culture, politics, commentary, criticism

Wednesday, March 24, 2004
Wal-Mart's private Republican tax. America's largest retailer takes its tidal wave to Washington by taxing its managers (Jeanne Cummings,
WSJ, sub. req'd.):
In Washington, Wal-Mart has five lobbyists on its payroll, and a bench of hired guns led by Thomas Hale Boggs Jr., one of Capitol Hill's best-known lawyer-lobbyists. The company's political action committee was the biggest corporate donor to federal parties and candidates in 2003, with more than $1 million in contributions -- up from $182,000 during the 1997-98 election cycle, according to Federal Election Commission disclosure reports. Wal-Mart's PAC ranks as the second-largest in Washington, according to the Center for Responsive Politics, a nonpartisan organization that tracks political giving.

"It's hard to go to a fund-raiser in Washington for a member of the [House] Financial Services Committee without running into one or two or three Wal-Mart lobbyists," says Ron Ence, a lobbyist for community bankers.

Unlike most corporations, which contribute to both parties in rough proportion to Congress's partisan split, about 85% of Wal-Mart's checks go to Republicans. And recently Mr. [Senior Vice President Jay] Allen was named a "Pioneer" by the Bush campaign, meaning he has raised at least $100,000 by getting friends and colleagues to make contributions of up to $2,000 each.


Congressional allies rushed to offer advice [on Wal-Mart's foray into banking], including Trent Lott, then Senate majority leader. Mr. Lott arrived in Bentonville in late 1999 with a simple message, according to a congressman who attended the meeting: Increase your profile and open your wallet.

So Wal-Mart executives set out to beef up their political action committee -- an account made up of voluntary employee contributions that executives use to make political donations. (Federal law prohibits direct corporate contributions to party committees and candidates.) At an August 2000 meeting attended by thousands of Wal-Mart managers, buckets were passed around for donations, as well as forms authorizing automatic paycheck deductions for the PAC.

For some employees, the pressure to contribute became a point of contention. "With my district manager sitting 3 inches over my shoulder, you think I didn't sign up?" recalls Jon Lehman, a Wal-Mart manager who quit in November 2001 and is now working with union organizers to enlist Wal-Mart workers. Current Wal-Mart employees, who asked not to be named, also report feeling pressured to give to the PAC.

Mr. Allen says Wal-Mart doesn't force workers to give to a PAC; such an action would be illegal. "I regret" that employees felt pressured, says Mr. Allen. "That is not the intent at all."

Wal-Mart managers boosted PAC contributions to $703,500 in the 1999-2000 election cycle from $230,800 in 1997-98. When Sen. Lott issued a call for help for Republican candidates in the late summer of 2002, Wal-Mart's PAC donated $50,000 in September and $101,000 a month later -- mostly to Republicans. "They came through, and people knew it," recalls a former Republican senatorial aide.


The support brought its own rewards -- including free publicity. In November 2002 the Bush administration proposed the removal of all tariffs on manufactured goods imported to the U.S. by 2015. U.S. Trade Representative Robert Zoellick stood on a stage before the news media with two identical baskets of baby goods, prominently marked as having come from Wal-Mart. The one without tariffs was $32 cheaper.

Wal-Mart's PAC today has swelled to nearly $1.5 million, according to its March 2004 report. Nearly 19% of the company's more than 60,000 domestic managers contribute, most through payroll deductions that average $8.60 a month, says Mr. Allen.
No wonder these people are against federal taxes. Wal-Mart managers are being forced into paying a private tax to support Republicans through automatic payroll deductions to Wal-Mart's PAC.

$100,000 in protection money is extorted from Wal-Mart managers every month, a pattern of coercion worthy of Tony Soprano.

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