Obama's Budget Chief Nominee Led Walmart's Targeted Giving
Sylvia Mathews Burwell. (Courtesy of Walmart.com.)
Update: On March 4, President Obama nominated Sylvia Mathews Burwell as director of the Office of Management and Budget.
Recent reports suggest that President Obama is about to nominate Sylvia Mathews Burwell, the president of the Walmart Foundation, as director of the Office of Management and Budget. Her nomination would be a coup for Walmart and its foundation, which under Burwell’s watch has wielded its massive budget to expand the retail giant’s influence at all levels of government and to pave the way for store expansions.
The most recent tax disclosure from the Walmart Foundation, obtained by The Nation, shows that between February 2011 and January 2012, the company gave over $175.68 million in grants to charities, municipalities, churches and various community groups across the country, from the Environmental Defense Fund to Friends of NRA to Puppies Behind Bars. Our review of the foundation’s giving reveals that it has donated considerable cash to groups that have gone on the record to support Walmart during its most contentious political disputes, including the ongoing effort to open stores in New York City. The foundation also donates directly to municipalities, funds groups tied to powerful elected officials and instructs grantees to publicize Walmart’s generosity.
Leslie Dach, who oversees the foundation as Walmart’s most senior executive devoted to political affairs, touted the benefits of the company’s philanthropy during a presentation to investors in October 2010. According to a transcript, Dach described “our reputation” as “a lever” in pursuing the company’s goals, which he said include “new markets,” among them “urban America.” A former Democratic Party operative, Dach also extolled the company’s improved polling numbers among self-identified “liberals” and “moderates.”
Activists allege that Walmart’s charitable outreach is part of a bid to co-opt potential critics and isolate workers demanding changes to Walmart’s labor practices. “They are very clear about the fact that they’re trying to use their political giving as a lever to pry open these markets,” said Russ Davis, the executive director of Massachusetts Jobs With Justice and a leader of the coalition Massachusetts Stands Up to Walmart.
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Burwell, a former deputy chief of staff to President Clinton, joined the Walmart Foundation in late 2011, after about a decade of working with the Bill and Melinda Gates Foundation. A Walmart press release announcing Burwell’s hire stated that she would report to Dach. At the time, Walmart was in a protracted lobbying effort to expand into major US cities, including New York, where efforts to build the first Walmart within city limits had become a controversial flashpoint. Faced with community opposition, Walmart failed to reach a deal with a developer to open a store in East New York.
Part of Walmart’s effort has been a campaign-style website, hosted by the company, with testimonials from “Community Stakeholders,” including some who are affiliated with organizations that have received donations from the Walmart Foundation. Hazel Dukes, a board member of the national NAACP and the president of the organization’s New York state chapter, is featured on the Walmart campaign site saying, “We welcome Walmart in New York City because they are willing to be part of the solution.” The Walmart Foundation’s latest filing shows a $200,000 grant to the national NAACP. Walmart itself was listed as the largest sponsor of the NAACP New York State Conference convention in 2011; the Walmart Foundation donated to several local chapters, although not the New York state conference.
Dukes did not respond to The Nation’s request for comment, but Eric Wingerter, a spokesman for the NAACP, explained that donations from the Walmart Foundation represent only a small percentage of the NAACP’s annual budget and that Dukes “expressed support for a Walmart coming to Harlem in order to bring jobs into a struggling neighborhood and grocery stores to areas that are currently food deserts.” Wingerter said that the Walmart Foundation’s donations to the NAACP had “no influence” on Dukes’ position or positions taken by the NAACP generally.
The same Walmart campaign page also includes a supportive quote from Phil Banks, a board member and former New York leader of 100 Black Men, who says, “I fully support Walmart building stores in New York City.” 100 Black Men has been generously supported by the Walmart Foundation over the years; in 2010 alone, Foundation made four separate donations to the group and its chapters. Last summer, Walmart sponsored the 100 Black Men conference in Atlanta, where Walmart executive Tony Waller—who played a key role in bringing Walmart stores to Washington, DC—was inducted as an honorary member.
In the summer of 2011, Walmart spent about $150,000 to become a corporate sponsor of Brooklyn Borough President Marty Markowitz’s summer concert series, prompting the headline “Just call him Wal-Marty Markowitz” in the conservative New York Post. The Post said the Borough President had “softened his once-staunch criticism of the store.” Markowitz responded that he was “not philosophically opposed to Walmart but I have been consistent in demanding they show a commitment to Brooklyn by paying a fair wage, offering health benefits [and] using union workers in any construction projects in New York City.” A Walmart spokesperson told the Post that the contribution was “consistent” with the nearly $13 million the company had contributed to New York City since 2007.
Other prominent New York–based organizations that received Walmart Foundation grants include The Mayor’s Fund to Advance New York City ($3 million); the New York Women’s Foundation ($700,000), whose board chair Diana Taylor is Mayor Michael Bloomberg’s long-time partner; and $25,000 to the venerable AIDS organization Gay Men’s Health Crisis, whose CEO, Marjorie Hill, has since been appointed by Governor Andrew Cuomo to chair the state’s AIDS Advisory Council. The New York Women’s Foundation did not respond to requests for comment; GMHC declined to comment.
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A four-page memo obtained by The Nation makes explicit Walmart’s expectations of public recognition from its grantees. The previously unreported document, titled “Recognizing the Walmart Foundation For Its Good Works,” instructs organizations that “we are looking to the grantees that turn to the Walmart Foundation for funding to help us spread the word.” It lists a range of “Best Practices” that organizations can use to honor Walmart, among them: outreach to national and local media, including “multicultural outlets”; celebrating the donation on Twitter, Facebook and blogs; linking to the Walmart Foundation website on the grantee’s site; inviting Walmart representatives to join the organization’s leaders at speaking engagements; considering the Walmart Foundation for philanthropy awards and mentioning the grant in employee newsletters.
The Walmart Foundation, grantees are told, “needs to approve press materials, including documents going to the media and materials being posted online like blogs.” Those materials “should position grants from the Foundation as timely support for programs that address an important national or local need/ issue.” The memo was provided to The Nation by an organizer working with city-based groups pushing for changes at Walmart. One such group received the document from a non-profit that had met with Walmart about a potential grant.
"Like many companies, we provide a best practice document to many of our grantees that includes guidance on publicizing Walmart’s support of their work," e-mailed Walmart spokesperson Tara Raddohl. Raddohl said that Walmart discusses "public policy issues" with a "broad range of stakeholders," but that these discussions “do not impact the Walmart Foundation's funding of any nonprofit organizations." Raddohl also told The Nation that Burwell has not engaged any Walmart Foundation grantees on labor-related policy.
Last year, Walmart faced the most significant US worker protests in its history, with strikes and walkouts at retail locations from coast to coast. While some workers identified their actions as a civil rights struggle, establishment civil rights organizations, including the Urban League, the Organization of Chinese Americans (OCA) and the League of United Latin American Citizens (LULAC)—all recipients of Walmart Foundation money—remained silent during the strikes. Between 2009 and 2011, the Walmart Foundation provided LULAC and its local affiliates with at least $813,000 in grants, the OCA national with at least $164,400 and the Urban League and its local chapters with at least $2,506,000, according to The Nation’s review. OCA and LULAC did not respond to requests for comment. Teresa Candori, a spokesperson for the Urban League, told The Nation that her organization “has consistently supported fair working conditions for all Americans, but traditionally does not take a position on specific labor-management disputes.”
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In his presentation three years ago, Walmart executive Leslie Dach celebrated the company’s progress in winning over “elected officials” and also said that “we want our size and scale to be seen as a force for positive change, because that helps us as a business.” The goodwill established with lawmakers, Dach stated, “makes it easier for us to site stores” and “makes it easier for us to stay out of the public limelight when we don't want to be there.” Walmart has grappled with media scrutiny and congressional investigations following New York Times reports last year that the company systematically bribed officials in Mexico, in potential violation of the Foreign Corrupt Practices Act.
As Walmart coordinates with its consultants on Capitol Hill to blunt the impact of the scandal, which is the subject of an ongoing congressional inquiry, the Walmart Foundation has used social media to remind lawmakers of its power. Since June, the Walmart Twitter account @WalmartAction has tweeted directly at lawmakers who represent districts where the foundation provided donations. When two Central Valley grants were disbursed from the foundation last month, the Walmart foundation tweeted at Congressman Devin Nunes (R-CA), the local representative. That same day, the Walmart Twitter feed pinged the Mayor of Los Angeles, as well as several other US representatives in Indiana and South Carolina to announce grants and charity work in their communities. The pattern has persisted, with Democrats and Republicans regularly alerted of the Walmart Foundation’s work.
This philanthropy produces a steady stream of positive press in local media, as well as serving as a constant reminder to elected officials that Walmart is deeply ingrained in their backyards.
Walmart’s IRS filing also shows direct donations, totaling over $250,000, to more than 200 towns, villages and cities. Some are designated for functions like fire services, parks and policing, which have faced cuts in cash-strapped cities across the country. Of the twenty top municipal grantees in the latest IRS filing, at least sixteen currently have Walmart stores and/or are targets for Walmart expansion. At least five have had controversies or political fights over Walmart expansion or zoning. In another four, Walmart has received tax expenditures or other public financing. Other than Walmart's hometown of Bentonville, the city to receive the most cash from the Foundation is Baytown, TX, which a 2004 union-funded report identified as the city that provided Walmart its 8th-largest subsidies in the country, worth $19 million. In August 2012, Baytown voted to pave the way for an additional Walmart.
Walmart already wields considerable influence within the federal government. The retail giant has one of the largest federal political action committees, with over $1.5 million in contributions during the last cycle. The company has spent $27,520,000 in federal lobbying since 2009, and provides an undisclosed sum to several powerful trade groups, including the Retail Industry Leaders Association and the US Chamber of Commerce. The Walmart Foundation’s filing also shows donations to the US State Department, Department of Veterans Affairs and Department of the Interior.
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An Obama appointment would position Burwell, who was named as a member of the President’s Global Development Council in December, to wield significant influence over federal policy-making. The Office of Management and Budget has the authority to review and even block federal regulations. Federal lobbying disclosures reveal that Walmart has attempted to influence the agency throughout Obama’s administration, for example pushing the OMB to block a Department of Labor rule governing employee benefit plans proposed three years ago.
If tapped by Obama, Burwell would not be the first business leader to join his Administration following work for a company marked by ugly labor relations. Obama’s previous OMB director, Jack Lew, served as chief operating officer at New York University while the university withdrew union recognition from its graduate student employees (Lew was promoted from OMB to White House Chief of Staff, and is now Obama’s Treasury Secretary nominee). GE CEO Jeffrey Immelt led Obama’s Jobs Council while union members rallied against the company’s plans to impose two-tier wages and eliminate future workers’ pensions. During Obama’s first term, Republicans blasted Obama-appointed officials at the National Labor Relations Board for pursuing an investigation against Boeing for allegedly illegally punishing strikers; Obama chose members of Boeing’s board as commerce secretary, chief of staff, and export council chair. The top contender for Commerce Secretary is reportedly Penny Pritzker, the Hyatt hotel heiress has sought to thwart organizing efforts by the hospitality workers’ union UNITE HERE (disclosure: one of our former employers), and who as a member of Chicago’s school board has been a staunch ally of Mayor Rahm Emanuel before, during and after the city’s teachers strike.
Asked about a potential conflict of influence policy regarding Walmart and regulatory review in a Burwell-led OMB, Raddhol told us: "Your question is more appropriate for the OMB." The Obama Administration did not respond to a request for comment.
“Walmart just kind of counts on people’s desperation,” said Jobs With Justice’s Davis. However, he said, “they can’t get away from basically who they are.”
In February, Walmart employees in Maryland went on strike, the first such action in the United States since the Black Friday walkout.