Issues | Political Influence

Prior to 1998, Wal-Mart failed to grasp the power of a Washington-based lobbying army. With enormous wealth and a friendly legislature, Wal-Mart and the Walton family came to the realization that they could advance goals such as school vouchers, restricting tariff protections, limiting port security, the elimination of the estate tax, and obtaining lucrative subsidies. Wal-Mart Subsidy Watch by Good Jobs First documented that Wal-Mart has received more than $1.2 billion from over 244 taxpayer-funded subsidies status, job training/recruiting funds, and general grants.

Using Public Handouts

In company coffers, public dollars in surprising amounts:

• More Than $1 Billion In Public Subsidies. A May 2004 report documented how Wal-Mart received more than $1 billion from at least 244 taxpayer-funded subsidies -- including free or reduced price land, Tax Increment Finance (TIF) districts, infrastructure assistance, property tax breaks, state corporate income tax credits, sales tax rebates, tax-exempt bond financing, enterprise zone status, job training/recruiting funds and general grants. [Mattera and Purinton, Good Jobs First, "Shopping for Subsidies," May 2004]
• Millions To Widen the Street to Its Headquarters. A federal highway bill signed by President Bush in 2005 included $35 million to widen Eighth Street in Bentonville -- the road to Wal-Mart's corporate headquarters. The company says it asked U.S. Rep. John Boozman (R-AR) to secure funding -- even though local highway officials said the driveway was not a high priority. [Associated Press, 3/25/05; Arkansas Democrat-Gazette, 8/11/05; Benton Daily Record, 8/21/05]
• $9.5 Million for a San Diego Development. A San Diego development project anchored by a Wal-Mart and a Sam's Club received about $9.5 million in public subsidies -- yet the stores contribute only about $800,000 in annual sales tax to the city. [Brennan Center for Justice]
• Costs Outweigh Benefits. A Penn State report on the economic impact of local subsidies found that "[t]he public costs that [Wal-Mart] imposes by raising the poverty rate suggest that public infrastructure subsidies may not be warranted." [Stephan J. Goetz, Hema Swaminathan, "Wal-Mart and County-Wide Poverty," Social Science Quarterly, 6/06]

Cozying Up to Regulators

Influence in government means access -- which can win sweetheart deals with agencies tasked to protect us:

• Fixing Prices. Wal-Mart's Asda must pay millions to end a price fixing investigation in the United Kingdom. Wal-Mart Stores Inc.'s Asda unit and five other companies agreed to pay as much as 173.3 million pounds ($344.7 million) to settle an investigation by the U.K.'s antitrust regulator into the coordination of cigarette prices. [Bloomberg News, 7/11/08]
  

• Employing Teens in Unsafe Conditions. In January 2005, after an investigation of 27 stores in three states, Wal-Mart reached a settlement with the United States Department of Labor for violations of the Fair Labor Standards Act. Wal-Mart paid a $135,540 fine for allowing 85 workers, aged 16 and 17, to participate in activities prohibited to minors -- "including loading and occasionally operating or unloading scrap paper balers, and operating fork lifts." Wal-Mart signed an agreement with the Department's Wage and Hours Division regarding future child labor conditions. [U.S. Department of Labor Press Release, 2/14/05.]
• Negotiating for Weak Enforcement. An audit by the Office of Inspector General (OIG) of the child labor agreement between Wal-Mart and the Department of Labor found "serious breakdowns in the WHD [Department of Labor's Wage and Hour Division] process for negotiating, developing, and approving such agreements. These breakdowns resulted in the WHD entering into an agreement that gave significant concessions to Wal-Mart. Specifically, the agreement provided for advance notification by WHD of Wal-Mart investigations, and gave Wal-Mart the ability to avoid civil money penalties (CMP) under certain conditions. In exchange, the agreement primarily committed Wal-Mart to continue measures that were already in place or required by law. Also, WHD did not consult with the Office of the Solicitor (SOL) in developing and approving the agreement."
  
  Connecticut Attorney General Richard Blumenthal said: "This report constitutes an unexpected and virtually unprecedented indictment of the U.S. Department of Labor's sweetheart deal with Wal-Mart. [It] should lead us to be more vigilant and vigorous in enforcing our state child protection laws." [Link to anchored Endnote: U.S. Department of Labor, Office of the Inspector General, Office of Audit, 10/05; Hartford Courant, 11/1/05.]

Rewriting the Tax Laws

For billionaires, the millions needed to influence elections adds up to small change -- but through those millions, the Waltons poised themselves for a massive return on investment:

• Wal-Mart Gains More Control Over Credit Card Service Fees The bill, known as Conyers-Cannon (H.R. 5546), would give a huge financial windfall to the giant retailers, who could rig the system to lower the fee they pay when a customer pays with a credit card. Wal-Mart's windfall also could be a death knell for local banks already floundering through the worst housing crisis since the Great Depression. Losing steady revenue from credit card servicing fees could force many community banks and credit unions out of business, knocking out a key pillar of capital formation and economic development in our low- and middle-income communities. [Alabama Voices, 7/18/08]

• Working to Permanently Repeal Estate Tax. "The Waltons have joined a coterie of wealthy families trying to save fortunes through permanent repeal of the estate tax, government watchdogs say. ... The Waltons declined to discuss their political activities. But a USA TODAY review of public documents reveals a small-town Arkansas family emerging as a political juggernaut on tax issues, extending Wal-Mart's influence over U.S. society even more." [USA Today, 4/6/05]
• Gave $600,000 to Lobbying Firm; Could Save Billions. Lobbyist disclosure records show the Walton family paid Patton Boggs LLP, an influential Washington-based lobbying firm, $600,000 since 1999 in an effort to repeal the estate tax. In 2005, the Walton family would have saved $32.6 billion if the estate tax were repealed. [Public Citizen, "Spending Millions to Save Billions," April 2006]
• Millions in Lobbying Expenditures in 2007. In 2007, Wal-Mart stepped up its lobbying expenditures: $1.8 million in the first six months of the year. That’s more than 10 times what Sears spent its efforts, and almost 20 times what Target paid. This doesn’t even include Wal-Mart’s contributions to the Retail Industry Leaders Association (RILA). [AP, 12/26/07]
  
• Gave $2.6 Million to Hard-Right Conservatives. USA Today reported that in the months leading to the 2004 elections, Alice Walton personally poured at least $2.6 million into the right-wing, pro-Bush group Progress for America. The donation was Progress for America's "sixth-biggest gift." Progress For America backed the 527 committee 'Swift Vets and POWs for Truth,' which attacked Sen. John Kerry during the 2004 Presidential election, and supports "a conservative legislative agenda to reform Social Security, confirm President Bush's judicial nominees, overhaul the tax code and end lawsuit abuse conservative. [USA Today, 4/6/05; Public Integrity Source; Progress for America Source]

Weakening Public Schools

In the name of 'reform,' Waltons spend millions to shift public funds to private schools:

• Spending Over $700 Million on 'Reform'. USA Today reported, "The Waltons -- the USA's richest family -- have quietly become top philanthropists in education reform, including controversial charter-school and school-voucher causes. They have donated at least $ 701 million to education charities since 1998." [USA Today, 3/11/04]
• Promoting Publicly Funded Vouchers. Critics call the private scholarships a stalking horse for publicly funded vouchers. And Walton concedes as much, insisting that private vouchers will never go far enough. Only with publicly funded ones will ''we secure the future of charter schools and all the other reforms," says [John] Walton. [Business Week, 2/7/00]
• Financing Pro-Voucher Movement. A study by the People for the American Way detailed Walton's pro-voucher donations. "One of Walton's most telling contributions was the financial backing he gave to found the American Education Reform Foundation (AERF), a voucher advocacy group," according to the report. "AERF was a driving force behind efforts to get voucher initiatives on the ballot again in California in 1996 and 1998, and has since relocated to Indianapolis." According to conservative journal Human Events, the Waltons also spent just shy of $1 million in 2000 to fund the Black Alliance for Educational Options -- which proceeded to mount national media campaign in favor of vouchers before the elections. [People for the American Way Source (PDF)]
• Supporting Pro-Voucher Ballot Measures. The San Jose Mercury News reported that "[John] Walton, son of Wal-Mart founder Sam Walton, was the chief financial backer of the ill-fated Proposition 174 -- a school voucher proposal shot down 70 to 30 percent by voters in 1993." Walton donated $250,000 for the Yes-on-174 campaign. According to the Detroit News, John Walton spent slightly more than $2 million in Michigan in 20000 to support Proposition 1, a similar pro-voucher ballot initiative. [San Jose Mercury News, 3/23/96; San Francisco Chronicle, 10/27/93; Detroit News, 11/1/00]
• Voucher Groups Welcome Walton Involvement. "Having someone like John Walton in this movement makes it easier for other business people to enter the fray," says Clint Bolick, litigation director of the Institute for Justice, a conservative group that promotes vouchers. [Business Week, "Going to Bat for Vouchers," 2/7/00]

What You Can Do

Ready to rein in Wal-Mart's political power?

• Joining thousands in signing the Handshake with Sam agreement and calling on Wal-Mart to wean itself from public dollars
• Tell friends and family about Wal-Mart's political influence -- and how it uses its power to tilt the scales against working Americans