AlterNet : : Wal-Mart's Culture of Crime and Greed
Jonathan Tasini examines some of Wal-Mart's business practices:
In February, those nice family-values people from Bentonville agreed to pay a pathetic $135,000 and change to settle charges of child labor violations. Think about it: a corporate culture that tolerates endangering children. As an aside, when the child labor deal was announced, I wrote that the level of the fine was scandalous; the whole sweetheart deal is now under investigation by the Department of Labor's inspector general.
In February, those nice family-values people from Bentonville agreed to pay a pathetic $135,000 and change to settle charges of child labor violations. Think about it: a corporate culture that tolerates endangering children. As an aside, when the child labor deal was announced, I wrote that the level of the fine was scandalous; the whole sweetheart deal is now under investigation by the Department of Labor's inspector general.
posted by Management at 11:25 AM
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Wal-Mart's Culture of Crime and Greed
By Jonathan Tasini, TomPaine.com
Posted on April 4, 2005, Printed on April 21, 2005
http://www.alternet.org/story/21658/
The Beast of Bentonville (better known as Wal-Mart) is grappling with a spate of management dismissals and investigations over the past few months that appear rooted in internal petty thievery. But rather than a few bad apples being rooted out, it's clear that crime, greed, wrongdoing, malfeasance and cronyism are deeply embedded in the Wal-Mart business model. Indeed, Wal-Mart could not survive without manipulating the system and breaking the law.
In case you didn't catch it, Thomas Coughlin--a former vice chair of the company and at one time a potential future CEO candidate--was forced to resign from the board because of, as the British Financial Times reported on its front page, an "alleged unauthorized use of corporate-owned gift cards and personal reimbursements that appear to have been obtained from the company through the reporting of false information on third-party invoices and company expense reports. The amount in controversy is estimated to be in the range of $100,000 to $500,000." Translation: the guy padded his expense accounts.
In the current investigation, three other employees, including a company officer, were also dismissed. And back in December, three other executives and four employees were fired for violating "unspecified" company rules. I would venture to guess that those rules had nothing to do, for example, with treating workers badly (that kind of conduct actually calls for a promotion at the Beast of Bentonville, or at least a one-time visit to the company's executive washroom) but with other financial wrongdoing.
But why should this be surprising? The culture of Wal-Mart encourages and condones misbehavior among its leaders every day. Let me tick off just the highlights--or lowlights, as the case may be.
Less than two weeks ago, the Beast paid $11 million to settle charges that it used hundreds of illegal immigrants to clean its stores. In February, those nice family-values people from Bentonville agreed to pay a pathetic $135,000 and change to settle charges of child labor violations. Think about it: a corporate culture that tolerates endangering children. As an aside, when the child labor deal was announced, I wrote that the level of the fine was scandalous; the whole sweetheart deal is now under investigation by the Department of Labor's inspector general.
Wal-Mart is facing the largest gender discrimination lawsuit in history--involving 1.5 million women. I hear the company is deeply engaged in talks to settle the case for obvious reasons: it's guilty as hell. The depositions in the lawsuit, detailed in Liza Featherstone's new book, Selling Women Short, make it crystal clear that the company, as a matter of policy, consistently broke the most basic laws of workplace equality.
Not enough? Workers have been illegally fired for trying to form a union, and Wal-Mart spends millions to thwart workers' basic rights, giving its union-breaking staff priority on resources (like corporate jets) over even higher-placed managers. In 2000, meat cutters at a Wal-Mart in Texas voted for the union--and Wal-Mart promptly violated the law by shutting down the meat-cutting department in the store and, for good measure, closing every other meat-cutting department in 180 other stores, just to make sure they had stamped out any smell of unionism. Even the National Labor Relations Board--no friend of labor--saw through the company's actions and charged the Beast with illegal behavior.
And, to top it off, the Beast's business model could not operate without the connivance of the authoritarian regime in China. You probably never heard of a guy named Wang Jun, but he's one of Wal-Mart's main men in China. Aside from being involved in a company called Poly Technology, which is the weapons-trading arm of the People's Liberation Army, Jun runs a Chinese state-sponsored investment company and ensures that Wal-Mart's wishes are known and satisfied by those running the Communist Party. In China, Wal-Mart has a ready supply of underage children and under-waged adults to produce its products. The point here is that Wal-Mart is no free-market miracle: Its profits are a result of an artificial suppression of wages. Wal-Mart could not operate in a truly free market--if such a thing even existed. Instead, Wal-Mart is in cahoots with the Chinese government, raking in profits by condoning the violation of basic international labor standards.
Greed is a theme with the Wal-Mart family. The family, worth a combined $95 billion, has given a stingy one percent of its wealth to charity. By comparison, Business Week, writing about Bill and Melinda Gates in a November cover story on the country's philanthropists, observed that the Gates made "history this year by giving their estimated $3 billion Microsoft Corp. dividend to their foundation. It's one of the largest donations in history by a living donor. To put it into perspective, that one gift is three times bigger than the amount that America's richest family, the descendants of Wal-Mart Stores Inc. founder Sam Walton, has given during their entire lifetimes." [Emphasis added]
The company's reaction to this record of law-breaking has been predictable: It's just a public relations problem--the standard response at a company that has built its image on myths. CEO Lee Scott, backed by millions of dollars of advertising on television and in print publications like The New York Review of Books, recently embarked on a public relations tour. Speaking in Los Angeles, he told business leaders, "We've got nothing to apologize for."
When you see all the law-breaking, malfeasance and greed around you, and your corporate leader thumps his chest in pride, a natural human reaction might be, "Where's my taste here? If my company routinely violates the law or runs right up to the edge of the law at every opportunity to squeeze out more profits, what's a few hundred thousand dollars in inflated expenses, morally speaking?"
Coughlin and the other management schlubs who have been shown the door are not anomalies. They are a reflection of a culture stretching back to Sam Walton himself--a man who was a classic bully, willing to trample on the little guy and make a profit off of the poverty of millions of people. That's the Wal-Mart way.
Wal-Mart's Sweetheart Deal
Jonathan Tasini
February 16, 2005
Wal-Mart may be the most visible offender of good workplace practices—it's the retail giant progressives love to hate, with good reason. Exhibit A: In a recent deal with the government, Wal-Mart agreed to pay a small fine for breaking child labor laws, with the understanding that next time the feds want to investigate, the retailer will be warned ahead of time. Jonathan Tasini says we can't reform the corruption of the corporate landscape overnight, but a Safe Workplace Act would at least mandate true punishments for offenders—not sweetheart deals.
Jonathan Tasini is president of the Economic Future Group and writes his "Working In America" columns for TomPaine.com on an occasional basis.
The administration has gotten used to the idea that it can hoodwink us (weapons of mass destruction, a phony Social Security “crisis”), which is part of the lens through which we should view the recent Wal-Mart scandal. After Wal-Mart was found breaking the law on child labor, the government fined the company a measly $135,000 (and change) and signed a deal with Wal-Mart that says "Next time we want to investigate what laws you might be breaking, we’re going to tell you about the investigation before we do it"—just to give you enough time to cover your tracks, shred documents or muddle the trail.
Of course, this is absurd and can only exist in a world where a tax cut for the rich is called the “Jobs and Growth Plan.” But there is a different part of this whole game that has annoyed me for a long time and has been missed by the media coverage (which has been scant). WhileThe New York Times’ Steven Greenhouse deserves kudos for bringing to light the story of the Department of Labor’s promise to alert Wal-Mart prior to launching an investigation, the big point is this: Wal-Mart endangers children and then gets away with a fine of 135 grand and change. Does anyone have a calculator to figure out what percentage that financial “penalty” represents to a company that had sales of $256 billion in 2003 or to the five Walton kids who are worth almost $100 billion? And, by the way, that damn fine is considered a business expense that Wal-Mart deducts from its taxes (unlike poor slobs like you and me, who cannot deduct legal fines).
Moreover, as part of the deal with the government, the company signed a paper that says it denied any wrongdoing. So the whole game is a hoax and charade. Everyone knows Wal-Mart broke the law. But using spin and doublespeak befitting a political race, the government says Wal-Mart will pay a fine, making it appear as if the government is really doing something about an act the company continues to say it didn’t do. It’s appalling.
We have a system in America that encourages companies to violate the law because it’s a tiny cost of doing business. Sure, it’s a scandal that Wal-Mart will now get tipped off when the feds want to come visit. But even if investigators descend like Elliot Ness on Wal-Mart’s Bentonville, Ark. headquarters, Wal-Mart will happily write a check for 135 grand and change 10, 20 or 100 times a year if the trade-off is to keep those registers humming and piling up the cash.
Crimes against people at work will never stop until we start putting corporate executives in jail, and not just for stock manipulation and accounting frauds. How fast do you think Wal-Mart would clean up its act—stop violating child labor laws, stop locking store cleaners inside the stores at great risk to their lives, stop illegally firing workers who try to unionize, stop discriminating against women—if Wal-Mart CEO Lee Scott or maybe one of the Wal-Mart kid billionaires spent a few days, weeks or months (I won’t be so naïve as to suggest years) in the pokey?
Indeed, our standards for crimes against people at work verge on the hypocritical. Outside of the workplace, endangering the welfare of a child can land a parent in jail. We easily pass laws for drug crimes, and in some states like my own New York, we plop people behind bars for life terms if it’s a third offense—for a crime that is often less severe than the death or severe injury of someone at work.
As an aside and a topic for a future column, jail sentences are just a reaction to a symptom of a deeper flaw in our system: Once a person walks through the door of the workplace, he or she loses basic rights we all take for granted like liberty and free speech. The only way to stop corporate misconduct against workers is to empower people to shape the conditions at work (mainly by having the real right to unionize), and strip away the power corporations have under our system to create conditions that lead to child labor violations.
But until we can reconfigure the corporate landscape, there is a place here for action. Wal-Mart’s crimes against children should spark a push for a Safe Workplace Act. With mounting pressure on workers—weak wages, vanishing pensions, evaporating health care, crushing personal debt—there is unease over the ever-growing untrammeled power of corporations. Maybe Barbara Boxer, the Senate’s heir to the legacy of Paul Wellstone, or George Miller, the most tenacious defender of workers rights in the House, could team up on a sweeping bill that calls for mandatory jail times for corporate executives who violate workplace laws. It would be great policy—and good politics.
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