On the Wal-Mart Money Trail

In an unprecedented collaboration, The Nation, The American Prospect, In These Times and AlterNet are focusing attention on issues raised by the new documentary, Wal-Mart: The High Cost of Low Price. On AlterNet, Joshua Holland explores the hidden costs of Wal-Mart's cheap merchandise from China in "Wal-Mart's China Price," and Greg LeRoy looks at sweetheart taxpayer subsidies in "Wal-Mart's Tax on Us."

In The American Prospect, Harold Meyerson's "Open Doors, Closed Minds" explores how one Wal-Mart true believer was excommunicated for his faith in doing what he thought the company expected of him: crying foul. Christoper Hayes of In These Times explores Wal-Mart as a "Symbol of the System."

Research support for this article was provided by the Investigative Fund of The Nation Institute. Thanks to Laura Starecheski, who contributed reporting, and to Meleiza Figueroa, a researcher on Wal-Mart: The High Cost of Low Price who, with the generous consent of her employer, shared her findings.

With a combined fortune of more than $90 billion, the Waltons--the immediate heirs of Wal-Mart founder Sam Walton--are the richest family in the world. Five of the country's ten richest individuals are members of Sam's immediate family: his wife, Helen, and their three surviving children--Rob, Jim and Alice--as well as his late son John's widow, Christy (John Walton died in June when his private plane crashed). Until recently, however, they gave away little of their fortune. As Sam Walton explained in his 1992 autobiography, Made in America, he didn't believe in giving "any undeserving stranger a free ride." Nor did he believe in being generous with company profits. "We feel very strongly," he wrote, "that Wal-Mart really is not, and should not be, in the charity business." Money that Wal-Mart donated to charity, he reasoned, would only come out of the pockets of "either our shareholders or our customers." (He didn't mention workers, perhaps a tacit acknowledgment that picking their pockets was just business as usual.) As for politics, Sam couldn't stand the stuff. At a 1988 Mother's Day "toast and roast" honoring Helen Walton, then-Senator Dale Bumpers of Arkansas quipped that waiting for big campaign contributions from the Waltons was like "leaving landing lights on for Amelia Earhart."

All that has changed. Since Sam died in 1992, both the Bentonville, Arkansas-based company and the family have dramatically escalated their charitable giving, becoming far more influential in the worlds of philanthropy and politics. It is hardly a coincidence that this transformation occurred after Wal-Mart became the nation's largest private employer and a flytrap for much-deserved criticism. The company is battling numerous employee rights lawsuits in court, the biggest of these being Betty Dukes v. Wal-Mart Stores, a sex-discrimination class action representing 1.6 million women. Communities around the nation, charging that the company is a stingy low-wage employer with an arrogant disregard for local and national laws, are battling to keep Wal-Mart from opening or expanding stores. Several labor unions have made fighting Wal-Mart a top priority. This year two major national organizations, Wal-Mart Watch and Wake Up Wal-Mart, formed to lead a citizens' movement to pressure the company to change its ways.

The National Committee for Responsive Philanthropy (NCRP), a watchdog group, released a report in September, The Waltons and Wal-Mart: Self-Interested Philanthropy, detailing the recent increase in Wal-Mart and Walton philanthropy and noting its likely relationship to the company's image problems. Indeed, the increase has been staggering. The Walton Family Foundation (WFF) gave away $106.9 million in 2003--the most recent year for which data are available--twice as much as in 2000. Wal-Mart's company PAC, now the third-largest corporate PAC and the second-largest corporate donor to the GOP, gave away $2.1 million in 2004, compared with just $100,000 in 1994. The Walton family, too, has greatly increased its political giving; in 2004, for example, Alice donated $2.6 million to the influential Republican PAC Progress for America, which supported the sleazy Swift Boat Veterans for Truth and gave Bush a critical push in the election's final months. Since 1999 the Wal-Mart Foundation (WMF)--a company-controlled entity with no direct connection to the WFF--has tripled its giving and by the end of this year will have doled out more than $200 million in cash and merchandise, according to spokeswoman Melissa O'Brien.

The company also donated $20 million in cash and merchandise to the Hurricane Katrina relief effort, garnering extensive--and partially justified--praise. To antigovernment zealots like New York Times columnist John Tierney and the wing nuts running the Wall Street Journal editorial page, Wal-Mart's impressive response to the hurricane showed that the private sector is simply more effective than the government. It is true that when you starve government by draining its resources and electing officials who don't believe in it, nothing seems to work. But Wal-Mart played a major role in that eviscerating process. Much of Wal-Mart's philanthropy (as well as that of the Walton family) has been directed toward promoting anti-government politics, whether by lobbying against high taxes for the rich or contributing to Republican candidates, conservative think tanks and efforts to privatize education.

Jeff Krehely, who co-wrote the NCRP report, says that for his organization, such a sharp increase in giving, coupled with the company's obvious desire to spin itself as a better corporate citizen, "raises red flags. We wonder, What's the agenda here? What's happening?" The WMF's Melissa O'Brien told The Nation that criticisms of the company come from "special-interest groups" and do not influence its giving. She also told the New York Sun that the NCRP report was funded by Target, a charge Krehely calls "ludicrous." (Dayton Hudson, Target's former parent company, contributed to the NCRP in the 1990s. In 2000 the company reorganized as the Target Corporation and hasn't contributed to the watchdog group since.)

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