The stock was down 1.3 percent at 3:41 p.m.

After Asda

A Massmart purchase would be the biggest by Bentonville, Arkansas-based Wal-Mart since its $11 billion takeover of U.K. retailer Asda Group Ltd. in 1999. Massmart is South Africa’s largest food and general goods wholesaler.

The tribunal has scheduled hearings from May 9 to May 13, with May 16 set aside for closing arguments, according to Nandi Mokoena, a spokeswoman for the Pretoria-based antitrust body.

Bride said his group wants antitrust authorities to ensure that if Wal-Mart enters the country, “it does so on a basis that will promote economic development rather than destroy it.”

The government affidavit questioning the sale was “poorly motivated and highly opportunistic,” said Mark Garden, Massmart’s legal counsel and a director at law firm ENS. The departments of economic development, agriculture, and trade and industry submitted the opinion to the court.

Massmart said Jan. 17 that it will continue to honor existing agreements with workers if the transaction with Wal- Mart is concluded.

--Editors: David Risser, Tom Lavell

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net.


Tell Walmart and Supervalu to stop selling endangered fish

March 10, 2011

Dear Adrian,
Two of the world’s largest food sellers -- Walmart and Supervalu (the parent
company of grocery stores chains like Shaws and Albertsons) -- are helping to
destroy the world's ocean population by selling massive quantities of endangered

Ninety percent of the seas' top predators have already disappeared. These are
fish like bluefin tuna, orange roughy, and shark -- the same species that line
the seafood coolers of the two companies.

After pressure from Greanpeace, Change.org members, and others, Trader Joe’s,
Costco, and Target have all pulled many imperiled species from their stores to
prevent further catastrophe. But Walmart and Supervalu keep pushing these
species toward the brink of extinction.

Their survival -- and the survival of the entire ocean ecosystems they're a
part of -- could rest on the decision making of Walmart and Supervalu.

They may hold billions of dollars in purchasing power, but they’ve got a major
weakness—consumer demand. If shoppers pressure these supermarkets to shape up
their acts, they’ll have no choice but to make sustainable seafood the only

Sign the petition asking Walmart and Supervalu to immediately develop
sustainable seafood programs and stop selling endangered fish:

Thanks for taking action,
Patrick and the Change.org team

First 3 Walmart Express Units Slated
Mar 9, 2011 4:51 PM, By ELLIOT ZWIEBACH

BENTONVILLE, Ark. Wal-Mart Stores here said Wednesday the first Walmart Express locations will open between May and early summer in three rural towns in northwest Arkansas.

The stores, each of approximately 15,000 square feet, will be located in Gentry, Prairie Grove and Gravette, with construction due to start on the Gentry unit next week and work on the other two scheduled to start later in the month, Steve Restivo, a chain spokesman, told SN.

He confirmed local reports that the stores will have about 12 aisles, with one side wall and part of the back wall allocated to produce, refrigerated foods and frozen foods, but he declined to comment on other layout features, including where the stores' pharmacies will be located.

Asked to say what differences there might be among the three locations, Restivo replied, "That's still being determined." He declined to say where or when the fourth Express store would open.

Wal-Mart has indicated it expects to open 40 Express stores this year, although supercenters will continue to be the company's primary expansion format. "Walmart Express can be part of the solution in urban and rural communities where residents don't have access to healthy, affordable food," Restivo said.


Walmart-Massmart merger a threat
March 3 2011 at 01:06pm
Business Report

In a hard-hitting submission to the Competition Tribunal three government departments have criticised Wal-Mart and Massmart for their unwillingness to make any binding commitments that would address public interest concerns about the impact of the merger on local procurement, food security and broad-based black economic empowerment (BEE).

“A merger of the size of the proposed Wal-Mart/Massmart transaction, and with the size and leverage of the parties which are involved, could, if not properly regulated, go some way towards undermining the New Growth Path”, the departments said.

A key condition sought by the three departments is that the merged entity will “at least maintain or increase the percentage of pre-merger local procurement by product category”.

The departments’ submission suggests that Wal-Mart and Massmart’s initial “willingness to co-operate in an attempt to alleviate those concerns” faded significantly last month after the Competition Commission recommended unconditional approval for the proposed merger.

The submission is also critical of Massmart’s unwillingness to provide the Economic Development Department (EDD) with information necessary for an indepth analysis of the likely impact of a merger between Wal-Mart and Massmart.

The submission, which was made on behalf of the EDD, the Department of Trade and Industry and xDon't Department of Agriculture, Forestry and Fisheries, requests the tribunal to postpone the hearing scheduled for March 22 to 24.

The departments have requested the postponement because they now believe that as a result of “the refusal of the merging parties to make any tangible or enforceable commitments, particularly with regard to procurement and small (especially broad-based BEE) businesses”, it is necessary for them to intervene more actively in the merger proceedings.

According to the submission, such intervention will require consideration of the negotiations that were facilitated by the EDD, as well as analysis of information that was sought from the merging parties in November but has still not been received.

The decision to intervene actively in the tribunal’s proceedings marks a significant change in the EDD’s initial approach to the merger. While the Competition Act empowers the EDD to address public interest issues relating to a merger, the EDD has chosen in this instance to use this power to facilitate discussion between the merging parties and affected parties, such as the trade unions.

Ten days after the proposed transaction was announced last September, the minister of economic development and the minister of trade and industry met with representatives of the two companies and their financial advisers.

At that stage, “the merging parties were not only receptive to the concerns voiced by (the) government, but also indicated a clear willingness to co-operate in an attempt to alleviate those concerns”, the submission said.

Despite not being provided with the information required to analyse the public interest aspects of the merger, and despite being given information that “presented the merger in a more positive light (than) would appear to actually be the case”, the EDD was keen to encourage the negotiations between Massmart and the unions.

However “since the commission’s recommendation that the merger be approved unconditionally, the EDD-facilitated negotiations have stalled”.

It appears that since the commission’s favourable recommendation, which was influenced by the prospect of a negotiated agreement between Massmart and the unions, the two merging parties have become “less flexible” on the issues of concern. - Ann Crotty


Massmart: Commission Recommends Wal-Mart Takeover
FEBRUARY 14, 2011, 8:58 A.M. ET

LONDON—African retailer Massmart Holdings Ltd. said the South African competition commission recommended approval of Wal-Mart Stores Inc.'s proposed $2.4 billion offer to buy a controlling stake in the company, even as labor unions plan to protest against the deal in a final hearing.

The proposed acquisition marks the Bentonville, Ark.-based retail giant's first foray into the growing sub-Saharan African market. The potential deal is opposed by local unions, concerned that the "Walmartization" of local industry will lead to job losses.


A customer exits a Game supermarket, part of Massmart Holdings Ltd, in Johannesburg, South Africa.

A competition tribunal hearing now needs to be scheduled before a final ruling on the transaction. No date has been set for the tribunal hearing, Massmart said over the weekend.

"It is difficult to predict exact timing [of the hearing] as this is largely dependent on the availability of suitable dates on the Tribunal's roll," said Massmart Chief Executive Grant Pattison.

In January, Massmart said almost 98% of its shareholders voted in favor of the deal to sell a 51% stake to Wal-Mart at 148 rand a share. The transaction needed the support of at least 75% of Massmart shareholders.

Massmart operates several wholesale and retail chains, including Game general-merchandise stores, Builders Warehouse for construction and Makro warehouse-club stores. The bulk of the company's 288 stores are in South Africa, although Massmart also operates in 13 other sub-Saharan countries.

Labor unions plan to present their case against the deal at the upcoming hearing. Unions are concerned that Wal-Mart's entry into South Africa will limit local manufacturers and food processors from being able to compete, leading to job losses and the demise of local industry.

"We will submit our opposition to the deal at the tribunal," a Saccawu spokesman said. "Imports of Chinese garments already caused job losses and decimated the garment industry here. We are worried Wal-Mart can add to that in a country with already high unemployment."

Massmart said it's holding discussions with the South African Commercial, Catering and Allied Workers Union to respond to the union's concerns. The two retailers previously said they will continue to honor all existing union agreements and South African labor law if the deal goes ahead. Massmart said Saccawu represents 41% of its employees.


TEHACHAPI – This small mountain town, known for its scenic landscapes and country-style living, may soon have its very own Walmart Supercenter.
The city’s planning commission approved the center Jan. 31, even though some residents are opposed to the idea.
About 200 people showed up at the Jan. 10 meeting to protest the supercenter. Commissioners said they weren’t prepared for such a crowd.
"If you people think that only Kmart and one of the markets will be taken out, which is a big take out, you guys have got your head in the wrong place," said resident Ted Kitzmiller.
Walmart representatives attended the meeting to speak to the community about their plans.
"Our customers are telling us that they would like to see a Walmart store in Tehachapi," said Amelia Neufeld, the senior manager for Walmart public affairs.
"They're tired of driving down to Bakersfield and Antelope Valley to do their shopping,” she added.
The new Walmart will provide 300 new jobs and bring in new sales tax revenues, Neufeld said
Now residents have a two-week time period in which to file an appeal of the planning commission’s decision. If an appeal is filed, the project goes back to the city council, which would make the ultimate decision.

Walmart Announces 12 New Stores in San Diego

SAN DIEGO - San Diego business leaders who oppose an ordinance that requires developers of big box superstores to perform costly economic impact studies urged the City Council Friday to repeal the law.

Opponents of the ordinance, passed in November, turned in enough petition signatures to force a public vote, and council members will decide next week whether to repeal the measure or call a special election.

Now that council President Tony Young has publicly stated that he will vote to repeal, and with Lorie Zapf replacing ordinance supporter Donna Frye on the ballot, it appears there are enough votes to rescind the law.

"A lot of us have been around long enough to know nothing is final (with the City Council) until all the (voting) buttons are pushed on the dais," said T.J. Zane of the Lincoln Club of San Diego County. "We're going to keep the pressure on."

If the ordinance is not overturned, then a coalition called "San Diego Consumers for Choice" will campaign for its defeat in a vote of the public, according to Zane.

Supporters of the "Ordinance to Protect Small and Neighborhood Businesses" say economic impact studies are necessary to determine the impact a large store might have on the surrounding neighborhood. It targets new retailers that are larger than 90,000 square feet and generate more than 10 percent of their revenue from groceries.

Opponents claim it amounts to a virtual ban on Wal-Mart because it employs non-union labor.

On Thursday, Wal-Mart proposed to build about a dozen new stores in San Diego, ranging from neighborhood groceries to superstores, but a spokeswoman said it would be difficult to carry out the plan if the measure was still in effect.

The City Council will acknowledge receipt of the petition signatures on Monday, then vote on the possible repeal on Tuesday.

Maggie Sans, Wal-Mart's vice president of public affairs, said Thursday no building sites have been identified, but "it is our intent to serve the city of San Diego across the city."

The proposed stores would range from smaller neighborhood markets of 30,000 square feet to superstores, Sans said.

It would be easier to fulfill the company's promises if the "Ordinance to Protect Small and Neighborhood Businesses" was not in effect, she said.

The law requires developers and big retailers, such as Wal-Mart, to submit costly economic impact studies before new stores can be built that are larger than 90,000 square feet and generate more than 10 percent of their revenue from groceries.

Mayor Jerry Sanders vetoed the ordinance, but it was overridden by the City Council.

Earlier this week, the city clerk determined that the measure's opponents gathered enough signatures to force a public vote on the issue.

The City Council now has to decide whether to rescind the law or call a special election, which would cost around $3 million.

Repeal became the likely result when council President Tony Young became the fifth council member to support rescinding the measure.

Young has repeatedly asked for a Wal-Mart in his southeast San Diego district, which only has two major grocery stores.

"The fact is, consumers are getting the short end of the stick in my district," Young said.

Sans said she would not guarantee that Wal-Mart would build in the area, which includes Encanto, Lincoln Park and Skyline, but the company is studying potential sites.

South Africans accept Wal-Mart bid
Associated Press

Massmart store, Macro, in a Johannesburg suburb Monday, Jan 17, 2011. The South African chain's shareholders have overwhelmingly accepted Wal-Mart's offer to buy 51 percent of their company paving the way for the giant U,S,-based retailer to enter Africa.
More News
A South African chain's shareholders have overwhelmingly accepted Wal-Mart's offer to buy 51 percent of their company, the chief executive said Monday, paving the way for the giant U.S.-based retailer to enter Africa.
Massmart said the proposal was approved by 97 percent of shareholders who voted Monday - 75 percent had been needed. Wal-Mart offered 148 rand (about $20) per share in a 17 billion rand (about $2 billion) deal.
The deal will have to be approved by South Africa's anti-monopoly regulators.
Massmart CEO Grant Pattison said once the deal goes through, Massmart will continue to operate the stores and continue to be listed on the Johannesburg Stock Exchange, while Wal-Mart will be the main owner. Massmart runs about 290 big box, pharmacy, electronics and other stores in 14 African countries.
"They are a great retailer and we really are looking forward to learning something from them, and teaching them something about Africa," Pattison told The Associated Press. "We're excited because they're coming as our partners."
Wal-Mart, based in Bentonville, Arkansas, has 8,692 stores in 15 countries, among them Brazil, China and India. But it has not until now ventured into Africa.
South Africa has the most developed economy on a continent slowly emerging from grinding poverty, and one that fared better than other parts of the world during the global recession. Consulting firm McKinsey & Company has concluded that global business cannot afford to ignore Africa's potential, or its growing middle class. The World Bank has said the continent is finally seeing the results of years of market reforms and investment in education and health care.
Business here has welcomed Walmart's arrival as recognition of the potential of the continent's economy, and of the reach South African retailers have throughout Africa.
South African labor groups, though, say that Wal-Mart is anti-union. Wal-Mart has said it would respect contracts and is committed to working with South African unions.
Sidumo Dlamini, president of the powerful Congress of South African Trade Unions, was at Massmart's Johannesburg headquarters for Monday's shareholders' vote. He said that while the approval was expected, he was disappointed.
The deal holds "nothing for the workers. We have empirical evidence from other countries where Wal-Mart is operating. It has never done anything for the workers," Dlamini said.
Labor activists from South Africa and abroad addressed the shareholders' meeting. One of the speakers, Michael Bride of the 1.3 million-member United Food and Commercial Workers International Union of USA and Canada, said he had not expected shareholders to turn down the offer.
"Shareholders can be forgiven for voting in their own interest," Bride said.
Among those with major Massmart holdings are South Africa's government-owned Public Investment Corp., which invests on behalf of civil service pension funds, and Scotland's Aberdeen Asset Management. Massmart workers, most of whom are black, also have a stake through a trust set up as part of a South African campaign to help those denied economic opportunities under apartheid.
Bride said the next step for the unions would be appealing to South African regulators, in hopes of - if not stopping the deal - persuading the government to impose conditions. Among the provisions unions want are guarantees Wal-Mart will buy local, which Bride said would protect jobs in a country with unemployment of at least 25 percent.
Pattison, the Massmart CEO, said he had assured unions no jobs would be lost and no labor contracts violated. And he said consumers would benefit.
"We would have failed if we don't bring prices down," he said.
Gerard Heath, a businessman pushing a load of sugar and bulk-pack toilet paper out of one of Massmart's Makro big box stores Monday, said lower prices would be just one benefit. He hoped African factories would find global markets for their products through Wal-Mart, and that Massmart's local rivals would be pushed to improve service.
"It will make Africa a lot more competitive," Heath said.
Nozipho Mkhonza, who works at a printing company and buys supplies for work and home at Makro, said she now needs to visit several stores to find all the items on her shopping list. She hoped that with Wal-Mart backing, Makro would widen its product range.
"If I can find everything under one roof," Mkhonza said, "all the better for me."

Built for Speed?
Nov 1, 2010 12:00 PM, By ELLIOT ZWIEBACH

Now that most supermarkets are learning to co-exist with supercenters, Wal-Mart Stores may create a new round of competitive challenges as it contemplates opening more medium-sized stores and developing a smaller urban model.

After months of industry speculation, Wal-Mart formally disclosed plans two weeks ago to begin opening medium-sized units of 30,000 to 60,000 square feet — with close to 40 units scheduled to open during 2011 — and to begin testing a smaller store of under 30,000 square feet as well.

“Since traditional supermarkets generally have more expensive cost structures, less flexible unionized labor and preexisting margin pressures, it would be difficult for them to compete on price with these new Wal-Mart stores,” Neil Currie, executive director of UBS, New York, told SN.

Mark Wiltamuth, executive director of Morgan Stanley, New York, said he believes Safeway and Supervalu would have the most exposure to Wal-Mart's new-store strategy.

Leon Nicholas, director of retail insights for Kantar Retail, Cambridge, Mass., suggested supermarkets begin planning now to get a jump on Wal-Mart.

“If I were a supermarket operator with plans to open ‘X’ number of stores in the next few years, I might reconsider and open X-plus before competition for real estate sites becomes too intense,” Nicholas said.

“So if I'm Kroger, I might look for more Marketplace locations, and if I'm Giant Eagle, I might look for more Express locations — formats that provide good returns and better sales per square foot.”

However, observers differed on how quickly the new formats are likely to grow.

Even if Wal-Mart moves forward with an expansion of Neighborhood Market “full force,” Jim Hertel, managing partner at Willard Bishop, Barrington, Ill., told SN, “it will have to find and identify real estate and go through extensive permit processes, so it could be as long as 18 months before it could even start to open stores, which means it could be three to five years before those new-format stores become a real retail threat.”

Nicholas also said it could be 2014 or 2015 before the number of medium- and small-sized Wal-Marts pose a major threat to traditional supermarket operators.

Wiltamuth said he believes the real threat may come a lot sooner. “While only 30 to 40 of these [medium and small-sized] stores will hit the market in 2011, the real estate pipeline is ramping, and [it's possible] the new Neighborhood Market pipeline could be in the 350 range in 2012.”

Currie said he believes Wal-Mart wants to grow its store base as quickly as possible, “but investors don't want it to spend a lot of capital, so I would not expect any degree of massive openings until it's proven the new formats work and ensured the returns are there.”

Once it does decide to move forward, however, the rollout could be rapid, Currie added. “While it may take some time for Wal-Mart to feel it has refined these [new] formats to a point where it is ready for a full-scale rollout, there is potential for it to open more than 400 of these smaller-format stores per year.

“While this level of store openings would be challenging, it would be manageable, given that smaller-format retailers such as Walgreens and Family Dollar have opened more than 500 stores per year at their peak.”

For Daniel Binder, an analyst with Jefferies & Co., New York, Wal-Mart has already proven the viability of the medium-sized format, pointing out that Neighborhood Market's return-on-investment is approaching that of a supercenter, “and EBITDA margins are apparently at least as good as the best EBITDA margins in the grocery industry — in the 5% to 6% range.

“Although that level of profitability would likely be dilutive to Wal-Mart earnings, the investment in Neighborhood Market stores has come down considerably over five years, and the company is now investing 78% of what it used to, allowing the company to achieve an ROI near supercenter levels,” Binder explained.

“So on a near-term basis, Neighborhood Market is primed for a rollout.”

Speaking at the Wal-Mart investor conference two weeks ago, Bill Simon, president and chief executive officer of Walmart U.S., said, “There are hundreds and hundreds if not thousands of opportunities in the U.S. for small formats. Some would be in fill-in markets we have already developed, but many, many, many of them exist in urban markets and small towns where we have no market share.”

Although Simon said the medium-sized stores will be similar to Wal-Mart's Neighborhood Market, he did not disclose what store banner it will use, though some observers are referring to the format as “Neighborhood Market” in their assessments.

According to one school of thought, if Wal-Mart opts to invest most of its capital the next few years in international acquisitions, then any large-scale rollout of new formats in the U.S. would be relatively slow — a scenario that would give supermarket operators a chance to chart their course more deliberately.

“These medium- and small-sized stores may not grow at the rate Wal-Mart grew supercenters, when it was opening close to 200 a year,” Nicholas told SN.

As Wiltamuth and Currie suggested, the rollout could exceed that number.

Hertel of Willard Bishop, however, said it might be too soon to predict any widespread Neighborhood Market rollout from Wal-Mart, given past history.

“I'm a bit skeptical about plans to expand Neighborhood Market because we've heard that promise from Wal-Mart in the past, yet very little has come of it. So I'm taking this discussion with a grain of salt.”

Art Turock, principal with Art Turock & Associates, Kirkland, Wash., was also skeptical. “Wal-Mart talked four years ago about growing Neighborhood Market and nothing happened — and it's opened small stores like Marketside in Phoenix that it doesn't plan to continue.

“I was very aware of the threat supercenters posed when the company first started opening them, but I do not have the same fear, worry or anxiety about Wal-Mart doing something small.

“It certainly has done well with supercenters, which is a more efficient format, but the company's track record indicates it doesn't do that well with smaller stores.”

Turock said he sees the combination of Save-A-Lot and Rite Aid in the Southeast as a more convenient, more viable approach to small formats.

Wal-Mart told the investor conference earlier this month the medium-sized stores would be similar to its 42,000-square-foot Neighborhood Market format. Though the development of Neighborhood Market has been slow, particularly by Wal-Mart standards — with only 181 locations opened since 1998 — the company said changes to the format have made it more viable as a growth vehicle.

During his presentation at the conference, Simon said the Neighborhood Market format has become a more attractive expansion vehicle over the last couple of years due to several “significant changes.”

“One of the first things we realized was that the prescription business at the stores' pharmacies was driving a disproportionate share of sales vs. the pharmacies in the supercenters,” Simon explained, “so as the share of that business and the profits improved, so did the top and bottom lines.

“We also changed our merchandising approach. For many years we were sending the same items in the same quantities to Neighborhood Markets as to supercenters, but we changed that in the last couple of years [by catering more to specific neighborhood needs].

“In addition, we began operating that format differently. Three years ago we had one market manager typically overseeing eight supercenters and two Neighborhood Markets, which meant most gave their attention to the eight, not the two. Once we made some structural changes to align the leadership in the stores and in the markets to focus on operational improvements, business improved — and our produce business also improved as we added more efficiencies,” Simon said.

According to Hertel, if the changes Wal-Mart has made to Neighborhood Market make it a more viable format, then it could be a very powerful competitive vehicle, especially in some urban food deserts.

“Right now ShopRite's PriceRite and Giant Eagle's Valu King represent the next generation of killer formats because they are priced very aggressively, albeit with some third-tier brands, and they seem to do a good job meeting the needs of local communities, particularly ethnic neighborhoods.

“That's the standard Neighborhood Market will have to meet, though I'm still skeptical about Wal-Mart's follow-through on its promise.”

Wal-Mart officials did not give out many specific details about the smaller-format stores during the investor conference. “Most markets around the globe have been successful with smaller stores, so we have a ton of institutional knowledge in our company, and we will continue to learn from our global counterparts,” Simon said.

Binder said stores under 30,000 square feet are “prevalent and successful” throughout Wal-Mart's international markets, “and the development of a prototype at Walmart U.S. will be drawing off that experience.

“The company plans to take this format into high-density urban regions where real estate availability and cost are key issues, and also out to rural markets where populations do not justify a larger format.

“This is not necessarily a dollar-store format, and given the small number of stores that will be introduced initially — and without further insight into how these stores will be merchandised — it's far too early to call them a competitive threat [to dollar stores],” Binder said.

Nicholas said he expects Wal-Mart's smaller units to be “similar to a food-and-drug store but with a site-to-store application.

“It will look like a Neighborhood Market, with a pharmacy, a limited assortment of HBC and over-the-counter drugs and a limited assortment of food and non-edibles, but it will also have the capability of serving as a pickup point for items ordered from Walmart.com.”

This approach would be particularly desirable in an urban market, Nicholas pointed out, where people tend not to be home during the day and would not want something delivered to their apartments. “But with Wal-Mart's highly efficient distribution, it could deliver products to these small stores where customers could pick them up.

“Currently, Wal-Mart is having merchandise in some cities delivered to FedEx locations that serve as instant distribution points, which has enabled Wal-Mart to expand its footprint with zero capital investment. These small urban stores would allow Wal-Mart to do what it does best, which is to distribute goods.

“It's an approach other companies could try, but they lack the scale of Wal-Mart to make it practical,” Nicholas said.

Currie suggested Wal-Mart could make an acquisition to hasten expansion of its smaller format, noting that Rite Aid, Camp Hill, Pa., would be an attractive target, “since Rite Aid's stores fit Wal-Mart's real estate needs, with numerous units over 20,000 square feet in urban areas to which Wal-Mart could bring its own processes and efficiencies, with clear potential for improvement.”

Most of Rite Aid's stores are located on the East and West coasts, with many in such urban areas as New York, Boston, Washington, D.C., and Los Angeles, where Wal-Mart does not have a major presence.

Given that Rite Aid's East Coast stores are smaller — averaging 11,000 square feet compared with a 20,000-square-foot average on the West Coast — and given that the Western stores are “better equipped to serve as a combination pharmacy/food retailer,” Currie noted, Wal-Mart could pursue an acquisition of just one segment of Rite Aid's operation.


Group sues to stop Walmart Supercenter plan in Antioch

Updated: 11/01/2010 05:34:46 PM PDT

ANTIOCH -- Wal-Mart's bid to expand its store here into a Supercenter is headed to court after an environmental group sued to block the plan last week.

Antioch's approval of a 33,575-square-foot expansion of the Lone Tree Way store in September violates its own municipal code and state environmental law, representatives from a coalition of environmental and labor groups said in a suit filed in Contra Costa County Superior Court.

The suit, filed by California Healthy Communities Network, will delay the company's plan to bring its first Supercenter store featuring a full-service grocery to the East Bay. Wal-Mart Stores Inc. is responsible for all city legal costs in the suit.

City Attorney Lynn Tracy Nerland could not be reached for comment Monday.

Council members said they were not surprised by the suit.

Angie Stoner, a Wal-Mart spokeswoman, said the company is frustrated.

"At a time when the city is facing potential bankruptcy and record unemployment rates, it is troubling to see, yet again, out-of-town special interest groups abusing the (environmental) process," she said.

The area surrounding the store has undergone substantial change since the environmental documents for Williamson Ranch Plaza were approved in 1998, according to the lawsuit.

As a result, Antioch should have prepared a subsequent environmental study that addresses new issues and changes to the severity of other issues, mainly the

proposed expansion's effect on local grocers in the trade area, said Phil Tucker, the group's project director.

Antioch's general plan also requires leaders to consider imposing reasonable conditions on approvals to protect public health and safety.

City leaders ignored substantial evidence from three months of public meetings showing that the approval of the expansion would harm public health and welfare, according to the suit.

The City Council's approval Sept. 28 was a reversal of its initial decision to deny the project on the grounds that an environmental study for the project underestimated the potential effects on the area's economy.

The council based the approval in part on a state appellate court decision this year involving a San Diego redevelopment project that raised questions about a city's ability to consider possible environmental effects when looking at a design review application.

Attorneys for Wal-Mart and an attorney retained by the city argued that an environmental study was not required to approve the expansion.

The council did what was legally required, Councilwoman Martha Parsons said Monday.

Tucker disagrees.

"The process to approve this project was legally defective," he said. "We believe the original decision of the council, before city staff intervened, was appropriate and correct."

Wal-Mart has been trying for six years to expand its Antioch store to include a bakery, produce section and full-service deli.

The City Council narrowly defeated a larger expansion plan in 2007.

No scheduled court date for the lawsuit has been set.


Debate over big-box stores rekindled in San Diego
Proposal would require supercenters to conduct analysis of impact on small businesses
By Christopher Cadelago - SignOnSanDiego.com
Sunday, October 31, 2010 at 12:01 p.m

— A proposal to provide further scrutiny for big-box stores that want to sell groceries in San Diego is rekindling the debate over whether supercenters spell the demise of small business or whether they’re saviors for hard-pressed families out for affordable goods.

The San Diego City Council in a special meeting Wednesday is scheduled to consider a draft ordinance that would require retailers such as Walmart to fund an economic impact analysis to determine whether their stores would harm surrounding neighborhoods and businesses.

Councilman Todd Gloria said the proposal is essential to ensure the city is not working at cross-purposes when it permits big-box retailers at the same time it aims to promote small businesses. About 92 percent of businesses in the city are considered small.

“What we’re simply seeking to do is provide them a voice in the process,” Gloria said. “If these (super) stores are as incredible as they claim to be, I would think that would show up in the reports.”

Steven Restivo, a spokesman for Walmart, said it boiled down to consumer choice.

“With the city facing significant unemployment challenges and historic budget deficits, we just don’t see the sense in creating fast-track legislation that’s going to stand in the way of opportunities to generate new tax revenues, create jobs and improve access to affordable food,” Restivo said.

Critics of the big-box proposal, including Councilman Kevin Faulconer, say now is not the time to place arbitrary roadblocks before top sales-tax generators. The meeting comes a day after voters weigh in on Proposition D, a ballot measure to authorize a temporary increase in the city sales tax of a half cent on the dollar.

Detractors also questioned the unprecedented way the proposal was being brought forward. This is the first time since the city assumed a strong-mayor form of government that a potential override vote was scheduled in advance of a hearing, officials said. In the past five years, the council has considered about three ordinances per year at special meetings, the majority of which were time-sensitive, records show.

Councilman Carl DeMaio said proponents deliberately scheduled the hearing after Election Day, and set a Dec. 2 meeting to override a possible mayoral veto before two council members facing term limits leave office.

“It’s hypocritical for Todd Gloria and members of the City Council to be pushing a larger sales tax while scheduling a complete giveaway to the labor unions,” DeMaio said. “But they’re worried District 6 will change hands and there’s only so much time to cram.”

Of the two candidates running for Councilwoman Donna Frye’s District 6 seat, Republican Lorie Zapf opposes the draft ordinance. Her opponent, Democrat Howard Wayne, did not return repeated voice messages for comment. When contacted by a reporter, Wayne said he was “too busy” and hung up.

The city three years ago banned large retailers with full-service groceries only to reverse course a month later when Frye dropped her opposition to Walmart Supercenters. A representative for Frye, who advocated requiring such economic studies when she opted not to support the ban, said the councilwoman was reviewing the ordinance and has met with both sides on this issue. “She will make a decision about how she will vote after listening to public testimony at the scheduled public hearing,” said Kevin Smith, Frye’s deputy chief of staff.

A supercenter — big-box retailers with more than 90,000 square feet and more than 10 percent of floor space dedicated to nontaxable items such as groceries and prescription drugs — would be required to evaluate how many jobs would be created and displaced. A traffic study and how the store would affect wages and benefits in the neighborhood would also be necessary.

Gloria said of particular concern were older communities such as Hillcrest, North Park and City Heights, which were decimated when modern department stores moved into Mission Valley in the 1960s. Several studies show big boxes with full groceries having deeper impacts on neighborhood businesses than other large shops, he said.

“Our neighborhood grocery stores provide good jobs and good health benefits to those workers,” said Mickey Kasparian, president of the United Food and Commercial Workers Union Local 135. “Why taxpayers should have to pay for Walmart employees’ benefits is ludicrous.”

Labor organizers contend that nonunionized workers often end up in taxpayer-supported health clinics and emergency rooms.

Others have decried Walmart’s “bullying tactics,” including attempts to confound consumers with full-page newspaper ads that are “deceptive, wrong and show what massive wealth can do to corrupt the system,” said Lorena Gonzalez, head of the San Diego-Imperial Counties Labor Council.

The small-business “voice in the process is being represented by the people they elected and Walmart is trying to prevent that,” Gonzalez said. “In some ways, I cannot believe we are having this big of a public fight in asking a massive retailer that if they want to put in a massive store they have to complete these studies.”

There are no pending supercenter applications on file. If approved by the council, the ordinance would take effect 30 days after a final vote.

christopher.cadelago@uniontrib.com • (619) 293-1334 • Twitter @ccadelago


Wal-Mart Sees Small Stores in Big Cities

October 13, 2010

Wal-Mart Stores Inc. is planning to open dozens of small stores in the nation's cities, in an effort to push back against the dollar chains and other competitors nibbling at its customers.

The prospect of Wal-Mart stores dotting America's biggest cities would change the urban landscape and the profile of the world's largest retailer, known for its blocky suburban edifices stocked with low-cost goods. The new stores, roughly a quarter to a third the size of a supercenter, largely will sell groceries.

Bill Simon, head of Wal-Mart's U.S. stores business, said Wal-Mart envisions opening in the next few years 30,000- to 60,000-square-foot Neighborhood Market groceries and new, smaller outlets modeled on the bodegas it operates in Latin America. Its supercenters average 185,000 square feet.

Mr. Simon said he believes there is room for "hundreds" of small Wal-Mart stores in the U.S., offering food and consumer staples. The retailer first will test their urban appeal with 30 to 40 stores over the next few years before a full-scale launch.

The move is an about-face for Wal-Mart. At the start of the recession, it focused on attracting more middle-class customers who were "trading down" to discount stores by remodeling to feature neater aisles, fashionable clothing, and eye-grabbing discounts on fewer items.

But Wal-Mart now admits the gambit alienated many of the blue-collar customers who had made it a retail behemoth in the first place. So after shuffling executives, the company is hurriedly restoring the ungainly pallets of merchandise to its center-store aisles and reworking its marketing strategy to emphasize the "every day low prices" formula that the company's late founder Sam Walton made famous.

"Sometimes we will try things, and sometimes they work and sometimes they don't," Chief Executive Mike Duke said. "Getting back to every day low price across a wide assortment of products is really the right approach."

Sales have fallen for five consecutive quarters at Wal-Mart U.S. stores open at least a year, a key benchmark for retail businesses. The company's U.S. store growth has also stalled as it has begun running out of rural and suburban markets for its warehouse-sized supercenter stores, leaving large cities such as New York, Chicago and Los Angeles as the company's last frontiers for domestic expansion.

Wal-Mart has made a push to show it is a socially responsible giant; it now, for instance, offers better health benefits than most of its retail rivals, and is requiring suppliers to limit their carbon emissions. Yet Wal-Mart has struggled at cracking the big cities amid stiff opposition from organized labor—even as its archrival, Target Corp., and other big-box chains such as Best Buy Co. make a steady march into urban areas with similar products, stores and nonunion workers.

Wal-Mart now discloses wages to convince critics that its pay is equal or better than competitors'; in New York hourly wages average $12.20, nearly $5 more than the state's minimum wage and $2 above the New York City retail median, which was $10.04 in 2009 according to the Fiscal Policy Institute, a nonprofit group financed by unions.

A spokesman for New York Mayor Michael Bloomberg said he would welcome the company.

"We shouldn't tell businesses that want to invest and create jobs in New York City that they can't," said spokesman Andrew Brent. "New Yorkers are already voting with their feet when they drive outside the City to shop at stores that aren't in the five boroughs" that make up New York.

Still, urban foes say they continue to battle every Wal-Mart with special reserves of vitriol, for a simple reason: It's Wal-Mart, a company with a history of anti-union tactics and worker disputes, including an ongoing gender discrimination lawsuit that is the largest ever.

Wal-Mart won the right to build its second and third stores in Chicago earlier this year after years of lobbying. But when New York politicians and union leaders learned Wal-Mart was eyeing a shopping center called Gateway II for its first store in the city earlier this year, they rallied at City Hall to deliver a rude message: "Fuggedaboutit."

"Wal-Mart can say they are a different company, but we are not going to roll the dice in New York City," said New York City Council Speaker Christine Quinn. "Target in no way has the history of employment problems that Wal-Mart has. You can't teach an old dog new tricks."

Yet Wal-Mart's move to go small is about more than trying to sidestep longstanding urban foes with stores that require fewer zoning approvals. Wal-Mart faces new challenges from bare-bones outlets including Germany's Aldi and chains such as Dollar General Corp.

Lower cost rivals have expanded exponentially since the recession, offering small sizes of staple items such as milk and toilet paper to attract strapped consumers who in some cases could not afford the super-sized versions of the items sold at Wal-Mart.

"I am not focused on any one competitor," Mr. Simon said when questioned by analysts about whether the small-store shift was spurred by dollar stores, but he added: "Do they have a head start? Yeah, they do, they have 20,000 [stores]."

Mr. Simon would not specify which cities Wal-Mart wants to enter, replying, "Yes. All of that," when asked whether coastal cities such as California's were a possibility. But he joked that he had liked the musical selections during a dinner the prior evening, which included "New York, New York" being sung by a choir of Wal-Mart workers. Wal-Mart currently has no stores in the Big Apple.

Wal-Mart expects to build the new stores without raising overall capital expenditures by shifting money from supercenter remodeling budgets, he said. The company plans to spend between $7.5 billion and $8 billion on equipment, new stores and updates in the U.S. during its fiscal 2012, roughly the same as this year.

Wal-Mart did not detail how many workers the smaller stores would employ, but Wal-Mart's mid-sized groceries, called Neighborhood Market, average about 95 workers each at more than 180 stores, mainly in the south.

"In this environment, we should be thriving," Mr. Simon said, explaining that weak economy posed an opportunity to gain market share.

In addition to convenience stores, Wal-Mart faces growing competition from Amazon.com Inc. and other e-commerce retailers that have added household staples to their selections of electronics, books and music.

To fend them off, Wal-Mart will begin allowing customers this month to place orders online and retrieve the goods at 800 stores, a program it called "Pick Up Today."

Wal-Mart also said it was expanding an experiment in which customers who live in urban areas with few or no Wal-Mart stores can order merchandise online and have it delivered free to a nearby FedEx location. The test is expanding to New York, Chicago, San Francisco and Washington, D.C., on Thursday, after beginning this summer in Boston and Los Angeles.

Yet Wal-Mart is recognizing that its biggest untapped market may be urban markets such as New York. There, potential customers such as retirees Marvin and Rhoda Treibitz say they would welcome a retailer they believe would bring greater variety and cheaper prices.

"I wouldn't mind at all if Wal-Mart opened, and I am speaking as a retired union man," said Mr. Treibitz, a former motion picture operator, as he exited a Brooklyn shopping center where Target and Best Buy have already opened shop.

—Ann Zimmerman contributed to this article.


Humana and Walmart Announce Innovative Medicare Part D Prescription Drug Plan with Lowest National Monthly Premium Offered in all 50 States and D.C.
October 1, 2010

LOUISVILLE, Ky. & BENTONVILLE, Ark.--(BUSINESS WIRE)--Today, Humana Inc. (NYSE: HUM) announced an innovative Medicare Part D prescription drug plan, co-branded with Wal-Mart Stores, Inc. (NYSE: WMT) or (“Walmart”), that can provide significant savings on monthly plan premiums and prescription medicine copayments and cost-shares for Medicare beneficiaries, including seniors and people with disabilities.

The Humana Walmart-Preferred Rx Plan (PDP) offers one low national monthly plan premium of $14.80 – according to CMS,1 the lowest national plan premium in 2011 for a standalone Medicare Part D plan premium offered in all 50 states and Washington, D.C. This new co-branded prescription drug plan can save a typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP) an estimated average of more than $4502 in 2011 on plan premiums and prescription medication copayments and cost-shares when compared with the average total costs for a Part D prescription drug plan in 2010. With nearly 18 million Americans relying on Medicare Part D for their prescriptions,3 the Humana Walmart-Preferred Rx Plan (PDP) provides an affordable prescription solution for those who need it most.

“One of the primary goals of health care reform is to make health coverage more affordable – and that’s what we’re doing with the introduction of this low-cost Medicare Part D plan,” said William Fleming, PharmD, vice president of Humana Pharmacy Solutions. “People are more likely to take the medications prescribed for them when they can afford those medications. And adhering to prescription-drug regimens can enable people to be healthier and prevent future illness. At Humana, we believe that this prevention helps people live healthier lives and achieve lifelong well-being.”

“We know every dollar counts, especially when you live on a fixed income. We believe no one should have to choose between buying their groceries or their medications,” said John Agwunobi, M.D., president of Walmart’s Health and Wellness division. “Financial health is a fundamental part of a person’s well-being. At Walmart, the customer is always front and center, and that is why we are committed to doing everything we can to ensure seniors have access to the medications they need at a price they can afford.”

Humana Walmart-Preferred Rx Plan (PDP): Benefits and Details

  • One low monthly rate nationwide. The monthly plan premium is less than $15 a month for everyone, regardless of where they live.
    • According to CMS, the $14.80 monthly plan premium is the lowest national plan premium in 2011 for a standalone Medicare Part D prescription drug plan offered in all 50 states and Washington, D.C.1
    • The Humana Walmart-Preferred Rx Plan (PDP) offers a monthly plan premium of $14.80, which is less than half the weighted 2010 national average for Medicare Part D prescription drug plans’ monthly plan premiums.4
  • Low copayments when plan members use preferred pharmacies like Walmart, Neighborhood Market or Sam’s Club pharmacies:
    • In-store copayments (at preferred pharmacies) on generic prescriptions start as low as $2 when plan members use preferred pharmacies.
    • Copayments as low as $0 for generic prescriptions filled via Humana’s RightSource home-delivery prescription service.
  • A broad competitive formulary comparable to other plans, with a list of prescription drugs included in the plan available at humana-medicare.com.

How to Enroll in the Plan: Call, Click or Go

Information on the plan is available starting today; annual enrollment for Medicare plans begins Monday, Nov. 15, 2010, and continues through Dec. 31, 2010. To get more information on the Humana Walmart-Preferred Rx Plan (PDP) and to learn more about these savings:

  • Call Humana to enroll at 1-800-899-0441. For TTY, call 711, 8 a.m. to 8 p.m., seven days a week.
  • Click on humana-medicare.com or medicare.gov to enroll.
  • Click on walmart.com/rxplan or samsclub.com/rxplan for additional plan details and links to enroll.
  • Visit a Walmart store to speak to a Humana representative.
    • Informational kiosks, including many staffed by Humana representatives, are available in approximately 3,000 Walmart stores across the country. Medicare beneficiaries can click on “Find a Location Near You” at walmart.com/rxplan to locate an on-site Humana representative.

Medicare Part D Background

Medicare Part D is the prescription drug program supported by the federal government. According to the Kaiser Family Foundation, nearly 18 million people are currently enrolled in a standalone Part D plan3 and Families USA reports that seniors generate one-third of all prescriptions filled in the United States.5

About Humana

Humana Inc., headquartered in Louisville, Kentucky, is one of the nation’s largest publicly traded health and supplemental benefits companies, with approximately 10.3 million medical members and approximately 7.3 million specialty-benefit members.

Humana is a full-service benefits-solutions company, offering a wide array of health and supplementary benefit plans for employer groups, government programs and individuals.

Over its 49-year history, Humana has consistently seized opportunities to meet changing customer needs. Today, the company is a leader in consumer engagement, providing guidance that leads to lower costs and a better health plan experience throughout its diversified customer portfolio.

More information regarding Humana is available to investors via the Investor Relations page of the company’s Web site at http://www.humana.com, including copies of:

  • Annual reports to stockholders
  • Securities and Exchange Commission filings
  • Most recent investor conference presentations
  • Quarterly earnings news releases
  • Replays of most recent earnings release conference calls
  • Calendar of events (includes upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors)
  • Corporate Governance Information

About Walmart

Wal-Mart Stores, Inc. (NYSE: WMT), or “Walmart,” serves customers and members more than 200 million times per week at more than 8,400 retail units under 55 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Walmart employs more than 2 million associates worldwide. A leader in sustainability, corporate philanthropy and employment opportunity, Walmart ranked first among retailers in Fortune Magazine’s 2010 Most Admired Companies survey. Additional information about Walmart can be found by visiting www.walmartstores.com and on Twitter at http://Twitter.com/Walmartnews. Online merchandise sales are available at www.walmart.com and www.samsclub.com.

Editor’s Note: B-roll containing store, customer and product images can be accessed via the online newsrooms at walmartstores.com/RxPlan and humana.com or at the satellite time below:

Satellite Schedule/Coordinates for B-roll Package:

Friday, October 1, 2010


6:00 a.m. – 6:15 a.m. Central
6:30 a.m. – 6:45 a.m. Central
7:00 a.m. – 7:15 a.m. Central
7:30 a.m. – 7:45 a.m. Central
10:00 a.m. – 10:15 a.m. Central
3:00 p.m. – 3:15 p.m. Central


Galaxy 18 (Digital KU)
Transponder 20A
D/L: 12086.5(H)
FEC: 2/3
Symbol: 6.62
Bit Rate: 8.144


1 “Centers for Medicare & Medicaid Services.” Click on the “2011 Drug Plan Information - State Fact Sheets” under “Spotlights.” September 2010. http://www.cms.gov/center/openenrollment.asp

2 Savings estimate is based on a comparison between 1) the projected average nationwide out-of-pocket costs for the 2011 benefit year for the average Medicare beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP) and fills their prescriptions in-store at preferred pharmacies like Walmart, Sam's Club, and Neighborhood Market pharmacies, and 2) the projected average nationwide out-of-pocket costs for the 2010 benefit year for the average Medicare beneficiary. Calculations based in part on industry average PDP premium and benefit information from the “Medicare Part D 2010 Spotlight, Medicare Prescription Drug Plans in 2010 and Key Changes over Five Years”, an independent review and analysis of CMS data by the Kaiser Family Foundation (September 2010). Actual savings may vary. For some beneficiaries, actual out-of-pocket costs may be more. Savings estimate may be updated when 2011 benefit year data becomes publicly available.

3 “The Henry J. Kaiser Family Foundation.” Medicare: A Primer. Chart: Prescription Drug Coverage Among Medicare Beneficiaries, 2010, Page 8. April 2010. http://www.kff.org/medicare/upload/7615-03.pdf

4 “The Henry J. Kaiser Family Foundation.” Medicare Part D 2010 Data Spotlight. Chart: Exhibit 2: Weighted Monthly PDP Premiums, 2006-2010, Page 9. September 2010. http://www.kff.org/medicare/8096.cfm

5 “Families USA.” Cost Overdose: Growth in Drug Spending for the Elderly, 1992 – 2010; Figure 1: Seniors Consume a Disproportionate Share of Drug Expenses, Page 2. July 2000.


Humana, Wal-Mart unveil low-cost Medicare drug plan

NEW YORK | Fri Oct 1, 2010 8:01am EDT

(Reuters) - Health insurer Humana Inc (HUM.N) and Wal-Mart Stores Inc (WMT.N) will team up to offer a U.S. Medicare prescription drug coverage plan next year that will have the lowest premiums in the country, the companies said on Friday.

The Humana Walmart-Preferred Rx Plan will cost $14.80 per month in premiums for prescription drug coverage in all 50 states and Washington, D.C., the companies said in a joint press release.

The monthly premium is less than half the average premium for Medicare prescription drug plans this year, the companies said.

Other features of the plan include co-payments for generic drugs as low as $2 when using preferred pharmacies such as Walmart and Sam's Club, and no co-pays for some generic prescriptions filled through Humana's mail-delivery service.

About 18 million Medicare beneficiaries are enrolled in plans that offer prescription drug coverage only, according to the Kaiser Family Foundation think-tank.

Humana is one of the largest providers of plans under Medicare, the U.S. government health coverage program for seniors.

The Louisville, Kentucky-based insurer expects the low-price plan will help it expand membership in its Medicare stand-alone prescription drug plans, as well as expand its mail-order prescription volumes.

Wal-Mart expects to expand its prescription volumes through the co-branded plan, according to Humana.

The low-priced plan may spark concern on Wall Street that Humana is overly sacrificing profit margins to gain membership. Humana said it expects the co-branded plan's profit margin "will contribute" to its overall target of a 5 percent pretax operating margin.

(Reporting by Lewis Krauskopf; editing by John Wallace)


Wal-Mart to aggressively roll out smaller stores
Published: Monday, September 20, 2010, 2:01 PM    
Updated: Monday, September 20, 2010, 3:55 PM

Associated Press business staff

Wal-Mart Stores Inc. is planning an aggressive push into urban markets with a new small format that's a fraction of the size of its supercenters.

NEW YORK  -- Wal-Mart Stores Inc. is planning an aggressive push into urban markets with a new small format that's a fraction of the size of its supercenters.

The expansion, expected to be spelled out next month at the retailer's meeting with analysts at its headquarters in Bentonville, Ark., is aimed to pump up sluggish U.S. sales. 

Real estate executives said that over this past summer, the world's largest retailer has been scouring for small locations, around 20,000 square feet, in urban areas including New York City, San Francisco and other cities. That size is larger than a typical drugstore but smaller than a supermarket. 

"I see this as a smart move, instead of coming into a market as a 900-pound gorilla," said Faith Consolo, chairman of real estate firm Prudential Douglas Elliman's retail leasing division. She noted that Wal-Mart has been talking to landlords and brokers.

"They're on an aggressive roll," she added. "This is a creative time. Everyone is thinking out of the box." 

She noted that in New York City, Wal-Mart has been looking in Queens and the lower part of Manhattan. 

Since 2008, Wal-Mart has been testing smaller stores called Marketside. They now total four and average 15,000 square feet. The format focuses on fresh food. And the discounter now has almost 200 Neighborhood Market by Wal-mart stores, which offer a mix of fresh food, pharmacy, beauty, stationary and pet supplies and are about 42,000 square feet. 

Wal-Mart has been shrinking its supercenters, which carry a wide assortment of food and general merchandise, to about 150,000 square feet from 195,000 square feet. But the company has maintained that it plans to use smaller formats in urban markets. 

In a note to investors Monday, Brian Sozzi, analyst with Wall Street Strategies, said he believes the new 20,000-square-foot stores would likely fuse the Marketside and Neighborhood Markets formats. 

"Wal-Mart needs to have a store concept that brings in customers more than once every two weeks when paychecks are distributed," he wrote. He added that using the Marketside Stores as a vehicle for growth is too limiting, and that Neighborhood Markets are too big to enter cities.

Wal-Mart spokesman Steven Restivo said Monday that "while we have not shared an exact size of the small format ... we continue to evaluate a wide range of stores sizes across the country and will consider any format that puts us closer to our customers." 

Bill Simon, the new president and CEO of Wal-Mart's U.S. business, told investors last week at a Goldman Sachs retail conference, said that "we will have a healthy mix of supercenters and small formats, including our grocery format, Neighborhood Market and smaller formats," he continued. He added that in particular, Wal-Mart is looking to open stores that are similar to the formats in Mexico, Central America, and Latin America. 

"We are going to beg, borrow, steal and learn from them as quickly as we can, because it is important for our urban strategy," he added. 

Wal-Mart, which now has more than 4,000 stores in the U.S. has hit a wall in the U.S. The company just reported its fifth straight quarterly decline in revenue at stores opened at least a year, considered a key indicator of a retailer's health.

Wal-Mart benefited during the recession as affluent shoppers traded down to cheaper stores. But stubbornly high unemployment and tight credit are still squeezing its main U.S. customers, lower-income workers who are having even more trouble stretching dollars to the next payday because of tight credit and an unemployment rate stuck at almost 10 percent. The discounter's own merchandising gaffes have also contributed to the company's revenue figure's decline.

Wal-Mart's rival Target Corp. is set to spell out more details of its urban strategy on Friday to the media at its headquarters in Minneapolis. Target had told analysts in January that it plans to open in the next few years smaller stores of 60,000 to 100,000 square feet. That compares with its current average of 125,000 square feet. But real estate executives including John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team, say Target also is looking at 20,000-square-foot locations.

 "I think 20,000 makes more sense than 80,000 square feet," Sozzi said.

 © 2010 cleveland.com. All rights reserved.


Wal-Mart Violates California Election Law in Sonora
Mega-Retailer Ignores Required Campaign Disclosures for Special Election Push

Tuolumne Jobs & Small Business Alliance
September 22, 2010

Domenic Torchia


SONORA – Tuolumne County residents have filed a formal complaint with the California Fair Political Practices Commission against Wal-Mart for illegally circulating a petition to force a special election on a proposed expansion of their Sonora store.

Throughout July and August, Wal-Mart paid local residents to collect signatures to place the initiative on the ballot. Though Wal-Mart gathered a sufficient number of signatures, they did not form a political committee to report their activity. Under California law, signature-gathering efforts on behalf of proposed ballot initiatives must disclose their activities to the California Secretary of State’s office.  Wal-Mart has failed to submit these disclosures, according to the Secretary of State, thus making the entire effort illegal.

Once enough signatures are gathered for a ballot initiative, the Sonora City Council may vote to hold a special election or simply approve the project. The Council voted on September 20th to order a 30-day impacts study and will vote on the matter at their October 18th meeting.  Wal-Mart’s Public Affairs Manager, Amelia Neufeld, attended the Monday night hearing to urge the council to immediately adopt the ordinance. Wal-Mart’s haste can only be construed as an attempt to push the initiative through the approval process before their signature gathering violations could be discovered.

The Tuolumne County Clerk and Sonora City Clerk each claim that the other has the responsibility of collecting campaign reports from local candidates and on ballot issues. Neighbors are concerned that not only has Wal-Mart ignored the law, but the local government bodies who are responsible for enforcing the law appear to be confused as to what their responsibilities are.

The FPPC can take the violations to court where the signature effort can be invalidated and fines can be levied against Wal-Mart.

The Sonora ballot initiative is part of a renewed Wal-Mart effort to trample on California’s environmental laws across the state. Just weeks ago, lobbyists for the giant retailer attempted to orchestrate a back room deal that would exempt many of their new store proposals from the state’s environmental laws, known as the California Environmental Quality Act (CEQA). When watchdog groups discovered that Wal-Mart was behind the effort, the deal fell apart.

CEQA is the state law that requires state and local agencies to disclose and, if possible, reduce the negative environmental impacts of development projects.  CEQA makes environmental protection a mandatory part of the decision making process, and is one of the most comprehensive of such laws in the country.


California legislators race through waning hours of session

SACRAMENTO - As the California Legislature raced through the final hours of this session's lawmaking Tuesday, dueling budget proposals went nowhere, while environmentalists and corporate interests traded victories and defeats.

With just a half-hour before a midnight deadline, the powerful oil and chemical industry lobbies defeated a bill that would have been the first statewide ban on plastic carryout bags in the nation. Republicans and several Democrats said charging for recycled bag alternatives would "tax the poor" and turn a consumer choice into a government mandate.

The 19 billion plastic bags consumed by Californians each year and the environmental impacts they cause were little discussed as the bill headed toward failure.

Click here for the rest of the story


Retailers push sponsored bill to avoid environmental law


Wal-Mart asks high court to halt suit
Boston.com/Bloomberg News
August 26, 2010

WASHINGTON — Wal-Mart Stores Inc. has asked the US Supreme Court to block female employees from suing on behalf of as many as 1.5 million women in what would be the largest sex-bias suit against a private employer in US history.

The world’s largest retailer appealed a 6-to-5 lower court decision allowing women who have worked at Wal-Mart since 2001 to be part of a single class-action lawsuit.
The justices will probably say later this year whether they will hear the case.

The workers are seeking billions of dollars in back pay, Wal-Mart told the justices. Claims of workers around the country are too diverse for a single case, the company said.

“The class is larger than the active-duty personnel in the Army, Navy, Air Force, Marines, and Coast Guard combined — making it the largest employment class action in history by several orders of magnitude,’’ argued Wal-Mart, the largest US private employer.
It is accused of paying women less than men for the same jobs and giving female workers fewer promotions. The lawsuit was filed in 2001 by six women.
The ruling “is well within the mainstream that courts at all levels have recognized for decades,’’ said Brad Seligman, an attorney for the workers. “Only the size of the case is unusual.’’
The company says no pay disparity exists at most stores.
Wal-Mart agreed in 2008 to pay as much as $640 million to settle lawsuits claiming it cheated hourly workers on pay.


City Council Approves Wal-Mart Supercenter Wal-Mart
Opponents Called "Un-American"

by Al Norman
Wal-Mart Watch, August 2, 2010

On May 10, 2009, Sprawl-Busters reported that a newspaper poll in Rohnert Park, California indicated that the public is losing enthusiasm for big box stores.

The Santa Rosa Press Democrat reported that its readers were "generally opposed to many of the pending big-box plans in Sonoma County, including a proposed Lowe's in Santa Rosa and a Wal-Mart expansion in Rohnert Park."

54% of readers opposed a plan by Wal-Mart to expand its Rohnert Park store on Redwood Drive by 32,000 s.f., and another 12% were unsure.

Only 34% supported Wal-Mart's expansion plans. "Please, we do not need an expanded Wal-Mart in Rohnert Park," wrote a Rohnert Park resident. "I never go to that store."

Click here for the rest of the story


Is Courtroom Next Stop in Wal-Mart Fight?
by Jeremy Hay
Santa Rosa Press Democrat
July 31, 2010

A day after the Rohnert Park City Council gave the go ahead for the controversial expansion of Wal-Mart, divisions remained razor sharp over the proposed supercenter.

The council late Thursday overturned - and sharply rebuked - an April vote by the city Planning Commission, which had unanimously rejected the application by Wal-Mart, the world's biggest retailer, to add a grocery to its Redwood Drive store.

"The Planning Commission didn't do their job and shame on them,"

Councilman Joe Callinan said in supporting the supercenter near the end of a 5 ?-hour meeting that drew hundreds of people to City Hall.

The commission had worried about the effect on other Rohnert Park grocery stores and said the expansion would be inconsistent with a section of the city's general plan that calls for encouraging supermarkets to be "close to where people live."

But the council, in a 4-1 vote with Councilman Jake Mackenzie opposed, said the project's benefits were greater than its potential negative impacts and the project was consistent with city land use policies.

Click here for the rest of the story


Walmart OK Sets Up Grocery Battle Line
by Nicholas Grizzle
Rohnert Park Community Voice
July 30, 2010

Council Overturns Planning Commission Decision to Deny 35,000 sq. ft. Expansion Into Super Center


Onlookers peer into council chambers through locked doors at Thursday night’s special meeting of the Rohnert Park City Council. The council met to decide the fate of Walmart’s expansion into a super center, drawing hundreds of people to the meeting, most of whom spoke to the council on the issue.


The Rohnert Park City Council approved Walmart’s expansion into a super center at a special meeting Thursday night.

“People say, ‘Don’t be afraid to do what’s the right thing,’ and unfortunately you could hear here tonight, this is a very divided issue,” said Mayor Pam Stafford. “There was no overwhelming feeling one way or the other, but even if there was one overwhelming feeling over the other, that’s not how we get to decide this issue... we have to do it based on the law.

“All our legal and staff reports have told us this is consistent with our General Plan.”

With that, the council voted to repeal the planning commission’s decision, thereby allowing Walmart to expand into a super center, adding 35,000 sq. ft. and including a full grocery store.

“I can’t see where the benefits will not outweigh the significant impacts. I think the benefits are much greater,” said council member Joe Callinan.

“We have been preaching economic development, and we have one of our biggest sales tax companies in Rohnert Park wanting to expand, I think we would look really silly if we didn’t agree with that.”

Reading from a paper, council member Amie Breeze said, “Both of these businesses are part of our community, by my definition, this makes them both local.” She added, “I feel confident that from the reports we have read... there are benefits to this project that do outweigh the significant environmental impacts.”

Council member Jake Mackenzie, the city’s longest standing council member, was the single naysayer in the votes. “I would like to have seen... actual evidence that supports that there will be sales tax revenue increases to this city... or any overall increase in jobs to Rohnert Park.”

His lone “no” echoed in the otherwise silent city hall.

After recollecting the vote regarding the proposed casino just outside city limits, during the vote Thursday night he said, “I would like to point out to this council that I personally believe there are grounds for legal action to be taken in this matter.”

Vice-Mayor Gina Belforte said she did not appreciate the tactics used to sway public opinion in this debate, citing a flyer saying the council was “bulleyed” into voting for the expansion and her personal cell phone number distributed for residents to call with their comments. She stressed, however, that this did not sway her vote.

“I do believe this will drive economic development,” she said. “I do see this as a benefit for the city as well.” She continued, “I don’t think the city council should, in any way, decide which businesses we choose and which businesses we don’t choose.”

Before public comment, which was extensive at the five-hour meeting, representatives from Walmart were given 15 minutes to present their case. They touched on sales tax revenue, the potential closing of Pacific Market and interpretation of the city’s General Plan, which was cited in the planning commission’s denial.

According to Angie Stoner, spokeswoman for Walmart, the Rohnert Park store generated $600,000 in sales tax revenue last year. If this is a total number, which Walmart was unable to confirm before deadline, Rohnert Park’s share would be about 11 percent of that, or $66,000.  The share of sales tax revenue increases to about 16 percent after a voter-approved sales tax increase goes into effect in October.

Regarding a possible increase in sales tax revenue from the grocery expansion, Stoner said, “According to the California Board of Equalization, our American Canyon store experienced an increase of 35.4 percent in taxable retail sales since a Walmart store with groceries opened there in 2007.”

A 35 percent sales tax revenue increase coupled with Rohnert Park’s sales tax increase would mean about $127,000 annually, or almost double the revenue the city currently receives. But the expansion will not be complete for a couple years and Measure E, the sales tax increase, expires in five years. Stoner did not supply data or say where her sales tax figures came from.

With about 80 extra seats in the lobby and 40 outside, police were keeping a strict count on the number of people inside city hall.  Standing room only would be an understatement. A speaker was set up outside for overflow attendance. One city employee estimated 100 speaker cards turned in, each given two minutes to say their peace.

Many were from out of town, but a significant portion were RP or Cotati residents. Many were objecting to or agreeing with Walmart based on ideological principals.

Marty Bennett, Co-Chair of the Living Wage Coalition of Sonoma County said before the meeting, “Walmart would like to put a super center in every county,” but the impact to local markets would be detrimental.  “One super center equals all retail wages in the county going down by 1 percent.”

The organization, “the leading opponent of the project,” Bennett said, would oppose the same project in any city in the region. “The regional impact will go far beyond Rohnert Park,” he said.

Steve Butler, a Santa Rosa attorney representing Pacific Market, said, “I do believe (the Walmart expansion) is contrary to your General Plan... (which) states ‘maintain land use patterns that maximize residents’ accessibility to neighborhood shopping centers.’ I would respectfully submit that this project would clearly violate that policy as well as other transit and air quality policies of your General Plan.”

City Engineer Darrin Jenkins confirmed after public comment, however, that the project “is consistent with the city’s General Plan policies.”

Pacific Market employees, and owner Ken Silveira also spoke to the council, describing their bleak situation. Silveria wrote a letter to the city stating his store would close if Walmart was allowed to expand. A study sponsored by the market also showed the job loss and economic blight would be significant if Pacific Market were to close, which was likely if Walmart expanded to include a grocery section roughly the size of Pacific Market.

But Stoner responded to these claims, saying, “We’ve met with the owner of Pacific Market and proposed multiple ways that we can assist in getting their business on more solid ground over the next couple years before an expanded store would open. They have responded with silence.

Save for a request to be bought out.”

She added, “Though it is convenient to blame Walmart, it is simply not true that our expansion will ultimately determine the fate of their store here.” Some comments from the public were emotional.

“I’d like to be able to buy my milk at a grocery store a short distance to my house, I don’t want to be standing in line next to some guy buying a gun at Walmart,” said Suzanne Sanders of Rohnert Park.

Shirley Slack of Santa Rosa cited a list of items currently available at Walmart for less than other RP stores, saying, “In this economy, we need this Walmart expansion.”

Crystal Robert, of Santa Rosa said she shops at the Rohnert Park Walmart. “I just think that there should be more opportunities for us lower income families to be able to go to Walmart and find everything that they need there.”

Jan Ogrin, who owns a business in Santa Rosa but lives in RP, was awaiting the council’s decision as a factor in where she would continue to locate her business. “The decision you’re making tonight is really a very major policy decision, and is speaking of where your loyalty lies.”

She concluded, bluntly, “I’m here to find out if it would be safe for me to consider moving my business to Rohnert Park or should I stay in Santa Rosa.”


Wal-Mart Debate Heats Up: Hundreds show up at City Hall to Weigh In On Proposal To Add Grocery to Rohnert Park Store
by Paul Payne
Santa Rosa Press Democrat
July 30, 2010

A bid by Wal-Mart to open what would be Sonoma County's first Supercenter by adding a grocery to its Rohnert Park store was hanging in the balance late Thursday night as opponents and supporters argued their case before the City Council.

"The only way Wal-Mart could conceivably offer any monetary benefit to Rohnert Park would be by cannibalizing the economies of the surrounding communities," Healdsburg resident Robert Neuse said.

Thomas Thunderhorse, a Rohnert Park resident who described himself as a low-income senior, said the council's decision would have political consequences. "If this council votes for the expansion of Wal-Mart, it will show those people in need that you care for them," he said.

"If you vote against it, you will be remembered by them."

Click here for the rest of the story


Opposition to Wal-Mart Supercenters Building Across the Bay Area
By Martin J. Bennett
The Daily Censored
California Progress Report
July 26, 2010

The San Francisco Bay Area has become the epicenter for contentious
battles in California to halt proposed Wal-Mart supercenters that
sell both general merchandise and groceries.

Both the City of Antioch in Contra Costa County and the City of
Rohnert Park in Sonoma County will consider supercenter proposals
this week. The outcome could derail Wal-Mart's strategy to build at
least one supercenter in each county of the state.

In April, the Rohnert Park Planning Commission unanimously denied the
Wal-Mart proposal to enlarge its existing discount store into a
supercenter. Wal-Mart has appealed the decision to the city council.

Click here for the rest of the story

Go Local vs. Wal-Mart and Super-sized Chains
July 21, 2010
By Will Shonbrun

On July 29 the Rohnert Park City Council will decide if it will
approve a proposal by Wal-Mart to expand its Rohnert park store by
more than 40,000 square feet, becoming a super center selling both
groceries and retail. Rohnert Park's Planning Commission voted to
turn down Wal-Mart's proposal in April, but the company appealed the
decision to the city counsel.

There are pros and cons regarding this massive project though the
negatives far outweigh the positives. What can be said in favor of
the proposal, and has been in a number of letters to the Press
Democrat, is that it will provide a place for inexpensive foods and
goods to many people on very limited incomes. It can also be said
that it will provide more jobs in the community though these are very
low-paying ones, most with no health benefits.

Counter to the argument for jobs gained is the potential for jobs
lost by local businesses that might well be forced to close; good
jobs paying decent wages and providing benefits, such as Pacific
Market, Oliver's and other groceries, and the 50-60 local and
regional businesses that would be affected by their closure. Just a
few of these local suppliers are Amy's Organics, Alvarado Street
Bakery, Wildwood Natural Foods, Redwood Hill Farms, Kozlowski Farms
and La Tortilla Factory. Nationally Wal-Marts has wiped out thousands
of local businesses and their suppliers leading to an urban decay in
neighborhood shopping centers where stores like Pacific Market are
the anchor and draw for other small businesses.

Therefore the potential for jobs lost would far surpass jobs gained.
Finally, in favor of the expansion it's argued that it will increase
tax revenue for the city, but this is debatable. Most of the
expansion will be for nontaxable food items, and what the super
center might provide in increased tax revenue may well be offset by
decreased tax money from affected local businesses.

Wal-Mart has become a retail behemoth by keeping costs low: wages,
health benefits, reducing full timers to part time, keeping unions
out and buying cheap goods from foreign sources. Giants like
Wal-Marts have closed tens of thousands of local independent
businesses nationally, including pharmacies, hardware stores,
bookstores, groceries and other retailers.

According to a University of Missouri report that examined 1,749
counties where Wal-Mart located and the resulting loss of jobs were
taken into account, "The superstores contributed just 30 jobs on
average" Furthermore, most of the dollars that go to Wal-Mart stores
leave the local economy. A policy study authored by Stacy Mitchell, a
senior researcher with the Institute for Local Self-Reliance, cites a
report by the firm Civic Economics, which found that, "Every $100
spent at an independent store generates $23 more in local economic
activity than $100 spent at a chain."

In addition local businesses tend to be much more community involved
than large out-of-state chains when it comes to charitable
contributions and participation in community services and
neighborhood organizations. Profits generated from Wal-Marts go back
to corporate headquarters in Arkansas, whereas locally generated
business revenue stays primarily in the community.

Wal-Mart Expansion A Threat to Transit-Oriented Development
by Martin J. Bennett
Santa Rosa Press Democrat
Sunday, July 18, 2010

The Rohnert Park Planning Commission unanimously denied a Wal-Mart
proposal to enlarge its existing discount store into a supercenter
that sells both groceries and general merchandise. Wal-Mart has
appealed the decision to the city council.

The economic and environmental impacts of a supercenter will extend
far beyond the City of Rohnert Park. All county residents should be
concerned about this proposal. The controversy raises fundamental
questions about future growth and the necessity for proactive city
and regional planning to promote equitable and sustainable

Development in the county is inevitable. According to the Association
of Bay Area Governments, the population of Sonoma County will
increase by twenty-three percent over the next twenty years. In 2008,
voters approved a landmark initiative to meet this challenge,
creating the two-county SMART train that will run on tracks adjacent
to Highway 101 from Cloverdale to Larkspur. The build-out of the
train system provides the opportunity for city-centered
'transit-oriented development' (TOD) around the fourteen SMART train
stations--development that could accommodate ninety percent of the
projected population growth.

TOD is densely-built, mixed-use development within one-half mile of
transit stations, accessible by bike and foot, and with a variety of
retail, office, and small businesses. Through land-use planning and
public funding, municipalities can promote development near transit
stations that includes good jobs paying family-supporting wages,
affordable housing for all income groups, open space, and walkable

The proposed 170,000 square-foot Wal-Mart supercenter located
one-quarter mile from the site of the planned Rohnert Park SMART
train station is a direct threat to such careful and appropriate

The labor, environmental, and local business organizations opposing
the Wal-Mart supercenter believe it undermines compact and equitable
development in Rohnert Park and violates the city's general plan. The
project undercuts transit-oriented development's efforts to reduce
low-wage work, support local business, tackle global warming, and lay
the foundation for a robust regional economy.

Nearly one third of the employees in the county are currently
'working poor' and do not earn self-sufficiency wages. According to
the Insight Center for Community and Economic Development in 2008,
two parents working full-time in Sonoma County must each earn $14.90
an hour or $62,940 a year to pay for food, housing, medical care,
child care, and transportation.
Sonoma State economist Robert Eyler reports that the supercenter will
contribute to job quality decline and increase the problem of working
poverty. According to his analysis, the county will lose105-211
jobs---mostly good jobs that pay hourly wages for full-time workers
ranging from $17.67 per hour at Pacific Market to $23.36 at Raley's
and Safeway. The Wal-Mart super center will employ 450 workers, and
according to the company, the typical full-time worker at Wal-Mart
earns $12.10 an hour.

With regard to global warming, the supercenter will have adverse
effects on air quality and greenhouse gas emissions. In order to
comply with AB 32, a 2006 state legislative measure, all nine cities
and the county have pledged to reduce greenhouse gas emissions
twenty-five percent by 2015. However, the Eyler report notes, Pacific
Market will close if the supercenter is built, and its 8,000
customers will drive an extra 28,400 miles each week to shop for

Further, Stacy Mitchell, author of Big Box Swindle, reports that
vehicle miles driven per customer will increase because a supercenter
draws shoppers from a greater distance than a discount store. Indeed,
since Wal-Mart's rapid expansion in the late 1970s, miles traveled
per household to shop has skyrocketed by three hundred percent, while
total household driving increased by seventy- five percent.

As for local business, there are sixty local suppliers that provide
produce and merchandise to Pacific Market, and more than seventy
supply Oliver's in Cotati. Wal-Mart suppliers, on the other hand, are
nearly 100% national and global firms (and that means increased truck
traffic into the county). The 'Go Local' movement has demonstrated
that patronizing local businesses ensures that more dollars remain in
the community. Studies by Civic Economics demonstrate that
locally-owned firms produce two to three times more economic activity
within the local economy than national chains ---including
locally-retained profits, wages paid to local residents, purchases
from local suppliers, and contributions to local nonprofits.

The Rohnert Park City Council should uphold the decision of the
planning commission, reject the Wal-Mart supercenter, and refocus the
city's planning process to promote sustainable economic development.

Martin J. Bennett teaches American history at Santa Rosa Junior
College and serves as Co-Chair of the Living Wage Coalition. He is a
board member of Sonoma County Conservation Action and the North Bay
Labor Council.

Dept. of Social Science
Santa Rosa Junior College
1501 Mendocino Ave.
Santa Rosa, Ca.

(707) 527-4873 Office
(707) 522-2755 Fax
(707) 939-8933 Home Office

You Can Buy Love 
Who paid pro-Walmart demonstrators $100 apiece?
July 15, 2010
By Max Brooks
Chicago Reader

Low on inspiration? Open your wallet. "Let me just first thank each and every one of the residents that are here today—I'd like to really acknowledge them," said Ninth Ward alderman Anthony Beale, speaking in the chamber of Chicago's City Council on Thursday, June 24. "It's residents like this who really give me the energy and drive to fight on their behalf."

Beale gestured toward the sea of white filling the spectators' gallery, men and women all wearing T-shirts sporting slogans that championed the project the council's zoning committee was about to approve: construction of a Walmart Supercenter in Pullman.

But it's possible not everyone felt as strongly about the project as their T-shirts did. Around 7:30 that morning, about a hundred Walmart supporters had filed onto two yellow school buses in front of the 63rd and Harper headquarters of the Woodlawn Organization (TWO). A south-side fixture, this social services organization is run, at least nominally, by president Georgette Greenlee-Finney, but it's heavily influenced by her husband, Leon Finney Jr., the City Hall insider who became TWO's executive director in 1969. He no longer holds a formal office at TWO, but he remains chief executive officer of its sister organization, the Woodlawn Community Development Corporation, which manages projects for the Chicago Housing Authority and develops real estate throughout the south side.

Many of the TWO partisans might sincerely have desired more jobs and retail options in Pullman. But they were also motivated by the promise of $100.

Aaron Garel, a 30-year-old Woodlawn native, was one of these protesters. Garel, known on the street as "Little" and "Little Man," says he used to be a drug dealer and a member of the Black Stones, a gang with ties to the old Blackstone Rangers. Three prior convictions on drugs and weapons charges make it hard for him to find work. When a friend, a TWO organizer, called him two weeks before the June 24 committee meeting and asked if he wanted to go downtown and make some money, he jumped at the chance. Besides, he believed in the cause: the south side did need more jobs, and if Walmart wanted to open a store, why not?

Garel says his friend told him to come to TWO's headquarters at 1 PM on Monday, June 21. When he got there, 15 minutes late, about 200 people were already gathered inside Tre's, a nearby restaurant and catering business part-owned by Finney. A TWO organizer addressed the crowd.

"He said it's about jobs, that they're trying to get people who are passionate about getting jobs for African-Americans and not just about looking to get money," Garel remembers. But there'd be money too, the organizer emphasized: $100 for two days' work.

The recruits signed up, were issued T-shirts and placards that said IT'S ABOUT JOBS, and filed onto four school buses that took them downtown. The TWO white shirts joined other demonstrators who were marching around City Hall chanting, "We need jobs," and after about an hour Garel and 100 others were led inside to show solidarity as Beale and a Walmart official held a news conference.

Half the recruits headed back downtown Tuesday for a rally outside City Hall that rang with the bleat of vuvuzelas. The other half, Garel included, were assigned to show their support before Thursday's zoning committee meeting.

On Thursday morning, about 100 white shirts gathered on the street in front of TWO. Two buses carried them north on Lake Shore Drive into the Loop, where they rallied with about 250 other Walmart supporters organized by Alderman Beale's staff. (Beale says none of the supporters he turned out was paid, though Walmart did pick up the tab for Beale's buses.)

The meeting that followed the rally turned out to be uneventful. The Chicago Federation of Labor had finally given prolabor aldermen the green light to vote for the project, which the zoning committee then approved unanimously. Without waiting for adjournment, the TWO contingent was whisked out of the chamber and onto the idling buses. Back in Woodlawn, an organizer told them to show up at Tre's between 3 and 6 that afternoon for their money. Garel got there at five. A TWO organizer had him sign a form and handed him a $100 bill.

Alderman Beale assured me neither his organization nor Walmart had paid any of the supporters, mostly Ninth Ward residents, who he'd brought to City Hall for the vote.

"I'd never do that," he said. "My integrity is extremely important to me. My staff worked extremely hard organizing folk legitimately."

Did he ask Finney or TWO to help out?

"No, not at all," Beale said. "You have people who have their own agendas, opportunists who try to insert themselves into any debate."

I called Walmart officials to ask if they knew about or had paid for the TWO demonstrations, but they didn't return my calls. Neither did TWO officials. But Leon Finney had acknowledged to me, months earlier, that last year TWO paid people to circulate petitions championing a pro-Walmart "Jobs or Else" campaign. (Garel says he got $25 a day for that effort.)

TWO's budget is almost entirely funded by tax dollars, and when public money's involved, nonpartisanship is generally expected. More than $4.4 million of TWO's $4.9 million budget for fiscal 2007-'08 (the last year for which tax returns and related documents are available) came from government agencies, including the Illinois Department of Human Services, Chicago Public Schools, and the city of Chicago. That was the year TWO managed to find busloads of people eager to show the Plan Commission, which Finney sits on, how ardently the public supported moving the Chicago Children's Museum to Grant Park. It was also the year Charles Holley, a Walmart executive vice president, wrote TWO a company check for $25,000.   



 [back to top]

by Ian Bauer, Milpitas
San Jose Mecury News

"The end result of our meeting tonight is the Walmart expansion is denied," said Mayor Bob Livengood to the hundreds of Walmart supporters and opponents who crammed into the Milpitas City Hall Council Chambers Tuesday night.

Milpitas City Council voted 4-1 June 1, with Councilwoman Debbie Giordano dissenting, to overturn on appeal Milpitas Planning Commission's prior approval to allow Walmart to build a nearly 18,500-square-foot addition to allow liquor sales, groceries and 24-hour operation at 301 Ranch Drive.

Months of debate followed by three hours of testimony from more than 50 speakers at the meeting culminated in applause after the council's ruling.

Appellant group Milpitas Coalition for a Better Community a loosely knit band of Milpitas and San Jose residents and labor representatives was formally opposed to what many in the group called Walmart's job-killing Supercenter that would destroy smaller local businesses, create more traffic, air pollution and crime and ruin the city's overall quality of life.

The local anti-Walmart group claimed the project's final environmental impact report and conditional use permit for the expansion should not have been certified, that the project did not meet the requirements of the California Environmental Quality Act, and the project was inconsistent with state and local planning and zoning laws.

Prior to the council vote, Walmart representatives and Milpitas Coalition members were granted 15 minutes each to present their respective sides on an expansion that aimed to add to the southern portion of Walmart's existing 131,725-square-foot store, expanding the business to nearly 150,200 square feet.

"We are concerned that our community will be negatively impacted by this expansion," Arthur Balangue, a Milpitas Coalition spokesman and Save Mart employee, told the council.

Balangue said Milpitas was "already over-served by supermarkets" that sold groceries and fresh produce and added Walmart's planned Supercenter would kill jobs at other stores such as Save Mart. "The single fact is if this expansion is approved it will close down more stores," Balangue said.

Conversely, Walmart representatives said the Milpitas store was popular among residents, that it had been a community partner for years donating monies to the city and community groups since it opened here in 1994, and they urged the council to uphold the prior ruling.

"We were very pleased with the planning commission's decision and hope you will also vote for this small expansion and move this project forward," Angie Stoner, a Walmart spokesperson, told the council.

Stoner added the new store would provide a more customer friendly shopping experience with a deli, a bakery and fresh produce. She added the opposition's opinions of Walmart were based on perceptions: "And their aim is to keep out competition."

In addition, she noted that Target would soon open a "super store" a couple of miles away in North San Jose off state Route 237 that could potentially suck more sales tax dollars from City of Milpitas. Stoner said Walmart contributes about $500,000 in sales tax to the city's coffers.

"As the mayor and council, you all want to keep your tax dollars local," Stoner said.
But the majority of people who came to the meeting many wearing fluorescent yellow and green "Say No To Walmart" stickers on their chests said a bigger Walmart would be detrimental to the city.

"Obviously, this store will not pay good wages to anybody," Jose Garcia, a Milpitas resident, said. "There's no wealth, no good paying jobs here."

Opponents also said Walmart destroys choice and competition with its "predatory pricing" tactics.

"Maybe it helps some people, but it hurts a lot of us in the long run," Debbie Rankin, a Milpitas resident, said. Others cited crime as a factor.

"A 24-hour operation in a remote part of town is asking for trouble," Greg Reeves, a Save Mart employee, said.

Phil Tucker, a California Healthy Communities Network representative, said other Walmart Supercenter stores including one in American Canyon had dramatically increased crime in that area.

Speakers also cited inadequate pay to those people Walmart hires.
"This is about values, this is about wages and benefits and this is still the most expensive place to live," Brian O'Neil, a Service Employees International Union county chapter chair, said.

O'Neil added Walmart's project conflicted with the Milpitas General Plan and did not promote business retention.

Raymond Quebec, a Save Mart bagger, said Walmart's expansion would close businesses here and leave City of Milpitas more vulnerable and dependent for sales tax dollars from the big box retailer.

"As those businesses close, Walmart will be even more important to Milpitas," Quebec said. "We'll be forced to give in to whatever they need... I ask you to vote no' and keep Walmart small and manageable."

Walmart supporters many wearing white, blue and yellow "Walmart" stickers on their chests stated the store is inexpensive and convenient.

DRIVE (APN 22-29-016), MILPITAS, CA 95035.

WHEREAS, on January 26, 2009, Walmart Stores, Inc., submitted an application to the City of
Milpitas for an amendment to its current site development permit to allow for an 18,457 square foot building expansion, remodel of the exterior building façade, installation of associated site improvements, replacement of existing signage with Walmart's new corporate branding, and an amendment to its current conditional use permit to allow for grocery and alcohol sales. The property is located within the General Commercial Zoning District and Site and Architectural Overlay (C2-S); and

WHEREAS, on March 24, 2010, the Milpitas Planning Commission held a duly noticed public
hearing on the Project's development application and approved the application, subject to conditions of approval; and

WHEREAS, on April 1, 2010, the Milpitas Coalition for a Better Community filed an appeal of
the Planning Commission approval. The City Council reviewed the application for hearing de novo and held a duly noticed public hearing on the matter on June 1, 2010 and considered public testimony and reviewed various written submissions and materials and the underlying record.

NOW, THEREFORE, the City Council of the City of Milpitas hereby finds, determines, and
resolves as follows:

1. The City Council has considered the full record before it, which may include but is not
limited to such things as the staff report, testimony by staff and the public, and other
materials and evidence submitted or provided to it. Furthermore, the recitals set forth
above are found to be true and correct and are incorporated herein by reference.

2. The project is inconsistent with the Milpitas General Plan as follows:

a. The project does not encourage stable and balanced economic pursuits which
strengthen and promote development, contrary to Policy 2.a-I-3.

b. The project does not promote a strong economy which provides economic
opportunities for all Milpitas residents within the existing environmental, social fiscal
and land use constraints, contrary to Policy 2.a-I-5.

c. The project does not promote the creation of a balanced economic base that can resist
downturns in any one economic sector, contrary to Policy 2.a-I-6.

d. The project does not provide opportunities to expand total employment in Milpitas
and promote business retention, contrary to Policy 2.a-I-7.

e. The project does not foster community pride and growth through sufficient
beautification of existing development, contrary to Policy 2.a-I-10.

f. The project would draw community, economic and business focus away from Town
Center and Midtown, contrary to General Plan.

1 Resolution No. ____

3. The proposed location of the project will be injurious or detrimental to property,
improvements, and/or the public health, safety, and general welfare. The project would
cause urban decay and neighborhood deterioration impacts that cannot be adequately
mitigated through conditions of approval.

4. Based on the foregoing findings and the evidence in the record, the City Council hereby
denies the application for Conditional Use Permit Amendment No. UA09-0002 and Site
Development Permit Amendment No. SA09-0003.

PASSED AND ADOPTED this day of June 1st, 2010, by a 4-1 vote

Wal-Mart Agrees to Pay $86 Million for Wage Claims

May 12, 2010
By Karen Gullo, Bloomberg Business Week

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May 12 (Bloomberg) -- Wal-Mart Stores Inc. agreed to pay as much as $86 million to settle a class-action lawsuit claiming it failed to provide vacation and other wages owed to thousands of California employees when they left the company, lawyers for the former workers said in a court filing.

About 232,000 former employees in California will share in the settlement, according to court filings yesterday by attorneys for the workers in the group lawsuit.

“The settlement represents a monumental result for class members,” the lawyers said in the filing.

Former workers accused Wal-Mart of failing to pay them holiday and overtime wages they earned before they left the company, or not paying those earnings within the time specified by state law, according to a 2006 complaint filed in federal court in Oakland, California.

California law requires employers to pay all wages owed to fired workers immediately, and employees who quit must be paid all earnings within 72 hours. Employers that violate the law can be required to pay as much as 30 days of wages to workers.

The former employees accused Wal-Mart of manipulating hourly workers’ time sheets to avoid paying overtime or making them wait days or weeks before paying their vacation wages after they quit.

Wal-Mart, the world’s largest retailer, didn’t concede in the settlement that any wages it owed hadn’t been paid, according to yesterday’s filings

Wal-Mart Compliance

“Wal-Mart has agreed to continue the use of various electronic systems and other measures designed to maintain compliance with its wage-and-hour policies and applicable law,” the company said today in a statement on its website. “The settlement will not impact the company’s results of operations for the first or second quarter of fiscal 2011.”

Greg Rossiter, a spokesman for Bentonville, Arkansas-based Wal-Mart, declined to comment.

The settlement includes $12 million in unpaid vacation wages and $74 million in potential penalties and interest on the unpaid earnings, according to filings by the workers’ lawyers. The exact amount Wal-Mart will pay depends on how many former workers participate in the settlement. Wal-Mart will pay at least $43 million under the agreement, according to the filings.

Wal-Mart, the largest U.S. private employer with 1.4 million workers, agreed in 2008 to pay as much as $640 million to settle 63 federal and state class-action lawsuits claiming workers were cheated out of wages.

Yesterday’s settlement of the overtime and vacation pay case in California isn’t part of the 2008 agreement, said Louis Marlin, an attorney at Marlin & Saltzman in Irvine, California. He declined to comment further.

The case is Smith v. Wal-Mart, 06-02069, U.S. District Court, Northern District of California (Oakland).

--Editors: Michael Hytha, Mary Romano.

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Corporate Barbarians at the Gate: Wal-Mart internships at Detroit Schools

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By Danny Weil
Daily Censored
March 6, 2010

Corporate Barbarians at the Gate: Wal-Mart ‘does Detroit’ as the privatized predators attempt to storm the gates of four Detroit High Schools

The following investigative story was compiled through the help of Donna Stern, spokesperson and organizer for ‘By Any Means Necessary’ (www.bamn.com), many brave Detroit teachers who were willing to speak out, and an 11th grade student at Frederick Douglass Academy for Young Men, in Detroit, Michigan, whom I will refer to in this article as ‘Jamal’, so as not to reveal his identity for fear of reprisal. I cannot thank all of them enough for their courage and willingness to allow me to share this story with you, the reader, and to fight for public education not beholden to the corporate barbarians who sell our kids for cash.

Dumping ‘The Crucible” by Arthur Miller in favor of the crucifixion by business elites

When Jamal, an 11th grade student, arrived at his English class in January of this year, he thought he would be continuing with his reading and analysis of The Crucible, by Arthur Miller.  The Crucible is 11th grade reading for the Frederick Douglass Academy for Young Men, a 6-12 high school in Detroit, Michigan .  Jamal was sadly mistaken.  As he took his seat in class the teacher notified all students that they would be shifting their focus, just for awhile she told them, from the reading and analysis of literature to the construction of a mock ‘resume’ or ‘job application’.  The ‘resume’ or ‘job application’ the students were to produce in their class was to be based on a ‘resume template’ handed out by the English teacher, by which students would then create their own ‘applications’.

Jamal was shocked.  Why would his English class shift from reading high quality works of literature to engaging in mock resume and job application constructions?   Jamal, upon hearing from the teacher about the shift in curriculum, raised his hand and asked the teacher point blank, “What is this all about?”  The English teacher told him, as his class mates sat silent, that the resume was the brainchild of Wal-Mart and that in conjunction with the Frederick Douglass Academy for Young Men, the transnational corporation had thought the experience of constructing and then filling out a job application would be a good academic experience for the young 11th graders to engage in.  Jamal was stumped.  “What kind of resume or job application will it be”, he went on to ask his teacher.  “Oh”, she responded, “it would have questions such as: ‘Do you need a job? What kind of skills do you have, Where have you worked in the past, What is your work experience, What kind of work skills do you possess”, all typical questions that would appear on an application for employment at say, Wal-Mart.

Incredulous, Jamal raised his hand once again and asked, “Is this lesson, this resume thing mandatory”.  The teacher told Jamal that no, it was not mandatory and that he did not have to do it.  It was a ‘voluntary lesson’, he and the class were told, and students were not required to complete the job application/resume.  At this point Jamal, in open voice in front of his 11th grade class told the teacher in no uncertain terms:  “I’m not doing this!”  “Why don’t you want to do it”, the teacher queried as the other students sat silently in their seats.

Jamal told me, when I spoke with him on the phone in late February, that he told the teacher, in front of the 11th grade class that he would not do a resume or job application from Wal-Mart because it was insulting.  He reported to me he told the class and the teacher that The Frederick Douglass Academy had a good reputation, that he and other students wanted to go to college, and that they wished to become business men, doctors, lawyers, professionals and young leaders in their community.  He told the class and the teacher that he wanted to go to Harvard one day, have a career and that to be forced to fill out phony resumes for Wal-Mart was an insult to both his integrity, his right to an education and a pockmark on the school.  The teacher did not reply, but while Jamal sat in silence, she handed out the resume templates to other students who then began to get to work constructing the Wal-Mart job application.

When the class terminated Jamal had a small conversation with the teacher.  He told me that she seemed distressed, frightened and really did not wish to talk about the fact she had been told, evidently by the school administration, to have students engage in the Wal-Mart lesson plan at the expense of any study of The Crucible; she indicated that basically she was asked to suspend her curriculum.  Jamal did say that during the conversation the teacher did state she thought Robert Bobb, the Eli Broad graduate who runs Detroit Schools as the Emergency Financial Manager was “crazy” and he said the teacher seemed embarrassed and confused by the whole episode.

According to Jamal, it seemed evident she was mandated to interrupt her literature lesson by the school administration and that in subsequent days following the event, the teacher had her students read the work of Henry David Thoreau on civil disobedience.  This, Jamal assumed, was to atone for the sin of allowing Wal-Mart to snake its way into the school and/or to educate the young men and really was a silent message of support the teacher was delivering to students, like Jamal, who wished to oppose the full out attack on public schools by the purveyors of privatization.

Jamal later discovered that it was not just his class that was asked to do the mock resume for Wal-Mart, but it was the whole school.  The lesson, he told me, was given through English classes to all 11th grade students, and not just at Frederick Douglass Academy; the lesson had made its way to three other high schools that had been targeted by the retail chain.  Western International High School was targeted, Detroit International Academy (the sister school of Frederick Douglass, an all girls schools), and Westside High School were all in the firing line.  The four high schools had been selected by ‘administrators’ in conjunction with Wal-Mart and other corporate business interests.  But that’s not all: the schools had also been sought out to host “internships” by Wal-Mart; eleven weeks (11) of job readiness/soft skills training that would replace the curriculum, but as an ‘elective’.  All of this was, as we will see, cleverly designed by the skilled manipulators.

This was just the beginning of what would become a public circus and a public relations quandary for the retail chain, Robert Bobb and the obsequious politicians bound to turn learning into training, education into servitude.

Jamal and BAMN fight back

It was at this point that Jamal told me that he had recently contacted ‘By Any Means Necessary’ (www.bamn.com) a national civil rights group that fights for integration, an end to racism, and for public schools and against privatization.  Jamal was so upset that Wal-Mart would be ushered into his school like a revolting skin eruption that he sought support to fight the giant retailer and the privatization of the curriculum.  He wanted to organize parents, students and teachers to squelch the corporate swelling and secret operating plan of Robert Bobb and his corporate paymasters.  For a more though expose on Bobb, his privatization history, his cultivation as an Eli Broad minion and his cronyism and transfer of public funds to private corporations please see (Weil, D. Detroit Teachers fight obsequious politicians http://dailycensored.com/2010/02/14/detroit-teachers-fight-back/).

On February 10, 2010 Jamal and one other Frederick Douglass student drafted a response to Wal-Mart’s plans to host internships at the four high schools.  The statement against the insidious plan can be found at (http://dailycensored.com/2010/02/15/wal-mart-set-to-skim-off-free-labor-in-detroit-high-schools-students-fight-the-road-to-serfdom/).  Here, Jamal and his cohort wrote:

The Frederick Douglass Affirmation proudly states “We are determined to get the root of success, not just the fruit of success.” When we decided to come to this school, we were deciding to make our dreams and aspirations a reality. We came here to learn and grow. We wanted our lives to have meaning, and we were going to be somebody. Frederick Douglass Academy was built to create leaders. Its purpose is to give students the opportunity to get a real education and get into schools like U of M. Frederick Douglass Academy is a beacon of hope for many Detroiters. We cannot let our hopes be trampled. We deserve MUCH more than Walmart (ibid).

Jamal indicated to me that most of the students in his school created and filled out the resume/job application lessons in their classes despite the fact he had hoped the flyer would dissuade them (he did state that few ever turned them in).  He also told me they were to turn the finished ‘product’ into their English teachers when the lesson was done, who then were evidently told to quarter back the stack of student work to the administration.  What would the administration do with it?  Why would they want it?  Whose interest would it serve?

Wal-Mart, the theatre of the insane, purveyors of the inane: “THE KICKOFF

After the Wal-Mart resume fiasco and after Jamal’s teacher had introduced Henry David Thoreau into her class, new flyers, this time drafted by the Neighborhood Legal Services Michigan (NLSM) were distributed to the students at the four high schools targeted by the giant retailer, the flyers formerly announced what Jamal had correctly assumed; that on February 11, 2010 there would be an assembly at the four high schools chosen by Wal-Mart for internships to promote the program.  The flyer, of which I have a copy, was titled: DPS HIGH SCHOOL ASSEMBLIES TO KICKOFF!  I’M IN GETTING READY FOR WORK! JOB READINESS TRAINING PROGRAM AT FOUR (4) DETROIT PUBLIC HIGH SCHOOLS.  The flyer went on to note what Jamal and his fellow students had suspected:

“Neighborhood Legal Services Michigan (NLSM), Walmart stores, Detroit Public Schools (DPS) and community/employer partners will KICKOFF the “I’m in! Getting ready for work! Job Readingess (sic)/Soft skills training program at DPS, aimed at delivering 11 weeks of job readiness/soft skills training at four (4) Detroit Public High Schools (copy of flyer from Wal-Mart” (ibid).

The “kick-offs” as they were known, according to the flyer would serve to:

“inform DPS students, staff and parents of the initiative which Wal-Mart stated would prepare DPS students for the 21st Century Workforce as students balance school and work in the pursuit of higher education” (ibid).

The flyer went on to try to excite students, faculty and staff by promoting the fiction that:

“The KICKOFFS will be fun, exciting, engaging and inclusive in sharing program goals, objectives and expectations.  Information about the program and sign-up process will be provided.  The KICKOFFS will include the Debut of a positive version of a “I’m in!” song written and performed by hip hop sensation Julia’n (Motor City Hits) and other DPS students” (ibid).

The flyer also mentioned that a host of ‘political and corporate dignitaries’ and ‘luminaries’ would be present at each road company ‘KICKOFF’ and the guests included such personages as judges, church representatives, city council members, Michigan State University members, Robert Bobb, the Emergency Financial Manager for DPS, Mayor of Detroit Dave Bing, Congressmen, including John Conyers, Senator Martha Scott, community leaders, employers, clergy, dancers, music, parents, students and yes, Governor Jennifer Granholm herself – the political charlatan that appointed Robert Bobb.  Truly a Kabuki show.

According to the Wal-Mart flyer:

“The job readiness/soft skills training program is designed to get employable youth ready to work, teach job readiness/retention skills, help young people explore the various career opportunities that are available to them and assist them in planning for the  (sic) futures accordingly.  DPS students will receive eleven (11) weeks of job readiness/soft skills training, e.g.: How to Balance School and Work, How to Complete Employment Applications, Resumes, Job Searching Skills, Interviewing Skills, How do Dress of Success, Conflict Resolution, Problem Solving, Budgeting, Four (4) Keys to Success, Positive Attitudes in the Workplace” (ibid).  I guess writing is not big on the list, as the flyers were poorly worded and miserably spelled.

After completion of the 11 week internships students were told those who participated would be placed in a work-school based program (low-paying, food stamp eligible jobs) where they would then work at “job-sites” that were designed to require the skills and knowledge students learned during the program.  What they were not told is that they would do this for no pay, that they would not be compensated for their ‘jobs’.  They would learn this later, as we shall see.

The flyer went on to rave about achieving ones’ dreams, growing up as a student, getting ready for work, inspiring students to excellence, and how, with the new Wal-Mart internships, “great things are happening in Detroit Public Schools”.  Sure, like hundreds of school closures, laid off teachers, the decimation of arts and music programs, standardized testing as the great sorting machine of students and the wholesale putrid privatization plans the flyer never mentioned.

John W. Cromer, known in Orwellian language as the ‘stability officer for the Stimulus Homelessness Prevention and Rapid Re-Housing Program at NLSM’, the main organizer for the road show stated:

“We are proud to say, “I’m in  at DPS”.  We lose so many high school students to the workplace before graduation.  We have to prepare them for work, but first they need to now how to balance school and work!  This also gives youth a sense of direction to keep them out of trouble in the first place.  We can not keep stuffing “our adult issues into children shoes and expect for our children to be able to walk straight!  Preparing people for work has to be the central policy behind any attempt to improve the quality of life…. Thanks to companies like Wal-Mart, Marriot, Autozone, NLSM and others who hear the call and step up to the plate for our children” (ibid).  More on Cromer later.

The KICKOFFS were to be held in the auditorium for each of the four schools selected;  all orchestrated for February 11, 2010 — a fantasy of fanfare.  These corporate and political predators, students and their parents were told, could help our children escape from the shark-filled waters of unemployment, homelessness, poverty, fear and insecurity.  Like Gilded Titans of a century ago, the ruling elite promised to stand as plutocratic monarchs, inheritors of the new age of disposability – eager to manage the public’s affairs while actually undermining the public interest.

Kicking out the “KICKOFF”

When Jamal entered the auditorium at Frederick Douglass Academy, he took a seat along with 259 students at the school and awaited the KICKOFF.  It was all becoming clear why students at the four high schools had been given the job of creating a job application instead of reading “The Crucible”.  Jamal began to see how under a system of traumatic dislocation, psychic delusion and perpetual disillusionment he and his fellow students sat at the feet of the capitalist masters.

Microphones had been put on stage, banners strung up and speakers from the assembled community of clergy, politicians, businesses and of course Wal-Mart lined up to speak to the positive aspects of the school-to-work program they were creating. Teachers, staff and of course the students had no choice but to be there; they were forced to herd into the killing floor of auditorium for the KICKOFF and as the speakers took the podium, Jamal and his friend, the other fellow student at Frederick Douglass Academy who had worked with Jamal to prepare the student statement against Wal-Mart, spoke out loud in front of many students about the degradation of learning and the low expectations for students at Frederick Douglass Academy, imposed by the autocratic authors of the KICKOFF program, now circumstantially and thus evidentially tied to the resume/job application they had been asked to do in their English class.  According to Jamal, most students seemed to accept the KICKOFF, or otherwise remained silent at the assembly as it began.  Besides, they were not allowed to speak.

Shortly after the auctioneers had given their pep talks to students, their rambling messages of work, education as training and the importance, if not the beauty of the free-market, Donna Stern from ‘By Any Means Necessary’ (BAMN) took the stage and  began to address the assembled.  She had been invited to speak at the assembly by John Cromer, but not as a BAMN member, but as a parent who had a child in the Detroit School system.  She had been invited by Cromer, as she told me, probably due to the fact she had been an ACT tutor prep for students (ACT is one of the standardized tests students must take for college entry).  It seems Cromer and his business community supporters and political hacks did not even know of Donna’s association with BAMN, nor were they aware of Jamal’s prior contact with the organization.

According to Donna Stern, she made three points when she took the microphone to address close to 300 student, teachers, staff, business elites, politicians, clergy and community members at the Frederick Douglass Academy for Young Males:

“1. The young men of Frederick Douglass should be receiving college prep courses, not a Wal-Mart prep education.

2. That it is and was an outrage that the same week politicians and corporations are celebrating Wal-Mart coming into the schools, they sent out pink slips to many of the fine arts teachers, including directors of high quality, long standing programs.

3. That Frederick Douglass, himself, would be turning over in his grave if he were there to see what was being done in his name” (e-mail, February 26th, 2010 Donna Stern).

The speech by Stern was not what Cromer and his cronies had expected and they scurried to whisk Stern off the stage before she could do more harm to their insidious plan to turn the high schools into a plantation for business interests.  But the real shock to the KICKOFF originators came when teachers, students and community members stood, clapped and cheered as Donna hurriedly made her way off the stage.  Her statements resonated with what many if not most of the teachers and students felt — that students were going to be put on a school-to-work track, literally turning them over to private corporate cannibals like Wal-Mart.  At the time Stern spoke it was unclear whether Wal-Mart was going to pay students the minimum wage of $7.25 or whether they would be able to get away paying the $4.25 per hour the Department of Labor allows for the first 90 days of employment of a minor. Of course paying the latter wage could be perceived as a money saver for Wal-Mart, already viewed by many as the epitome of capitalism-gone-amuck and dead-end culdasac to underpaid employment that qualifies one for food stamps.

The issue was clarified by an e-mail from John Cromer to a teacher at DPS asking if students would be paid for the internship. The answer was a resounding “NO”:

“No.  Students are not paid for the 11 week job readiness training” (e-mail, February 27th, 2010 from John Cromer to DPS teacher).

The whole vicious child-exploitation scheme was exposed in its raw and sweltering form for what it really was: a set-up hatched by the elite and their obsequious hirelings – from the resume lesson plan to the KICKOFF itself.  The whole conspiracy was planned.  It was and is little more than exploitation condoned and heralded by the coin operated politicians who blessed the event and shepherded it into reality, from Governor Jennifer Granholm to to her servant in chief, Robert Bobb.  Their DNA is all over the crime scene.

Mayor of Detroit Dave Bing, Robert Bobb and Governor of the state of Michigan, Granholm never did attend the KICKOFF, as they promised, at the assembly on February 11th, deciding instead to send representatives.  Lucky for them.  A full-court press interview with ‘representatives’ and participants had been scheduled after the KICKOFF with the corporate media, all part of a public relations gimmick, but according to Jamal the press interviews never occurred. Stern’s captivating condemnation of the program and its participants on behalf of BAMN, the students and teachers stole the show and left the job fair proponents speechless and utterly incoherent at the carnival they had organized. The corporate media cowered, now wanting to report the news of resistance as did the politicians and business interests — all in face of open defiance by teachers, students, staff and BAMN to the jobs fair program.  This was certainly something they did not expect nor relish.

Jamal began to speak with students immediately after Stern’s speech, advising them they should not turn in their resumes to their teachers or the school administration.  He also mingled with students and staff and told me the teachers seemed frightened, as did students, of being singled out and perhaps retaliated against by administrators or their ‘spies’.  One police officer, a woman who officially attended the KICKOFF in uniform on behalf of the Detroit Police Department, suggested openly and aloud that Donna Stern should be arrested.  She complained that Stern was rude, her speech inappropriate, and told Jamal, “She can’t do that she should be arrested!”  Jamal confronted the officer directly and stated that it was Stern’s first amendment right to speak at the assembly but the officer would not back down, repeating that BAMN”s presence was inappropriate and that there should be police retaliation for her presence and her remarks.  No arrest was made, however, this time. As we will see, this was not the first time the heavy presence of Detroit Police was seen at educational events.

When I spoke to Donna Stern she told me that after her short comments condemning the program, the microphone was taken from her by the KICKOFF backers and that she immediately left the KICKOFF stage for she intuitively knew that her remarks would upset the KICKOFF founders and could possibly put her in harms way from the police who have been continuously used by Robert Bobb and Detroit Federation of Teacher’s union boss, Keith Johnson to frighten and intimidate teachers at public forums (Weil, D. Detroit Teachers fight obsequious politicians, union bosses and privatizations planshttp://dailycensored.com/2010/02/14/detroit-teachers-fight-back/).

This KICKOFF was to be no different, as police mingled with what was now an excited and fired up crowd of both teachers and students.  Although Jamal stated that Wal-Mart brochures carpet bombed the KICKOFF along with other business flyers, the assembly had been virtually destroyed by the activism and defiance displayed by Donna Stern and echoed in the vocal support for her comments by teachers, staff, community members and students.

The KICKOFF’s were not the success that Wal-Mart and the city administrators and politicians had hoped for.  In fact, at this date there are no internships actually scheduled at the four high schools.  Everything has been placed on hold.  Jamal informed me in a phone interview that the strategy of the students was now to organize students and teachers, to create flyers denouncing the Wal-Mart business plan, to attend more BAMN meetings, grow the opposition to the Wal-Mart takeover of 11 weeks of instructional time and to organize petitions and media events denouncing the program and thus prevent Wal-Mart’s entry into Detroit Public Schools.

FOX and Friends gets involved

Shortly after the failed KICKOFF, Donna Stern told me she appeared on the morning show, FOX and Friends with none other than John Cromer.  The fiasco had caused blowback and media attention and Cromer of course was there to defend the program and its adherents.  Stern told me that Cromer spoke about “how students needed to stop wearing their pants low, like in prison, and begin to make themselves presentable for employment purposes”.  Stern tried to point out to Cromer that the Frederick Douglass Academy had a dress code and that the male students were required to wear shirts and ties, that no students resembled the stereotype painted by Cromer.  To no avail, Cromer had already stereotyped Detroit students and their families as vestiges of gangs and prisons.  All of this is part of the new war on youth.

Why did Robert Bobb, John Cromer and his elite business cronies target four successful Detroit High Schools for a Wal-Mart internship?

The answer to the above question is still unknown, a mystery.  The four high schools selected by the curriculum assassins were all considered well performing high schools.  Frederick Douglass, according to Jamal, had been a “bad boy’s school” up to a few years ago but in 2008, he told me, 75% of the students who graduated went on to college and in 2009 the percentage of graduates who went on to college was 100%.  Of course this could include phony for-profit colleges like the University of Phoenix or other ‘for-profit’ ‘drive-by universities, but still, these are hardly failing schools.  In fact, some of the students at these schools are doing an exceptional job, and it is not due to the help of Wal-Mart or other corporate predators that have nothing but disdain and low-expectations for minority students.  The support comes from the public sector, not the money changers.

Central Michigan University has in place what is called an “Upward Bound,” program.  In 2009 the Upward Bound program celebrated 10 years of service as a college preparation program that provides tutoring, academic advising, community service, early intervention methods, and many other socially enlightened programs. There are more than 800 UB programs throughout the United States that assist low-income, first- generation college students and disabled individuals from middle school through post-baccalaureate programs.  CMU’s program is stationed both at The Detroit International Academy, in Detroit, and CMU’s Campus Office in Warriner Hall. The program focuses its work on high school students at the Detroit International Academy for Young Women and the Frederick Douglass Academy for Young Men, two of the four schools put in the cross-hairs by Wal-Mart, Robert Bobb and John Cromer, and the program has been a success.

In November of 2009 Detroit freshman Alexis Bailey who was only 18, yet garners the respect of peers and elders as a first-generation college student, proudly proclaimed:

“I feel like I am an inspiration to my family and friends” (Keaton, Sherry Upward Bound celebrates 10th year of helping students academically, personally, November 23, 2009.  http://www.cm-life.com/2009/11/23/upward-bound-celebrates-10th-year-of-helping-students-academically-personally/)

Before entering the program, Bailey had a 3.6 grade point average but had some troubles in school.

“Before the program I was bad. I was always smart, the program just gave me that extra push to do what I needed to do” (ibid).

After the program she had 4.0. She said she eventually wants to become a judge and hopes to make the program proud.  In an interview she did with CentralMichiganLife, an online news paper Bailey said:

“I want to let them know they succeeded in helping me out (ibid).

Ask Detroit senior Fatima Sylvertooth and she will tell you what she knows about having motivation and the importance of education.

“When I was in the program it shed hope to my future helping me to understand that there is more to life than my neighborhood. I’ve learned to take responsibility in the things you value; and my education was one of them.  The only limit we have in life is the one we set for ourselves, others can believe in us, but we must also believe in ourselves” (ibid).

While growing up, Sylvertooth acknowledged that she had challenges of her own and was sometimes discouraged.  She had been given the message early on that her life was not equal to those more affluent and white.  She had been indoctrinated with low-expectations and pounded with messages she would not succeed.

“I thought I was supposed to fail, and I didn’t understand why (UB) cared so much, the only person in my family who was my biggest encouragement was my mom” (ibid).

Getting students to believe that they are supposed to fail, that they shouldn’t be on a college track, that music and arts is not important, that literature is untenable for them is the goal of Robert Bobb, John Cromer, Wal-Mart and the rest of the privatizers.  Getting poor, minority students on an early ‘vocational track’ for low-paying service jobs seems to be the priority for this morbid band of bandits and thieves.  Attacking public education with work-fair projects and setting low-expectations for students while slashing and burning authentic curriculum is what Robert Bobb and his cohorts are taught at the Eli Broad Academy as you can see in the articles I reference above. After all, why teach the science and the arts to low-achieving students who will just end up working at Wal-Mart anyway, like Cromer insinuated?   This is better left for the elite.

Not according to Cromer.  Over a luncheon shortly before the event, John Cromer, of NLSM and Rita, Cindy and Jim, of Wal-Mart Stores talked about the need of preparing our youth for the workforce and wondered how we could get to the officials of Detroit Public School (DPS).

“We met the Emergency Financial Manager, Mr. Robert Bobb, of DPS.  He approved it has a pilot program in public 4 high schools.  With the success of this program we hope to be in all of the Detroit Public high schools this summer and Fall 2010”.

When Cromer was asked, “How do you respond to criticism of the program training kids to be ’subservient workers?”, Cromer replied:

“This is completely untrue.  We have to start from somewhere.  We are teaching transferable skills that can be applied in every line of work including the Four Keys to Success, Problem Solving Skills and Conflict Resolution.  Most introductions into the workforce for our youth start at places like retail stores, fast-food restaurants, etc.  This program will teach them how to build a resume, complete a job application and how to dress for success- “get their pants off the ground” for job searching activities (e-mail from Donna Stern re: Cromer comments).

When asked what the student response has been in regards to the Wal-Mart internships, Cromer crooned:

“Youth used to have paper routes, and have other means to earn money: shovel snow, cut grass, etc. Our youth today need money.  Of course they are excited.  They are very welcomed of the idea. We need to find a way to connect their excitement with employment, and set standards for summer employment that dictates some kind of measurement in academic achievement, attendance and conduct while in school- that leads to a summer or part time job.  Our youth are just ready for someone to come along any give them a sense of direction that will keep them out of trouble in the first place” (ibid).

And as to the role of private business entering Detroit Public High Schools, Cromer had this to say:

“Government can not do it all.  Our youth need to be motivated to achieve.  We used to have programs in Detroit that helped to develop youth leadership skills.  We are losing so many youth to the workforce or to the juvenile justice system.  Thanks to the participating companies we can get them ready to complete job applications, resumes and even teach them how to dress how to dress for job searching activities.  Our youth are going to these companies anyway for work.  It is our responsibility as “this Village” to get them ready.  We are connecting to the employers.  And if we get employers and teachers to speak the same language, we can build a better and new America starting in cities that are already struggling like Detroit MI” (ibid).

Finally, when pressed as to how he should respond to criticism that the program brings private corporations into public schools and then ultimately influences curriculum, Cromer turned his privatization cards face up:

“That would be a good thing.  It is important to teach transferable skills.  The purpose is to prepare students for employment.  Why wouldn’t employers what to have some involvement?  Employers translate into business which is designed by the market, and then the economy.  These are companies that are close enough to the market to know what it is going to take to compete in the global market and boost the American economy.  So, we need to get our youth prepared to compete” (ibid).

John Cromer and the privatizers have shown they are simply another example of Milton Friedman’s economic wet dream – the commodification and privatization of education.

For now, the Wal-Mart internship program has been put on hold, much to the chagrin of Wal-Mart and the other ‘business partners’.  You can thank Jamal, Donna Stern and Detroit teachers and the Detroit community for this.

As Donna Stern and I were finishing up a discussion by phone a few days ago, she and I mused over what is clearly emerging as the billionaire philanthropists’, corporate business elite and giant transnational corporations’ plan for Jamal and his class mates at Frederick Douglass and the other three Detroit High schools – turning public schools into vocational schools, stripping out arts, literature, music in favor of low-paying service jobs where students learn early that they are not supposed to go to college, that their lives have been predetermined by the Gods of capitalism.  What they need to learn, in the eyes of the privatizers, is not to think critically about society and their place in it but to ask, “Do you want fries with that, Sir?”  Like peasants on the lord’s manor they are to be treated like cattle readying for the long herd.

This is the economy these capitalist behemoths are manufacturing for the 21st century, Delirium USA, and they make no bones about it.  Let us hope that Jamal, Donna, BAMN and Detroit teachers and the Detroit community are successful in letting the politicians and the corporate elites know that this is never going to be acceptable, that their children and students will not be exposed to a message that tells them they are supposed to fail and dead end service jobs at Wal-Mart is all they can accomplish in life.  The message must be the opposite of that promoted by corporate America: that providing a decent, equitable public education to all students is what is needed – by any means necessary.

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Walmex announces deal to buy Walmart Centroamerica

By Tomas Sarmiento
and Cyntia Barrera Diaz,
December 7th, 2009                          
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Mexico's top retailer Wal-Mart de Mexico, or Walmex, said on Sunday it had signed a deal to buy Walmart Centroamerica, the local division of Wal-Mart Stores, Inc.

Walmex said in a statement it would pay 1.4 billion pesos ($110 million) in cash and would issue around 593 million new shares to compensate minority investors in the Central America retail chain who agreed to be paid in shares.

Walmart Centroamerica is the main supermarket chain in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica, with 519 stores.

Wal-Mart Stores, Inc owns 51 percent of Walmart Centroamerica, with the remainder in the hands of local investors and the deal gives it control in Central America as the U.S. company also has a majority share of Walmex.

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Wal-Mart Warms Up to Facebook

ABC News
December 6th, 2009                       
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A company executive once said, Wal-Mart is the only retailer in the world without a traffic problem. Thats not necessarily true. Sure, the retailer has no trouble attracting droves of customers to its stores these days. When it comes to Facebook, however, Wal-Mart (WMT) has struggled to gain traction relative to its rivals. As of October, fewer than 18,000 people had declared themselves fans of Wal-Marts page. Around the same time, competitor Target (TGT) had nearly half a million fans. ( Target is included in The Big Money Facebook 50 , our ranking of the brands doing the best job on Facebook.) This type of discrepancy might not have seemed like a big deal two years ago, when Wal-Mart was first jumping into the budding social network at a time when a handful of other big brands were just testing the waters. But since Facebooks audience recently hit 350 million and retail rivals have proven their popularity on the site, Wal-Mart has been under pressure to do a better job.

Wal-Mart has enjoyed a banner year, as customers have flocked to the store for its budget-friendly reputation. The retailer, with some $400 billion in revenues last year, seems to have no trouble connecting with the American consumer when it comes to everyday shopping decisions. But ringing up sales at the cash register requires a different strategy than winning fans on Facebook. The social network is a space where a company doesnt need to be successful as much as it needs to be  liked. Stock performance means little, but brand equity means everything. And thats something that Wal-Mart has finally started to figure out.

Earlier this fall, Wal-Marts fan page was sparse. The retailer had not posted anything on the page. A small number of people had left a smattering of comments on Wal-Marts wall, the pages public-message board. While some offered compliments, there were many disparaging posts as well. A few people wrote that they were just plain confused about why Wal-Mart even had the account on Facebook. What's this page for? one fan asked.

Wal-Mart was refraining from active participation on Facebook for a reason. In the past, two big campaigns it launched on the social network ended up backfiring. In August of 2007, Wal-Mart created a sponsored Facebook group, called Roommate Style Match, promoting its dorm-room supplies for college students. The campaign was lambasted for Wal-Marts attempt to tightly control the discussions on the page (which was eventually flooded with anti-Wal-Mart comments, anyway).

Not long after, Wal-Mart paid to sponsor a free  gift on Facebook for a day. That day, 300,000 Facebook users could send a friend the image of a cellophane wrapped, ghost-shaped cookie emblazoned with the Wal-Mart logo. A click on the cookie would redirect users to Wal-Marts Halloween Web site. Critics bashed the campaign as purely self-serving, some calling it a  terrible social media marketing tactic. Adversaries even created a group on Facebook urging the site to stop running Wal-Mart ads.

For a while, Wal-Mart let its opponentswho happen to be vocal and well-organized onlinescare it away from Facebook. But it turned out that pulling out of the network altogether wasnt a good idea, either. It made Wal-Mart seem not only out of touch, but uninterested in the thousands of people who had expressed interest in its page, according to Jeremiah Owyang, a partner at the digital consulting firm the Altimeter Group. He says, Its like having fans outside of their stores in real life but not talking to them. Sam Walton, Wal-Marts founder, who insisted that all of the Wal-Mart retail stores employ friendly greeters at their doors, probably would not have been pleased.

As Wal-Marts company overview on its Facebook page now says, Sam was a firm believer in listening to what his customers had to say. That tradition continues today. But now, it doesnt have to end when you leave the store. Through Facebook, were able to talk to you. Find out whats on your mind and let you know what were up to. Perhaps it was this corporate philosophy that pushed Wal-Mart to try again on Facebook. Or maybe its because Wal-Mart is making a big push to promote its online sales for the holiday season. Regardless of its motive, over the past two months, the retailer has been increasingly active, but this time it appears to have a strategy that just might work.

Wal-Marts Facebook page administrator has been regularly posting updates and responding to wall posts. It recently launched a new charity-related applicationsomething that worked wonders for Targets Facebook pageand another app to promote holiday gifts. Wal-Mart is also encouraging employee interaction on the page. With 1.4 million employees in the United States alone, Wal-Mart has an army of people who are already intimately connected with the brand and some who presumably like their jobs. Most of the comments on the page now are from Wal-Mart staff members. For example, one fan recently posted i work at store 1832 in Palm Springs. Glad to be aboard. Another fan wrote, I love my walmart family !!

Wal-Mart has apparently quit worrying about the negative feedback its bound to get online. Instead, its trusting that its fan base will grow larger and louder than its detractors. The page now boasts slightly more than 200,000 fans. It has grown tenfold in just two months. And according to recent reports, Wal-Mart is in the process of launching what the executive vice president and chief marketing officer, Stephen Quinn, calls a very big, significant initiative on Facebook. It seems that the worlds biggest retailer is preparing to win over the Facebook community once and for all. Better late than never.

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Jo-Ann Stores: A Retail Category Walmart's Not Killing

By Ian Ritter,
December 5th, 2009                      
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There aren’t many retailers out there operating a business in which Walmart (WMT) doesn’t control a huge chunk of market share, if not lead an entire category. The largest retailer in the world is the top seller of groceries in the country, and near or at the top in electronics, toys and clothing.

Walmart probably sells a lot of craft and fabric materials too, but if so, its business isn’t hurting Jo-Ann Stores (JAS). The retailer turned in a very strong quarter, with net income hitting $24.1 million, more than doubling the $10.2 million that came from the same year-ago period. Sales at stores open at least a year rose 4.3 percent, a sizable increase in this economy.

Darrell Webb, Jo-Ann’s chairman, president and chief executive officer, said that Walmart might actually be helping his 759-store company build market share, in addition to the fact that smaller retailers in the sector aren’t performing very well. “Walmart continues to remove fabric departments as they remodel stores, which is providing further opportunity to build share,” he said during Jo-Ann’s third-quarter conference call, as quoted by Home Textiles Today.

In an interview with Reuters last year, CFO James Kerr said Jo-Ann’s advantage its ability to serve as a superstore for customers seeking fabric and craft materials. “We differentiate by having a more complete selling assortment, which we think gives us a competitive advantage,” he said.

Management is trying to further capitalize on that advantage by increasing its number of large-format stores, which offer a wider variety of items and framing departments, while closing smaller units. So far this year, Jo-Ann opened 15 of the bigger locations and closed 23 smaller stores.

Jo-Ann might perserver in the face of Walmart, but it is not the only major player in the craft sector. Rival Michaels Stores (MIK) is larger, with just over 1,000 units, and though its most recent financial numbers aren’t as impressive as Jo-Ann’s, they’re improving and solid. Michaels recorded a third-quarter net income of $15 million, up from a $20-million loss during the same year-ago period, and same-store sales rose 1.3 percent.

Despite that competition, retail analysts like Holy Guthrie of Boenning & Scattergood like what they see from Jo-Ann. In a report on its third quarter reiterating an outperform rating on the retailer, Guthrie wrote that she expects Jo-Ann to increase market share and said “sales growth is also expected to continue into the foreseeable future.”

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Wal-Mart will pay $40m to workers

By Dave Copeland,
Boston Globe
December 3rd, 2009                              
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Wal-Mart Stores Inc., the world’s largest retailer, has agreed to pay $40 million to as many as 87,500 current and former employees in Massachusetts, the largest wage-and-hour class-action settlement in the state’s history.

The class-action lawsuit, filed in 2001, accused the retailer of denying workers rest and meal breaks, refusing to pay overtime, and manipulating time cards to lower employees’ pay. Under terms of the agreement, which was filed in Middlesex Superior Court yesterday by the employees’ attorneys, any person who worked for Wal-Mart between August 1995 and the settlement date will receive a payment of between $400 and $2,500, depending on the number of years worked, with the average worker receiving a check for $734.

“The magnitude is large - it’s bigger than most settlements paid in wage-and-hour cases,’’ said Justin M. Swartz of New York-based law firm Outten & Golden LLP, who has handled similar cases, including a pending case against Wal-Mart. “But you would expect it to be bigger since Wal-Mart is the biggest retailer.’’

Under the terms of the settlement, neither side is allowed to comment. But in an affidavit filed with the settlement, the lead counsel for the employees, Philip Gordon of Boston’s Gordon Law Group, said the accord “dwarfs settlements of similar class actions against Wal-Mart across the country.’’

“For many employers, this settlement will serve as a reminder to take the payment of earned wages and benefits seriously. For many other employers, it will provide comfort that all Massachusetts businesses must operate on a level playing field,’’ Gordon wrote in the affidavit. “But most importantly, for employees of Wal-Mart, it finally pays them their earned wages and it puts in place systems and processes to ensure that abuses like those alleged never happen again.’’

The Massachusetts case is similar to many others that have been brought against the retail behemoth by employees across the country, most alleging that the Bentonville, Ark.-based company violated laws by requiring employees to work through breaks, to work beyond their regular shifts, and similar practices. Wal-Mart has denied the allegations, but in December, the merchant agreed to pay up to $640 million to settle 63 federal and state class-action wage-and-hour lawsuits.

The Massachusetts case, which was not part of that settlement, was initially filed eight years ago on behalf of 67,000 people who worked for Wal-Mart in Massachusetts between 1995 and 2005. The two plaintiffs, Elaine Polion and Crystal Salvas, left Wal-Mart years ago. The case has been moving back and forth for years, first being certified as a class action, being almost thrown out as a trial date approached in 2006, and then being revived on appeal and sent back to trial as a class action by the state Supreme Judicial Court two years ago.

This isn’t the first wage case settlement for Wal-Mart in Massachusetts. In September, the retailer settled an investigation of violations of state meal-break policies, agreeing to pay $3 million. The state attorney general investigated after workers reported they were required to work though meal breaks, take breaks after having worked more than six hours, or to cut such breaks short, according to the state.

After some preliminary skirmishes over the terms of the latest Massachusetts settlement, the lawsuit was set to go to court this week, but lawyers for the company and employees alerted the court they would be filing settlement papers instead. In the settlement affidavit, Gordon said his firm had begun tracking down as many former Wal-Mart employees as possible.

A phone number could not be located for Polion, and a phone listing for Salvas was disconnected. Workers approached yesterday by The Boston Globe at a Wal-Mart parking lot in Raynham declined to comment on the settlement.

Sean Blais, who worked at a Wal-Mart in Weymouth for a year before he was fired for texting at work in July, said he thought the accord “seems reasonable.’’ Blais, 19, said while he did not notice any discrepancies in his pay, he routinely had trouble scheduling breaks during his shift.

“You got a 15-minute, unpaid break, but you usually had to fight to get it,’’ he said.

David Reis, chairman of law firm Howard Rice’s labor and employment practice in San Francisco, said Wal-Mart has probably already addressed the alleged practices in the suit. “Given that this suit was filed more than eight years ago, I would expect that any alleged suspect pay practices have been remedied by Wal-Mart long ago and that this settlement is simply a calculated business decision that it’s cheaper and easier for the company to resolve the case and move forward than to continue paying its lawyers to fight it,’’ said Reis.

Prior to the latest Wal-Mart settlement, the biggest wage-and-hour case payout in Massachusetts was $14.5 million last year by Canyon Ranch. In that lawsuit, the owners of the Lenox spa were accused of not passing along gratuities to workers. The settlement affected 600 workers.

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Wal-Mart, others, claim AG's lawsuit is a class action

Legal Newsline
December 3rd, 2009                           
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West Virginia Attorney General Darrell McGraw and a group of prescription drug retailers are debating how the federal law regarding class action lawsuits pertains to actions brought by state attorneys general.

As the two sides argue about where McGraw's lawsuit should be heard, one of the sticking points has become whether the suit is a class action. CVS, Walgreen, Target, Kmart, Wal-Mart and Kroger all claim McGraw has filed a class action that should be handled in federal court.

McGraw, through private attorneys he hired to represent the State, alleges the companies have been filling prescriptions with generic drugs and not passing savings along to consumers.

"The Attorney General brings enforcement actions such as this one not as class actions on behalf of a class of citizens (as in a class action), but under authority conveyed by state law. No court has held otherwise," the firms representing West Virginia wrote Monday.

"Nonetheless, defendants claim that this case - which was not brought as a class action, requires no class certification, and lacks the essential qualities of a class action - somehow fits the definition of 'class action' in the Class Action Fairness Act."

"That term is defined narrowly in CAFA, and recent Fourth Circuit precedent requires it be construed strictly in favor of remand. Any reasonable construction of the term, much less a strict one, demonstrates this case is not a 'class action' under CAFA, a conclusion bolstered by abundant evidence of congressional intent to exclude state attorney general enforcement actions like this one."

McGraw's attorneys are attempting to have the case remanded to Boone County. The companies disagree, however.

"(B)y bringing this suit to recover alleged damages for and on behalf of a defined group of West Virginia citizens, the Attorney General plainly has brought a 'class action' for the purpose of CAFA, however he may try to characterize it," they wrote Nov. 10.

The companies note a Senate Judiciary Committee wrote that the definition of "class action" should "be interpreted liberally."

"Its application should not be confined solely to lawsuits that are labeled 'class actions' by the named plaintiff or the state rulemaking authority," the committee wrote.

The two sides dispute a ruling in an antitrust case brought by Louisiana Attorney General Buddy Caldwell against Allstate Insurance.

The U.S. Court of Appeals for the 5th Circuit ruled the case should be heard in federal court because it involved allegations of violations that impacted citizens.

"In Caldwell, because the state attorney general had sued to recover damages for certain of the state's citizens (and under a statutory provision that each citizen could have used himself), the case was a removable 'class action' under CAFA," the companies wrote.

McGraw's attorneys say the court found the action to be a "mass action," while the companies say there is no difference between the two.

"Defendants have made no assertion this case is a mass action, presumably because they must acknowledge this case does not fit the definition of a mass action, and because the thought of individually joining all persons and entities who purchased generic prescription drugs in West Virginia, frankly, is absurd," McGraw's attorneys wrote.

They added in a footnote that there is a difference between class and mass actions. A mass action, they say, is a civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly.

Bailey & Glasser is working with DiTrapano Barrett & DiPiero on McGraw's case. The two firms have contributed more than $60,000 to McGraw's campaign fund over the years, including $11,800 for his 2008 race against Republican Dan Greear, who decided Thursday to run for Kanawha County Circuit Court judge.

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Is Wal-Mart recovery-proof?

By Joe Light,
Money Magazine
December 3rd, 2009                             
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Throughout the recession, wealthier households "traded down" and started to shop at Wal-Mart (WMT, Fortune 500) for the first time. As a result, the world's largest retailer saw its market share in general merchandise rise as the economy went south.

Wal-Mart's stock jumped 20% in 2008, but this year its shares are down about 8%, as investors anticipate a recovery that could get shoppers -- especially the company's new upscale clientele -- thinking about more than everyday low prices.

Safe from scrooge

Holiday sales, which make up a third of the revenue at many retailers, are expected to drop 3.2% from last year's anemic levels, according to the National Retail Federation.

But while a lackluster shopping season could send pricier stores reeling, Wal-Mart enjoys a buffer: grocery sales -- staples that don't fluctuate much with the seasons. Food accounts for about half the discounter's overall sales.

Moreover, the consumer's quest for cheap gifts might actually boost Wal-Mart's wallet share. The company recently launched one of its earliest holiday campaigns ever -- before Halloween, much less Thanksgiving -- slashing prices on more than 100 toys to $10 apiece for Christmas.

Broadening its appeal

Shoppers tend to stay home when the economy is bad, but Wal-Mart officials said their foot traffic rose in this recession. About 17% of that new business came from new customers, a majority of whom earn more and spend 40% more per visit than typical Wal-Mart shoppers.

But as the economy heals, some of those customers might migrate back to their preferred stores. So Wal-Mart is remodeling its locations to appeal to them. The company also announced plans to start an eco-labeling program for store products to appeal to green-minded shoppers.

Plus, with unemployment still high, consumers are likely to be value-oriented for a while, says Morningstar analyst Joel Bloomer.

Lost in translation?

Wal-Mart already accounts for 10% of U.S. retail spending, minus autos and restaurant sales. So "long term, more of its growth will come from overseas," says Brad Hinton, a portfolio manager for Weitz Funds.

Foreign stores now make up a quarter of its square footage and sales, but only a fifth of operating income. Wal-Mart has struggled to adapt to local tastes. It exited South Korea after stocking stores with dry goods and electronics -- not the food and beverages that draw Korean shoppers to local discounters.

In Japan, Wal-Mart is only now expected to turn a profit -- after seven years of losses. Says Hinton: "It's not as simple as transplanting the U.S. playbook to the rest of the world."

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Sustainability Consortium clarifies goals, Walmart relationship

By Anne Marie Mohan,,
December 2nd, 2009                           
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The Sustainability Consortium, launched last August, clarified its mission and strategies today, while debunking the misconception that it is working on a “sustainability index” for Walmart. This information, along with a comprehensive dialogue on the types of product data to be collected and shared around sustainability were the topics of a 90-minute Webcast, “Inside the Sustainability Consortium,” presented by GreenBiz.com on Dec. 2. Consortium co-chairs, Dr. Jay S. Golden of the School of Sustainability, Barrett Honors Faculty, at Arizona State University, and Dr. Jon Johnson of the Sam M. Walton College of Business at the University of Arkansas, were the event’s guest speakers.

In July, Walmart released news that it would be creating a Sustainable Product Index, saying, “the company [Walmart] is helping create a consortium of universities that will collaborate with suppliers, retailers, NGOs, and government to develop a global database of information on the life cycle of products — from raw materials to disposal. Walmart has provided the initial funding for the Sustainability Index Consortium and has invited all retailers and suppliers to contribute.”

During the Webcast, Dr. Golden clarified the nature of the relationship between Walmart and the consortium, confirming that Walmart was a founding partner of the consortium, but that the consortium does not have “an index governing board.” What the consortium does have is a steering committee made up of CPGs, NGOs, government agencies, and others interested in “advocating for good business.”

Noted Dr. Johnson, “Walmart understands that multiple retailer engagement is necessary if this initiative is going to work.” Retailer Walt Disney has also signed on as a partner in the consortium.

Dr. Johnson added that the consortium does not believe that the scientific community is qualified to make value judgments regarding the relative life-cycle data of products. By separating itself from the creation of indexes and certifications, he said, the consortium will be able to preserve its integrity.

What’s it all about? As Dr. Johnson and Dr. Golden explained, the consortium was established to pull in the best practices and information from the myriad of LCA data and certification guidelines surrounding products’ environmental impacts in order to produce standardized, transparent tools and methodologies that can be used to make good business decisions.

Said Dr. Johnson, “If you don’t account for the environmental impacts of a product over its entire life cycle, you are bound to make bad decisions. A good, scientific system that drives innovation is vital.”

The consortium was established around six principles, Dr. Johnson explained: • Science- and outcome-based processes • Focus on impact • Transparent data and methods • Need for speed, “balanced with a need to heed.” • Obsess on affordability, accessability, and scalability • Innovation that creates value. “We’re not in it for the sake of metrics,” Dr. Johnson emphasized. “We want to create value for members of the supply chain.”

Another certification to slap on the package? Regarding the issue of certifications, or the “Tower of Ecobabble,” as Dr. Johnson referred to it, the consortium has no desire to add to the 400-plus certification programs related to sustainability available today in the marketplace. However, Dr. Johnson noted, the consortium is very interested in understanding the “landscape of certifications.”

Dr. Golden agreed: “We are trying to understand the science behind the labels. We want to use good science and build upon it, leveraging it as best as possible.” Once the consortium makes its LCA data available, retailers and packagers, such as Walmart, will then be free to use it within their own certification programs and labeling.

Tangible results The Sustainability Consortium’s near-term goal is the creation of a data tool available to all members of the supply chain, using Earthster, a free, open-source, Web-based software. Now in its beta form, Earthster is a drag-and-drop system that allows users to easily compute their products’ LCA cost-effectively.

The software then allows producers to benchmark themselves versus industry averages, and optionally to click-to-report environmental and social attributes of their processes and products to the marketplace, without revealing any proprietary information.

Said Dr. Johnson, “We look to Earthster to become the de facto standard tool for LCA.”

Currently, the consortium’s goals focus on enabling innovation in the business community, although future initiatives may include efforts around consumer education. “We want to look at opportunities to communicate in new ways to consumers,” said Dr. Golden, “but this will be a few years out.”

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Dallas County to offer free swine flu shots to all residents

The Dallas Morning News
December 2nd, 2009                                   
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Free swine flu shots will be available to all Dallas County residents starting next week.

County health officials decided Tuesday that it was time to expand the vaccination effort beyond the high-risk groups that have received the scarce H1N1 shots since October. Three walk-in vaccination clinics will get under way next Tuesday.

"We felt like we got the vaccine out to the priority groups and that their interest in getting the shots was waning," said Zachary Thompson, director of Dallas County Health and Human Services. "If we don't do it now, we may end up having to throw out vaccine that we don't use."

County health officials said they were concerned that people were being turned away from local pharmacies where they had sought the shot but did not meet the guidelines. Local pharmacists complained to the county that their longtime customers, including elderly people who were the most vigilant about getting annual flu shots, were being denied.

It is not known yet if local pharmacies that have the H1N1 vaccine will be able to distribute it more widely. Stores can charge up to $20 per shot.

Thompson said he would consult with area pharmacists later this week. Pharmacies are required to distribute the vaccine to only high-risk groups, which include pregnant women; people 6 months to 24 years old; adults ages 25 to 64 who have chronic conditions such as asthma and diabetes; health care workers; and people who care for babies under 6 months old.

"We don't think it's a good idea to keep turning them away, especially when we have vaccine available," Thompson said. "They might not come back later." A spokeswoman for the state health department confirmed that vaccine distribution decisions could be decided locally.

"From a state perspective, we strongly encourage providers to focus on the priority groups to protect those most at risk," said Carrie Williams, assistant press officer for the Texas Department of State Health Services.

The state issued a news release late Tuesday urging health care providers to continue to focus on the high-risk groups.

"Texas expects to have enough vaccine in January to make it available to the general population," the statement noted.

However, officials in Tarrant and Harris counties made similar decisions to expand their vaccinations, noting that much more H1N1 vaccine would be arriving soon. The distribution slowdown has been attributed to manufacturing problems.

Harris began mass vaccination clinics last week, said Sandy Kachur, a spokeswoman for Harris County Public Health and Environmental Services. "We think we've achieved a balance of supply and demand."

Dr. Sandra Parker, Tarrant County's health authority, urged Texans to get vaccinated before embarking on holiday travel to areas that could have more severe H1N1 outbreaks. Her county began administering the shots without restriction Tuesday from a dozen clinic locations.

Dallas County has received about 70,000 H1N1 vaccine doses and distributed most of them through mass clinics and local pharmacies over the past few weeks. However, 5,000 doses had not been distributed as of last weekend, indicating it was time to drop the restrictions, Thompson said.

An additional 370,000 doses were distributed through doctors' offices and hospitals.

Some local pharmacies are expecting to receive sizable H1N1 vaccine orders within the next week through the state health department.

"We will have ample supply of vaccine to run clinics across North Texas next week," said John Roehm, spokesman for Mollen Immunization Clinics, which operates inside Walmart stores.

Until the larger vaccine supply arrives, Mollen will administer a more limited supply of flu vaccine at seven Walmart stores in the Dallas area, starting today. Each location will have about 300 doses of vaccine covering H1N1 and seasonal flu, Roehm said. The clinics and their hours of distribution can be found at flushotsusa.walmart.com.

Walmart's clinics will follow the distribution guidelines required by the vaccine supplier – either the state or the county, he noted. "We have to work under whatever guidelines we're given."

A Saturday shot clinic in Richardson, sponsored by Dallas County, will serve only those in the high-risk groups who have made an appointment by calling the county's hotline – 214-819-6001. The free H1N1 shots and nasal mist will be distributed from 8 a.m. to 4 p.m. at St. Barnabas Presbyterian Church at 1220 W. Belt Line Road, Richardson.

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Another Wal-Mart "Shoplifting" Nightmare

By Al Norman,
Huffington Post
December 1st, 2009                      
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On December 3rd, a 15 year old black girl will enter a Juvenile Courtroom in Davenport, Iowa to face charges of shoplifting $39 worth of merchandise from the Wal-Mart superstore on West Kimberly Road. Hundreds of similar incidents take place everyday in the Wal-Mart Empire, and most escape notice by the media.

Destiny Crawford, the 15 year old defendant, denies she stole anything from Wal-Mart. But the ordeal she went through after the alleged incident doesn't fit the crime.

According to the family, on August 2, 2009, James Crawford Jr. was shopping for groceries at Wal-Mart. James' teenage sister, Destiny, was in his care while his parents made a short trip to Chicago. Destiny was accompanied by a schoolmate on the shopping trip. While James shopped for necessities, the two teenagers wandered through the aisles, trying on shoes, and looking at trinkets. In the bakery section, the girls met up again with James, who gave them his wallet and a bag of dog food, instructing Destiny to pay for the item with cash at the self-check out and to meet him outside at the car. James waited in a longer line to pay for the groceries with his EBT card.

As the two girls left Wal-Mart, two men--who neither produced identification nor asked the two teenagers for their I.D.--stopped the girls, and accused them of shoplifting. The men physically forced the teenagers back into the store. James saw the men walking his sister and her friend to the other end of the store. He made his way over to the girls and asked the men what was taking place. He was told the teens were being taken to an interrogation room. James stated that he was his sister's guardian and as a minor she needed to have a parent or guardian present. The Wal-Mart employees told James he wasn't allowed in the room. A Wal-Mart manager appeared and stated that she would serve as guardian for Destiny. James refused to agree to his sister or her friend being questioned without his presence, and he tried to follow the girls into the interrogation room.

The girls complied with the order to enter the room, but when James followed, he was pushed out of the way and the door was shut in his face. James says he could hear the men yelling at the girls. One asked, "Why don't you people respect us?" James then called 911. Two Davenport police officers arrived. They didn't identify themselves to James nor did they ask for his version of the incident. They took their place in front of the door.

Within seconds of the officers' arrival, the door to the room opened, and Destiny ran out toward her brother. Destiny had not been told to stay in the room, nor was she being physically restrained. She never reached her brother's side. One of the officers applied an arm bar that put Destiny face down on the floor of Wal-Mart. The officer then dropped his knee into the middle of her back. As her forehead hit the floor, Destiny was lifted up by the back of her shirt and spun around so that her forehead hit the wall. Her face was then manually turned by the officer and pressed into the wall. The officer turned Destiny around so that she was facing him and pressed down on her shoulders until she was sitting on the floor.

As Destiny hit the floor James took a step forward and said, "That is my sister." The second officer told James to step back, and he stepped back. But when Destiny's forehead hit the wall, James stepped forward again and asked, "Why are you doing that to my sister?" The second officer then put James' hands behind his back. James says he knew in that instant that this was an entirely new game and he said nothing else.

James was taken to jail and charged with two misdemeanors: disorderly conduct and interfering with an official act. Destiny was put in a squad car. One officer reportedly took out his stun gun and said to Destiny, "I swear to God I will taze you if you resist." The stun gun was held twelve inches from Destiny's head a little above her ear. Upon arriving at the squad car Destiny had her face forced into the trunk of the car. She was then handcuffed and read her Miranda rights. A short while later, Destiny was released from the squad car to her second oldest brother. She was given a ticket for shoplifting. Destiny was taken to the hospital. She had a concussion, lacerations and bruises. Her hospital bill totaled $3,000.

This week, 4 months after this harrowing incident, the Crawford family has still not seen either the police tapes from this incident, or the Wal-Mart surveillance tapes. James and his family asked Wal-Mart for a copy of the tape. They were told by Wal-Mart that the Davenport Police Department had the tape. The tape eventually showed up in the City Attorney's office. After two months of having the tape and preparing his case, the City Attorney offered to let James see the tape if he would go to trial without a lawyer.

On November 24, 2009, the Assistant County Attorney in Scott County, Iowa wrote to Destiny's Court-appointed attorney, indicating that the County had reviewed the Wal-Mart surveillance video. The Assistant County Attorney said the Wal-Mart tape was "not material or relevant to the case...It does not show the alleged theft, it does not contain a confession by Ms. Crawford or the other involved juvenile, and it does not show the retrieval of the stolen property." The Assistant County Attorney also acknowledged that he had a copy of the police video of the incident, which he said was also 'immaterial and irrelevant to the alleged offense." Destiny's lawyer subpoenaed the Wal-Mart video from the county, but the Assistant County Attorney says he cannot provide that tape, since it is in the hands of the Davenport Police. Neither Wal-Mart nor the Davenport Police want a Rodney King-style video to reach Iowa TV viewers.

So far, the Crawford family has received no apology from either the Davenport Police, or from Wal-Mart over the violent arrest of their daughter for allegedly stealing $39 from the world's richest retailer. Wal-Mart has not dropped the charges, or offered to pay for Destiny's hospital bills.

But they still have time before Destiny walks into that courtroom.

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Wal-Mart Rivals Safety of U.S. Government

By David MacDougall,
The Street
December 1st, 2009                         
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Which companies come to mind when investors think of safety?

Microsoft? Wal-Mart? Exxon Mobil? Those companies are among the largest and most secure in the world, yet only two carry a AAA credit rating from Standard & Poor's, the highest. Wal-Mart doesn't, even though a paltry 19% of its capital structure comes from debt issues and annual revenue exceeds $400 billion. As companies such as General Electric(GE Quote) and Pfizer(PFE Quote) are dropped from S&P's top level, and Wal-Mart gains market share during the recession, investors should consider buying Wal-Mart bonds and shares.

Wal-Mart's total debt stands at about $40 billion, 41% of which isn't due till 2023 or later. Near-term refinancing needs for the company are nominal, leaving financing costs the only concern. While Wal-Mart's financing expenses are low -- the company has a credit score one notch below the top rating -- its bond yields are well in excess of government issues.

With about $10 billion in free cash flow on revenue of $400 billion, can there be any question about Wal-Mart's ability to repay its commitments? The company continues to expand globally, ensuring its growth, and a decade-plus track record of rising sales and profits leaves little doubt the company can weather any economic condition. Just imagine that the company was founded as Walton's Five and Dime in Arkansas.

The five companies that carry AAA ratings by Standard & Poor's are impressive, but none are any safer than Wal-Mart. The list includes Exxon, Microsoft, Johnson & Johnson, Berkshire Hathaway and Automatic Data Processing.

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Wal Mart Cyber Monday Becomes Cyber Week

Daily News and Trends
December 1st, 2009                            
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Wal-Mart just announce that it is extending its Cyber Monday Deals all week, in a move that is sure to be followed by KMART, and others, although, a quick check of KMART’s site does not show that they have done so yet. Wal Mart has a long history of driving prices through the floor, and forcing its competitors to follow suit, so we think Amazon and possibly Best Buy may follow with their own “cyber week” campaigns. Great news for consumers, but likely a move that will frustrate other online retailers, particularly smaller ones.

Wal-Mart was on our weekend list of some of the best Cyber Monday online deals, having also made our list for the best Black Friday deals. Realizing that consumers are shopping for a number of electronic items this Cyber Monday (now apparently cyber week), the retailer has focused many of its deals on popular electronics like HDTV’s and video game systems. These were items that were slow sellers earlier this year due to the tough economic situation, but consumers seem to be eating them up.

Wal-mart’s cyber monday traffic was apparently down today according to some reports, and that may be the reason it coined the term “Cyber week.” We’re going to be watching for the best deals all week.

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Amazon Takes The Top Spot For Cyber Monday

By Leena Rao,
Washington Post
December 1st, 2009                      
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Experian Hitwise just released its Cyber Monday stats, with Amazon reportedly topping the list as the most visited retail website yesterday, seeing a 44% increase in visits compared to 2008. Amazon received 15.53% of the visits among the top 500 online retail sites. Hitwise says Amazon has been the top visited site on Cyber Monday since 2006.

Hitwise reports that among the top 500 retail websites, the percentage of U.S. online visits were down 9%o n Cyber Monday in 2009 compared to Cyber Monday 2008. Wal-Mart was the second most visited with 9.54% of visits followed by Target with 5.16%. BestBuy was the fourth most visited with 3.56% followed by JC Penney with 2.58 %. Walmart took the top spot for the most visited online site on Thanksgiving Day this year, according to Hitwise but Amazon edged out Walmart on Black Friday. This is the fifth year in a row that Wal-Mart was the top visited site on Thanksgiving Day.

Among the top 20 sites visited on Cyber Monday 2009, Staples saw the largest increase in visits compared to 2008 with a 61% increase, Barnes & Noble saw a 46% increase.The Apple Store, which didn't make Hitwise's top 20 sites, saw a 71% increase in visits on Cyber Monday 2009 versus 2008. Online stores who dropped in traffic from last year included Overstock.com (down 25%) and Home Depot (down 29%).

Most signs point to a positive trend when it comes to online sales and traffic this year. Coremetrics reported that online retailers saw a 13.7 percent increase in sales compared to last year, and 24.1 percent more than on Black Friday 2009. According to Hitwise, traffic to retail sites on Black Friday was up 9%. Of course, Hitwsie is just one metric used to measure traffic for these sites; comScore also provides an accurate measure for statistics but has not released its data yet for Cyber Monday.

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Fighting Wal-Martization 25min. (2005)

A new video by The Labor Video Project 25 min. (2005)

Wal-Mart is now the largest private employer in the United States and has the same impact that General Motors had nearly 50 years ago. This 26-minute video shows why working people and trade unionists are fighting back and what Wal-Mart has in store for the communities it is seeking to build stores in. "Fighting Wal-Martization" is a hard hitting documentary that looks at how the constant price cutting not only drives local small businesses out of the community but how this ends up driving down the living conditions of the very people who shop at Wal-Mart. The video also looks at the healthcare crisis and how Wal-Mart increases its profits by sending it¹s employees to public hospitals to get treatment thereby shifting costs back onto the taxpayer. This video can be used at union meetings, community meetings and on cable TV to get the message out about the Wal-Martization of America and what it means to every working person.

Please mail your check of $20.00 and order form to

Labor Video Project
P. O. Box 720027,
San Francisco, CA 94172

For more info: lvpsf@labornet.org, (415) 282-1908

Wal-Mart: The High Cost of Low Prices (www.walmartmovie.com)

Independent America: The Two Lane Search for Mom & Pop (www.independentamerica.net)

Big Box Mart (www.jibjab.com)

Garth Brooks Parody (www.walmartworkersrights.org)

"Is Wal-Mart Good for America?" Frontline, PBS Video, (www.pbs.org)

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The Case Against Wal-Mart By Al Norman Raphel Marketing ruth@raphael.com

Wal-Mart: The Face Of Twenty-First Century Capitalism
Edited By Nelson Lichtenstein The New Press www.thenewpress.com

The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement
By Jacob S. Hacker Oxford University Press www.oup.com

War On The Middle Class: How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back
By Lou Dobbs Viking, a member of Penguin Group www.penguin.com

Momentum: Igniting Social Change in the Connected Age
By Allison H. Fine Jossey-Bass www.joseybass.com

Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses,
By Stacy Mitchell, www.beacon.org www.newrules.org

Wal-Mart: The Face Of the Twenty-First-Century Capitalism, Edited by Nelson Lichtenstein, Published by The New Press www.thenewpress.com

 The Bully Of Bentonville - How the high cost of Wal-Mart's Everyday Low Prices is Hurting America, By Anthony Bianco, Published by Doubleday
Email: specialmarkets@randomhouse.com

 How Wal-Mart is Destroying America (and the world), By Bill Quinn, Published By Ten Speed Press, Box 7123, Berkeley, CA 94707, www.tenspeed.com (pp. 163)

Slam Dunking Wal-Mart, By Al Norman, Published By Raphel Marketing, 12 S. Virginia Avenue, Atlantic City, New Jersey 08410, www.sprawl-busters.com (pp. 237)

The Great American JobsScam, By Greg LeRoy, Published By Barrett-Koehler Publishers, Inc., 235 Montgomery Street, Suite 650, San Francisco, CA 94104-2916, www.bkconnection.com (pp. 257)

Nickel and Dimed, By Barbara Ehrenreich, Published By Henry Holt and Company, LLC, 115 West 18th Street, New York, NY 10011, www.henryholt.com (pp.221)

United States of Wal-Mart, By John Dicker, Published By Jeremy P. Tarcher (Penguin Group usa), www.us.penguingroup.com (pp.257)

The Wal-Mart Effect, By Charles Fishman www.penguin.com

Megamall On The Hudson, By David Porter and Chester L. Mirsky www.trafford.com


Death By Discount, By Mary Vermillion, Published By Alyson Publications, P.O. Box 4371, Los Angeles, CA 90078-4371, www.maryvermillion.com (pp. 275)

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