Down and Out
Troubled times at Wal-Mart. Struggling with mounting business, legal and public relations problems, a number of familiar faces in Bentonville have been shoved out the company’s proverbial open door. Desperate to stay a step ahead of grand jury indictments or the next negative headline, lots of shuffling has occurred at the top. The new faces are supposed to be more polished and experienced in the ways of Washington and Wall Street, but their fidelity to big business is just as strong.
Even with the shake-up, the press and investors remain unimpressed with Wal-Mart’s performance. The company’s stock price is stuck in a two-year slump and its business practices continue to spawn negative news stories every day. Lawmakers are finally taking notice and have introduced legislation in statehouses across the country.
Despite the company’s continuing slide, the small group of insiders who control Wal-Mart’s multi-billion dollar destiny are staying put. CEO Lee Scott took home over $17 million last year. Meanwhile, the Walton Family, which controls 38% of company stock, spends lavishly on conservative crusades and multimillion dollar paintings instead of providing adequate health care and wages for their employees.
Yes, some faces have changed, but the song remains the same. The revolving door of Wal-Mart insiders continues to spin. Wal-Mart Watch offers you this guide to who’s down and who’s out in Bentonville. Check back here often.
Latest News
- Wal-Mart retreats on fired VP (Arkansas Democrat-Gazette)
- Wal-Mart: Fired VP not a whistle-blower (AP)
- Wal-Mart Responds to Whistleblower Complaint (Wal-Mart Stores)
- Ex-Employee Sues Wal-Mart for Defamation (Reuters)
- Hardball will chill reports (Democrat-Gazette)
- Wal-Mart Sues Former Top Executive (AP)
Insider Profiles
Thomas Coughlin
STATUS: OUT
DATE: 3/25/05
POSITION: Vice-Chairman of Wal-Mart
This former hunting partner of Sam Walton was shot down for allegedly stealing $500,000 from the company till.
Coughlin, a Wal-Mart legend and twenty-seven year veteran of the company, claims he didn’t take the funds for personal gain. He says they were used to fund a top-secret effort to pay off union employees and gather information.
Wal-Mart disagrees with Coughlin and now the matter is the subject of a Federal grand jury investigation.
The Wall Street Journal observed, “For a man of Mr. Coughlin’s means – his total compensation topped $6 million last year – the alleged abuses seem surprisingly petty.”
Jared
Bowen
STATUS: OUT
DATE: 4/4/05
POSITION: VP who reported to then Vice Chairman Tom Coughlin.
Apparently unaware of the old proverb "don't shoot the messenger," Wal-Mart fired Jared Bowen after he reported a series of questionable payments requested by Thomas Coughlin. Bowen says Coughlin told him that the spending requests were part of "union project." He said, "I believe they were trying to clean house of everybody that was associated with or knew about this."
By all appearances, Bowen cooperated with the investigation on Coughlin, but nonetheless Wal-Mart conveniently felt the need to get rid of the whistleblower for "loss of confidence in associate as a company officer." Bowen has since filed for Federal whistle-blower protection. Wal-Mart officials struck back by denying Bowen is a whistleblower and accusing him of being part of a "scheme to defraud the company."
Kirby
STATUS: OUT
DATE: 11/11/05
POSITION: Customer Service
The most talked about Wal-Mart employee to get the boot this holiday season is only known to the public by his first name, Kirby. Kirby nearly touched off a boycott by the Catholic League when he wrote back a truly bizarre response to a customer's complaint about Wal-Mart's unfair treatment of Christmas on the store's website.
“Walmart is a world wide organization and must remain conscious of this. The majority of the world still has different practices other than ‘christmas’ which is an ancient tradition that has its roots in Siberian shamanism. The colors associated with ‘christmas’ red and white are actually a representation of of the aminita mascera mushroom. Santa is also borrowed from the Caucuses, mistletoe from the Celts, yule log from the Goths, the time from the Visigoth and the tree from the worship of Baal. It is a wide wide world.”
It is a wide world indeed, but not wide enough for Kirby's shamanistic missives to customers. Wal-Mart promptly fired Kirby and issued a series of apologies and changes to the company's website to quell the controversy. We're not sure exactly what Kirby looks like, but based on his writings and his familiarity with the Goths of the late Roman Empire, we think he might look something like the smiling fellow above.
Eduardo Castro-Wright
STATUS: IN
DATE: February 2005
POSITION: COO of Wal-Mart
Cut from a totally different cloth than Sam Walton’s old hunting buddy, Eduardo Castro-Wright nonetheless is a ruthless retailer in his own right.
Born into a wealthy Ecuadorian family that owns the largest supermarket chain in his native country, Castro-Wright has worked around the world for corporate giants such as Honeywell, Nabisco and now Wal-Mart.
In front of the cameras, Castro-Wright doesn’t shy away from signs of public affection as he did with Maryland Governor Bob Ehrlich during a veto ceremony of the state’s historic “Fair Share” Health Care initiative.
Behind closed doors, on the other hand, he won’t hesitate to play hardball. Before Gov. Ehrlich did Wal-Mart’s bidding, Castro-Wright threatened to reconsider a Maryland distribution center if the bill went forward.
The "Fair Share" Health Care Initiative received broad support from Maryland lawmakers who were outraged that Wal-Mart pushes off their health care costs to taxpayers. The measure would have required companies with more than 10,000 employees to spend at least 8% of their payroll on health care.
Eugene Scalia
STATUS: IN
DATE: 6/9/05
POSITION: Legal counsel to defend Wal-Mart against whistleblower claims.
Wal-Mart executives thought hiring well-known labor lawyer Eugene Scalia was a smooth move, but the negative attention generated by their new associate has been more of a headache.
Like his father, Supreme Court Justice Antonin Scalia, Eugene is recognized for his ultra-conservative views and legal work. He is closely associated with the right-wing Federalist Society and is law partners with Ted Olsen, who served as George Bush’s chief counsel during the 2000 Florida Recount. Scalia has “distinguished” himself in legal circles by ridiculing worker claims of repetitive stress injuries as “junk science.”
Working inside and outside of government, Scalia has consistently fought for the rights of large corporations over working Americans. During his 10 years as a labor lawyer, Scalia managed to represent only two workers. At the Department of Labor, Scalia undermined whistleblower protections and supported the Bush Administration’s efforts to limit overtime pay.
Scalia’s actions at the Labor Department even concerned several of his fellow Republicans. Sen. Chuck Grassley (R-IA) sharply criticized Scalia’s application of whistleblower protection provisions of federal law: “If this is the way the Labor Department intends to enforce the new law, then most corporate whistle-blowers won’t be protected.” Unsure of his chances of being confirmed by the full Senate, the Bush Administration gave up on Scalia when his recess appointment expired in 2003.
James
Lynn
STATUS: OUT
DATE: 2002
POSITION: Global Service Manager
It seems James Lynn took his job a little too seriously for Wal-Mart's taste. As a global service manager, Lynn was responsible for inspecting Wal-Mart supplier factories in Central America, where he uncovered "workplace violations, like locked exits and mandatory 24-hour shifts."
Lynn's reports didn't sit so well with senior Wal-Mart executives, who found some dirt on the whistleblower and promptly fired him.
A nine-year veteran of Wal-Mart, Lynn discovered abysmal working condition in Central America factories. According to the New York Times, "Several of his monitoring reports noted that factories in Honduras padlocked exits, lacked drinking water, did not have toilet paper and did not pay overtime to some employees. He said some factories were so hot that people passed out and that several gave pregnancy tests to newly hired women, dismissing those found to be pregnant."
After 13 years and numerous violations, Wal-Mart has failed to do anything about sweatshops around the world, which endanger the lives of thousands of workers. Wal-Mart's long history of sweat shop violations led the Domini 400 Social Index to remove Wal-Mart from their list of socially responsible companies.
Peter Kanelos
STATUS: OUT
DATE: 6/10/05
POSITION: Community Affairs Director of Arizona and Southern California
Sam Walton famously said that he’d never build a store where one wasn’t wanted. Like the company’s “Buy American” Program this policy is a thing of the past. Starting in the mid 1990s, executives like Peter Kanelos were hired across America to make sure voters or anyone else didn’t stand in Wal-Mart’s way.
Known for his ruthless campaign tactics, Kanelos won more battles than he lost on the Western frontier of Wal-Mart’s expansion. The game got rougher, however, when local activists in Inglewood successfully protected their community from Wal-Mart’s invasive growth plans.
In his last campaign, Kanelos went over the edge by comparing Wal-Mart’s opponents to Nazi book burners in a series of newspaper ads in Flagstaff, AZ. Unable to withstand the public outcry, Wal-Mart sent their campaign gunslinger packing but continue to spend millions fighting local initiatives to responsibility limit their growth.
Erik Winborn
STATUS: OUT
DATE: 3/9/05
POSITION: Fmr. VP of National Government Relations
Being Wal-Mart’s chief Washington lobbyist was a little too much for Eric Winborn to handle. The burnout was evident when he spoke to the press after he called it quits. “I’ve been working since I was in the seventh grade, and it’s time for a break,” he said. “I think it’s time for a third career, and that’s why I resigned.”
Clearly Winborn wasn’t up to the task of lobbying for a corporation with such diverse goals as increasing corporate welfare, expanding trade with China and weakening worker protections at home. “They need to form an internal team of heavyweights to stop the bloodletting before it starts,” a Capitol Hill insider explained. “They are the 800-pound gorilla, and hunting season is upon us.”
Lee Culpepper
STATUS: IN
DATE: 6/6/05
POSITION: VP of National Government Relations
Wal-Mart searched far and wide to find a Washington “heavyweight” able to lift their heavy lobbying load. At his previous job as VP of Government Affairs at the National Restaurant Association, Culpepper fought to protect the restaurant industry from minimum-wage increases, overtime regulations and obesity-related lawsuits. All good stuff as far as Wal-Mart is concerned.
The newspaper Roll Call observed that, “Culpepper’s learning curve will be short on many of the issues Wal-Mart cares about” thanks to his experience as a lobbyist and his strong connections to the Republican Party. Delighted by the GOP’s victory in the 2004 election, he shared his feelings with reporters by quoting a James Brown soul classic, “I feel good, like I knew I would.”
