Inside the Bat Cave

Inside the Bat Cave: Paranoid Wal-Mart’s spying scheme

Being the world’s biggest retailer doesn’t make Wal-Mart Stores, Inc. feel secure. No sir! According to the Wall Street Journal [subscription required], Wal-Mart spies on reporters, critics, stockholders and the consulting firm McKinsey & Co.

And you thought the US was paranoid with its Patriot Act that lets librarians track your web searches and its Total Information Awareness system. Wal-Mart makes Hewlett Packard Company, Inc. which spied on its board of directors to detect press leaks—look like a chump!

Wal-Mart’s spying operation is run by a 20-person Threat Research and Analysis Group from the Bat Cave—a separate glass-enclosed structure which its employees access by holding the palm of their hands to a biometric reader. Here are some of the choice details of Wal-Mart’s spying scheme:

Protestor infiltration. Wal-Mart hooked up a wireless microphone to a long-haired employee who infiltrated an anti-Wal-Mart group—Up Against the Wal’s—to determine if it planned protests at Wal-Mart’s annual meeting.

Vendor porn tracking. Wal-Mart used Defense Department monitoring equipment that detected the degree of flesh-tone on a viewed Internet image, and alerted monitors that a vendor sharing Wal-Mart networks was viewing pornography.

Employee spying. Wal-Mart managers receive a list of email addresses and phone numbers with which their employees have communicated, and a list of Web sites visited. Wal-Mart limits Internet access, blocking social-networking and video sites. It also views emails that employees sent to or received from private accounts such as Hotmail or Gmail whenever the employees were hooked into the Wal-Mart computer network.

Consultant monitoring. Suspecting that the leaks of confidential memos might have come from McKinsey employees who had been working on a health-care project at Wal-Mart’s Bentonville, AK headquarters at the time of a leaked memo, Wal-Mart’s security experts monitored McKinsey Internet activities.

Shareholder resolution threat assessment. The Bat Cave also conducted “potential threat assessment” of those submitting proposals to its June shareholder meeting, particularly those whose resolutions Wal-Mart was trying to block. The list included proposals from a Boerne, TX, religious group; the New York City Controller’s office; and Sydney Kay, an 85-year-old, retired science teacher who submitted a resolution requiring that board nominees own at least $5 million in Wal-Mart stock, and his 93-year-old sister Hilda Kaplis. (Kaplis sounds particularly threatening.)

Wal-Mart sounds like one sick puppy to me. I think it needs psychological counseling! Do you really want to support a company with that view of the world?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Hewlett Packard or Wal-Mart.

Posted by Alex Goldschmidt on Wednesday, April 04, 2007

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