From Jim Gilliam's blog archives
Wal-Mart corporate goes to Washington

July 18, 2005 5:51 PM

Clay Risen at the New Republic takes notice:

Until recently, the battle against Wal-Mart -- from unionization drives to anti-sprawl initiatives -- took place exclusively at the local level. But, during the last year, it has matured into a national fight. And the campaign hasn't just gone national--it's gone to Washington. Virtually overnight, both sides have been taken over by campaign-hardened staffers and Beltway superlobbyists, who deploy tactics taken straight from political playbooks even as they insist that the Wal-Mart battle is still a "grassroots" effort. The "Washington-ization" of Wal-Mart, in turn, is transforming the company into a campaign issue -- one that will likely figure heavily in the national elections in 2006 and 2008.

Full Article:

Store Lobby
by Clay Risen
Issue date: 07.25.05, Post date: 07.14.05

On April 5, Wal-Mart did something that would have been almost unthinkable even a year ago: It held a press conference. After decades of rapid growth, the retail giant has recently experienced a wave of activist ire and bad p.r., from campaigns to block new stores to lawsuits over its lower-than-living-wage wages. The press has lapped it up, which is what led the formerly press-shy company to invite several dozen reporters to an Embassy Suites hotel near its corporate headquarters in Bentonville, Arkansas, to be lectured for two days by a bevy of Wal-Mart representatives, including CEO Lee Scott.
But Scott's team wasn't the only group talking Wal-Mart. In a scene reminiscent of the spin alleys set up outside the presidential debates last fall, after each session, representatives from Wake Up Wal-Mart, an anti-Wal-Mart campaign backed by the United Food and Commercial Workers (ufcw) union, were waiting to give their own take, including statements from the group's director, Paul Blank. The spin room worked: Blank appeared in almost every media account of the event. The talk at the event was about wages and health care, but the tactics--the damage-control press conference, the post-speech spin--were more Beltway than Bentonville. For a brief moment, one could be forgiven for confusing an Arkansas hotel with the halls of Capitol Hill.

Until recently, the battle against Wal-Mart--from unionization drives to anti-sprawl initiatives--took place exclusively at the local level. But, during the last year, it has matured into a national fight. And the campaign hasn't just gone national--it's gone to Washington. Virtually overnight, both sides have been taken over by campaign-hardened staffers and Beltway superlobbyists, who deploy tactics taken straight from political playbooks even as they insist that the Wal-Mart battle is still a "grassroots" effort. The "Washington-ization" of Wal-Mart, in turn, is transforming the company into a campaign issue--one that will likely figure heavily in the national elections in 2006 and 2008.

When Wal-Mart became a major blip on labor's radar screen in the early '90s, the obvious answer was, of course, to organize. But organizing retail is different from organizing, say, a factory. Even large stores require much less capital than industrial plants, a fact that allows Wal-Mart to easily shutter upstart stores or departments (in 2000, for example, when the ufcw organized the meat-cutting department of a Texas store, Wal-Mart closed its meat-cutting departments nationwide two weeks later). Not that many stores have ever gotten to that point. Wal-Mart--which is the nation's largest private employer and the world's largest company (with annual revenue that exceeds the GDP of Sweden)--trains its managers in anti-union tactics and, as a last resort, even dispatches anti-union response teams. "Straight-up organizing in this country is difficult enough under the law," says one ufcw representative. "And, when you're going up against a nation-state company, it doesn't behoove you to go after one store at a time."

Soon after Joe Hansen took the ufcw helm a year ago, the union decided to freeze its Wal-Mart organizing activities altogether and take what, in many ways, is the mirror-image approach. Instead of disparate, store-specific drives, it would concentrate its efforts in Washington, using Internet-age campaign tactics and drawing staff from the city's abundance of savvy politicos. In April, the union announced Wake Up Wal-Mart, a Washington-based campaign led by Blank, Howard Dean's former political director. (Chris Kofinis, the former deputy policy director for Wesley Clark's primary campaign, is its communications adviser.) Meanwhile, at the same time Wake Up Wal-Mart appeared, the Service Employees International Union (seiu) helped to launch another effort, Wal-Mart Watch. Like Wake Up Wal-Mart, Wal-Mart Watch has attracted a coterie of bold-faced campaign names, including John Kerry's former campaign manager Jim Jordan (officially a partner at the lobby shop Westhill Partners), former Democratic Senatorial Campaign Committee Executive Director Andrew Grossman, and the former deputy director of research at the Democratic National Committee (DNC), Tracy Sefl. (The afl-cio, which is the umbrella organization for both ufcw and seiu, has its own Wal-Mart operation, run, until recently, by Ellen Moran, a DNC veteran.)

Wal-Mart was already of interest in Washington, not only because of a series of federal lawsuits and investigations, but also because Kerry and other candidates had made it a symbol for the shortcomings of corporate America. So it's little surprise that Wake Up Wal-Mart--which works closely with Dean's Democracy for America--and Wal-Mart Watch have copied the top-down grassroots model that Dean championed and that other campaigns quickly adopted. They blog, organize local meetings, and use their websites to recruit local organizers; meanwhile, as the Bentonville press days showed, fast-response spin, slick daily press releases, and mass communications to legislators are now standard operating procedure. "When it comes to public education, the skills developed in campaigns are the skills needed here," Blank says.

Sam Walton, Wal-Mart's founder, famously disdained Washington and shunned the press. As a result, under his direction and even long after his death, Wal-Mart kept out of the Washington game. As recently as 1998, for example, it spent less than $50,000 on federal lobbying, a miniscule amount compared with outlays by other top-ten U.S. companies. In the late '90s, at the urging of Senator Trent Lott, it set up a small government relations office and opened the PAC spigot a bit, but its 2000 givings didn't even place it among the top 100 donors. "They used to be nowhere," says Larry Noble, executive director of the Center for Responsive Politics. Which was fine with Wal-Mart. Even with Lott's prodding, the company saw little need for anything more. On issues like free trade and wages, it was well-represented by organizations like the Retail Industry Leaders Association and the National Association of Chain Drug Stores. And the problems it did have--union drives, opposition to store openings--were strictly local ones, with little need for a national strategy. By the beginning of 2004, the Washington office had expanded by exactly three lobbyists.

That picture has changed drastically over the last year. Partly in response to growing public antipathy and the change in union strategy, it has greatly expanded its Washington office. It has hired several new lobbyists and replaced its government affairs chief with Lee Culpepper, the former head lobbyist for the National Restaurant Association and a key player in backroom GOP politics (among other things, he was instrumental in organizing support for John Thune, the conservative Republican who unseated Tom Daschle). And it has quickly developed a network of well-connected outside lobbyists; according to lobbying disclosure records, it has retained more than a dozen of them, including two Bush pioneers, two former staffers for House Majority Whip Roy Blunt, Tennessee Representative Harold Ford Jr.'s former chief of staff, and George Koch, father of George W. Bush's brother-in-law.

The company has boosted its campaign spending as well. Giving about 80 percent to Republicans, it laid out $1.67 million in the 2004 cycle, more than triple its 2000 spending, and far more than other Fortune 500 leaders. "It gives you an idea that they're a big player," Noble says.

What's more, the Walton family, which still controls about 40 percent of the company, has quickly become a major force in Washington in its own right. The Waltons gave millions to conservative candidates and groups in 2004, including $2.6 million to Progress for America, a GOP 527 organization. Aubrey Rothrock III, a partner at star lobbying shop Patton Boggs, works for both the Walton family and Wal-Mart. Overall, according to USA Today, the Walton family spent $3.2 million on lobbying, candidates, and conservative causes during the 2004 cycle, more than twice what it spent in the previous two elections combined. Notes Noble, the family and company "are often seen as a package. Together with Wal-Mart, they are quite a formidable machine."

With both sides pursuing Washington strategies--and with Washington politicos starting to take notice--it's almost a foregone conclusion that Wal-Mart will become an issue in the next elections. For one thing, as Kerry found last year, the company makes a great stand-in for the issues that many Democrats want to focus on: Health care, wages, and offshore outsourcing. "They will be held up as bad guys in '06 on particular issues," says Jennifer Palmieri, a 2004 presidential campaign veteran now with the Center for American Progress. "They're Democrats' best talking point on why we need more progressive policy."

Indeed, the attacks have already begun. In May, 51 Democratic members of Congress signed a letter calling on Wal-Mart to address accusations of gender discrimination. And, late last month, Senators Ted Kennedy and Jon Corzine and Representative Anthony Weiner held a press conference--organized by the ufcw--to introduce a bill requiring states to make public the number of employees at large companies who are on government health care. "Part of the plan," said Weiner, "is to embarrass companies like Wal-Mart." Added Kennedy, "This is the first step, but it certainly will not be the last."

Actually, it's not the first--similar legislation has already been introduced in several states, seeding the sort of negative publicity that Democrats can draw on when going after the company next year. This spring, Maryland passed a bill requiring the company to spend more on employee health care, which Republican Governor Bob Ehrlich then vetoed. Baltimore's Democratic Mayor Martin O'Malley is running against Ehrlich in the 2006 election, and there are signs that the Wal-Mart bill will be a central part of his campaign.

Then there's the fact that so many of the people currently working for Wake Up Wal-Mart and Wal-Mart Watch, as perennial campaign vets, are likely to sign up with candidates over the next six months; in doing so, they will naturally push their bosses to take a strong line against the company. "I do think a lot of the values embodied in our fight are values you see in important campaigns," says one such staffer. And Wal-Mart's emergence on the national political scene is a silver lining to the unions' frustrated organizing efforts. "I'm not sure anyone believed we were going to organize in that way, but we were learning what the company was like," says one union veteran. That experience, in turn, will make it easier when the ufcw, the seiu, and other groups push for anti-Wal-Mart tickets next year.

Finally, the company's newfound Washington presence, ironically, could end up hurting it politically. With most of Wal-Mart's lobbyists coming from Republican ranks--and more than 80 percent of its contributions going to the GOP--Democrats will have an easy time linking their opponents to Wal-Mart's misdeeds. "All the money in the world isn't going to change the facts," says Blank. "It's their business decisions that are coming back to haunt them."

After the Kennedy-Corzine-Weiner press conference, reporters were met by ufcw's Hansen and representatives of Wake Up Wal-Mart, ready with sound bites about the "Wal-Martization of our economy." But, this time, the company was ready, and Hansen and Co. found themselves competing for ink with a team of company flacks ready with their own spin. "They're playing catch-up," insists Palmieri. And, with the 2006 campaign season already getting underway, they're going to have to.

More from the archive in Business, Politics, Wal-Mart.

Wal-Mart corporate goes to Washington (07.18.2005)

Next Entry: The June 10th 2003 INR memo (07.21.2005)
Previous Entry: "Remind me, how long is he going to stay on staff?" (07.14.2005)

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