Wal-Mart Dramatically Increases Lobbying Expenditures in 2007

When Wal-Mart cuts costs on employee health care or product safety, the company doesn’t always pass the savings along to its customers. Sometimes, Wal-Mart passes it on to its multi-million dollar lobbying firms. Wal-Mart increased its lobbying expenditures by 60% last year, spending a total of $4 million to have its way with the American legal system. Why is the company doing this? Wal-Mart isn’t satisfied to simply abide by the law. The company is used to getting its way with suppliers and employees, and from the way the company is investing in lobbyists, it seems Wal-Mart wants to get its way with the U.S. legal system, too.

Topic for discussion: is it fair for Wal-Mart to use its power to influence politics this way? Is this a legitimate form of political participation, or is the company behaving unethically?

Wal-Mart Lobbying Up 60 Percent in 2007 [Associated Press via Forbes]

Wal-Mart, the world’s largest retailer, jacked up its lobbying budget by 60 percent in 2007, spending $4 million to influence the government on issues ranging from energy efficiency to retail crime.

While its lobbying budget is still pocket change compared with other major trade groups and corporations, Wal-Mart’s increased spending marks a growing recognition that the bottom line in Bentonville, Ark. is subject to the ways of Washington.

In 2006, the company spent about $2.5 million in lobbying dollars, up from $1.6 million in 2005. But less than a decade ago, Wal-Mart barely broke the six-figure mark thanks largely to Sam Walton’s distaste for it. It spent $140,000 in 1999, after establishing a Washington shop about 10 years ago. It spent about a $1 million annually for the next several years, before increasing its lobbying representation and funds in 2005 amid increased criticism of labor practices and benefits.

A spokeswoman in company’s Washington office said Wal-Mart decided around 2004 that it needed to focus more on federal relations and better educate policy makers on the many issues affecting the global retailer and employer. The company has 12 registered lobbyists now, up from two in 1999, said E.R. Anderson, who is part of the office’s D.C. staff.

The company also has worked with a stable of outside lobbying firms, including Patton Boggs LLP, the Podesta Group Inc., Mehlman Vogel Castagnetti Inc. and 10 others for the last few years.

Wal-Mart Stores Inc. easily ringed up more than its major rivals. Target Corp. (nyse: TGT - news - people ) spent $200,000 lobbying in 2007, while Costco Wholesale Corp. (nasdaq: COST - news - people ) and Macy’s Inc. (nyse: M - news - people ) aren’t even registered to lobby. Wal-Mart also outdistanced the top retail trade group, the National Retail Federation, which spent about $1.7 million last year.

Wal-Mart didn’t nudge its way into the K Street stratosphere of major trade groups and veteran corporate lobbyists.

The drug industry trade group, the Pharmaceutical Research and Manufacturers of America, spent $22 million in 2007, while Exxon Mobil Corp. (nyse: XOM - news - people ), the world’s largest publicly traded oil company, spent $17 million.

Wal-Mart lobbied on numerous issues, including a food stamp program, free trade, consumer product safety legislation, energy efficiency and standards. It also pushed for tougher enforcement of organized retail crime.

It also lobbied for a bank license, although it dropped its bid last year after it was strongly opposed by banks, unions and other critics. It continues to push for the ability to offer other financial services, such as prepaid Visa debit cards for millions of low-income shoppers who don’t have bank accounts.

Long criticized for its skimpy employee health-insurance benefits, the company has also lobbied against legislation that would allow employees to form, join or help labor organizations. Its employees are not unionized.

The company - which lobbied Congress, the White House, Consumer Products Safety Commission and Commerce and Labor departments, among other agencies - spent more than $2.2 million in the second half of 2007 to lobby the federal government, according to a disclosure form posted online Feb. 15 by the Senate’s public records office. It spent nearly $1.8 million in the first six months of 2007 to lobby on similar matters.

Breana Teubner, a former legislative assistant to Rep. Jeff Flake, R-Ariz., was among those lobbying on behalf of Wal-Mart.

Lobbyists are required to disclose activities that could influence members of the executive and legislative branches, under a federal law enacted in 1995.

Posted by Alex Goldschmidt on Monday, March 10, 2008