To Repel Critics,
Wal-Mart Courts Democrats
Black, Hispanic
Members Receive Special Attention;
Rep. Rangel Is
Unmoved
By Jeanne Cummings
and Kris Hudson, WSJ on line, August 26, 2006
WASHINGTON -- Wal-Mart Stores
Inc. is wooing some core Democratic constituencies as part of a strategy to fend
off another round of election-season attacks from labor unions and politicians.
In particular, the retail giant is giving to African-American and Hispanic
lawmakers on the theory that many of their constituents are satisfied Wal-Mart
shoppers and workers. More than 10% of the company's 1.4 million U.S.
workforce is Latino and more than 16% is African-American.
The Bentonville, Ark., firm has rounded out its once insular and heavily
Republican political operation by hiring Democratic lobbying and
public-relations firms. It is also sweetening health-care benefits for
workers just as the issue is poised to become a hot topic in the fall elections,
ranking at the top of voter concerns -- and those of Wal-Mart's own employees.
But the company faces a tough road as it tries to woo black lawmakers and create
fissures in the Democratic party.
"My feeling with them is that it is all about how they treat workers," said Rep.
Charles Rangel of New York, who has received a $2,000 donation from Wal-Mart.
"The ball is in their court to provide decent wages and benefits."
Asked if Wal-Mart's recent adjustments have met his standard, he replied:
"Not at all."
Rep. Jesse Jackson Jr., an Illinois Democrat, says he has allies on both sides
of the Wal-Mart battle. The retailer recently opened a new store near Mr.
Jackson's Chicago district. About 3,000 people applied for the store's 300
positions. Wal-Mart also hired local minority businesses to do accounting
and logistical work for the store. But Mr. Jackson says he isn't ready to
move into Wal-Mart's camp.
"I fundamentally believe in a living wage. What I refuse to believe is
that the richest company in the world can't pay it. I can't reconcile
that," he says.
Wal-Mart's efforts reflect a recognition it will be a big target not only in the
November midterm elections but also in the 2008 Democratic presidential primary.
In Democratic circles, attacking Wal-Mart is shorthand for slamming big
businesses and its treatment of workers. It's a message so embedded in
Democrat culture that it was a rare point of agreement between Connecticut
Senator Joseph Lieberman and his victorious primary challenger, businessman Ned
Lamont, both of whom attended an anti-Wal-Mart event during their race.
Whether the company can make a dent in critics' armor is an open question.
In other areas, such as health care and the environment, changes made by
Wal-Mart have damped attacks from some opponents. On the political front,
Democrats closest to the labor movement might be hard to win over.
The company's efforts took a step backward recently when Andrew Young, a former
civil-rights leader hired to promote the company in urban areas, resigned under
a cloud. Defending Wal-Mart in an interview with an African-American
newspaper in Los Angeles, Mr. Young said mom-and-pop stores run by Jews, Koreans
and Arabs had been "overcharging us" for poor-quality food. Mr. Young
later called his remarks "completely and utterly inappropriate."
Wal-Mart's donations to Democrats appear to be targeting members of the
Congressional Black Caucus rather than the party's leadership. House
Minority Leader Nancy Pelosi of California hasn't gotten a penny from Wal-Mart,
but the Congressional Black Caucus Foundation, the charitable arm of the
Congressional Black Caucus, received $1 million from the firm. In 2005,
Wal-Mart donated $1.5 million to the United Negro College Fund.
"I think you would find that we give to people who support our approach to our
business and people who have stood up for us. Members of the black caucus
have been great allies," says Bob McAdam, Wal-Mart's vice president of corporate
affairs.
In spring 2005, Wal-Mart Chief Executive Lee Scott took members of the black
caucus to dinner at Charlie Palmer's Restaurant, just off of Capitol Hill.
"Communication is good," says Paul Brathwaite, the caucus's executive director.
"It would be nice if other companies, such as Target, Kohls, Sears and others
that hire African-Americans, and where African-Americans are consumers, would
seek the same type of dialogue."
Earlier this year, Mr. Scott also met privately with the Congressional Hispanic
Caucus.
In June 2005, eight House members of the black caucus voted against a
Democratic-backed amendment to the Labor Department budget. The measure,
which failed to pass, would effectively have prevented the government from
giving Wal-Mart advance warning about visits from various government inspectors.
A couple of years ago, Wal-Mart decided it needed to start polishing its image,
something it had previously been reluctant to do. Internal polls showed
its brand name's value slipping among voters and shoppers as a result of the
drumbeat of bad publicity about its treatment of workers, in particular as a
result of its successful effort to fend off union activity at its stores.
Wal-Mart's Washington office, once run by Bentonville-trained lobbyists, is now
headed by Lee Culpepper, a Capitol Hill insider -- a Republican who has worked
for top Democrats -- who was hired away from the National Restaurant
Association. The company's lobbying expenses jumped to $1.6 million in
2005 from $140,000 in 1998, and Wal-Mart now retains a host of lobbying firms
with ties to both parties, according to the nonpartisan Center for Responsive
Politics.
Ten years ago, 98% of Wal-Mart's political donations went to Republicans.
Now, 70% go to Republicans, who control Congress and the White House, and 30% to
Democrats, according to Political MoneyLine, a nonpartisan watchdog group.
"As our company has grown, it becomes more important to broaden our giving,"
says Wal-Mart's Mr. McAdam.
Polls commissioned by the company suggest it might have popular support on its
side. A June poll by RT Strategies, a bipartisan polling firm, found that
62% of voters disapprove of Democratic candidates making Wal-Mart an issue in
the election. Among Democrats, 48% disapproved while 34% approved.
A July poll by Strategy One, a research arm of Wal-Mart's outside
public-relations firm, Edelman Public Affairs, found that 64% of Democrats have
a favorable opinion of Wal-Mart, with much of the support coming from
African-Americans, one of the party's most loyal voting blocs.
Thomas Riehle, a Democrat and an RT Strategies polling expert, says the results
suggest his party might be erring in aligning itself so closely with labor's
battle against Wal-Mart. "In politics, you don't go to a great deal of
effort to annoy people," he says.
Wal-Mart's previous efforts to burnish its reputation have paid some dividends.
Last year, it teamed up with the National Fish and Wildlife Foundation on a
program that preserves one acre of wildlife habitat for every acre Wal-Mart has
developed and will develop over the next 10 years. It's doubling its fleet
of 100 hybrid cars, has pledged to boost the fuel efficiency of its massive
trucking fleet by 25% within three years and says it will cut the volume of
solid waste produced by its stores by 25% within two years.
In addition, the résumé of Leslie Dach, Wal-Mart's new head of communications
and lobbying, includes work for the National Audubon Society and the
Environmental Defense advocacy group.
Carl Pope, executive director of the Sierra Club, is a strong Wal-Mart critic.
Yet while skeptical of many of the company's environmental promises, he also
acknowledges the improvement. "We are excited by examples where a company
can do well by doing good," Mr. Pope says. "I would love to have everybody
else copy Wal-Mart," when it comes to reducing oil consumption.
Yet Wal-Mart still faces dozens of lawsuits that provide ammunition for critics,
many of whom think the company hasn't done enough to improve the lot of its
workers, especially on wages. Many suits, some of which have been
certified as class-actions, allege employment and hiring violations. The
most significant is a potentially expensive and damaging complaint in federal
court in San Francisco alleging that Wal-Mart discriminated against women in its
promotion and pay practices. A Wal-Mart spokeswoman declined to comment on
the case. In December, a California jury awarded 116,000 Wal-Mart
employees in that state $172 million after finding they had been denied lunch
breaks.
In the past year, Wal-Mart bolstered health-care coverage, offering lower
premiums with high deductibles for employees who visit the doctor infrequently
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