Wal-Mart’s ‘Invisible Army’ of Lobbyists
Wal-Mart faces many threats to its ongoing profitability. That’s why it employs two platoons worth of lobbyists, and spends millions of dollars annually to minimize the dangers from government policy.
Every year Wal-Mart is required to list out for the Securities & Exchange Commission (SEC) the ‘risk factors’ that could adversely affect its financial performance, such as:
prevailing wage rates… health and other insurance costs and adoption of new or revised employment and labor laws and regulations; All of our suppliers must comply with applicable laws, including labor, safety and environmental laws… the availability of raw materials to suppliers, merchandise quality issues, currency exchange rates, transport availability and cost, transport security, inflation and other factors… the U.S.’s foreign trade policies, tariffs and other impositions on imported goods, trade sanctions imposed on certain countries, the limitation on the importation of certain types of goods or of goods containing certain materials from other countries and other factors relating to foreign trade.
For these reasons, Wal-Mart hires lobbyists, and wages an aggressive campaign to hold what it calls “discussions” with dozens of federal agencies like the Department of Commerce, Department of State, Federal Trade Commission, Department of Labor, National Security Council, USDA, U.S. Trade Representative, and Congressional committees regarding the food industry, e-fairness taxation, financial services, health issues, labor issues, pharmacy, consumer issues, homeland security, immigration, firearms, manufacturing and veterans. These are all report areas from Wal-Mart’s lobbying disclosure report to Congress.
But such disclosure forms do little to explain to the company’s employees or shareholders what the company is really up to on Capitol Hill.
Take the Employee Free Choice Act (EFCA), for example. In March of 2009, Senator Ted Kennedy introduced into the 111th Congress S. 560, the Employee Free Choice Act. This legislation would have allowed a union to be certified to bargain with an employer by collecting signatures from a majority of workers — with no additional, separate vote necessary. This is obviously legislation that would fill Wal-Mart management with fear and loathing. Many of its workers, however, might want to see the company use its resources to help democratize the workplace, and improve wages and benefits.
To bury the EFCA, Wal-Mart’s leadership [translate: the Walton heirs] revved up its internal lobbying spending by hiring at least five new lobbyists with revolving door Capitol Hill connections. Ivan Zapien came to Wal-Mart after serving for three years as Chief of Staff for U.S. Senator Robert Menendez (D-NJ). Jason Hill served as an aide to Senator Carl Levin (D-MI) and worked on the Obama-Biden presidential campaign. Steve Replogle was employed by Senators John Thune (R-SD), retired Senator Jon Kyl (R-AZ), and Senator Alexander Lamar (R-TN). Lauren Robitaille joined Wal-Mart’s lobby team in 2010 after working for seven years as legislative director for Congressman Mario Diaz-Balart (R-FL). Wal-Mart hired Sarah Beatty in 2011, who worked for Congressman Mike Conaway (R-TX) for three years, and for two years was Chief of Staff for Congressman Patrick Meahan (R-TX).
By 2012, six out of 14 Wal-Mart’s direct lobbyists had worked in Congress. In that same year, Wal-Mart retained a total of ten outside lobbying firms, bringing its total legislative agent count to 79 lobbyists — of which 64 were revolving door lobbyists.
Most remarkable of all, one of the lobbying firms working on Wal-Mart’s payroll against the Employee Free Choice Act was the Podesta Group, named after the Podesta brothers. Anthony Podesta cut his political teeth working on the presidential campaigns of Gene McCarthy, George McGovern, Bill Clinton — and Ted Kennedy. In 2009, while Ted Kennedy pushed for his Employee Free Choice bill, Tony Podesta’s lobbying firm was paid $420,000 by Wal-Mart to block bills like the EFCA. On Podesta’s staff was Walter Pryor, who had served three years as legislative director to Senator Mark Pryor (D-AR) and a member of the Justice Department during the Clinton administration. Wal-Mart hired Democratic insiders to lobby against Ted Kennedy and his union supporters. Walter Pryor did most of that work, but Tony Podesta is listed in 2009 as working against this bill.
Last year alone, Wal-Mart spent a staggering $8.68 million on lobbying expenses — 70 percent of which was spent on its own platoon of internal company lobbyists.
In addition to buying lobbyists, Wal-Mart also makes corporate contributions to presidential and Congressional candidates: $9.5 million between 2000 and 2012. Wal-Mart created a political action committee to handle these contributions, Wal-Mart Stores, Inc. PAC for Responsible Government. The money for Wal-Mart’s PAC comes from many sources, including a bimonthly payroll deduction from many of its top executives. For example, Wal-Mart CEO Mike Duke pays into the PAC $192.30 twice a month, as does former Democratic operative Leslie Dach, Wal-Mart’s Executive Vice President for Corporate Affairs, as does David Tovar, Mary Chambers and many other top Wal-Mart VIPs. Multi-billionaire Chairman Rob Walton kicks in $192 twice a month. It’s a form of political tithing.
The Center for Responsive Politics notes that “the contributions of the Wal-Mart Stores political action committee to federal candidates and other political committees has grown rapidly during the past decade.”
In 2012, Wal-Mart invested $3.55 million in political contributions, of which $1.47 million went to candidates, with the remainder going to political parties and so-called ‘527’ committees. The company’s political contributions were designed to please everyone. For example, Wal-Mart’s PAC gave $66,281 to Mitt Romney’s campaign, and $57,711 to Barack Obama’s. Wal-Mart contributions were largely symbolic, ‘door-openers’ to conservative lawmakers like John Boehner, $12,500; Eric Canter, $10,000; Scott Brown, $7,500; Ted Cruz, $7,500; Ron Paul, $4,680; Michele Bachman, $300. Wal-Mart even tossed a few crumbs to the Presidential aspirations of Herman Cain, $750; Rick Perry, $750; Newt Gingrich, $1,749, and Rick Santorum, $2,000.
To show it is an equal opportunity contributor, Wal-Mart also gave prominent Democrats their share: $10,000 to Dianne Feinstein, $5,000 to Max Baucus, $5,000 to Henry Waxman, $3,500 to John Conyers, and $2,500 to John Lewis.
Since 1998, Wal-Mart has spent $49.2 million on lobbying. Plus, from 1990 to 2014, the retailer contributed $14.5 million to federal candidates, around 32 percent for Democrats, and 68 percent for Republicans. In 2012, for the retail sector alone, two giant corporations, Home Depot and Wal-Mart, accounted for 44 percent of the PAC contributions to federal candidates. Of the $6.56 million contributed by retailers’ PACs, nearly two-thirds went to Republicans.
The remarkable thing about this massive investment of corporate money in politics is that very few people inside the corporation really know the company’s agenda or strategy. If you are a Wal-Mart shareholder, or one of its 1.3 million U.S. employees, you will find nothing in the corporation’s 2013 annual report about lobbying costs. You can find out how much Wal-Mart spent investigating its alleged violations of the Foreign Corrupt Practices Act in Mexico and elsewhere ($157 million). You can find out how much Wal-Mart spent on advertising ($2.3 billion). But you will find nothing about the company’s lobbying goals in its Annual Report or its SEC 10-K annual report.
Only Wal-Mart’s Government Relations Departments know about the company’s interactions with elected officials and legislative and regulatory bodies at the federal, state and local level. Shareholders are disengaged, employees receive no briefings.
Federal disclosure requirements are woefully thin. Wal-Mart’s invisible army of lobbyists wanders in and out of Congress largely unobserved, and unreported. They have more free speech than the rest of us, because they have tens of millions of dollars to buy it.
At a minimum, corporations like Wal-Mart should be required to have a standing legislative affairs committee at the board level that includes shareholders, which reports annually to the shareholders and employees on political contributions and lobbying made in the company’s name, and its position on every law and regulation it “discusses” with policymakers. This should be incorporated into the financial notes section of every annual report, just as litigation is reported now.
Wal-Mart faces many risks to its profitability. But we in the public also are at risk, because many of the corporation’s positions put its profits ahead of its shareholders, its employees, and the public’s general welfare. We suffer the adverse impacts from Wal-Mart’s lack of transparency on Capitol Hill.
There is no reason why a publicly-chartered corporation cannot be held accountable by the people it purports to serve.