New Breed of Critics Fight Wal-Mart Stores in Nation's Capital

The battle over Wal-Mart Stores Inc. has long been waged in towns and cities, with opponents using zoning ordinances and referendums to block the big-box retailer from their neighborhoods. Now the two sides are taking their fight straight to Washington. Working out of offices that resemble political war rooms, two groups, Wake Up Wal-Mart and Wal-Mart Watch, are running campaigns to pressure the world’s largest retailer to be a better employer and corporate citizen. Run by veterans of political campaigns, these groups are aligning themselves with lawmakers in hopes of passing laws that are aimed at Wal-Mart. They also hope to make the company a political campaign issue for 2006. Their efforts extend beyond the Beltway. Wake Up Wal-Mart, supported by the United Food and Commercial Workers Union, and Wal-Mart Watch, which draws support from a wider network, have also recruited thousands of volunteers around the country to help their cause. Wal-Mart, meanwhile, has increased its own Washington presence. Since early spring, its representatives have visited and written to lawmakers, particularly Democrats who have been most critical of the company. It also plans to bolster its lobbying team, which has already more than doubled to 10 over the past year. The fight in Washington comes as Wal-Mart faces increasing legal problems, from child labor violations to charges of gender discrimination. The company recently paid a fine to settle federal charges that underage workers operated dangerous machinery, and agreed to pay $11 million to settle charges that its cleaning contractors hired illegal immigrants. It also faces a class action lawsuit by female employees who charge Wal-Mart with gender discrimination. Wake Up Wal-Mart and Wal-Mart Watch are fighting the discounter on issues ranging from outsourcing of jobs and gender discrimination to its environmental record. The groups are attacking its wages and health benefits, which they say are driving down pay and benefits for workers in many other companies as Wal-Mart’s rivals try to compete. Both organizations have sent letters and met with lawmakers including Sen. Edward M. Kennedy, D-Mass., Sen. Jon Corzine, D-N.J., and Rep. Rosa DeLauro, D-Conn. Around the country, they’ve held online petition drives, organized meetings and barbecues, staged boycotts at Wal-Mart stores and launched ad campaigns. And they’re using Web sites and blogs to try to rally the public. “We’re attacking the Wal-Martization of the economy,” said Andrew Grossman, the executive director at Wal-Mart Watch and former executive director of the Democratic Senatorial Campaign Committee. Although the groups are labor-backed, they say their fight goes beyond employee issues. “In order to change Wal-Mart we first have to build a broad base social movement in this country for change,” said Wake Up Wal-Mart director Paul Blank, who was the political director for Howard Dean’s presidential campaign. “This is about empowering people to build that movement.” Ray Bracy, vice president of federal and international affairs at Wal-Mart, said the company is listening to its opponents, but he described some labor-backed groups as mostly “self-serving, misguided and desperate.” As for the groups’ recruitment of volunteers, Bracy responded that Wal-Mart attracts 120 million shoppers per week. “People vote by shopping there, and by applying for jobs,” he said. Wal-Mart, Bracy said, pays its fair share of taxes, creates jobs for Americans and upgrades the standard of living with its low prices. Wal-Mart is intent on getting that message out to lawmakers and the public, he said. Last month, the company, which opened a lobbying office in D.C. five years ago, replaced its top legislative chief with Lee Culpepper, who was chief lobbyist at the National Restaurant Association. The eventual goal for Culpepper is to enlist the company’s more than 1.3 million workers at its 3,000 stores to rally behind its legislative agenda — the way he mobilized support from the over 300,000 restaurant members at his old job. The UFCW has cited those legal problems as it broadens its campaign beyond Wal-Mart employees. The union has failed in several attempts to represent workers at individual Wal-Mart stores. “Wal-Mart’s power is its profits,” said Joseph Hansen, who became UFCW president last year. “Our power is the American people.” In Washington, Wake Up Wal-Mart’s full-time staff of six, which also is tapping the services of UFCW’s 1.4 million members, includes communications director Chris Kofinis, who was a strategist for former Democratic presidential candidate Wesley K. Clark; political director Buffy Wicks, formerly state organizer for Dean; and field director Jeremy Bird, formerly deputy field director for Dean. Kofinis declined to talk about how much funding it gets from the UFCW, but said that it is a “significant commitment.” So far, Wake Up Wal-Mart has signed up 65,000 volunteers across the country and it hopes to have 150,000 by year-end. “I feel like I’m part of a movement for progressive change,” said volunteer Caroline Vernon, who has never worked at Wal-Mart, but turned against the company after media reports about the company’s legal problems. The 44-year-old Davenport, Iowa, resident has staged protests outside her local Wal-Mart and is writing letters pressing Iowa Gov. Tom Vilsack for legislation to make Wal-Mart spend more on employees’ health benefits. Vernon also keeps an eye on her local store and reports back to Wake Up Wal-Mart about employment and other issues. Like Wake Up Wal-Mart, Wal-Mart Watch is aligning itself with political veterans, including Jim Jordon, a former campaign manager for Kerry, and now a political consultant to the group; and Tracy Sefl, the group’s communications director, who was the deputy director of research at the Democratic National Committee. Wal-Mart Watch, which has about three dozen full-time staff members, began with funding from the Service Employees International Union, but now has other donors, Sefl said. Its board includes representatives of the Sierra Club, the National Partnership for Women & Families and Common Cause. The groups have won support in Congress. “I don’t want to put Wal-Mart out of business, but there is a distinction between Wal-Mart the retailer and the employer,” said Rep. Rosa DeLauro, D-Conn., who led 51 members of Congress in mid-May calling on Wal-Mart to address its record on gender discrimination. She added, “This is a public educational campaign. We are seeing increasingly that low prices come at a cost. They have to be made aware of the kind of employer they are.” In June, Wal-Mart was cited for 11 child labor violations in Connecticut, according to DeLauro’s Web site. One of the most controversial issues is Wal-Mart’s health plan, which with high deductibles and other stringent requirements has forced some employees to rely on Medicaid as a safety net. Lawmakers like DeLauro and others from such states as Idaho and Georgia are voicing concern that Wal-Mart’s inadequate benefits are hurting state budgets. The issue is spurring federal legislation aimed at pressuring the retailer to be more generous. In June, Kennedy, Corzine and Rep. Anthony D. Weiner, D-N.Y., touted a measure that would require states to disclose annually the number of employees of large companies who receive government funded health care. At a news conference, the lawmakers said Wal-Mart employees comprise the largest group of state-funded health care users in 15 states that require such disclosure. Meanwhile, several states are considering legislation that would force business with more than 10,000 employees to spend 8 percent of their payroll on employee health care. Bracy believes such legislation unfairly targets Wal-Mart and said that contrary to what the critics say, Wal-Mart has actually taken people off the state health care plans. He noted that 7 percent of hourly store employees were on Medicaid three months before joining Wal-Mart, but that dropped to 5 percent once they joined. After two years or more of employment, the figure dropped to 3 percent. While Wal-Mart has maintained it can’t compete with state-funded plans, which offer a better value, Bracy said the retailer is looking at making its plan better for employees without compromising its low-price model. Still, the real problem, he said, is not Wal-Mart but a “broken” employer-based health care system. The discounter plans to push for solutions that would make consumers more financially responsible for their choices. “In the end, I am convinced that our story has merit, and it will prevail,” Bracy said. “We’re not perfect, but we have a lot of value.” Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.