Shameless—California: Campaign Cash

CALIFORNIA

Campaign Cash

Wal-Mart funnels $4.3 million to front groups set up to ensure Supercenter expansion in most populous state

ALREADY A SIGNIFICANT PRESENCE IN CALIFORNIA with 148 discount stores, the offices of Walmart.com, and nine distribution centers,¹ Wal-Mart is working hard and spending big to build Supercenters throughout the state.

In 2002, Wal-Mart boasted that the company would open 40 Supercenters in California within 4 to 6 years; today there are only four. But Wal-Mart remains undeterred. Capturing market share in California, by itself the world’s 8th largest economy, is critical for Wal-Mart’s ongoing dominance. CEO Lee Scott said of the opposition in the state: “…they need to bring their lunch, because we’re not going to lay down…We’ve got nothing to apologize for.”²

Since 2000, Wal-Mart has given $4,334,859 to front groups in ten California communities.³ These local groups have been created to run political-style campaigns aimed at winning referendums and ballot initiatives that push for the construction of Wal-Mart Supercenter stores over local legislative or community opposition. Wal-Mart brags about being challenged by 27 ballot referendums in the state and winning 22. (See “Keeping Score in the Golden State,” page 17.)

Contra Costa County

Even though Wal-Mart had no immediate plans to build Supercenters in Contra Costa County,⁴ it feared the precedent being set by Ordinance 2003-18, adopted by the county Board of Supervisors in June, 2003.⁵ The ordinance limited the development of “big box” stores over 90,000 square feet with more than 5% of their merchandise classified as non-taxable.
Wal-Mart quickly mobilized its forces in response.

“We certainly believe that the consumers in Contra Costa have every right to shop and to spend their hard-earned dollars where they want. And we think this ordinance hurts working families by limiting their choices,” Wal-Mart spokeswoman Amy Hill said.

Wal-Mart went on to outspend its opponents in a campaign to defeat the ordinance by bringing it to a popular vote. It was called “Ballot Measure L.”

Wal-Mart contributed $1,577,075 to “Contra Costa Consumers For Choice,” a coalition identified as Contra Costa Residents and Wal-Mart Stores, according to California State campaign finance records. Contra Costa Consumers For Choice gathered 30,000 signatures for the “No on L” campaign, getting it on the ballot for the March 2, 2004 election.⁶

Wal-Mart won. The ban on big-box stores was overturned 54% to 46%.⁷

Inglewood

In October of 2002, the Inglewood City Council adopted an emergency ordinance barring the construction of retail stores larger than 155,000 square feet that sell more than 20,000 taxable items. Under threats of a lawsuit from Wal-Mart, the council withdrew the ordinance within a month of its introduction.⁸

Expecting further opposition from Inglewood’s elected officials, Wal-Mart tried to get around the public planning process by sponsoring a ballot referendum that would have forced the city council to approve a Supercenter without the usual Environmental Impact Review (EIR) or public hearing, and would require a two-thirds majority vote to repeal.⁹

By forcing a public ballot referendum, Wal-Mart effectively bypassed local government officials and asked Inglewood voters to approve, with a simple yes or no vote, extensive urban planning, land use and other project details in exchange for Wal-Mart’s low prices.¹⁰

“This is the most outrageous thing I’ve seen a corporation do in a low-income community,” said Madeline Janis-Aparicio, Director of the Los Angeles Alliance for a New Economy (LAANE), a leading opponent of the Inglewood development. “It says to me they’re afraid of the public process.”¹¹

According to data from the California Secretary of State, Wal-Mart made $1,062,825 in monetary donations to a group, “Citizens Committee to Welcome Wal-Mart to Inglewood,” to manage their local campaign activities. The group obtained more than 15,000 signatures to qualify the Wal-Mart-sponsored referendum on the ballot.¹²

The Coalition for a Better Inglewood, a community group representing city residents, labor unions, churches, small business owners and others, organized massive community opposition through precinct-walks, volunteer phone banks, media campaigns, and endorsements from high-profile spokespeople.

Of the fight, the Rev. Norman Johnson, Executive Director of the Southern Christian Leadership Conference in Los Angeles, said, “I have not witnessed the kind of bullying that I saw in Inglewood by any other corporation or business that wanted to come in.”¹³ When the people of Inglewood finally voted on April 6, 2004, Wal-Mart lost by a margin of 3 to 2.¹⁴

Rosemead

The Rosemead City Council began negotiating with Wal-Mart in 2002, and submitted a development application for a new Supercenter in October, 2003. To respond to any early opposition, an organization called Putting Rosemead In a Desirable Environment (Rosemead PRIDE) emerged to back Wal-Mart’s plan. The group was spearheaded by a Wal-Mart consultant, Mike Lewis.¹⁵ Rosemead PRIDE operates out of the same offices as Lewis & Company, Lewis’ land use, air and water quality regulations consulting firm. Rosemead PRIDE received $15,000 in monetary support from Wal-Mart in addition to whatever consulting fees or salary the company also provides Lewis.¹⁶

In September 2004, Rosemead City Council approved Wal-Mart’s Supercenter plan, including 24 hour operation, by a vote of 5-0.

Local Wal-Mart opposition formed to challenge the Council’s decision. Save Our Community collected signatures for a referendum, but their effort was short-circuited when the pro-Wal-Mart City Council repealed the approval altogether, allowing Wal-Mart to speed up construction.¹⁷

Save Our Community fought Wal-Mart by filing suit in 2004, alleging that the environmental impact documents were biased in favor of the retailer.¹⁸ Los Angeles Superior Court Judge David Yaffe confirmed this claim in June 2005 when he ruled that studies had not adequately addressed the retailer’s 24-hour operations.¹⁹

Judge Jaffe criticized the City Council’s actions in reversing a decision to limit Wal-Mart’s hours of operation. “It appears that the last minute change, after the public hearing, authorizing the Walmart (sic) store to operate 24 hours a day, was a political maneuver to conceal such action from the public and avoid accountability for such action” he wrote.²⁰

Judge Yaffe’s ruling has effectively delayed Wal-Mart’s construction for now.

Save Our Community is currently pushing for a recall of Mayor Jay Imperial and Council Member Gary Tayor. PRIDE responded with a mailer in July.

Besides campaigning for ballot initiatives, Wal-Mart has a history of threatening local officials with litigation.

Stanislaus County

On January 13, 2004, the City of Turlock (located in Stanislaus County) banned stores larger than 100,000 square feet that devoted more than 5% of floor area to non-taxable retail sales as part of an overhaul of its municipal code, in part to protect its grocery market.²¹

Wal-Mart retaliated by filing two lawsuits, one in federal court and one in Stanislaus County Superior Court, to overturn the ordinance.

By denying Wal-Mart’s demand for writ of mandate and declaratory relief, the court indicated that it did not agree that the City of Turlock did anything illegal by passing the ordinance.

An appeal was filed in February of 2005, according to the Stanislaus County Court Clerk’s office. The federal case is still in litigation. Wal-Mart’s attorneys in the federal case subpoenaed Safeway as well as other grocery market players.^22-23

“They are just harassing us,” Turlock City Councilman John Lazar said of Wal-Mart’s suits. “Instead of being good stewards in the corporate world, they are being bullyish.”²⁴

Alameda County

In December 2004, Alameda County passed an ordinance banning stores over 100,000 feet. Wal-Mart soon filed suit in Alameda County Superior Court to overturn it, even though they had no plans to build a Supercenter in the area. The county rescinded the ordinance to diffuse the legal battle.^25-26

“Wal-Mart was being very aggressive and was essentially threatening us with a lawsuit they said would be as expensive as possible,” said Richard E. Winnie, Alameda County counsel, explaining why the county dropped the anti-Supercenter ordinance.²⁷

Away from the ballot box, Wal-Mart has routinely engaged in intimidation and pressure on local officials to overturn local ordinances that stand in the way of company growth.