With over $12 billion in profits in 2007, Wal-Mart is the biggest and arguably most influential corporation in America. The majority owners, the Waltons, are therefore also one of the most influential families with a net worth of more than $100 billion. Over the past year, we have conducted an exhaustive study of public records related to political giving by Wal-Mart and the Walton family in order to determine how this influence is used to affect politics. The conclusion is clear. The Waltons are strong supporters of an extreme right wing agenda.
Wal-Mart Profits Lead to Right Wing Influence
The Walton family's political influence around the country is truly remarkable. They exert it through four primary mechanisms: private Walton family political contributions; Wal-Mart's Corporate PAC contributions; corporate lobbying; and the Walton Family Foundation giving. The Waltons use these tools to affect a wide range of policy decisions and regulations. They have used the Wal-Mart PAC and its lobbying efforts to avoid paying taxes, weaken or block environmental regulations, resist corporate transparency, hinder workers rights, block enhanced port security;1 and tighter regulations on food safety.2 Through their own private giving, the family has opposed the estate tax,3 and supported charter schools.4 Many of our lives are affected by these efforts.
Wal-Mart PAC for Responsible Government
Videos obtained from Flagler Productions shed new light into Wal-Mart's political giving strategy. Fully understanding that PACs are the primary vehicle for gaining influence in Washington, Wal-Mart executives were desperate to make sure its PAC was the most powerful, after years of neglect. However, Wal-Mart had a problem. With over $12 billion in profits last year, Wal-Mart cannot legally donate to its PAC. What the company can do is solicit funds from "corporate stockholders, executive and administrative personnel and the families of both groups."5
One strategy Wal-Mart utilized to increase funds was to match manager contributions to the PAC with a donation to the Wal-Mart Employees in Critical Need Fund. The donation, made in the employee's name but with company funds, potentially helped (less than one percent of) Wal-Mart employees in financial crisis. Not technically illegal, the practice is at the very least dishonest. Wal-Mart will do whatever it can to "buy a seat at the table." At a 2001 Wal-Mart managers meeting in Houston, (which was captured on video), Wal-Mart officials boasted about how they lobbied against the Patients Bill of Rights for liability protection.
Taxes and Health Care
Since federal lobbying disclosure laws do not require lobbyists to show how much they spend on a particular issue nor their client's position, it is difficult to understand Wal-Mart's true intentions on many issues. Nevertheless, evidence indicates that Wal-Mart attempts to avoid paying taxes as much as possible through various avenues and schemes. Since 1998, Wal-Mart, through internal and external lobbying, has spent over $20 million to ensure favorable legislation on numerous issues, including tax issues.
For example, when the Maryland legislature passed a bill requiring large employers to spend at least 8% of total wages on employee healthcare, Wal-Mart fought the bill by donating to Maryland's governor, Robert Ehrlich, who later vetoed the legislation.6 Additionally, Wal-Mart "deployed at least a dozen Annapolis lobbyists" to prevent a veto override.7 When a similar bill was being pushed in California "which would [have] forced big employers like Wal-Mart to either provide affordable health insurance to their workers or pay into a state insurance pool", Wal-Mart spent $500,000 to defeat the measure.8 And as Wal-Mart's recent REIT tax scandal in North Carolina shows us, Wal-Mart will do anything to avoid paying taxes.
With help from the DC-based PR firm Edelman, Wal-Mart has been trying to boost the company's image as environmentally responsible. But despite the company's "sustainability" initiatives, Wal-Mart is actively lobbying against the clarification of carbon offset guidelines. The company's hypocritical stance on the issue came to light in a hearing of the Federal Trade Commission (FTC). The FTC is attempting to modernize the "Green Guides," guidelines issued for corporations by defining acceptable marketing claims regarding environmental products and initiatives. In January 25, 2008 response to the FTC's solicitation of retailer comment to guide the process, Wal-Mart's Director of Energy Regulation, Angela Beehler, expressed Wal-Mart's firm opposition towards the clarified scope and definition of carbon offsets saying "Although some may urge otherwise, the Commission should resist the temptation to define what constitutes an eligible offset or REC. Doing so would require the Commission to resolve highly technical environmental debates that are beyond its expertise..."9
Americans with Disabilities Act
Wal-Mart has also used its wealth to prevent legislation that could actually help its employees. The most recent lobbying reports show Wal-Mart spent $3.6 million on lobbying multiple pieces of legislation, including the Americans with Disabilities Act (ADA) Restoration Act of 2007, a bill that would tighten the definition of what qualifies as a disability and make it more difficult for companies to evade the ADA. The U.S. Chamber of Commerce and the Food Marketing Institute, both of which Wal-Mart is a member, vehemently opposed the bill. Currently, there are several high profile ADA cases pending against the giant retailer so it makes sense that Wal-Mart would oppose even stricter regulation if they are incapable or unwilling to follow the laws that already exist.
In 2005 Wal-Mart opposed a law requiring disclosure of employee health insurance data in Minnesota. Legislators introduced a bill that would require Minnesota state agencies to gather and make public data about whether the employees and family members of Wal-Mart and other large employers use the state's public assistance programs. Wal-Mart sent two officials to St. Paul to lobby against the bill and sent each legislator a two-page letter outlining its opposition to the law.10
Wal-Mart gives money to trade groups in order to advance its interests. Through Retail Industry Leaders Association (RILA) and Food Marketing Institute (FMI), Wal-Mart has lobbied against port security measures, living wage ordinances, country-of-origin labeling, and health care reform.11
Take food safety for example. Wal-Mart, through its donations to FMI, has fought legislation to make the origin of your food more clear, preferring to hide the fact that most of its food items are imported - often from countries with lax safety regulations.
Outside of its own lobbying machine, Wal-Mart spends money on various initiatives through other membership organizations, namely the Retail Industry Leaders Association (RILA) and Food Marketing Institute (FMI). In 2006, RILA came under fire for working in conjunction with Wal-Mart to block Port Security Measures by contributing hundreds of thousands of dollars to House Homeland Security Committee members.12 According to Congressional Quarterly, "Why would Wal-Mart, the world's largest retailer, with its recently expanded in-house lobbying team, need to join a trade association? As it turns out, for largely the opposite reasons that other companies cite. The retail giant doesn't want to draw attention to its legislative agenda; it wants to use its membership in the Retail Industry Leaders Association (RILA) as a buffer."13
In addition to port security, RILA lobbied against Fair Share Health Care legislation in Maryland14 and a living wage ordinance in Chicago.15 To combat the Fair Share legislation, Wal-Mart used RILA and notoriously "worker-friendly" Eugene Scalia to argue the case. "RILA's motion was argued before U.S. District Judge J. Frederick Motz by Eugene Scalia of the law firm of Gibson, Dunn and Crutcher. RILA has taken a leading role in coordinating opposition to state and local health spending mandates under consideration in states and localities across the United States and in challenging these laws in court, when necessary."16
FMI was also criticized, namely for its opposition to the Country of Origin Labeling (COOL) measures. Country of Origin Labeling (COOL) will disclose on the package if your food product is sourced from places outside of America with known records of poor working conditions, weak environmental regulations and/or dangerous standards for food safety.17 From 2000-2004, FMI contributed over $1.5 million to politicians opposed to COOL, in addition to the $3.45 million contributed by Wal-Mart.18 The legislation eventually passed after several years of opposition. More recently, FMI spent over $1.7 million in the second quarter of 2008 to lobby on nutrition, retail crime and other issues.19
The Walton Family - Champions of the Right
According the latest edition of the Forbes 400 Richest Americans List, the Walton family is worth over $100 billion. It is truly astonishing how fast the family's wealth has grown. "While the Waltons have been billionaires since the 1980s, it was only in the late 1990s, when Wal-Mart saw explosive growth around the country, that the Waltons were catapulted to the ranks of the very richest Americans. In 1987, Forbes magazine named Sam Walton the richest man in America, with a fortune of $8.7 billion. By 1997, the combined family fortune was $31.8 billion and by 1999 that figure had more than doubled to $85 billion."20
While Wal-Mart's leadership often throws a public relations smokescreen to cover the corporate right-wing agenda it promotes, the Walton family itself has been much less subtle. The Waltons use their wealth to zealously support right wing causes such as Social Security privatization, school vouchers and the repeal of the estate tax.
The family's great wealth is the direct result of the creation of the Walton Family Enterprises, which allowed Sam Walton to transfer much of his wealth to his family while avoiding most estate taxes, and allows his children to combine their stock holdings into one group, thus enhancing control of the company.
Fearing they might lose this control of the company if a family member dies, the Walton family advocates nullifying or at least greatly reducing the estate tax, and has spent millions fighting on the issue. According to the USA Today, "The Waltons have joined a coterie of wealthy families trying to save fortunes through permanent repeal of the estate tax...review of public documents reveals a small-town Arkansas family emerging as a political juggernaut on tax issues, extending Wal-Mart's influence over U.S. society even more."21 It is interesting to note that Warren Buffet, the second wealthiest person in America, advocates against a repeal of the estate tax and Bill Gates, the wealthiest person in the America, does not advocate for the reduction of the estate tax.22
Social Security Privatization
Regarding social security privatization, the Walton family supported groups devoted to George W. Bush's re-election in 2004. With his election came the promise of a new approach to help fund the Social Security system. For example, Alice Walton gave over $2 million to Progress America in 2004 - a group that ran advertising on social security privatization during the election. Alice Walton's donation was "Progress for America's sixth-biggest gift" and it made her "a political force to be reckoned with," according to Larry Noble, the former head of the Center for Responsive Politics.23
The Walton Family's support of the school voucher and charter schools movement is unparalleled in the United States. According to the 2006 Walton Family Foundation 990, the family gave over $48 million to individual charter schools and supporting institutions. Sam Walton once said, "I'd like to see an all-out revolution in education." He proudly supported school-choice movements along with his son John.24
"Why is the richest family in the world so committed to education, and specifically school choice, when they themselves mostly attended public school to apparently good effect? Some critics argue that it is the beginning of the "Wal-Martization" of education, and a move to for-profit schooling, from which the family could potentially financially benefit."25
1 “UNCHECKED: How Wal-Mart Uses Its Might to Block Port Security,” AFL-CIO report to Congress, April 2006.
2 “Tabled Labels: Consumers Eat Blind While Congress Feasts on Campaign Cash,” Public Citizen, September 2005; CQ Moneyline.
3 Jim Hopkins, “Wal-Mart family lobbies for tax cuts,” USA Today, April 5 2005.
4 “Trying to Hold On for the Walton Family Foundation,” CQ Weekly, November 7 2005.
5 “Federal Election Commission Campaign Guide,” January 2007, http://www.fec.gov/pdf/colagui.pdf (accessed October 2, 2008).
6 Michael Barbaro, “Ehrlich Vetoes Health Care Bill Aimed at Wal-Mart,” Washington Post, May 20, 2005.
7 John Wagner, “Wal-Mart Girds for Battle on Md. Bill,” Washington Post, November 17, 2005.
8 Reed Abelson, “States are battling against Wal-Mart over health care,” New York Times, November 1 2004.
9 “Comment of Wal-Mart Stores, Inc. on the Guides for the use of Environmental Marketing Claims Carbon Offsets and Renewable Energy Certificates Public Workshop,” U.S. Federal Trade Commission Project No P074207, January 25 2008, http://www.ftc.gov/os/comments/carbonworkshop/533254-00040.pdf (accessed October 2, 2008); “Reporter Resources: The FTC’s Green Guides,” Federal Trade Commission, http://www.ftc.gov/opa/reporter/greengds.shtm (accessed October 2, 2008).
10 Chris Serres, “Wal-Mart Fights Benefits Disclosure in Minnesota,” Minneapolis Star Tribune, June 1 2005.
11 “ALF-CIO Wal-Mart blocking port security efforts,” Raw Story, April 5 2006, http://www.rawstory.com/news/2006/AFLCIO_WalMart_blocking_port_security_efforts_0405.html (accessed October 2, 2008); Shawn Zeller, “Wal-Mart Gets Protective Cover in Retail Trade Group,” CQ Weekly, May 1, 2006 ; RILA Press Release, June 23, 2006; Jennifer Waters, “Chicago demands 'big boxes' pay higher wages,” Market Watch, July 26 2006.
12 “ALF-CIO Wal-Mart blocking port security efforts,” Raw Story, April 5 2006, http://www.rawstory.com/news/2006/AFLCIO_WalMart_blocking_port_security_efforts_0405.html (accessed October 2, 2008)
13 Shawn Zeller, “Wal-Mart Gets Protective Cover in Retail Trade Group,” CQ Weekly, May 1 2006
14 RILA Press Release, June 23, 2006.
15 “Chicago demands 'big boxes' pay higher wages,” Market Watch, July 26 2006.
16 RILA Press Release, June 23, 2006.
17 “Human cost behind bargain shopping,” Dateline, June 17 2005, http://www.msnbc.msn.com/id/8243331/ (accessed October 2, 2008).
18 “Tabled Labels: Consumers Eat Blind While Congress Feasts on Campaign Cash,” Public Citizen. Figure 3, p 17.
20 “The Waltons and Wal-Mart: Self-Interested Philanthropy,” National Committee for Responsible Philanthropy, September 2005, http://www.reclaimdemocracy.org/walmart/walton_philanthropy.pdf (accessed October 2, 2008).
21 Jim Hopkins, “Wal-Mart family lobbies for tax cuts,” USA Today, April 5 2005.
22 Jeanne, Sahadi, “Buffet: Tax my kin, please,” CNNMoney, November 14 2007; “The 400 Richest Americans,” Forbes, September 17 2008.
23 Jim Hopkins, “Wal-Mart family lobbies for tax cuts,” USA Today, April 5 2005.
24 Jim Hopkins, “Wal-Mart Heirs Pour Riches Into Education Reform,” USA Today, March 11 2004.
25 “The Waltons and Wal-Mart: Self-Interested Philanthropy,” National Committee for Responsible Philanthropy, September 2005.
Was there ever any doubt? This is a most unethical company. They outsource and undercut small businesses at every opportunity. Wal-Mart now has an eye on the organic food market. I feel quite certain that we'll soon be seeing organic products manufactured in China where organic standards are questionable. Not to mention that they will squeeze out small organic farmers by driving down prices.ReplyDelete
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