On the Wal-Mart Money Trail (Page 2)

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.

Each Walton heir has philanthropic projects of his or her own--Alice, for example, is building a world-class art museum in northwest Arkansas--but the family fortune should be considered as one because most of the money is managed together. The giving is also largely administered together, through the Walton Family Foundation, as well as through close communication among its family members. (At least twice a year, the family meets to talk about how to spend its money.) The Waltons own about 40 percent of Wal-Mart's stock, making Wal-Mart essentially a family business--highly unusual for a large multinational company. (Both the Wal-Mart Family Foundation and Walton Enterprises--the company that represents the Walton family's interests--declined to cooperate with this article, or to make any of the notoriously press-shy Waltons available for interviews.)

Philanthropy obscures the often unseemly process by which the money was made--and for Wal-Mart that's at least part of the point. Stephen Copley, a United Methodist Church pastor who serves on the board of the Arkansas Single Parents Scholarship Fund, a Springdale, Arkansas, charity that has benefited from Walton dollars, says that the program has "an incredible success rate. One lady even got a PhD. [The Walton money] does a tremendous amount of good." However, he adds, "it's great to help single parents go to school, but those same single parents might be working for Wal-Mart, and they can't afford health insurance." Copley, also head of the Arkansas Interfaith Committee for Worker Justice, is troubled that in his home state, Walton and Wal-Mart generosity "gets great media...they look so good even though in reality their business practices are very bad."

The Wal-Mart Foundation gives a staggering number of gifts, apparently in order to buy goodwill in as many communities as possible, rather than, as Krehely points out, "giving to sustain organizations." The WMF's 2003 IRS 990 form is 2,239 pages long, far longer than that of the Ford Foundation, which has billions more in assets. That's because most WMF gifts are tiny: thousands or even hundreds of dollars to churches and Lions clubs and Boys and Girls clubs, $500 to the YMCA of Nashville and Middle Tennessee and to the Tulip Trace (Indiana) Girl Scouts Council and so on. Communities where Wal-Mart faced a particular battle over opening a new store--Inglewood, California, or New York City--enjoyed especially generous largesse. Like the flowers and other tokens of courtship from a suitor who later becomes a wife-beater, such gifts are often followed by demands for public subsidies and tax breaks. In this way Wal-Mart is repeating the strategy that has served it so well in Arkansas, where Wal-Mart and the Waltons' charitable gifts are many and company critics are relatively few. Says Lindsay Brown, president of the Central Arkansas Labor Council, "It's a hell of a plan, and it works."

We are supposed to applaud philanthropy--the very word connotes altruism and "giving back"--but Walton and Wal-Mart giving serves as a reminder that philanthropy provides an alternative to taxation, a way for rich people and corporations to decide what to do with their extra money, as opposed to letting the rest of us decide through our elected governments. Since charitable donations are a tax write-off, as Krehely points out, "they are supposed to benefit the public good." He thinks it is reasonable to ask whether a family's--or a company's--philanthropy serves the common good, or at least enough good "to make up for the public revenue that we're losing."

Funny he should mention taxes: Wal-Mart and the Waltons have, after all, been notably reluctant to pay them. Not only has the company lobbied for tax breaks in communities all over the nation, the Waltons--the family that former Wal-Mart board member Hillary Clinton has called "the best America has to offer"--have campaigned vigorously against the estate tax. They have donated money to its opponents, Republicans like John Thune of South Dakota and David Vitter of Louisiana, and enlisted one of Washington's top lobbying firms, Patton Boggs--a leading anti-estate tax lobbyist--to represent their interests.

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