(AP Photo/Steve Helber)
The Democratic establishment, and even much of the mainstream media, have in recent years embraced Walmart, an unlikely paramour. But revelations about Walmart recently published by the New York Times, which found evidence that the retailer’s largest foreign operation, Walmex, had paid more than $24 million in bribes to Mexican politicians who could grease the wheels of its expansion in Mexico, are providing an opportunity for the company’s critics to break up this ill-fated romance.
To be sure, for the veteran Walmart watcher, the news that the company broke laws is nothing new. Allegations of companywide wage violations and sex discrimination are well-known. But here’s the difference: while past scandals have involved mainly lower-level managers, and thus been famously dismissed by Walmart’s PR flacks as the work of “a few bad apples,” the documents unearthed in the Times report show that Walmart officials at the highest levels knew about the Mexican bribery scandal and took steps to thwart—and even cover up—an internal investigation.
In its early years in rural America, Walmart proudly owned its conservatism. And at the 2003 shareholders meeting, officials made rhetorical sport of Walmart’s position on the red-state side of the culture wars, contending that those criticizing the company’s employment practices were “city people” who didn’t get Walmart, a company for “country people.”
But the company has recently changed its tune: bipartisanship, peddled by former Democratic operative Leslie Dach, Walmart’s vice president for corporate affairs who is also in charge of “reputation management” for the company, is now the order of the day. Dach, hired by Walmart six years ago, has wooed blue-state America on the retail giant’s behalf, using environmental initiatives, as well as generous bipartisan campaign contributions and strategic donations to liberal nonprofits like Demos and the Center for American Progress. The reason for all this courtship, of course, is that Walmart needs the liberal establishment in order to expand in coastal cities, where elected officials tend to be Democrats, and to secure a friendly regulatory environment no matter which party is in power. Despite a long history of right-wing engagement on the part of Walmart and the Walton family, Dach and Walmart can claim many successes in this campaign to appeal to liberals.
Michelle Obama has made the retailer her most prominent partner in her crusade against child obesity. Walmart CEO Mike Duke has been a frequent lunch guest and telephone buddy of Michelle’s husband. And many community activists and local Democrats—notably in Washington and Chicago, where the company’s expansion efforts have faced considerable grassroots resistance—have supported Walmart, often in exchange for embarrassingly small campaign contributions or favors.
But since the Times story broke, at least one pillar of the Democratic establishment has lost patience with Walmart’s leadership. In 2005, during the period in which the company appears to have been bribing Mexican officials, then–New York City comptroller Bill Thompson—who oversaw the city’s massive pension fund, the NYC Fund, which is a Walmart shareholder—was concerned enough about the company’s various legal problems (though he knew nothing of the Walmex activities) to ask the retailer to develop a better system of legal oversight. After some hemming and hawing, Walmart dismissed Thompson’s concerns. Now, given the likelihood of massive lawbreaking in Mexico, New York is fed up and is pushing a shareholder resolution to replace several of the officials directly responsible, including Duke and board chairman Robert Walton, the son of company founder Sam Walton.
For those seeking to change the company, the scandal is well timed. The shareholders meeting is next month, and while the NYC Fund’s proposal certainly won’t pass—the Walton family owns more than half the shares, so proposals not supported by management are essentially performance art—robust support from other shareholders could embarrass and put pressure on the company. Analysts say other pension funds will likely follow suit.
In addition, more scrutiny of the company’s lobbying has revealed just how liberal it is not. Pressure is mounting for Walmart to withdraw support from ALEC because of its pushing of Stand Your Ground laws; the laws came under intense scrutiny after the Trayvon Martin shooting. And the Washington Post reported recently that Walmart lobbied aggressively against laws harshly penalizing companies engaging in bribery overseas—a lobbying campaign that coincided with the Walmex scandal.
After the Walmex revelations, Leslie Dach’s Walmart—with its closely managed reputation and contributions to NPR and Harvard, along with fleets of fuel-efficient trucks—will have a harder time distracting liberals from the company’s human rights abuses and far-right activism. Now is a good time for the Democrats—and all progressives—to follow New York City’s example and take a sideways look at this shady suitor.