Al Norman2013-05-25T15:30:33-04:00Al Normanhttp://www.huffingtonpost.com/author/index.php?author=al-normanCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Al NormanGood old fashioned elbow grease.There's Nothing 'Fair' About the Internet Sales Taxtag:www.huffingtonpost.com,2013:/theblog//3.32333492013-05-08T10:23:24-04:002013-05-08T10:23:32-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/in this space which charged that giant retailers like Wal-Mart and Target were using mom and pop stores as human shields in their battle against Amazon.com over taxing online sales.
Powerful real estate investment trusts along with big box stores have convinced many in Congress that consumers should pay a sales tax on Internet purchases. It's being done in the name of the small merchant -- the ones that were dispatched to an early grave by the likes of Wal-Mart.
The group spearheading the lobbying for the internet sales tax calls itself the "Alliance for Main Street Fairness." They are not located on Main Street, and what they want is not fair. These corporations are the ones who picked dry the bones of Main Street businesses for the past 50 years. One Wal-Mart official complained to theWall Street Journal, "The rules today don't allow brick-and-mortar retailers to compete evenly with online retailers, and that needs to be addressed." Wal-Mart crying about fair competition?
This Alliance recently staged a "fly-in" to Washington, D.C. "to speak to their Members of Congress about the importance of passing something called "e-fairness." It was worth every drop of jet fuel, as the Senate caved in and passed the "Marketplace Fairness Act."
Ironically, the Alliance is being challenged by some conservatives in the U.S. House who see an internet sales tax as a new tax. In response, the Barons of Main Street have paraded out figurehead conservatives like Congressman Paul Ryan (R-WI) who is quoted as saying of the internet sales tax: "It's only fair that the local brick-and-mortar retailer be treated the same as the big-box online sales company out of state."
I have never seen a "big box online sales company" because there is no such thing. Companies like Amazon do have huge warehouses -- the same kind that Wal-Mart has -- but Amazon and eBay don't have big box stores sprawling along our highways, attracting tens of thousands of cars every day -- crime magnets and exhaust corridors.
Here is why a sales tax on internet sales is not fair:
1. The sales tax is regressive, and imposing it on internet sales hurts low income people the most, rich people the least.
2. Bricks and mortar big boxes impose an enormous cost on taxpayers in the form of public safety expenses -- like added police and fire protection -- environmental damage (google: "heat islands"), infrastructure costs (water, sewage, roads), etc.
3. Raising the bottom line cost of an internet sale is a perverse incentive, because as a society, we pay a lower transaction cost when people stay off the road and avoid another gas junket to the mall.
We should give virtual retailers an "advantage" because they do not tax our public support costs like the big box stores do. We should be creating incentives for consumers to shop local and shop online for this very reason.
The Alliance claims it represents "florists and independent bookstores... electronics stores and art galleries." I am not moved by the argument that local bookstores or florists are being killed by online retailers. The truth is, big box stores got to that graveside first. And nobody goes to Wal-Mart to buy art -- not even the Elvis on Velvet crowd.
If you want to help smaller merchants, give them an income tax break or more generous deductions on their taxes. Lower their cost of doing business. Encourage shoppers to visit smaller stores by lowering the sales tax at establishments with less than $1 million in annual sales, and make up the lost revenues by raising the sales tax at retailers with sales greater than $10 million. Make the sales tax more progressive at the point of sale. That would help level the field for a small clothing store that can't buy 1 million shirts from Bangladesh like Wal-Mart can.
We need to drop the fig leaf of 'fairness' and realize that taxation in this country has never been about fairness. It's all about corporate power and money. Our tax system favors the rich -- so Congress responds by raising the one tax which hurts the poor the most.
"We are not advocating for a new tax," the Alliance says. "Instead, we are advocating for states to be able to enforce their current sales tax laws on every business selling in their state." Even if you can't find an eBay store or an Amazon store in your state, the Alliance wants you to pay taxes just like you do at the big box store that steals local jobs and runs up a huge police and fire tab in your hometown budget every year.
Let's reward people who shop online. Let's create incentives for consumers to shop local. And let's make the big boxes see what it's like to be disadvantaged.
Ask yourself this: If Wal-Mart has become the champion of Fairness, then who is watching over the gates of Hell?
Al Norman is the founder of Sprawl-Busters. He has been helping communities fight big box stores for the past 20 years. His latest book is "Occupy Walmart."]]>Warren Buffett, Waltons Get Welfare From Wisconsin Taxpayerstag:www.huffingtonpost.com,2013:/theblog//3.30022442013-04-03T08:54:06-04:002013-04-03T08:54:12-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
On April 10th, the Walton Family will open another superstore on a piece of property left polluted by a company Warren Buffett acquired. This ribbon cutting would not have been possible without a financial "gift" to the billionaires -- courtesy of the taxpayers of South Milwaukee, Wisconsin.
A 115,000 square foot Wal-Mart was approved on a 6-2 vote by the South Milwaukee Common Council in October of 2011. The only two aldermen who voted against the project represented the district that includes the development site. The land itself was environmentally contaminated, and the corporation responsible for the pollution is linked to Buffett's Berkshire Hathaway "family" of companies.
To make this $12 million big box project work, city officials had to rezone one property from manufacturing to commercial, vacate a city street, spend $2.5 million to acquire a string of parcels -- and chip in to clean up pollution on the property. The site sits over a former wetland and a creek mere blocks from the shores of Lake Michigan. The land was contaminated with tannery toxins such as hexavalent chrome -- the carcinogen that made Erin Brockovich a household name.
It took the city 7 years to assemble 7 parcels, which it then sold to a developer for roughly 20 percent of what it cost taxpayers to buy and clean up. Part of the sale agreement required the developer to clean up the site. But city officials thought the Walton's might need some financial help to swing the deal.
The cost to handle the contamination for the western site was estimated at over $2 million. The company that polluted the site was "consolidated" through several holding companies -- into Berkshire Hathaway. Warren Buffett also happens to be a major Wal-Mart stockholder. He went on a Wal-Mart buying binge between 2009 and 2012, adding 26.7 million shares to his portfolio.
The corporations pitching this Wal-Mart had far deeper pockets than the taxpayers of South Milwaukee, a community of just over 21,000 people, with an annual budget of only $18.5 million. Warren Buffett is the third richest man in the world with a net worth of $50 billion -- enough to pay for South Milwaukee's budget for the next 2,700 years -- not counting inflation. The heirs of Sam Walton have a total net worth of $107 billion.
When corporations pollute, just try to find a board of directors willing to accept responsibility. In this case, a company called Midwest Tanning operated on the site for sixty years. It closed its doors at the South Milwaukee plant in July, 2001. Industrial trash was still piled outside the building ten years later. Midwest's operations were consolidated with a sister company, Paul Flagg Leather Company, which were both part of the Midwest Leather Group of companies owned by Wells Lamont.
Wells Lamont was purchased by the Marmon Group of Companies, and in 2008, Berkshire Hathaway purchased controlling interest in Marmon, making Wells Lamont a part of the Berkshire Hathaway companies. This sequence of entities swallowing entities, is a corporate version of the Russian nesting dolls. The original polluter is hidden by larger corporate dolls, and the city is left holding the (contaminated) bag.
Instead of asking the billionaires to clean up their act, South Milwaukee Alderman shifted part of the tab to city taxpayers. They created a TIF -- a Tax Incremental Financing District. Wisconsin has allowed TIFs since 1975. They are basically a financing mechanism that earmarks property tax payments for site improvements that inure to the benefit of the developer.
Warren Buffett did not offer to pay for the South Milwaukee contamination deposited by his consolidated company. The Walton family did not offer to scrub every ounce of pollution from their site. Instead, the city of South Milwaukee diverted $1.8 million in tax revenues to improve Wal-Mart's holdings. Such subsidies are a source of consternation to smaller businesses who get no such municipal candy. The TIF money could have gone to defray other costs in the city budget, like public safety, schools, or the library.
Dean Chapman, a South Milwaukee businessman, vigorously opposed the Wal-Mart-and-welfare deal. When he realized the Midwest Tanning connection to Berkshire Hathaway, he reached out to Warren Buffett. "I naively hoped Mr. Buffett would welcome the positive spin of paying for his division's mess," Chapman told me. "But I never got a reply. I even tried his son Peter, who I'd met when he lived in Milwaukee and shared mutual friends. Then I tried his son Howard, whose passion is responsible land use. Not one response."
"I felt like a fool when I learned Berkshire Hathaway was a major Wal-Mart stockholder," Chapman recalls. "By then, the Wal-Mart was already breaking ground. One of these billionaire's families should refund the hard-working taxpayers the $1.8 million tab we got handed."
Over the past couple of years, this project was bitterly fought by two citizens groups. Sidewalk rallies were held. Legislation and litigation was filed. The public hearings on the plan were described as "very heated" in the local media. More than 200 citizens packed the Common Council hearing room on the night the project was approved.
But one year and five months later -- another Wal-Mart store will open in South Milwaukee -- literally built on a foundation of corporate welfare. These subsidies for the rich can be a very dirty business sometimes.
Al Norman is the founder of Sprawl-Busters. He has helped communities fight big box sprawl for twenty years. His latest book is Occupy Wal-Mart.]]>Dentist Sues Wal-Mart: 'They Stole My American Dream'tag:www.huffingtonpost.com,2013:/theblog//3.27130772013-02-20T16:56:44-05:002013-04-22T05:12:01-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
Just before Christmas, Dr. Kianor Shahmohammadi ("Shah"), 32, filed a lawsuit in Riverside County, Calif. Superior Court, naming Wal-Mart Stores Inc. and Comfort Care Dental Management (CCDM), a Dental Service Organization, as defendants charged with counts of civil conspiracy, misappropriation of trade secrets, breach of contract and confidence, tortious interference with prospective economic advantage, and other "violation of laws, requirements, and regulations."
Shah, who was born in Tehran, Iran but later became a U.S. citizen, now lives in Irvine, Calif. He did his undergraduate work at Western Illinois University, and received his Doctor of Medical Dentistry degree from Southern Illinois University in 2006. He is currently an MBA student at Brandman University.
According to Dr. Shah, in late 2008, he developed plans for opening low-cost, full-service dental offices inside big-box retailers: "I got the idea of opening an in-store dental clinic one day when I was watching a Wal-Mart ad on TV. I developed a 400 page business plan. I wanted to bring down the cost of dental care."
Dr. Shah traveled to Bentonville, Ark. to present his idea to a roomful of Wal-Mart executives. After months of negotiation, the retailer initially committed to trying Dr. Shah's in-store clinics -- but the retailer subsequently informed Shah that it had changed its mind, and had no interest in dental clinics. Shah had Wal-Mart sign a non-disclosure agreement prior to the meeting to prevent the company from disclosing his plans without his consent.
But Dr. Shah claims that Wal-Mart then revealed his plans to Kent Reeves, a former Wal-Mart Vice President of New Business Development, and Ken Antos, a restaurant partner who owns more than 2,000 Subway stores inside Wal-Marts. In 2012, Wal-Mart opened a dental clinic inside its store in Moreno Valley, California, managed by dentist Christopher Comfort of CCDM, Reeves and Antos. (Dr. Comfort deserves his own sidebar for his six stormy months as Chairman of the Nevada GOP.) Shah says in his litigation that the Moreno Valley clinic was based almost entirely on his specifications, even down to the type of dental chairs used.
In one of the more bizarre twists in the story, in late 2011, Dr. Shah moved from Illinois to California. "Needing a job," the lawsuit says, Dr. Shah responded to a Craigslist add placed by Comfort Care seeking a dentist for an in-store clinic. In April of 2012, Shah was hired to work in the clinic that he had conceptualized. Dr.Shah writes that he "quickly realized" that Comfort's dental office was "almost an exact replica" of the dental office that Shah had shown Wal-Mart almost three years earlier.
At the grand opening of the Wal-Mart dental clinic, Shah said it was "crystal clear" to him that the defendants had "stolen" his business model. "It was the strangest day in my life," Shah told me. When Wal-Mart saw Dr. Shah at the opening ceremony, they informed Dr. Comfort that he had "unknowingly hired the very man" that had designed the dental clinic. The defendants then agreed to send Shah home, on the pretext that he refused to sign a non-disclosure agreement as part of his job acceptance.
By the time he got home, Shah says he was "greeted with an email telling him that his services were no longer needed due to the direction of the company." "I had planned to work there for a couple of months," Shah notes, "and see if I could work myself up into management." Instead, his career at Wal-Mart lasted less than one day.
In his litigation, Shah says that Wal-Mart "repeatedly lied... about its plans to open dental offices in Wal-Mart stores across the country." Shah has asked for a trial by jury, and for compensatory and punitive damages. "In 2009, the valuation and growth potential of my company was tremendous," Shah says.
"The mission of my dental project was to increase access to health care in rural areas," Shah told me, "to reduce dental care prices, accept all insurances -- including Medicaid -- and to create jobs along the way. Wal-Mart could have easily helped me provide a solution to the dental care access crisis in our society -- but they chose to operate my model in a highly profitable fee-for-service approach, with their own people."
I wanted Wal-Mart from the start, because I needed a place with high foot traffic for the model to succeed. I promised my investors Wal-Mart, but when Wal-Mart pulled out, I lost my investors and my bank support. I lost everything. I have lost 5 years of my life. I lost my home and properties; I lost my cars, investments, and savings. Everything was taken from me.
In response to Shah's lawsuit, a Wal-Mart spokesman told the Press-Enterprise newspaper that his company "did not misappropriate any information from the plaintiff in this case. Simply put, his (Shah's) allegations are baseless and misguided."
Dr. Shah now lives with his wife in a one-bedroom apartment. "I perform surgery part-time at three different dental offices," he says. "Professionals who have my skills and background usually are doing very well, but to this day, I am still struggling to get back on track." Shah does not have his own practice.
When asked if he is prepared to spend years battling Wal-Mart in court, Shah says: "If not years, then decades. I can find no compelling reason to stop fighting Wal-Mart. No one should have to experience what I went through. It was torture on earth. They stole my American Dream."
Al Norman is the founder of Sprawl-Busters. He has been helping local citizens fight big box retailers for 20 years. His most recent book is Occupy Walmart.]]>Vermont Governor Takes Heat for Warming Up To Wal-Marttag:www.huffingtonpost.com,2013:/theblog//3.25584902013-01-26T22:20:09-05:002013-03-28T05:12:01-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
Shumlin joins ranks with former Vermont Governor, Republican Jim Douglas, who stumped at a pro Wal-Mart rally in St. Albans, Vermont in January of 2010 -- cheerleading for the same developer who now has Governor Shumlin at his side.
This is the same Shumlin who has called for the shut-down of an aging nuclear power plant in southern Vermont, and described the power plant's owner, Entergy, as "not trustworthy."
This is the same Shumlin whose website lists "energy and the environment" as one of his top six priorities.
This is the same Shumlin who in 2010 opposed a Wal-Mart store near the Wilderness civil war battlefield in Virginia, where 1,200 Vermont soldiers died in 1864. "Our brave soldiers gave their lives to keep the country together, and end slavery," Shumlin said. "It would have been an awful loss to have that battlefield covered in the shadow of a Wal-Mart store."
Apparently the shadow of a Wal-Mart store across his own state is not a problem for Shumlin. On January 17, 2013, Democratic Governor Shumlin was featured on Wal-Mart New England's website:
The Walmart Corporation has signed a lease with developer Jeff Davis of Burlington to build Vermont's first Walmart Supercenter on Route 5 in Derby. Sunlight broke through morning clouds Tuesday, as Davis welcomed Vermont Gov. Peter Shumlin...to the location of the proposed Walmart Supercenter...'This is an example of how we create jobs in the Kingdom,' Shumlin said to applause.
Derby Center Village had roughly 619 people in 2010. Its surrounding trade area is less than 5,000 people. The community has lost 12 percent of its population since 1990. It's a very small community in Orleans County on the northern edge of Vermont's Northeast Kingdom, which economic planners have described as "a region that truly has a sense of place." Planners say two of the Northeast Kingdom's "critical problems" are a "lack of adequate income" and "absence of sufficient high skill jobs."
When it comes to big box sprawl, Shumlin apparently has a blind spot the size of a superstore parking lot. Shumlin is backing the same developer who has two Vermont Wal-Marts under his belt already -- both of them bitterly fought -- and is aiming now to build another one in the Northeast Kingdom.
Shumlin was quoted by the Associated Press as boasting that developer Jeff Davis' Wal-Mart plan was "good news" for this high unemployment region, and he's hopeful the Wal-Mart won't be greeted with a lot of opposition. But the Governor went even further. He said the Wal-Mart would bring 300 jobs and had "huge support" in Derby and surrounding towns.
In response, a spokesperson for the Vermont Natural Resources Council, which has done much of the legal work over the years to slow Wal-Mart down, said the developer's proposal was the wrong scale in the wrong place. The VNRC issued a statement saying:
We're especially disappointed to see the Governor supporting big box sprawl. We are very concerned that this development -- which is the wrong scale in the wrong place -- will undermine Newport City, one of the many downtowns that the State and so many others have been working hard to revitalize.
Residents in the city and town of St. Albans, Vt., who fought off several developers, including Jeff Davis, for nearly 20 years, have offered to help Derby defeat Vermont's first 145,000 square foot superstore. Opponents in St. Albans lost their epic battle in 2011 to protect a tract of farmland from Wal-Mart.
No construction on the St. Albans store has begun yet, but opponents say the new store will only detract from existing jobs, something Governor Shumlin apparently never learned. Shumlin critics also charge that the Governor has used his appointment powers to stack the deck with pro-big box commissioners on regional Environmental Review Boards.
According to anti-Wal-Mart activist Sue Prent of St. Albans, "Governor Shumlin is making precisely the same statements about Walmart coming to Derby that [Gov.]Jim Douglas made a decade ago about St. Albans. To this seasoned veteran of the Wal-Mart wars, Peter Shumlin might as well be a Republican... now he endorses the 'Walmartification' of Vermont."
In an article for the Green Mountain Daily, Prent added:
The Governor has disappointed me a-plenty over the past couple of years, but never more so than when he endorsed the completely false premise that Wal-Mart means local prosperity. He's 'hopeful it won't be greeted with lots of opposition' and hints darkly at 'forces outside the [Northeast] Kingdom' which he fears might get involved. I'm hopeful that there will be plenty of opposition; and as someone 'outside the Kingdom' I will welcome the opportunity to share all that we in the Northwest Citizens For Responsible Growth have learned throughout the past decade about how Wal-Mart impacts communities and how Mr. Davis works his way through the permit processes.
Prent notes that when Shumlin "had barely assumed office, aided in no small part by the efforts of progressive minded folks like myself who abhor the exploitation of Wal-Mart, the Governor made it clear that his loyalty is to the monied class of developers and pocket-padders."
Brushing aside our objections, he reappointed as [environmental board] commissioner, a man whose family business has recently re-located from downtown St. Albans City to Exit 20, so as to take advantage of the Wal-Mart and other potential development out there; all of which has been and will be under review by that commissioner. Not surprisingly, Davis' Wal-Mart slipped through Act 250 [environmental review process] like butter.
It must have taken some tortured logic for progressive Governor Shumlin to backslap one of the worst environmental corporate actors in America. There is green in Vermont's Green Mountains -- but not the kind that environmentalists and tourists flock to see. Numerous economic studies, including reviews done in Vermont as far back as 1993 (Williston) show that Wal-Mart is a form of economic cannibalism, that "captures" sales from local and regional retailers.
So where are the 300 jobs going to come from? Does Shumlin seriously think Vermonters are going to spend more money simply because they have another place to buy Chinese-made underwear? Cutting the retail pie thinner does not create net new jobs.
If economic dislocation is 'good news' to Shumlin, what about the enormously wasteful land consumption associated with big box development, and the traffic congestion? Vermont's existing land use patterns are antithetical to sprawl.
How odd that Shumlin is fighting corporate power at Vermont Yankee, yet shilling for Wal-Mart. Vermont has the lowest number of Wal-Marts per capita of any state in the nation. For economic and environmental reasons, Governor Shumlin should consider Wal-Mart as the retail equivalent of a nuclear power plant. A superstore in Derby would cast a shadow over the entire Northeast Kingdom, and cement Shumlin's image as the Governor of Sprawl.
Activist and author Al Norman has written 3 books about Wal-Mart. His most recent book is Occupy Walmart. He is the founder of Sprawl-Busters, and has been helping communities fight big box sprawl for two decades. ]]>Wal-Mart Discovers 'Made in America' -- Againtag:www.huffingtonpost.com,2013:/theblog//3.25233682013-01-22T10:27:29-05:002013-03-24T05:12:02-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
In a nearly 3,700 word speech before the National Retail Federation in New York City, Wal-Mart U.S. CEO Bill Simon described his company's "American renewal" with the fervor of a born-again retailer.
"I know," Simon admitted, "according to urban legend Wal-Mart's shelves are filled with foreign products. But the truth may surprise you."
Here is Bill Simon's surprise: "According to data from our suppliers, items that are made here, sourced here, or grown here account for about two-thirds of what we spend to buy products at Walmart U.S." The finger on the scale here is Wal-Mart's food sourcing. "Don't forget, we run a pretty large grocery business," Simon explained. Once you take out food, one would expect Wal-Mart's domestic sourcing to plummet.
Alas, the truth is no surprise. According to a 2007 brief by the Economic Policy Institute, the total U.S. trade deficit with China reached $235 billion in 2006:
Between 2001 and 2006, this growing deficit eliminated 1.8 million U.S. jobs...The world's biggest retailer, U.S.-based Wal-Mart was responsible for $27 billion in U.S. imports from China in 2006 and 11% of the growth of the total U.S. trade deficit with China between 2001 and 2006. Wal-Mart's trade deficit with China alone eliminated nearly 200,000 U.S. jobs in this period.
As early as 2004, the China Business Weeklyestimated that 70 percent of the textile merchandise inside Wal-Mart was from China. The Weekly reported that if Wal-Mart were an individual economy, it would rank as China's eighth-biggest trading partner, ahead of Russia, Australia and Canada. More than 5,000 Chinese enterprises had established supply contracts with Wal-Mart.
Before his death, Sam Walton admitted in his autobiography, ironically titled Made in America, that Wal-Mart was "a huge purchaser of imported merchandise from overseas." He said Wal-Mart had no choice, because "a lot of America-made goods simply aren't competitive, either in price, or quality, or both." That was in 1992. Walton rejected the idea of "buying American at any cost," which he described as a "blind patriotic idea": "We, like any other retailer, will only buy American if those goods can be produced efficiently enough to offer good value. We're not interested in charity here."
Walton sent an open letter to his suppliers, inviting them to work with him to increase American sourcing. "It turned out that if Wal-Mart committed to high volume purchases well in advance of shipping deadlines," Walton wrote, "a lot of American manufacturers could save enough on the purchase of materials, personnel scheduling, and inventory costs to realize significant efficiency gains." At the same time, Walton said his company "took a close look at our overseas buying practices and discovered a number of hidden costs." Wal-Mart "developed a formula which enabled us to make a true apples-to-apples cost comparison of buying something overseas versus buying it at home."
Walton even promised that if an American manufacturer could get within 5 percent of a foreign producer, he would "go with the American product." But even before Walton died, Wal-Mart embarked on a China binge that has lasted more than 20 years -- much to the detriment of the American economy.
Now, according to Bill Simon, the shine is rubbing off of the Chinese apple. "In previous decades, investment mainly went to Asia," Simon told the NRF.
Wages were low. The price of oil was low. And new factories sprung up out of the ground. But today, some of those investments are nearing the end of their useful lives.... Labor costs in Asia are rising. Oil and transportation costs are high and increasingly uncertain. The equation is changing.
America is starting to look better to Wal-Mart. Again.
Simon told the story of a factory in Georgia owned by a company called 1888 Mills. Simon said Wal-Mart went over the financials line by line, and "with a little capital" from the supplier, Wal-Mart decided the numbers "looked pretty good," and by this spring, towels from this Georgia factory will be sold in 600 Wal-Mart stores. The textile industry in the U.S. has been ravaged by Asian suppliers -- but one factory in Georgia is hiring back workers!
Such anecdotes will never mask the enormous job migration caused by what Sam Walton called "a pattern of knee-jerk import buying." Wal-Mart today is rightfully concerned about its inefficient global supply chain, the unpredictability of the value of the yuan, and the inevitable rise in foreign labor costs.
We can be sure of one thing: Wal-Mart has promised before that it would Buy American -- and it didn't.
It will take one or two decades at least to undo the damage to American manufacturing caused by Wal-Mart's knee-jerk import buying. Like Sam Walton's promises 20 years ago, Bill Simon's rediscovery of American manufacturing in 2013 isn't worth the paper his press release was printed on.
Author and activist Al Norman is the founder of Sprawl-Busters. His latest book is Occupy Walmart. He has been helping communities fight big box stores for twenty years. ]]>The Wal-Martyrs of Mexican Briberytag:www.huffingtonpost.com,2012:/theblog//3.23565582012-12-23T18:10:42-05:002013-02-22T05:12:01-05:00Al Normanhttp://www.huffingtonpost.com/al-norman/
At the conclusion of its lengthy expose of Wal-Mart's intense bribery campaign in Mexico, the New York Times narrated the tragic story of Emmanuel D'Herrera Arizcorreta, who died in prison as a result of his battles against Wal-Mart. But fellow activists charge that Wal-Mart is responsible for his death.
D'Herrera was a colorful, media-savvy opponent of Wal-Mart. The Times quoted him describing Wal-Mart de Mexico as "an ocean of corruption." For nearly a decade, D'Herrera wrote letters, went on hunger strikes and agitated for protection of cultural heritage sites -- all at great personal price.
In March of 2005, almost 8 years before the New York Times expose of bribery in Teotihuacan, reporter John Ross wrote in The Progressive that "activists immediately suspected a deal had been cut between the conglomerate, the municipal government, and the National Institute of Anthropology and History (INAH), without whose permission the project could not go forward."
Ross wrote that on October 1, 2004, D'Herrera and several other activists "set up camp at the Wal-Mart site, rolled out their petates (straw mats), lit copal incense to the guardian figure of Coatlicue, a sort of Aztec Shiva, and, in classic lost-cause Mexican struggle posture, declared themselves on hunger strike... When (their) camp was attacked by angry construction workers, the three hunger strikers moved to the ruins (at Teotihuacan)." When the Wal-Mart store finally opened months later, D'Herrera was in the 4th week of a hunger strike, and "a band of toughs" broke up his camp and slashed several student protestors with razor blades.
According to the New York Times, at one point in his crusade to protect Mexico's cultural legacy, D'Herrera "finally snapped," and "placed a crude homemade bomb in a shopping cart," at Wal-Mart. "The bomb consisted of a small juice can containing gunpowder and nails." The Times says that D'Herrera wrote later that his plan was "to kill himself... and damage the store to draw public attention back to Wal-Mart."
But an April, 2010 article posted in Revuelta by Dr. Enrique Bonilla Rodriguez, a fellow Mexican big box activist, asserts that it was Wal-Mart who killed D'Herrera.
According to Rodriguez,
Mr. Emmanuel entered the store... with a can containing some powder. When detected, security personnel, arrested him immediately in an act completely unfair because Emmanuel had not committed any act that is outside the law... The events we have just narrated became a pretext for the manufacture a series of transnational crimes to deprive the freedom of Emmanuel, who was imprisoned in the Prison Molino de las Flores in Texcoco, Mexico State, for three months.
"After a trial," Rodriguez continues, "the trial judge asked bail and granted his freedom. However, Wal-Mart, dissatisfied with the verdict, sued Emmanuel again." Rodriguez charges that when D'Herrera left prison, the Mexican police "took him prisoner and put him through threats, beatings and psychological torture for at least six hours." D'Herrera was imprisoned a second time for 8 months, "and, unfortunately, died on April 10, 2010 from cardiac arrest resulting from a stroke that was caused by the lack of adequate medical care for a patient suffering from diabetes and hypertension."
I asked Jaime Lagunez Otero, another outspoken Mexican activist who fought Costco at the Casino de la Selva site in Cuernavaca, about his memories of D'Herrera:
Q: How well did you know D'Herrera?
Otero: Quite well I would say. He was a very intelligent, experienced man with the highest levels of culture and education. Extremely passionate about Mexico and the quest for justice. He was quite fluent in Nahuatl [language of the Aztecs].
Q: Do you remember any particular incidents about his battle against Wal-Mart?
Otero: Many incidents, some of them certainly dramatic and terribly unpleasant. We were almost put in jail for speaking out. But what is truly horrifying is that our friend Emmanuel died in jail -- for protecting the Constitution and World Heritage. We of course, we blame the company and corrupt officials for this crime.
Q: Did he ever talk about why he took a "bomb" into Wal-Mart?
Otero: As far as I remember it was not a bomb but some device based on some sort of spray paint container.
Q: You personally have been punished for your opposition to Wal-Mart. How have you been affected by speaking out against this big box store?
Otero: I have lost my job as a scientist and am currently living a very stressful economic situation. I want to continue research on cancer, bioinformatics and the promotion of cryonics, but the system prefers that we keep quiet. Probably make others take heed of what can happen to them as well.
Q: Do you feel that Wal-Mart de Mexico should be charged with illegal activity, and some officials of the company sent to jail for what they did?
Otero: Yes. Our group, the Frente Civico, wants to have two stores closed: the one made by Wal-Mart in Teotihuacan, and the one constructed by Costco in Cuernavaca. Practically the same thing happened there. In fact I specifically warned the people of Teotihuacan that Wal-Mart would probably use same methods to get their way. Sadly, I was right. The Times article confirms what we have said all along.
Critics in the U.S. who have spoken out against huge retail corporations have rarely risked personal safety or death -- -but this is not the case in other countries. The New York Times described D'Herrera's ten-year life-and-death battle with Wal-Mart as a "hopeless campaign." But that is not how his colleagues in Mexico see it.
As Dr. Rodriquez wrote after D'Herrera's death: "Unfortunately... Mexican justice gives pride of place to multinationals like Wal Mart and not the citizens. Given this, it is necessary to unite all our efforts nationwide to achieve the change we all want... Emmanuel, your example of the struggle for a better world for all, will guide our efforts and work."
In October of 2007, two years before his death, D'Herrera sent me an email in which he charged that
powerful interests of real estate speculators ... forced the construction and operation of a Wal-Mart inside the archeological zone of Teotihuacan. These interests planned the assassination of Raul Cordoba Garcia, director of the INAH in the state of Mexico in June of 2004 when he opposed the license that the INAH had granted to... a front for Wal-Mart, to construct in a prohibited zone for that type of establishment.
D'Herrera went far beyond The New York Times investigation, and accused former Mexican President Vicente Fox Quesada "as ultimately responsible for the crimes I cite, and I do this as a criminal accusation."
The unraveling of Wal-Mart's crimes in Mexico are just beginning, and activists like D'Herrera, Rodriguez and Otero, are the "hopeless" campaigners who found that truth is revealed at great personal expense.
But it is Emmanuel's courage that has allowed the corruption of Wal-Mart to rise out of Mexico like the great pyramids of Teotihuacan.
Al Norman is the founder of Sprawl-Busters. His most recent book is Occupy Walmart.]]>Demanufacturing Wal-Mart: Profiting From Prison Labortag:www.huffingtonpost.com,2012:/theblog//3.22247432012-12-03T08:37:09-05:002013-02-02T05:12:01-05:00Al Normanhttp://www.huffingtonpost.com/al-norman/
Every year, Wal-Mart has to dispose of millions of dollars worth of customer returns, buy-backs, over-stocks, shelf-pulls, scratch-and-dent, and excess inventories. The giant retailer sells this merchandise to liquidators, who scrub the products of any Wal-Mart serial numbers, UPC bar codes -- and then resell them to after-market retailers, who re-sell them to the public.
The workers used to strip these Wal-Mart products clean are often prisoner laborers, under a program made possible by the federal government. In effect, the liquidators are partially subsidized by federal taxpayers, who provide the 'demanufacturing' facilities, and cheap, captive labor -- usually female prisoners. This form of corporate welfare allows salvage companies to offer Wal-Mart a low price for their cast-off products.
According to a confidential agreement between Wal-Mart and one of its major salvage buyers, the Jacob's Trading Company, "demanufacturing" means "to remove all of the identifying marks, including, but not limited to, manufacturer's or retailer's names, logos, serial numbers, UPC numbers, RA numbers, and other identifying marks... from the packaging, or to clearly and conspicuously mark the packaging so that it is readily apparent and obvious that the Merchandise has been through a salvage process. Contractor agrees to further demanufacture the Merchandise by making a vertical mark through the bar code of the Merchandise."
Jacob's Trading Company (JTC) was founded by Wall Street Icon Irwin Jacobs, once described by Forbes as "Irv the Operator," a "corporate raider (who) terrorized chief executives" by purchasing shares in companies like Walt Disney.
According to Minnesota-based Jacobs Trading, when Irwin Jacobs was 18 years old he "stumbled into" the closeout merchandise business when he bought and sold a pile of skis from the U.S. Customs Service. In 1996, JTC became a prime liquidator for 'a major retailer' (Wal-Mart). JTC was purchased in 2011 by Liquidator's Supply for $140 million.
Over the years, Irwin Jacobs has had to do some salvage on his own reputation. In 2010 he was prominently featured in an ugly bankruptcy process when Jacobs Trading had to take a $20 million loss on investments it made in another company that Jacobs headed at the time, the now-bankrupt Genmar boatmaker.
In 2007 Jacobs was ensnared in lawsuits between Wal-Mart and a fired SVP of Marketing at the Arkansas retailer, who charged that while Jacobs held exclusive rights to purchase unsold Wal-Mart merchandise, Wal-Mart CEO Lee Scott had purchased from Jacobs' boat companies "a number of yachts at preferential prices" and "a large pink diamond for his wife at a preferential price." Scott was also accused of accepting "jet aircraft travel (for his own personal use) on private airplanes provided by Mr. Jacobs... for Mr. Scott and his wife to travel to their residences in Longboat Key, Florida and Las Vega, Nevada." Jacobs also reportedly hired Lee Scott's son, Eric to work at Jacob's Trading and in his boat company. Jacobs told the Wall Street Journal that these accusations were "totally outrageous," and that he had never shown any favoritism to Lee Scott or his son. "I swear to God Lee never called me about... putting Eric to work." The lawsuits were eventually dismissed.
But Irwin Jacobs put prisoners to work to help make his fortune. JTC built its reputation on selling customer returns from the "nation's most well-known retailers" and offering "closeout prices" by the truckload. The company maintains a network of 9 distribution centers in states like Minnesota, New York, North Carolina, Oklahoma and Texas.
In Taft, Oklahoma, for example, JTC's purchases from Wal-Mart are "demanufactured" at the Eddie Warrior Correctional Center. According to the Oklahoma Department of Corrections, JTC delivers semi loads of merchandise to the prison weekly, which are cleaned of any identifying bar codes and company specific labeling, repackaged, palletized and shipped nationwide for resale. "This operation employs approximately 18 female offenders," the ODOC says.
In Nevada, the entire JTC operation is housed inside the Southern Nevada Women's Correctional Facility in North Las Vegas. Jacobs is the only private employer of female prisoners in Nevada. In 2000, a female prison laborer working 40 hours a week kept just over half of what she earns. After several deductions mandated by the state prison department, she took in about $460 per month. That's net pay of $2.67 an hour. Even updated to today's wages, this pay is not comparable to private sector wage levels. These women strip original store labels and price tags off surplus wholesale items, and repackage the compressors, ceiling fans, yard lights and other products that originally did not sell. "It's physically demanding," one worker said. "It requires cognitive and motor skills and problem-solving abilities."
The federal law that makes this prison labor possible, the Prison Industry Enhancement Certification Program (PIECP) was created by Congress in 1979 "to establish employment opportunities for inmates that approximate private-sector work... to place inmates in a realistic work environment, pay them the prevailing local wage for similar work, and enable them to acquire marketable skills..."
It's not clear what kind of prevailing wage or marketable skills these women inmates get from removing Wal-Mart labels from returned products, but it has provided a very clear subsidy to Wal-Mart and to its wealthy partners in liquidation.
Not bad for a retailer that says in its Standards for Suppliers: "Forced or prison labor will not be tolerated by Wal-Mart."
Al Norman is the founder of Sprawl-Busters. His latest book is Occupy Walmart. He has been helping communities fight big box stores for nearly 20 years.]]>Pushed Over the Fiscal Cliff by Wal-Marttag:www.huffingtonpost.com,2012:/theblog//3.21507672012-11-19T08:50:32-05:002013-01-19T05:12:01-05:00Al Normanhttp://www.huffingtonpost.com/al-norman/
Clinton promotes Wal-Mart CEO Mike Duke like the late Sam Walton used to push Moon Pies. But it's hard to imagine Barack Obama suffering through a meeting with Duke, who personifies the 1% corporate power-broker, and whose store managers warned Wal-Mart "associates" in 2008 that a Senator Obama in the White House would favor the unions. Ironically, now its Duke who is in the White House.
After meeting with the President, Wal-Mart's CEO issued a 216-word statement that was equal parts arrogance and ignorance. The Walmart Statement on Fiscal Cliff Meeting with President Obama included the following dictums:
"In many ways, Wal-Mart's customers are at the center of this debate." Why? Because there are 19 million of them every day? Discount shoppers represent no social movement or coherent vision of America---but because they are the only people who can move Wal-Mart's stock price--they are the focus of everything Wal-Mart says.
"Walmart Moms tell us their confidence in the economy is shaped by whether they believe Washington is working for them." Wal-Mart loves it that political pollsters have created this demographic that bears the retailer's name. But every demographic group in the country thinks that more Congressional gridlock is intolerable, and that the government is not "working for them." But ask these same people if the Walton Family is working for them?
Wal-Mart Moms might not be pleased to learn that according to the Economic Policy Institute, the U.S. trade deficit with China, between 2001 and 2006, eliminated 1.8 million U.S. jobs---and Wal-Mart's trade deficit with China alone eliminated nearly 200,000 U.S. jobs. Wal-Mart was responsible for 11% of the growth in the U.S. trade deficit during this period.
"Our customers are working hard to adapt to the 'new normal,' but their confidence is still very fragile. They are shopping for Christmas now and they don't need uncertainty over a tax increase." In other words, don't ruin the holiday spirit for our shoppers with all this talk about falling off a Cliff. Sure, customers are "fragile," because many have had to trade down a decent-paying job for a Walton Job. A recent study by the Investigative Reporting Workshop notes that U.S. factory jobs dropped by 44% from 21 million jobs in 1979, to 11.7 million manufacturing jobs in 2011.
Walton Jobs lock hundreds of thousands of workers at the poverty level. Wal-Mart needs an underclass of workers who are financially desperate enough to work part-time for $8.90 an hour. These people aren't worried about the Fiscal Cliff---they have already gone over it by working at Wal-Mart.
A 2011 research brief by the Center for Labor Research and Education at UC Berkeley concluded that "jobs created by Wal-Mart in metropolitan areas pay less and are less likely to offer benefits than those they replace...Wal-Mart workers earn an estimated 12.4% less than retail workers as a whole, and 14.5% less than workers in large retail."
The same report concluded that if Wal-Mart paid its workers $12 per hour and passed on the entire cost of that wage increase to customers, the average Wal-Mart shopper would pay 46 cents more per shopping trip. The workers would receive as much as $6,500 in an average annual pay increase--which they would no doubt spend in their local economy to pay their rent, food and utility bills.
Part of the 'new normal' in a Wal-Mart economy is that fewer people are working, and they are working for less. The National Bureau of Economic Research found that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, and each Wal-Mart worker replaces approximately 1.4 retail workers at other merchants.
"We encourage the White House and Congress to work together on an approach that includes additional revenue, comprehensive tax reform, and spending cuts, including entitlement reforms, to get our fiscal house in order while creating economic growth." Keep in mind that the man writing this was paid $18.1 million by Wal-Mart in 2011, not counting the use of a company plane---a perk valued at around a $100,000.
What kind of "entitlement reforms" would Wal-Mart want? They certainly don't want to shrink Medicaid, because in states that have published data on corporate use of Medicaid, Wal-Mart consistently places at the very top of private companies with the most employees and dependents who rely on taxpayer-supported Medicaid health care. Similarly, cutting Medicare and forcing elders to pay more out-of-pocket for health care is going to reduce their discretionary spending at Wal-Mart.
Social Security should not be on Wal-Mart's entitlement reform list, because it's a Trust Fund. That distinction is likely to be lost on Mike Duke, who, because of the cap on Social Security wages subject to the payroll tax, contributes based on only 2.6% of his $4.18 million in base salary and cash performance bonus. His $13.1 million in stock awards is not subject at all to the payroll tax. Duke pays the same FICA tax as someone earning $110,100. In the first 10 days of the year, Mike Duke hits the cap on Social Security taxable income---the rest of his work year is tax free. So any "reforms" on Social Security should start with people like Mr. Duke (and the much richer Waltons, whose unearned income is not taxed by Social Security) paying their fair share to help today's retired workers.
"Washington needs to find an agreement to avoid the fiscal cliff." Wal-Mart could help that agreement by changing its business model from one of rampant exploitation of its workers and vendors, to one that keeps product sourcing and jobs in America, offers a liveable wage to its workers, and calls upon families like the Waltons to pay their fair share in taxes.
If America goes over the Fiscal Cliff, we will find Wal-Mart waiting or us at the bottom with a check-out register.
Al Norman has been helping communities fight big box sprawl for 19 years. He is the founder of Sprawl-Busters. His most recent book is Occupy Walmart. ,. You can follow him on Twitter @SprawlBusters.]]>Shopper Assaulted Over Wal-Mart Pumpkintag:www.huffingtonpost.com,2012:/theblog//3.20292172012-10-29T13:49:40-04:002012-12-29T05:12:02-05:00Al Normanhttp://www.huffingtonpost.com/al-norman/
On October 16th, Carter was shopping at a Wal-Mart in McKinney, Texas. "I walked through the store selecting the items on my list, and sorted them in my basket according to food type as I normally do," Carter told me. "At the last minute I decided it would be fun to pick up one or two pumpkins for my wife's party. I went to the lawn and garden center because the pumpkins are located outside the store."
"I stopped my basket next to the display. I was still well within the store boundary. I wanted to be able to keep an eye on the shopping basket and I did not want someone to think the basket had been abandoned. There was an employee manager who saw me place the shopping buggy in the door and he said nothing to me about it. I picked up a pumpkin and was setting it down when the next thing I know I was tapped on the shoulder by another Wal-Mart employee, saying 'Please come with me.'"
"No one ever asked me the simple question if I was finished shopping or what my intentions were. I would have replied, I am still shopping and will pay for all my items before I leave like I have always done my whole life."
"After a minute or two of this, the employee told me that I needed to put the pumpkins down and just come with her. I was thinking perhaps I had committed a rule violation of the store by going outside to shop for pumpkins or there was some other minor concern. While following her in she began talking on her walkie talkie. This is when I started to become nervous."
Carter says he was escorted by at least three Wal-Mart employees towards what he calls "the interrogation room." "At this point I became very nervous and frightened and decided to just leave the store. I was in possession of nothing that belonged to Wal-Mart as they had confiscated my shopping basket. I had not been told I was under arrest or what if anything I was being accused of. As I started to leave, a female Wal-Mart employee made a dive for me grabbing my clothes and called me a "son of a bitch." She must have tripped on something because she fell down. I turned around, asked her if she was ok, and helped her up. Another Wal-Mart employee then violently grabbed me from behind and physically assaulted me. My tooth was cracked in this exchange and is still causing me pain. I did not fight back or resist. I was then forcibly pushed and restrained against my will through the store causing me great embarrassment."
"I was pleading with them to just let me pay for what was in the basket and leave, and that this was all a huge misunderstanding, I told them I parked my buggy at the door to look at the pumpkins. I did not take any merchandise with me outside. I did not attempt to leave the store premises. Yet I was being held forcibly against my will and was being cursed at."
"I was thinking: if it is not allowed to go outside to shop for merchandise, Wal-Mart should not place merchandise outside."
Carter says that once inside the "interrogation room," things went from bad to worse. "I was treated like a common criminal. I kept trying to plead with them that I was just looking for pumpkins and to please just allow me to leave. My demeanor was never agitated nor was I using any foul or inappropriate language like they were using on me. I was repeatedly told to "Shut up."
When five uniformed officers from the McKinney police department arrived, Carter thought that someone would finally listen to him. But the officers' only response to Carter was: "You need to just sit there and shut up!"
"I was made to place my hands on a wall and was then searched and handcuffed. I was never read my rights or fully explained exactly what I was being arrested for. I did not have any Wal-Mart items on my person. An officer came to me and took my personal information. I was trying to speak to him, to convince him to listen to my side of the story, but his only response was 'We don't mess around in McKinney.'"
"I had been falsely detained against my will," Carter complains, "and assaulted by overeager, aggressive Wal-Mart staff because one employee thought I intended to commit a crime. All of this is on video tape to prove my innocence, but the tapes were never reviewed. I was guilty with no investigation done at all."
"I am gainfully employed and earn a good living as a corporate travel agent. I have been with the same company for many years. I strive to be a good provider and role model for my family. This event has greatly damaged my self esteem and self worth. If I wanted to steal something it certainly would not be groceries and it certainly would not be at a place where I shop regularly, where I pay for items with a credit card, and could be easily be identified on video tape."
Several "alleged" shoplifters have died during Wal-Mart "Asset Protection" incidents. In the retailer's Associate Guide, employees are instructed to "PUT PEOPLE FIRST. Protecting the physical well-being of suspects, customers and Wal-Mart Associates is your first priority." The Guide adds: "If at any point the Suspect or any other involved person exerts physical resistance, determine whether your next reasonable step is to disengage from the confrontation, or move to an authorized detention method. Associates may only defend themselves or others to the extent necessary to disengage the Suspect and to withdraw from the situation."
Wal-Mart allows its Asset Protection staff to "use reasonable force to physically limit or control the movements of a Suspect." But the policy notes: "Only the least amount of force necessary to affect the detention under the circumstances may be utilized."
Rockey Carter's pumpkin shopping turned into a Halloween nightmare. This incident is a reminder that "asset protection" warfare still exists at Wal-Mart. The McKinney police have not given Carter their incident report, and Wal-Mart may never turn over their tape of what happened October 16th.
"I plan to fight this case in any way I can to prove my innocence," Carter vows. "I was never properly questioned, and I was falsely arrested. I am requesting an apology from Wal Mart and to have these charges against me be dropped immediately."
Sam Walton's pledge to "take care" of the customer has become darkly nuanced this Halloween.
Al Norman is the founder of Sprawl-Busters. He has been helping communities fight big box sprawl for 19 years. His new book is Occupy Wal-Mart.]]>Wal-Mart in Libya? Don't Bet Your Hog Futures On Ittag:www.huffingtonpost.com,2012:/theblog//3.19214632012-09-28T13:17:12-04:002012-11-28T05:12:01-05:00Al Normanhttp://www.huffingtonpost.com/al-norman/
How else to explain President Bill Clinton's absurd question to the head of Wal-Mart: "If the new president of Libya asked you to open a store in Tripoli, would you consider it?"
Clinton has boosted Wal-Mart since his days as Governor of Arkansas, when Hillary graced the retail giant's Board of Directors. Mike Duke, the CEO of Wal-Mart, was careful not to answer President Clinton's question, choosing instead to write a 'guest blog' for The Huffington Post about how "Business must lead. And Walmart should always be right at the front."
President Clinton depicts Wal-Mart as a leader in sustainability, because the retailer has 148 stores (out of more than 4,000) with solar installations. But Wal-Mart is also the company that has abandoned more stores than any other retailer in the history of America, imports products thousands of miles, and creates huge 'heat islands' around its superstores. None of this is sustainable or good for the environment.
Here is the straight answer to Bill Clinton's question: "Wal-Mart will never open a store in Tripoli (or Cairo,or Damascus)." Here's why:
· Libya is in a state of political turmoil. Wal-Mart still remembers how its Jakarta, Indonesia store was looted and burned to the ground during the 1998 riots.
· A Wal-Mart store would be a prime target for terrorists operating in the country. Wal-Mart has enough trouble maintaining security at its U.S. superstores--much less in a war-torn city.
· Wal-Mart has imploded in a number of foreign markets besides Indonesia,like Germany, South Korea, and Hong Kong. Wal-Mart does not need another foreign failure.
· The IMF ranks Libya 86th in terms of GDP per capita--right above the Dominican Republic .
· Wal-Mart told Reuters just last month that international sales had slowed and the retailer planned to scale back its addition of store space this year.
Using Clinton's improbable question as a springboard, Duke described Wal-Mart "as a new model for making change." But with anti-American sentiment blowing through the Arab Spring nations, now is not the time for two rich, white Americans to be musing at a Global summit about the change that Wal-Mart could bring to Libya.
Duke took it upon himself to proclaim that Wal-Mart is working for "the global emerging middle class." The people who work for Wal-Mart in this country might take issue with that statement--but certainly activists in Libya want no part of America's vision of middle class life.This is precisely the time when giant American chain stores should not be talking about setting up shop in Libya. Wal-Mart has its hands full in India and China.
To foreign eyes, Wal-Mart must appear as the threatening embodiment of retail colonialism. Anyone doing cultural due diligence would realize that these "emerging" nations do not seek America's 1% corporate elites meddling in their affairs.
No one in the Middle East is clamoring for Wal-Mart intervention. Bill Clinton's unsolicited offer of a big box store in Libya was as culturally tone deaf as offering a Muslim a pork chop.
Al Norman is the founder of Sprawl-Busters. He has been helping communities fight sprawl for nearly 20 years. His new book is called Occupy Walmart.]]>Wal-Mart Discloses "Nada" in Mexigate Bribery Casetag:www.huffingtonpost.com,2012:/theblog//3.17787392012-08-17T18:04:10-04:002012-10-17T05:12:09-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/nada. Even worse, lawmakers now charge that Wal-Mart's own documents suggest that the company may have been involved in tax evasion and money laundering as well as bribery.
In a sharply spiced letter sent August 14 to Wal-Mart CEO Mike Duke, Congressmen Henry Waxman and Elijah Cummings, the ranking House members on the Energy & Commerce and Oversight and Government Reform Committees, respectively, told Duke,
You have failed to provide the documents we requested, and you continue to deny us access to key witnesses. Your actions are preventing us from assessing the thoroughness of your internal investigation and from identifying potential remedial actions.
Waxman and Cummings charge that the retailer's potential violations of the Foreign Corrupt Practices Act may stretch far beyond Mexico, and could be "global in nature." Wal-Mart reportedly has been looking at its own anti-corruption practices in five other countries outside of Mexico.
On April 21st, shortly after the New York Times broke the bribery story, Wal-Mart issued a statement in English and Spanish saying that its Board of Directors has been conducting its own "extensive investigation" for months, using outside legal counsel and forensic accountants. The retailer claimed these experts were "reporting regularly" to the Board -- yet Congressman Waxman and Cummings say they have seen nada.
"To date, however," the lawmakers told Duke,
you have not produced a single document we have requested. You have refused to provide Committee staff with copies of any internal reports or specific information about the findings and recommendations of your worldwide assessment... you have not allowed us to speak to any Wal-Mart employees responsible for compliance with the Foreign Corrupt Practices Act.
At its Annual Meeting in Fayetteville, Ark., last June, Board Chairman Rob Walton told shareholders, "Acting with integrity is not negotiable. You have my word. We will act the right way." A few minutes later, Mike Duke asserted, "There's no gray area between right and wrong. It's either the right thing to do, or we shouldn't do it."
Apparently Wal-Mart has decided that talking to Congressional investigators is not the right thing to do.
Yet in their April 21 statement, Wal-Mart boasted: "We have met voluntarily with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) to self-disclose the ongoing investigation on this matter." The company promised to "continue to meet" with the DOJ and SEC "to report on the progress of the investigation."
So where's that "self-disclosure" now?
Waxman and Cummings have warned Wal-Mart that their August 14 letter is "a final opportunity to respond" to their requests before the lawmakers release their own investigative report and make public the documents they have obtained to date as part of their Congressional investigation.
Wal-Mart now has until August 28 to become transparent. For a company that says it has no gray areas, Wal-Mart remains a remarkably opaque company. Only a business with something to hide would stone-Wal Congress this way.
Al Norman is the author of the new book Occupy Wal-Mart. His organization, Sprawl-Busters, has been helping local communities fight big box stores for nearly two decades. ]]>The Wal-Mart/Facebook Social Genometag:www.huffingtonpost.com,2012:/theblog//3.17148022012-07-30T18:16:00-04:002012-09-29T05:12:39-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
According to a statement from Facebook founder Mark Zuckerberg, he and his top management team travelled to Bentonville, Arkansas to "deepen" its relationship with Wal-Mart. That's "deepen" as in pockets. But it's also about something called The Social Genome project.
These huge corporations are already fast friends, with crafted, interlocking directorates. James Breyer, for example, a venture capitalist, has been on the Facebook board since 2005, and on the Wal-Mart board since 2001. Last year, Wal-Mart paid Breyer $261,523 in fees and stock options to serve on their board. And Wal-Mart's board in June drafted Marissa Mayer, the new CEO of Yahoo, formerly a VP at Google. Facebook and Yahoo recently unveiled plans to form a "strategic alliance" involving advertising.
Zuckerberg met privately with Michael Duke and the Wal-Mart management team on July 20th. The two giant companies already have a significant financial relationship. In its 2012 Proxy statement, Wal-Mart said it "paid Facebook for display advertising....[and] will continue to purchase advertising from Facebook during FY 2013." No dollar figure was revealed, but Wal-Mart said its paid ads "represent less than 1% of Facebook's 2011 revenues." Extrapolating from Facebook's second quarter advertising revenues of $992 million, Wal-Mart is buying somewhere around $39 million in ads on Facebook.
A deeper Facebook/Wal-Mart relationship could result in a very lucrative agreement considering that Facebook has 955,000,000 monthly users, and Wal-Mart's website has 18,241,227 likes. But Wal-Mart has something more important that Zuckerberg may want: the Social Genome project.
At the end of November, 2011, WalmartLabs launched an application for Facebook called Shopycat, which currently has 18,749 likes--or roughly one-hundredth of one percent of Wal-Mart's Facebook likes. WalmartLabs says The Shopycat app "makes gift giving less stressful and more fun "by analyzing their Facebook activity through likes, shares and posts using our Social Genome technology."
Got that? Wal-Mart is already mapping your social DNA--and Facebook is supplying them with your genome. Shopycat illustrates how the process works using a guy named Joe, who posts a lot about the Red Sox, and whose Facebook "genome" allows WalmartLabs to infer that Joe likes Harry Potter, running, Angry Birds, sushi and yoga. Shopycat then "matches user's interests to a giant catalogue that includes products from Walmart.com."
WalmartLabs defines the "Social Genome" as "a giant knowledge base that captures entities and relationships of the social world." Wal-Mart has spent the last few years building this in-house Social Genome, part public data, part private data, "and a lot of social media." Tweets, Facebook messages, blog posts, You Tubes, its all streaming into Wal-Mart. Streaming in so fast, that WalmartLabs created something they call Muppet, a solution for processing Fast Data, using large clusters of machines. The Labs describes the Social Genome as their "crown jewel."
Wal-Mart's Shopycat is just an inane example of where this social genome matching is going. But it is a warning that the Social Genome project is converting Facebook data into something far beyond a place "to stay connected with friends and family." It turns out that the "friend" you are being connected to is Wal-Mart.
Social networking sites are vast data mines for large corporations like Wal-Mart, who will sift through your posts looking to target you for products based on your genome, or perhaps one day for credit card companies, insurance salesmen, real estate marketers, political pollsters, government security officials, etc. It's already happening.
Your "friends" Zuckerberg, Duke and Muppet, are engaged in what Wal-Mart calls "deep semantic analysis of social media." They want to "deepen" their reach into your electronic make-up, and turn surveillance of your habits, likes, locations, and politics---into a marketable genome.
The writing is on your Wal.
Al Norman is the founder of Sprawl-Busters. He has been helping citizen groups fight big box retailers for almost 20 years. His latest book is Occupy Walmart. ]]>It's Time for Wal-Mart Employees to Stop Killing Shoplifters!tag:www.huffingtonpost.com,2012:/theblog//3.15849792012-06-11T09:00:16-04:002012-08-11T05:12:07-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
In August, 2005, 30-year-old Stacy Driver, of Cleveland, Ohio, a master carpenter and the father of a two-year-old son, died from a heart attack while lying face down in a Wal-Mart parking lot in Houston, Texas.
Driver was pinned down on the burning hot pavement by several Wal-Mart workers who accused him of shoplifting a package of diapers, a pair of sunglasses, a BB gun, and a package of BBs. "When we got there," a paramedic said, "the man was facedown (in cardiac arrest) with handcuffs behind his back. That's not indicative of someone given CPR." Four Wal-Mart associates chased Driver, who was shirtless at the time, wrestled him to the ground and struggled with him on the hot pavement for 10 to 30 minutes, witnesses said.
A Houston lawyer who witnessed the event, told the Houston Chronicle that one of the Wal-Mart employees had Driver in a choke hold as other employees pinned his body to the ground. "He was begging, 'Please, I'm burning, let me up,'" Another employee brought a rug for Driver to lie on, but one of those holding Driver said he was fine where he was. "After about five minutes, (Driver) said, 'I'm dying, I can't breathe, call an ambulance,'" the eyewitness lawyer continued. After Driver was handcuffed, the eyewitness said one employee had his knee on the man's neck and others were putting pressure on his back. Stacy Driver eventually stopped moving.
Most likely as a result of the Driver case, Wal-Mart updated its Loss Prevention (now called "Asset Protection") Associate Guide, which now instructs employees to "PUT PEOPLE FIRST. Protecting the physical well-being of suspects, customers and Wal-Mart Associates is your first priority." Then the Guide adds: "If at any point the Suspect or any other involved person becomes violent, disengage from the confrontation, withdraw to a safe position, and contact law enforcement. If at any point the Suspect or any other involved person exerts physical resistance, determine whether your next reasonable step is to disengage from the confrontation, or move to an authorized detention method. Associates may only defend themselves or others to the extent necessary to disengage the Suspect and to withdraw from the situation. After disengagement, Associates should contact law enforcement."
Wal-Mart policy is that suspects can only be detained "in a reasonable manner, for a reasonable period of time. Employees are instructed to "utilize good judgment in determining whether detention is authorized and the manner in which to proceed. Remember: protecting the physical well-being of Suspects, customers and Walmart Associates is your first priority."
But Wal-Mart allows its Asset Protection staff to "use reasonable force to physically limit or control the movements of a Suspect." The policy notes: "Only the least amount of force necessary to affect the detention under the circumstances may be utilized." The Guide says: "If restraint is attempted and the Suspect cannot be controlled with a reasonable level of force, disengage from the situation, withdraw to a safe position, and contact law enforcement."
Wal-Mart workers are told to "always honor a suspect's request for medical attention," and on the list of "prohibited techniques" employees are warned "never place a Suspect in a prone position unless you are unable to safely disengage from an encounter and need to do so to prevent the Suspect from committing a violent act. A Suspect in a prone position should be constantly monitored and moved to a sitting or standing position as soon as reasonably possible."
Stacy Driver was not only physically assaulted, but died lying prone in Wal-Mart's parking lot. All over some BBs and a pair of sun glasses. Two years later, Wal-Mart paid Driver's family $750,000 in a settlement of the family's wrongful death lawsuit.
In December, 2009, a 38-year-old suspected shoplifter named Marty Bridges was fleeing a Wal-Mart store when security staff working for Wal-Mart grabbed him, and a fight broke out. By the time the Dunwoody, Georgia police arrived on the scene, Bridges was on the ground, and bystanders were trying to give him CPR. The suspect was taken to nearby Northside hospital, where he was officially pronounced dead.
The Dunwoody police told the Atlanta Journal-Constitution that the unspecified items Bridges was accused of stealing were less than $300 in value, and would have resulted in a misdemeanor charge.
"It was basically a big pile-up," a Dunwoody police spokesman told the newspaper. "They had him pinned on the ground to keep him from running." According to one report, store officials had contacted the police saying that a man had been seen stuffing his shirt with store items. Yet as he lay dying in the parking lot, no items were found on his person.
Last week, another alleged shoplifter died in a Wal-Mart parking lot in Covina, California. Jose Marcos Picazo, 41, of Azusa, California reportedly left the Wal-Mart store without paying for merchandise and was followed out into the parking lot by Wal-Mart Asset Protection employees.
"They went outside to detain him, and basically, the fight was on," the police department said. "He resisted them and they began fighting. They were able to get him down on the ground and that's when the Covina police officers arrived."
The Los Angeles County coroner's office said Picazo "became unresponsive" while under the control of Wal-Mart employees, and was pronounced dead at the local hospital in Covina. An autopsy has been performed to determine the cause of death. The Covina cops told the San Gabriel Valley Tribune that by the time they arrived the "suspect appeared to be in medical distress." Picazo was accused of stealing some clothes and body wash.
Wal-Mart Loss Prevention staff must have lost their copy of the company's Loss Prevention Associates Guide. "We just can't have associates trying to take matters into their own hands," a Wal-Mart spokesman has said.
It's time for Wal-Mart to follow its own manual and "disengage and withdraw" from these parking lot confrontations. Stacy Driver, Marty Bridges, and Jose Picazo are all dead because Wal-Mart still hasn't figured out that people's lives are more valuable than their cheap Chinese "assets."
Al Norman is the founder of Sprawl-Busters. He has been helping activists fight big box stores for nearly two decades. His latest book is Occupy Walmart.]]>Wal-Mart Gives Workers Justin Timberlake in a Grass Skirttag:www.huffingtonpost.com,2012:/theblog//3.15652552012-06-04T08:06:01-04:002012-08-04T05:12:12-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/Reuters described it as an "upbeat event," but aside from the Nashville/Hollywood glitz on the stage -- the event was more of a corporate mea culpa.
I didn't even go -- but I'm exhausted from reading the mainstream media reports about how Wal-Mart has found a new determination to "act the right way," to quote Sam Walton's son, Chairman of the Board, Robson Walton. In light of the Mexi-gate bribery scandal, it's reassuring to know that after half a century, Wal-Mart has discovered "there is no grey area between right and wrong," according to CEO Mike Duke. ""It's either the right thing to do or we shouldn't do it."
For community activists like me, it wasn't Justin Timberlake or Celine Dion who livened up the Wal-Mart party. Instead, it was Wal-Mart's slow-growth pattern from its financial statements that heartened us. Say what you will about Wal-Mart's stock peformance -- the good news is that Wal-Mart is building far fewer superstores than in the past. And what they are building is getting smaller.
Twenty years ago, Wal-Mart was adding a new store every 2.3 days. The company added 158 stores in 1993. From 1992 to 1995, Wal-Mart boosted its U.S. store count by an average of 127 stores per year. But since 2009, the retailer has increased domestic stores by an average of 70 stores per year, a 45% slow-down in growth. In 2011 the company's store count rose by only 49 units, and in 2012 by only 64 stores.
This translates into fewer stores to fight, fewer neighborhoods on the defensive, and fewer headlines about Wal-Mart confrontations.
It also means Wal-Mart Realty has had a chance to focus on filling the "dead stores" the company has accumulated during its major growth years. In 2005, I reported on Sprawl-Busters that Wal-Mart was carrying 356 dead stores, with nearly 27 million square feet of empty space on the market. Today, Wal-Mart Realty has 143 buildings either for sale or lease. More than 60% of these buildings are larger than 100,000 square feet, so it takes a lot of real estate agents to fill up buildings that large.
Typical of what happens to these cast-off buildings is that they sit idle for several years, and then some less productive resuse is made of them. For example, there is a store for lease in Houston, Texas that was 115,348 square feet when Wal-Mart abandoned it. Today a church is leasing 27,843 square feet, and the other 87,508 square feet are empty.
In Derry, New Hampshire, Wal-Mart shut down its discount store, and is building a supersize me directly across the road. Their 120,000 square foot discount store sits empty on 15 acres of land, waiting for someone to lay out $4.65 million to buy it.
On the same day that the Walton family was parading across the stage in Bud Walton Arena, the company they grew unspeakably rich from was quietly settling a federal religious discrimination lawsuit brought against it by the U.S. Equal Employment Opportunity Commission. The suit charged that Wal-Mart had threatened to fire a Morman employee who refused to work on the Sabbath---a violation of the Civil Rights Act of 1964. As part of its settlement, Wal-Mart agreed to pay $70,000 and train its HR people on how to accommodate the religious practices of its workers.
So perhaps Rob Walton was on the level when he told investors "Acting with integrity is not negotiable. You have my word. We will act the right way."
I wonder if the company will translate that into Spanish?
Finally, as I read the long list of celebrities who performed on stage, I kept wondering how many Wal-Mart workers in the audience could have been decently paid from the retainers charged by Taylor Swift, Lionel Richie, Justin Timberlake, and Celine Dion.
Wal-Mart continues to exploit its workers, and instead of doing the right thing, the company spends its money to buy workers an afternoon with Justin Timberlake in grass hula skirt.
Al Norman is the founder of Sprawl-Busters. His book Occupy Walmart was released this month. ]]>Wal-Mart At 50: A Crisis of Governancetag:www.huffingtonpost.com,2012:/theblog//3.14897762012-05-07T09:00:44-04:002012-07-07T05:12:01-04:00Al Normanhttp://www.huffingtonpost.com/al-norman/
Last year, entertainers Will Smith and the Black Eyed Peas were brought in to divert the 16,000 shareholders from the company's worst-ever U.S. U.S. same store sales growth of -1.5%
I did not go to Bud Walton Arena last June, and I won't be there this June. I own one share of Wal-Mart stock, which I bought in 1993, but I prefer to monitor the festivities online. It would not surprise me if the corporation passes on my suggestion that they hire a few Mexican mariachi bands to serenade the shareholders.
The 'Mexigate' bribery cover-up has spiced up the debate over corporate governance at Wal-Mart. Last week, the California State Teachers' Retirement System (CalSTRS), which owns $315.5 million in Wal-Mart stock, filed a "derivative action" against Wal-Mart executives and board members, charging "alleged gross misconduct" by executive officers and directors." The lawsuit claims that "senior Wal-Mart officials engaged in large opportunistic stock sales prior to the charges of corporate corruption being made public." CalSTRS says that members of the Wal-Mart board "participated in a high level cover-up."
"How we do business," CalSTRS warned, "is just as important as how well we do business."
So how does Wal-Mart do business? Here are some examples involving Wal-Mart directors from their most recent FY 2012 proxy statement, under the heading, "Related Party Transactions:"
· Eric Scott, the son of Lee Scott, former Wal-Mart CEO and current member of the board, is the CEO of Cheyenne Industries. Wal-Mart bought roughly $24 million in home furnishings from Eric Scott's company in 2012.
· Wal-Mart paid Saatchi & Saatchi $198,000 for marketing services. Brittany Duke, the daughter of Wal-Mart CEO Michael Duke, is an executive officer at Saatchi.
· Stephen Weber, a senior manager in IT at Wal-Mart, was paid $167,869 in salary and benefits in 2012. Weber is Michael Duke's son-in-law. His bonus alone of $32,024 is 40% more than the average Wal-Mart worker in Texas makes in a year.
· Arne Sorenson, the CEO of Marriott International, is also a director at Wal-Mart. Sorenson's company received $19 million from Wal-Mart in 2012 for "hotel, lodging and related services."
Under New York Stock Exchange rules, a majority of Wal-Mart directors must be "independent." But this determination is left up to the Wal-Mart board, which is controlled by Jim and Rob Walton, Sam Walton's surviving sons. (Rob Walton's son-in-law, Greg Penner, also sits on the Wal-Mart board).
Wal-Mart lists 10 of its 16 directors as being "independent," yet 3 of these directors--including Arne Sorenson--are officers of a Wal-Mart provider or service vendor; 6 Wal-Mart directors also sit as a director of a company that is a Wal-Mart provider or vendor; 3 Wal-Mart directors are associated with an entity to which Wal-Mart made donations; and 2 have immediate family members who worked for Wal-Mart vendors. In the Wal-Mart corporate family, it appears that everybody is doing business with everybody else.
The "independence" of these Wal-Mart directors is further compromised by the fact that they are paid between $229,819 and $288,251 per year to sit on the board. Rob Walton, whose net worth is around $23 billion, was paid $235,000 for his services as Chairman of the Board---which is more than 10 Wal-Mart workers in Arkansas make in a year.
Last week, a group of community and union activists in Boston went searching for Wal-Mart board member James I. Cash, Jr. Cash is an Emeritus Professor at the Harvard Business School, and sits on the board of General Electric. "We're calling on locally-based Wal-Mart board member Dr. James Cash to support the call for resignations of top executives who are implicated in the Mexican bribery scandal," Russ Davis, Executive Director of Massachusetts Jobs With Justice, told me. "We are deeply concerned that Wal-Mart is using money and fear to coerce local communities into accepting their expansion plans. We are demanding to know how much money Wal-Mart has contributed to local officials and nonprofit organizations through their lobbyists and the Walton Family Foundation and what, if anything, was promised in return."
At the Wal-Mart annual meeting on June 1st, shareholders will be asked to support a Resolution that calls on the company to produce a report 'disclosing the amounts that the company has paid or incurred in connection with influencing legislation, participating...in any political campaign...and attempting to influence the general public" on legislative matters or referenda. In their supporting statement, the shareholders say they support "transparency and accountability in corporate spending on lobbying and political activities." They quote the Citizen's United case that political spending disclosure "permits citizens and shareholders to react to the speech of corporate entities in a proper way."
After researching the Mexican bribery case, CalSTRS concluded that "the complete breakdown of Wal-Mart's corporate governance threatens to damage the Company's business reputation."
Wal-Mart may have entered the Golden Years, but its self-dealing and covers ups have seriously tarnished the brand, and put its "independent" governance in a state of crisis.
Al Norman is the founder of Sprawl-Busters. His latest book, Occupy Walmart, a collection of Huffington Post essays, was released this month. ]]>