Wal-Mart Cuts Taxes By Paying Rent to Itself

From the Wall Street Journal:

As the world’s biggest retailer, Wal-Mart Stores Inc. pays billions of dollars a year in rent for its stores. Luckily for Wal-Mart, in about 25 states it has been paying most of that rent to itself—and then deducting that amount from its state taxes.

The strategy is complex, but the bottom line is simple: It has saved Wal-Mart from paying several hundred million dollars in taxes, according to court records and a person familiar with the matter. And Wal-Mart is far from alone.

The arrangement takes advantage of a tax loophole that the federal government plugged decades ago, but which many states have been slower to catch. Here’s how it works: One Wal-Mart subsidiary pays the rent to a real-estate investment trust, or REIT, which is entitled to a tax break if it pays its profits out in dividends. The REIT is 99%-owned by another Wal-Mart subsidiary, which receives the REIT’s dividends tax-free. And Wal-Mart gets to deduct the rent from state taxes as a business expense, even though the money has stayed within the company.

Partly thanks to sophisticated financial strategies like these, states’ tax collections from companies have been plummeting. On average, Wal-Mart has paid only about half of the statutory state tax rates for the past decade, according to Standard & Poor’s Compustat, which collects data from SEC filings. The so-called “captive REIT” strategy alone cut Wal-Mart’s state taxes by about 20% over one four-year period. Now several state regulators are trying to crack down on the strategy, used largely by retailers and banks, and some other states have changed their laws to try to end the practice. Yesterday, New York Gov. Eliot Spitzer included elimination of the loophole as part of his proposed budget, a fix he said would bring the state $83 million a year.

North Carolina tax authorities are challenging Wal-Mart, saying its REIT strategy was intended to “distort [the company’s] true net income,” according to its filings in the case in Superior Court in Raleigh, N.C. The state calls captive REITs a “high priority corporate tax sheltering issue” and in 2005 ordered Wal-Mart to pay $33 million for back taxes, interest and penalties stemming from the REIT. The company paid it and last year sued the state for a refund.

The structure Wal-Mart is using features some unusual elements. Because REITs must have at least 100 shareholders to gain tax benefits, roughly 100 Wal-Mart executives were enlisted to own a combined total of around 1% of the REIT’s shares, without any voting rights. H. Lee Scott Jr., now Wal-Mart’s CEO, was listed as the REIT’s “managing trustee” from 1996 to 2004.

A single Wal-Mart real-estate official, Tony Fuller, represented the company both as tenant and landlord in its lease with itself. Ernst & Young LLP, the accounting firm that sold the strategy to Wal-Mart, also is the company’s outside auditor. In its internal sales training materials, the accounting firm explicitly labeled the strategy as a method to reduce taxes—a red flag to tax authorities, who often demand that tax shelters have other business purposes.

Wal-Mart attorneys say in court filings that the strategy is perfectly legal and that North Carolina is exceeding its authority. A spokesman for the Bentonville, Ark., company, John Simley, said Wal-Mart “is comfortable with its current structure and is in compliance with federal and state tax laws.” He added that the REIT structure was adopted to “more effectively and efficiently manage the company’s real-estate portfolio, including the impact on the company’s overall state tax planning.”

Regulators in at least a half-dozen states are going after companies that have trimmed their taxes through similar arrangements, including Regions Financial Corp.’s AmSouth Bancorp. unit; AutoZone Inc. of Memphis, Tenn.; and two units of Bank of America Corp. In a Massachusetts case against Bank of America unit Fleet Funding Inc., authorities call Fleet’s REIT arrangement a “sham” in court filings. They note that Fleet increased the salaries of the roughly 100 employees whom it made REIT shareholders to compensate them for personal income taxes stemming from ownership. The Multistate Tax Commission, an association of state revenue authorities, says it has started examining the use of captive REITs to avoid taxes, alerting states to the issue and proposing legislative fixes to close the loophole.

States collected more than $44 billion last year in corporate income taxes, out of $607 billion in total state tax receipts, according to the Nelson A. Rockefeller Institute of Government, a nonpartisan think tank associated with the State University of New York. But the average effective corporate state and local tax rate has dropped from 6.7% during the 1980s to about 5% during the first half of this decade, according to a recent report by the Congressional Research Service. This is in part because of the proliferation of state and local tax breaks, as well as tax shelters, according to several academic and government studies.

Some corporate state tax planners say arrangements like these are merely smart business, and that the loopholes exploited by companies should be fixed by state legislatures rather than litigated by state lawyers. Critics of the shelters complain they let companies use public services provided by local governments—such as police and fire protection or new highways—without having to shoulder their fair share of the costs. Meanwhile, the portion of state taxes borne by individuals is steadily rising.

Congress created REITs in 1960 as a way to allow smaller investors to put money in a wide portfolio of commercial real estate, spreading their risk. Congress also gave them a tax benefit: REITs aren’t subject to corporate income tax on the profits they pay to shareholders as long as they pay out at least 90% of the profits. The shareholders still usually get federally taxed on the dividends, which still count as income for them.

After a boom in REITs in the early 1990s, big accounting firms including Ernst & Young and KPMG LLP figured out that on the state level, they could pair the tax break on REIT dividends with a separate tax rule that allows companies to receive dividends tax-free from their subsidiaries. With the REIT as a subsidiary itself, two rules aimed at avoiding double taxation could be combined to effectively avoid any taxation at all.

The strategy worked especially well if the REIT was owned by a company incorporated, and claiming to do all its business, in a state such as Delaware or Nevada that often wouldn’t tax the corporate income anyway. That created an extra hurdle for other states to challenge the practice if they caught onto it.

Ernst & Young early on targeted the banking industry as a possible beneficiary of the captive REIT strategy. Like retailers, banks have branches in many states and often are liable for lots of state-level corporate tax. Ernst & Young targeted at least 30 banks, some of them its audit clients. The SEC generally permits that dual role as long as the firm’s fee isn’t contingent on the tax savings.

According to documents from a 1995 internal Ernst & Young sales training meeting reviewed by The Wall Street Journal, the accounting firm suggested banks put some of their income-producing assets, such as a portfolio of mortgages, into a REIT subsidiary, then use the double-tax break to “shelter” the income from state taxes. The REIT would issue a tiny number of non-voting shares to bank “officers and directors” to meet the 100-shareholder rule that REIT law requires.

U.S. banks “pay millions of dollars each year in state and local taxes,” read the Ernst & Young presentation to its sales force. “The FSI State Tax Financial Product we have developed can significantly reduce or eliminate this heavy tax obligation...” One section of the Ernst & Young sales package featured hypothetical questions from clients about the REIT shelter, and the proposed answers. To pass legal muster, many corporate tax shelters purport to have additional business purposes behind merely saving taxes. Ernst & Young, however, was blunt about the reason for its proposed strategy:

“Q: What’s the business purpose?

“A: Reduction in state and local taxes.

“Q: What if the press gets wind of this and portrays us as a ‘tax cheat’?

“A: That’s a possibility....If you are concerned about possible negative publicity, you can counter it by reinvesting the savings in the community.”

An Ernst & Young spokesman declined to comment on its REIT work, saying the firm was “prohibited from commenting on client matters.” The spokesman said he could not verify the authenticity of the internal sales training documents based on quotes provided by the Journal. However, he said the “limited language communicated in the internal memo does not reflect the quality and nature of the advice we provide to our clients.”

State authorities have had mixed records so far in pursuing back taxes and penalties in captive-REIT cases. AutoZone, the big auto-parts chain, won the right to deduct the dividends from its taxes in Kentucky but lost a preliminary round in Louisiana. The Hawaii Department of Taxation won a case involving a REIT used by Central Pacific Financial Corp., a bank holding company. AmSouth is in litigation with Alabama over tax benefits from its REIT.

Fleet Funding’s REIT, on which the company was advised by KPMG, has led Massachusetts to seek more than $42 million in back taxes, interest and penalties. BankBoston Corp. is in similar litigation with Massachusetts. Both banks have been acquired by Bank of America, which declined to comment on the litigation.

Fleet’s attorneys have said in court papers that its REITs were legitimate, and the fact that they were partly motivated by tax considerations does not legally undermine their valid business purpose—to raise capital, they say. A KPMG spokeswoman declined to comment on the Fleet case, but said it had stopped any involvement with “prepackaged tax products” before a 2005 agreement it made with the U.S. Justice Department over improper tax strategies that also led to the indictment of 17 former KPMG officials.

It’s unknown how many disputes have been raised over the strategy used by Wal-Mart and others, because such tax disputes are generally not disclosed unless lawsuits are publicly filed or the company reveals them in SEC filings.

Wal-Mart adopted its captive-REIT structure just as it was unwinding a previous strategy to reduce taxes that states had begun to challenge. For the first half of the 1990s, the retailer used a so-called intangible holdings company structure also used by many other corporations. Wal-Mart transferred its trademarks to a subsidiary called WMR Inc. in Delaware, which does not tax many forms of corporate income. Then it paid the subsidiary for the use of the brands. That allowed Wal-Mart to deduct those payments from its local income taxes in some states, while WMR’s income wasn’t taxed by Delaware.

Several states won challenges to the strategy, used by various retailers. Wal-Mart settled a dispute over its use of WMR in Louisiana—the details of the settlement are sealed—and lost on the main points of a case in New Mexico. Wal-Mart merged with WMR in February of 1997 and its use as a state tax avoidance vehicle was apparently discontinued, according to New Mexico court records.

In the meantime, Wal-Mart set up a new vehicle to control its state tax bill: captive REITs. In the summer and fall of 1996, Delaware corporate records show, Wal-Mart created a new hierarchy of subsidiaries: a REIT called the Wal-Mart Real Estate Business Trust; a Delaware-based parent company for the REIT, called the Wal-Mart Property Co.; and Wal-Mart Stores East Inc., parent of the Delaware firm. Wal-Mart Property owned 99% of the REIT’s shares, and 100% of the voting shares, according to Wal-Mart court filings in North Carolina and West Virginia. The company also set up a similar arrangement for its Sam’s Club stores.

To meet the 100-shareholder threshold required for REITs, Wal-Mart distributed a minimal amount of nonvoting stock, to approximately 114 Wal-Mart employees, according to a person familiar with the arrangement. The dividend payouts were nominal. The structure involved Wal-Mart’s top executive tier. The shareholders were generally executive vice presidents and above. David Glass, then Wal-Mart’s president and CEO, was listed as president of Wal-Mart Stores East on the lease agreement, and Paul Carter, then a Wal-Mart executive vice president, was listed as the president of the REIT.

Wal-Mart began transferring to the REIT ownership of the properties—the land and buildings—for hundreds of its stores in 27 states, real-estate records show. Then Wal-Mart Stores East signed a 10-year lease agreement with its REIT that took effect on Jan. 31, 1997, agreeing to pay a fixed percentage of the stores’"gross sales” as rent, according to a copy of the arrangement filed in the North Carolina case. Mr. Fuller, the Wal-Mart real-estate official, is listed as the contact for both the tenant and the landlord. The original lease was due to be renewed this week.

Wal-Mart could deduct from its state-taxable income the rent paid by Wal-Mart Stores East to the REIT. The REIT paid the majority of its rental earnings to its 99% owner, Wal-Mart Property Co., in the form of dividends. That company’s base in Delaware gave it another way to avoid liability for state taxes, since some states do require that dividends a REIT pays to its corporate owner be taxed, as the federal government does.

The Delaware subsidiary then paid the money back to Wal-Mart Stores East, the same subsidiary that made the payments to the REIT to begin with. Those payments to Wal-Mart Stores East weren’t taxed either, because dividends paid to a corporation by a subsidiary normally aren’t counted as taxable income for the parent company.

The result of the circuitous transaction: Wal-Mart could effectively turn rental payments to itself into state level tax-deductions in most of the states where the payments have been made. Under typical circumstances, rent paid to a third-party landlord also would reduce taxable income. But that would ordinarily be cash out the door, like most other tax-deductible expenses. Here, the majority of the tax-deductible rental payments came straight back to Wal-Mart.

The national tax savings have been significant. Over a four-year period, from 1998 to 2001, Wal-Mart and Sam’s Club paid company-controlled REITs a total of $7.27 billion that eventually came back to Wal-Mart in states across the country, according to a North Carolina Department of Revenue auditor’s report filed in court by Wal-Mart. Based on an average state corporate income tax rate of 6.5%, three accounting experts consulted by The Wall Street Journal estimated the REIT payments led to a state tax savings for Wal-Mart of roughly $350 million over just those four years. SEC filings show the company paid $1.18 billion in state taxes during that period. The loss of federal deductions that bigger state tax payments would have triggered brought the company’s effective tax savings overall down to about $230 million. Wal-Mart declined to comment on the figures.

It is not clear how much Wal-Mart has paid to its own REITs in the most recent five years. The yearly rental payments—on which the tax savings are based—are pegged to the “gross sales” of the stores, according to the lease agreement.

Underscoring that the rental payments were cashless Wal-Mart accounting moves, an affidavit filed in North Carolina by the company’s former controller, James A. Walker Jr., states that the payments were made by simply debiting the account of one subsidiary and then crediting the account of the other. “Wal-Mart Stores, Inc. served, in effect, as a bank for” both sides, the affidavit stated.

In 2005, after an audit, the North Carolina Department of Revenue issued a notice to Wal-Mart challenging the REIT structure. The state is site of about 140 of the company’s roughly 3,900 U.S. stores, including Sam’s Clubs. Wal-Mart paid the $33 million the state sought, and in March 2006 sued for a refund.

The company argues that the state does not have the authority to essentially combine the results of the subsidiary that did business in North Carolina with those of the Delaware-based unit and the REIT. The Delaware-based subsidiary, the company says, did no business in North Carolina and therefore was not taxable there. The company says in court filings that the REIT was qualified under federal law, that all the deductions were properly taken and that its North Carolina tax returns reflect its “true income.”

Posted by Russ Fagaly on Thursday, February 01, 2007

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COMMENTS

So much for Walmart using the tax advantage for communities as a good reason for letting one of their new stores being built and operated.

Companies are such liars and cheats.

Danny in
Thursday, February 01 at 11:46 AM

Nothing wrong with this—good business strategy—if we were all large business, we would do the same. I did it on a smaller scale. All within the framework of the law.

The problem with the federal and state governments is that we have too many laws and regulations (which are not law) for companies to comply with. Just read the above blog and see if you can understand it in just a few minutes.

Most on here will not agree for they are too liberal, but we
need less laws and less government. As I posted in the past read the “Fair Tax” book and you will understand. Unless you wish to have a socialistic government (we are almost there).

Please everyone, learn how government operates and watch who you vote for. Politicians are by far more evil, than WM and they influence your everyday life, WM does not for you don’t have to shop there. Need I say, Have a blessed Day!

knowledgeable in
Thursday, February 01 at 12:02 PM

Doggone if I didn’t forget to add: Wal-Mart and all corporations, large and small DO NOT PAY THESE TAXES OR ANY OTHERS.

Think about it—you the consumer pay all of these taxes in the cost of goods or services that you purchase. The company is merely the transfer agent of part of your puchase price that is passed on to the government. Please,
please learn how it all works.

knowledgeable in
Thursday, February 01 at 12:07 PM

Not what Walmart claims. When they want to set up shop THEY pay the community taxes. As I said, they are liars and cheats.

Danny in
Thursday, February 01 at 01:03 PM

knowledgeable,

Nice post, too bad most people won’t get it. It is also true, that only PEOPLE pay taxes and while companies are made up of people, the company is not a person per se, so it just acts as a tax collector. On the other hand, companies don’t make money either, PEOPLE do, the stockholders, and workers make the money, the company is just the vehicle that generates the cash flow.

Danny,

It is not that they are liars and cheats, it is just that you don’t understand how the system works. A company generates tax revenue, by just existing. If it didn’t EXIST, NO tax revenue would be generated for the community, that is why communities are willing to give tax breaks to get a company into their area.

Bob in
Thursday, February 01 at 03:33 PM

R E M E M B E R
J O N Q U I E R E
Q U E B E C

Home of Walmart Worker Abuse.
We will never forget what you did Walmart.

Alex in Ontario, Canada
Thursday, February 01 at 04:17 PM

Walmart builds a new store, hires a few hundred people, they get a pay check, they pay taxes, hense, tax revinue generated. wow, that was hard to figure out.

Another point,when walmart saves money they pass all the savings along to the customers.
Now people have more spending money for other things.
All that savings is spent at other businesses, creating more tax revenue, so on and so forth.

bry in rogers, ar
Thursday, February 01 at 04:18 PM

And the Waltons end up with billions upon billions, as industry moves to China, and everyone lives happily ever after.

R E M E M B E R
J O N Q U I E R E
Q U E B E C

Alex in Ontario, Canada
Thursday, February 01 at 04:32 PM

Are we somewhat bitter, Alex?

I have detected a note of envy in most anti-Wal-Mart posts. People are not mad that Wal-Mart does something profitable. No, they are only angry that it doesn’t benefit them. They have an entitlement mentality and they wouldn’t understand capitalism if it sat on their face.

The Wal-Mart haters are just like the Bill Gates haters. A bunch of wannabee, snooty, greedy, envious self-haters who are angry because someone took such a simple concept-retail, software, internet, etc.-and made a fortune at it. I disagree with Bill Gates’ political views but you have to hand it to the guy: he’s brilliant and he became the richest man in the world peddling the software equivalent of McDonald’s hamburgers. I use that example because Gates, like McDonald’s, standardized a simple concept. McDonald’s hamburgers may not be fine dining but at least you know what you are getting. The anti-Microsofit snootfest ended up with a ridiculous anti-trust lawsuit that punished Microsoft and Bill Gates for being too good.

Let this be a lesson to all future pioneers: someone, somewhere will be envious of you. And you can expect lawsuits and blog smears to be directed at you. Welcome to the world of the successful.

EllisW in
Thursday, February 01 at 06:42 PM

EllisW,

That is exactly why you hear things like, “The janitor is just as important to a business as the CEO, so he/she deserves great pay and benefits!!”. The problem is, anyone can clean a toilet and sweep a floor, but, not everyone can run a multi-national company. They somehow don’t get that concept.

Then they complain about “tax breaks” for corporations, while they get all their tax money back and in some cases, more than they paid in. It is hard for them to understand, that someone who doesn’t pay taxes, doesn’t need a “tax break”. Or, that a “tax break” is nothing more than letting you keep more of YOUR money. Somehow, they think that the money that a company has, is the governments money and that the government is giving them part of the governments money. But, they don’t mind their own personal “tax breaks”, somehow that is DIFFERENT.

Bob in
Thursday, February 01 at 10:07 PM

I personally think it’s a travesty to equate* this current bunch in Bentonville with Bill Gates. I agree with you totally, Ellis, Bill Gates is truley the poster boy for the American way of doing business. So why is it that you are posting on an anti Wal-Mart site when you could be blogging pro Microsoft?

Here’s a fun comparison between Bill and Sam’s spawn:

“The No. 1 givers Bill and Melinda Gates, the world’s largest international donors, who made history this year (2004) by giving their estimated $3 billion Microsoft Corp. dividend to their foundation. It’s one of the largest donations in history by a living donor. To put it into perspective, that ONE gift is THREE TIMES BIGGER than the amount that America’s RICHEST Family, the descendants of Wal-Mart Stores, Inc. founder Sam Walton, has given during their ENTIRE lifetimes, according to our ranking.” ~ Business Week

Ken V in Texas
Friday, February 02 at 04:50 AM

Ken V,

So, what’s your point? If I decided to give most of my wealth to charity, must YOU do the same? And, if my donations were 3 times what you gave, it makes you a ‘slimeball’? How is what I do with MY money, a measurement of what YOU are to do with your money? As for the 3 billion that the Gates gave, remember at one time, they had over 2 Trillion dollars in wealth, so 3 billion is just a drop in the bucket to them. And, you are comparing the wealth of 1 family, with the wealth of a number of families.

Bob in
Friday, February 02 at 01:27 PM

Bob

Exactly. I never fail to be amazed or disgusted with the modern American practice of telling others what to do with their money. Here is a lesson for all you liberals who do not understand simple concepts such as economics or our own Constitution.

1. Tax breaks are not a gift. They are not given by the government. The money for tax breaks does not come from a government fund. Every tax break you get is simply the government, with the power of guns behind it, permitting you to keep more of your own money. How generous! Government does not produce $1 but managed to confiscate a record $2.4 TRILLION this year. That’s $8,000 for every single person in America! And they somehow managed to spend close to $2.8 trillion. Real fiscal management, that.

2. Your neighbors wealth is not your wealth. You have no claim, legal or moral, upon the wealth of your fellow citizens. We have no right to demand that wealthy taxpayers in San Diego pay for public schools in West Virginia. We have no right to tax and tax someone’s wealth and property, only to demand 55% of the assets when the person dies. Regarding this death tax mess: liberals say that repealing this tax will “cost” us $800 billion over the next decade. Then they proceed to say that no one will actually be affected by this because the rich people hide their wealth in trusts and such. Which one is it>

3. Money belongs to its owner. It does not belong to this group or that group. You have no right to demand that the Waltons give more. The taxpayers have given more more more when it comes to education and our return has been embarassing. Despite spending that has grown more than 8 times over, test scores remained constant. Imagine a company invested $100 million in capital projects and managed to produce 10 million widgets next year. Now imagine this same company investing $800 million in capital projects and still producing 10 million widgets. Wasteful, I know.

It is none of our business what the Waltons, Bill Gates or anyone else does with their money. It’s theirs. They have a right to spend it however they want. It doesn’t belong to me so I don’t presume to have a say in the matter.

Of course, I believe in and respect Property Rights, both in concept and practice.

EllisW in
Friday, February 02 at 09:52 PM

EllisW,

“Regarding this death tax mess: liberals say that repealing this tax will “cost” us $800 billion over the next decade.”

This point always makes me upset, think about it, they already have the money they will take from your family when you die, figured into their budget, while you are STILL ALIVE!! I read a book, written by a former IRS auditor and he stated that according to the IRS, everything you ever get, is taxable. If you were to find a nickle in a parking lot, by law, you are required to report it as income or if you were to be given a piece of gum, that is a gain and its value is taxable. The government considers ALL of your money and assets are theirs and sometimes, they are nice enough to let you have some of it for yourself. That is the Liberal way of looking at things and why they are against ‘tax cuts’, they love spending someone elses money. That is why they are willing to pay $600.00 for a toilet seat and $300.00 for a hammer, it’s not their money, so why worry about how much things cost, after all, they have a money tree, called the American Taxpayer, especially the successful ones!!!

Bob in
Saturday, February 03 at 01:02 AM

“So, what’s your point?

My point* is “..it’s a travesty to equate this current bunch in Bentonville with Bill Gates” on any level!

As for the Right wing-nut contention of “the modern American practice of telling others what to do with their money” you couldn’t be farther from the truth.

It doesn’t bother me a bit that since 2000 the Walton’s have lost 20+% of their ‘paper’ fortune without so much as a whimper.

*For future reference, Bob, “my point” is usually contained in the first sentence of a post (or at least the first paragraph).

Ken V in Texas
Saturday, February 03 at 04:15 AM

Ken V,

Let’s see now, first we heard that “Personal Responsibility” is a Whacko concept and now we hear that “the modern American practice of telling others what to do with their money”, is a Right wing-nut contention, yet, you do it. So, I guess that the Left-wing way, is to hold no one responsible for their actions and it is perfectly correct for someone to tell others how to spend their money. What’s next, it is OKAY for people who need things, to just go out and take them? Or, if your neighbor gets you angry, it is perfectly acceptable to shoot him? How far is this all going to go, are we going to make excuses for EVERY type of ‘bad’ behavior?

Bob in
Saturday, February 03 at 12:07 PM

“Or, if your neighbor gets you angry, it is perfectly acceptable to shoot him?

I’d have to borrow a gun from one of my Right wing-nut NRA buddies.

Ken V in Texas
Saturday, February 03 at 12:15 PM

“What’s next, it is OKAY for people who need things, to just go out and take them? Or, if your neighbor gets you angry, it is perfectly acceptable to shoot him? How far is this all going to go, are we going to make excuses for EVERY type of ‘bad’ behavior?”
Bob in
Saturday, February 03 at 01:07 PM

Shoplifter dies after being handcuffed by Wal-Mart security guards

“There’s still an investigation in progress into this one, but police say an unnamed shoplifter died after he tried to flee from security guards at a Tulsa, Oklahoma Wal-Mart. The security guards say they struggled with the dude and handcuffed him, but he was dead when the police arrived.”

http://www.walmartfiles.com/shoplifter-dies-after-being-handcuffed-by-wal-mart-security-guards/

A man suspected of shoplifting goods from an Atascocita Wal-Mart — including diapers and a BB gun — had begged employees to let him up from the blistering pavement in the store’s parking lot where he was held, shirtless, before he died Sunday, a witness said.

http://www.commongroundcommonsense.org/forums/index.php?showtopic=35440

Bob let us ignore for a moment that ‘corporate’ billed the U.S. government for a $600 toilet seat or a $300 hammer.
Since your insanity takes you to WalMart worship and a total loss of perspective as a Edelman ‘war room’ blogger, we need to arrest your “type of ‘bad’ behavior” attitude before you attempt to continue with justifications.

WalMart- We kill shoplifters over petty theft.

SanDiegoView in
Saturday, February 03 at 09:13 PM

SanDiegoView,

“Shoplifter dies after being handcuffed by Wal-Mart security guards.......The security guards say they struggled with the dude and handcuffed him”

See, this is what I’m talking about, divert from the fact that the man chose to SHOPLIFT (It’s called STEALING) and BREAK THE LAW, and put the blame on the Wal-Mart security guards. Try to wrap your brain around this, “If he hadn’t been shoplifting, he would never have been handcuffed”. As Baretta used to say, “If you can’t do the time, don’t do the crime”. Wonder if what he stole was worth it!!!

What about that ‘poor’ Bank robber who was put in jail and deprived from being home with his family for 5 to 10, those cruel police, how dare they be so mean to arrest him!!!

“Bob let us ignore for a moment that ‘corporate’ billed the U.S. government for a $600 toilet seat or a $300 hammer.”

But, the government “Happily” paid the bill and ordered some more at the same price. They should have shopped at Wal-Mart!!!

Bob in
Saturday, February 03 at 10:40 PM

Since this original subject was about taxes, let us look at the taxes Bob wants petty thieves to pay-

“See, this is what I’m talking about, divert from the fact that the man chose to SHOPLIFT (It’s called STEALING) and BREAK THE LAW, and put the blame on the Wal-Mart security guards. Try to wrap your brain around this, “If he hadn’t been shoplifting, he would never have been handcuffed”. As Baretta used to say, “If you can’t do the time, don’t do the crime”. Wonder if what he stole was worth it!!!”

Bob- you are insanity beyond extreme arrogance. You are trying to justify WalMart killing someone over petty theft. WalMart security as judge, jury and executioner. I can only hope the WalMart employees who did this go to prison for murder. WalMart sued for heavy punitive damages and your attitude types are thrown to each other under the ‘do unto others as you would have others do unto you’ reality. Apparently you do not want to define ‘excessive force’ for petty theft. You make me want to exercise ‘rght to carry’ in case of contact with you or WalMart ‘security’.

You are desperate to equate this to bank robbery with-
“What about that ‘poor’ Bank robber ...” Typical piss poor propaganda Bob-
This is about petty theft. And for your information, WalMart does not get to prosecute anyone for crime. The local DA does that. That is what they get paid for as the legal authority for law enforcement- not WalMart security slobs.

Bob- you have proven by your own words that you show a ‘love of money’ psychopath feature- written in stone.
Dismissive of a person’s life with insane justification like-
“Wonder if what he stole was worth it!!!”

Divert from the fact-
WalMart- We kill shoplifters over petty theft.

SanDiegoView in
Saturday, February 03 at 11:44 PM

SanDiegoView-

First, get one thing straight: Wal-Mart didn’t kill anyone.

Second, you are correct in that death didn’t exactly fit the crime. However, to say that the man is blameless in this is beyond ridiculous. Bob is right when he says that if the man had not committed a crime, then he would probably still be among the living.

Third, the employees probably should serve time for this, but I’d have to look at all of the details to say so definitively.

Someone in USA
Sunday, February 04 at 02:06 AM

There was a similar incident in Houston a year or so back. Five Wal-Mart employees sat on an alleged shoplifter’s chest on a blacktop parking lot in August. The heat of the pavement cooked the man to death.

Ken V in Texas
Sunday, February 04 at 04:57 AM

Perhaps I have different ideals but I don’t believe that theft is a minor crime. When you steal from someone else, you are displaying a very negative attitude. You are saying, in effect, “I don’t care about you. I don’t care how hard you had to work to get this. I don’t care about what it cost you. I need it and I’m going to take it because my need trumps your need and I have absolutely no concern for you or for the rules of society”. That is my take on theft. The taking of another’s property is bad enough. The arrogance on display is even worse. Here is how we should handle theft.

1. First Offense-written warning, public notice that the offender has been warned-clearly explained that next offense will bring serious conssequences.

2. Second Offense-cut off a finger on each hand.

3. Third Offense-Cut off one hand.

4. Fourth Offense-Cut off the other hand.

5. Fifth Offense-Public execution.

If you look at places like Singapore, which is a modern, wealthy, clean and relatively free country, you should study their crime rates. Why do places like Singapore and Malaysia have little or no crime? Because punishment is swift and brutal. I used to be in the Loss Prevention business. We often caught the same person stealing from different stores. We caught a guy and it was his 13th offense. He had spent one day in jail for 13 thefts!! He was always found guilty. The police don’t want to do paperwork so they encourage the store to file charges on their own. You do that, pay the fees, then you wait for months. Finally, a court date rolls around. You show up early and sign in only to find out that the defendent, if he shows up at all, comes in very late to sign in so that you have to sit there for 6 or 7 hours waiting to get to his case. Then you get up before the judge and you find out that the DA or the Public Defender has requested a continuance for no good reason. It is granted then you leave. You may have to go through this 3 or 4 times over a 6 month period. If you stick to your guns and show up each time, the judge finally sentences the douchebag to a $100 fine.

And you wonder why I advocate public humiliation and cutting off of hands for theft?

EllisW in
Sunday, February 04 at 10:53 AM

Your solution to theft may cause some unintended losses in productivity, Ellis, since according to the National Retail survey:

“• Loss prevention specialists responding to the survey see employee theft as the single most significant source of inventory shrinkage.

•Retailers lost $14.6 billion to employee theft according to the survey.

•There is no other form of larceny that annually costs American citizens more money than employee theft.”

Ken V in Texas
Sunday, February 04 at 11:02 AM

Ellis

So you have made it clear that you would kill someone for stealing a loaf of bread. What would you do to those that steal peoples life savings? Give them a medal? Like those at World Com, ENRON, Or more close to your heart Neil Bush and the rest of the S&L;SCUM...... HYPOCRIT! The Bible says an eye for an eye. Not a life for some pampers!

As for Milasia, they CAIN people for chewing GUM! But of course its only the poor that get the worst treatment, the wealthy get a free pass, just like here.

What ever happened to “innocent untill PROVEN guilty”

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Sunday, February 04 at 01:16 PM

Here is how we should handle theft.

1. First Offense-written warning, public notice that the offender has been warned-clearly explained that next offense will bring serious conssequences.

2. Second Offense-cut off a finger on each hand.

3. Third Offense-Cut off one hand.

4. Fourth Offense-Cut off the other hand.

5. Fifth Offense-Public execution.

EllisW......you really need to see a doctor.

mary hingley in
Sunday, February 04 at 03:48 PM

Ken V,

““• Loss prevention specialists responding to the survey see employee theft as the single most significant source of inventory shrinkage.

•Retailers lost $14.6 billion to employee theft according to the survey.

•There is no other form of larceny that annually costs American citizens more money than employee theft.””

Sounds like the employees are already getting their increase in benefits!! And, you think that Wal-Mart treats their employees ‘badly’, what would you call what the employees are doing to the company?

SanDiegoView & Dave,

You seem to forget this part, “they struggled with the dude and handcuffed him”, besides, what was his ‘cause of death’, are you sure it was because of something the guards did? I would think that handcuffing someone would not cause death!!!

Bob in
Sunday, February 04 at 06:33 PM

Boob

“I would think that handcuffing someone would not cause death!!!”

Are you realy that DUMB or do you just like to come across that way?....... No, your realy that dumb!

No, of corse the handcuffs didn’t kill him. But the choke hold that may(or in this case more than likely) have been used in subduing him probabaly did. As for the one in Texas that was crushed by the weight of 5 or 6 WM employees while they COOKED him slowly on the summer pavement, while awaiting the REALpolice to show up is not a case of someone dying because thy were handcuffed. Its all the other stuff that happens along with it. The fact is WM employees DO NOT have the right to use deadly force with shoplifters. PERIOD!

Part of the problem is that WM hires city police wannabees and whats worse is that with what they pay, all they are getting is the never could bee officers, you know the ones that have failed the entrance exams over and over. The ones that were the hall way monitors in school, the ones that ratted on every one in school, got the hell beat out of them for being rats, and now they have a GUN and a badge that WM issued them, and their on a power trip.

What has to be the crazyest part is that Boob, Ellis, and Someone support the WM security gards in their whole wild west, judge, jury, and excutioner role. Justfying the killing of a pamper thief, as some kind of public service is discusting!

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Sunday, February 04 at 08:07 PM

IRONHEADED,

Okay, let’s pretend that you were a Wal-Mart Security Guard and you saw someone “Stealing” something from the store, remember, your job is to stop theft, what would you do, if the shoplifter refused to stay on the store property until the police arrived and wanted to “fight and run”? Would you just stand there hollering “Halt”, or would you try to prevent him from getting away?

You call it ‘petty theft’, but what is the LINE between ‘petty theft’ and major theft? And, is it alright for people to steal things from others, as long as the dollar amount isn’t too high? It is a fact, that if people get away with shoplifting, they move on to stealing bigger and better things.

Remember that commandment in the Bible, one of the “Big Ten”, THOU SHALT NOT STEAL. It mentions nothing about it’s okay, if it’s just ‘petty theft’!!

By the way, what is it with your propensity for favoring people who break the law, do you have something against law enforcement, been arrested a few times before, have you?

Bob in
Sunday, February 04 at 11:41 PM

Boob

It’s not that I am in favor of criminals, it’s just that killing someone over diapers is over the top! The fact that you don’t have a problem with that speaks volumes about the kind of person(for lack of a better word) that you are.

1) The people that were MURDERED by WM security were at that point INNOCENT! They were only “suspected” of being shoplifters. Remember they didn’t get a chance to get a fair trial.

2) Stealing PAMPERS is not a capitol offense.

3) When a security officer takes someone into custody their safty becomes their responsiblity. If they die while in their custody they become responsible.

Both of those deaths were as a direct result of the brutal treatment that they recieved while in the custody of the WM rent-a-cops. They should do prison time for what they did!

“It mentions nothing about it’s okay, if it’s just ‘petty theft’!!”

No Boob, but it sure does mention “an eye for an eye, a tooth for a tooth” But it sure doesn’t say “a Life for some PAMPERS” Killing someone over petty theft is NEVER acceptable!!!!!!!!

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Monday, February 05 at 12:06 AM

Dave, like your new friend, SanDiegoView, you need to learn to read more carefully and think about what you are saying before you click the “SUBMIT YOUR COMMENTS” button. Where did I say it was right to kill a man for shoplifting?

Someone in USA
Monday, February 05 at 12:07 AM

The people that were MURDERED by WM security were at that point INNOCENT!

Dave, you’re too much.

Someone in USA
Monday, February 05 at 12:09 AM

IRONHEADED,

You keep saying that word MURDER, let me ask you a question, okay (you probably won’t answer it though)? If you were to get drunk, get into your car and drive and get into an accident where someone died, would you be charged with MURDER and sent to prison for life? My 8 year old son was killed by a drunken driver, the driver got a DUI fine and had to take a driving course to retain his licience. He didn’t even get charged with involuntary manslaughter, much less murder.

And, you didn’t answer any of my questions, as usual!!!

Also, you completely missed my point about how, if he hadn’t stole those “Pampers” in the first place, and hadn’t resisted, he wouldn’t have been tackled and pushed to the ground and handcuffed, doesn’t any of that make HIM responsible for anything with you!!!

Bob in
Monday, February 05 at 12:31 AM

Someone

By minimizing their responsibility you give them your support.

“Bob is right when he says that if the man had not committed a crime, then he would probably still be among the living.”

That statment is akin to placing the blame on someone that just had a plane wing fall from the sky and kill them in their living room. After all if they had been doing somthing productive with their time, they would still be alive. But oh no they were watching the price is right and turning their brain to oat meal so they were partly at fault.

Again, he was only accused of wrong doing, he NEVER got his day in court! At the point that he was MURDERED he was innocent! All over some pampers. Ya, thats worth a mans life!

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Monday, February 05 at 12:40 AM

Boob

I am sorry about your son. The man that killed him, I feel was guilty of MURDER and should have been charged acordingly. All I can say is that must have been some time ago, in this climate today I’m quite sure that he would have been much more sevierly punished, unless of course he had a lot of money, then he would probably walk. But Boob that has nothing to do with the MURDER that was commited by those WM rent-a-cops!

Its obvious that they used EXCESSIVE force. Also I would be willing to bet that they went on to beat the shit out of him well after they had him subdued. Of course thats my opinion.

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Monday, February 05 at 12:55 AM

In all fairness I have to say this. Bentonville’s move from Loss Prevention (LP) to Asset Protection (AP) was a good one. It removed the unstated quota and put the emphasis where it should be, on asset protection and recovery.

Having said that I hasten to add Wal-Mart botched the implementation of this change and left some store managers and associates under the impression that the new AP policy allowed shoplifters to steal.

For those of you who missed the point of my earlier post, while Wal-Mart’s thug cop-wannabes are killing a shoplifter in the parking lot over a few dollars of stuff, employees are stealing the store out the back door. Nealy half (47%) of retail shrink is employee theft!

Ken V in Texas
Monday, February 05 at 04:43 AM

Someone in USA
Sunday, February 04 at 03:06 AM
Propagandizes with this crap-

“First, get one thing straight: Wal-Mart didn’t kill anyone.”
“Third, the employees probably should serve time for this,...”

The employees of whom?

“WalMart security guards” killed this guy for petty theft.

Someone in USA
Sunday, February 04 at 03:06 AM
Misleading with a careful lie-

“However, to say that the man is blameless in this is beyond ridiculous.”

I never said that. Another misrepresentation carefully placed as piss poor blogging from Edelman. A plain lie-

“Dave, like your new friend, SanDiegoView, you need to learn to read more carefully and think about what you are saying before you click the “SUBMIT YOUR COMMENTS” button. Where did I say it was right to kill a man for shoplifting?”
Someone in USA
Monday, February 05 at 01:07 AM

“ Bob is right when he says that if the man had not committed a crime, then he would probably still be among the living.”
Someone in USA
Sunday, February 04 at 03:06 AM

What is this other than an attempt at justification for killing someone over petty theft?

“Second, you are correct in that death didn’t exactly fit the crime.”
Someone in USA
Sunday, February 04 at 03:06 AM

A careful disavowing of the action and trying to be magnanimous at the same time. Let us all now worship WalMart with “Someone in USA” as the innocent corporation that has not excessively broken the law all over the United States and whose reputation is above reproach. What a load of crap-
You are attempting jurisprudence without noting known remedies with “...death didn’t exactly fit the crime.”

The DA gets to make the decisions over who to prosecute and why. Not WalMart security guards. Security cameras everywhere and eyewitness evidences to produce to the DA for prosecuting someone over shoplifting. Excessive force from security guards detaining petty thieves in these type cases that lead to a death will result in WalMart being sued for not having a proper policy in place for the police and DA to deal with shoplifters. In the United States only the legal system can convict a person of a crime. Not WalMart. Employees and customers perhaps should carry firearms (right to carry) because of inevitable false accusations by WalMart security guards and subsequent actions that will probably happen (have already happened) in the future by WalMart security slobs or because you may encounter Bob or EllisW types.

WalMart- We kill people over petty theft and then try to make it seem normal and acceptable with piss poor blogging-

SanDiegoview in
Monday, February 05 at 08:10 AM

Dave-

Forgive me if I don’t exactly feel sorry for the burglar who breaks into the serial killer’s house. That doesn’t mean I think the serial killer is in the right for killing him.

Also, why is it that you keep saying these INNOCENT men MURDERED the shoplifter? Have they been convicted in a court of law? Pay attention, Dave.

SDV-

My first comment toward Dave suffices to address the bulk of your post. A few other things:

WalMart being sued for not having a proper policy in place for the police and DA to deal with shoplifters.

What exactly do you think the policy says?

Another misrepresentation carefully placed as piss poor blogging from Edelman.

You make a lot of baseless assumptions that are easily refuted. There is a lot of evidence readily available to you that I don’t work for Edelman. If anything qualifies as “piss poor blogging,” it’s jumping to conclusions like you do.

Someone in USA
Monday, February 05 at 11:30 AM

IRONHEADED,

“That statment is akin to placing the blame on someone that just had a plane wing fall from the sky and kill them in their living room. After all if they had been doing somthing productive with their time, they would still be alive.”

You get more idiotic with every post. The person sitting in their living room, would have no knowledge of the plane wing falling, but are you seriously saying that the shoplifter didn’t know he was shoplifting and could get caught and might get taken into custody? Then, you add the fact that HE RESISTED, doesn’t that add to the perception of possible guilt? Now, if you hire someone, to work for one of your many businesses, and they, while working for you, cause someone to die, does that make you a MURDERER? Do you seriously believe that Wal-Mart TELLS it’s guards to kill shoplifters? And, you keep adding ‘Pampers’ to the discussion (which would suggest, that he was indeed stealing something, therefore he is no longer innocent), where does that come from? Or are you trying to emote sympathy for the guy, by saying he was just trying to get diapers for his poor little baby ( put a halo on this guys head)?

SanDiegoview,

“The DA gets to make the decisions over who to prosecute and why.”

Right, and was Wal-Mart charged with murder in either of the cases mentioned, by the DA? Did the guards get charged with excessive force, by the DA? Also, you guys keep jumping over the fact that the guy RESISTED, “innocent” people don’t run, or fight capture!!!

Bob in
Monday, February 05 at 11:57 AM

Ken V,

“Nealy half (47%) of retail shrink is employee theft!”

And, you believe that these employees should be rewarded for this, by being given a raise and better benefits, right?

By the way, did you see the news today, Wal-Mart beat it’s estimates with STRONG (January) same store sales!! So, I guess your negative oppposition is working well!!!

Bob in
Monday, February 05 at 12:08 PM

Boob

I’m going to tell you right now, if a security guard from WM or any other store trys to detain me for ANY reason, they are going out TOES UP! Trust me on this one. I’m not a thief, and I wouldn’t apreciate being treated as such. I will not be searched by some wanna-be-cop on a power trip, and YES I would fight them. But thats because I don’t believe that people should have their rights violated by a store employee, even if they do have a “badge”.

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Monday, February 05 at 01:17 PM

“...Wal-Mart beat it’s estimates with STRONG (January) same store sales!!”

The New York Times referred to Wal-Mart’s 2.2&#xJa;nuary same store sales increase as “modest”. Dow Jones wasn’t quite as positive:

“The results topped the Bentonville, Ark.-based retailer’s prediction that sales in U.S. stores open for at least one year would rise annually by 1% to 2% in the five-week period, ending Feb. 2.

But Wal-Mart’s (WMT) monthly results follows a series of weak results, such as a 1.6% gain in December, a decline in November and less than a percent gain in October. For the entire fiscal year, ending Jan. 31, Wal-Mart may end up delivering the lowest same-store sales growth in the 27 years the retailer started tracking this figure. Through December, Wal-Mart was tracking at a 2% gain for the fiscal year.”

“STRONG”, indeed! lol

Ken V in Texas
Monday, February 05 at 02:07 PM

Ken V,

I know that you understand, that as a business grows, it reaches what they call a saturation point, where it becomes harder to increase profits by large amounts, don’t you? As a small business, increasing sales from $50,000 to $75,000 a year may be fairly easy, that’s a 50% increase, but, that same store might have a problem increasing it’s sales by $500,000 in a year, later on down the road. As there are only X amount of people in a community, with X amount of money to spend, there comes a point where it gets harder to increase sales.

Bob in
Monday, February 05 at 11:38 PM

IRONHEADED,

“I’m going to tell you right now, if a security guard from WM or any other store trys to detain me for ANY reason, they are going out TOES UP! Trust me on this one.”

No wonder you agree with the criminals, tough guys like you don’t take no crap from anybody, now do you? After all, you’re a big tough ironworker aren’t you? Who cares if there are laws, they don’t apply to you though, right? You, your ‘illegal alien’ friends and ‘Pamper’ thiefs don’t put up with that silly law enforcement crap.

Bob in
Monday, February 05 at 11:50 PM

Boob

You are absolutly right about one thing, I don’t, and I won’t, just stand by and let my rights be violated, for no other reason than, I’m not doing anything wrong, so let them search me. Let them accuse me in a public place. When private citicens try to detain or arrest people, those people have the duty to fight that type of infringement of their rights. Just because walmart gives them a badge doesn’t make them Wyatt Earp and judge Roy Bean all rolled up in one little rent-a-cop uniform. Judge, Jury, and executioner.

Thats part of whats wrong with this country now. People have given up almost all of our rights, all in the name of safety (safety from who?). One small right at a time. You take enough small rights away, and there are NO rights left. Take a long hard look at the “Patriat Act” that “act” took more rights away from gun owners and private citicens than all the legislation of all the past presidents. I for one have given up ENOUGH!

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Tuesday, February 06 at 01:41 AM

IRONHEADED,

Let me tell you something, on a couple of occasions, while passing through those security things at the doors of Wal-Mart, the alarm went off. Stupidly, according to you, I stopped, let the greeter check my reciept and cart and went happily on my way. I guess, I should have raised a fuss, punched out the greeter and ran out the door, to prove to them that they couldn’t push me around. Acting like an A$$, when you are innocent, only gets you into trouble. Usually, when security gets involved, it is because they have spotted someone putting something in their pockets, purse or stuffed something in their pants. At that point, they make a decision to detain that person, because clearly, they are shoplifting. And, sorry, but those people need to be detained, or they will continue to shoplift and eventually go on to bigger crimes, in the future, if they feel they can get away with things.

Bob in
Tuesday, February 06 at 03:13 AM

Per policy, to make the stop, AP has to see the thief select the item, conceal it, and take it past the payment area (as in out the door). They cannot lose sight of him, since he could have ditched the item in that time. If Wal-Mart AP detains someone, then they know that he has taken something (if they want to keep their jobs anyway). So, IRONHEAD, unless you are a thief and they’ve seen the whole thing, they will not detain you.

The store does have the right to protect its property.

Someone in USA
Tuesday, February 06 at 12:35 PM

Someone

“The store does have the right to protect its property.”

They do have the right to protect their property, they DON"T have the right to kill accused shoplifters. PERIOD!!!!!!!

DAVE SMITH
PROUD UNION IRONWORKER

IRONHEAD in Oklahoma City
Tuesday, February 06 at 01:32 PM

Ironhead

Just as an aside WM does not issue badges to anyone.
In most states the guard (what ever you wish call them) has to be certified by that state. Golly gee and my goodness gracious, why can’t we get facts reasonably correct when we post.

Didn"t I read that these security personnel were also police officers just working when off duty as security guards??

knowledgeable in
Tuesday, February 06 at 08:41 PM

Hi all,
I know that the best way to destroy an long-time friendship is to admit them that you’re in love with them. The last thing that I desired was to destry the storythat I have with him. Now, I sometimes wonder if I’ll never meet someone who does me feel the way I felt when I was with them and have them feel exactly the same way about myself, evne when he talk something about <a >keywords adsense</a>. What if you are with a men that you believe is the one to marry. That just freaked me out for the rest of the time I was there so I had to put that in this diary so somebody could feel the same way that I tried when I discover it, that person is fine though. And I did make that for you and though of you while doing so. It was meaning that if you have worries forgiving somebody for a bad stuff they did to you, then you need to thinkof something equal that you have done to someone else, and see why they did what they did, or at least try. I don’t know if I am able to do it.
Penelope

justontimewithmyself in UK
Tuesday, February 13 at 10:05 AM

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