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Wal-Mart Plays Politics with Charity

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New video footage of Wal-Mart manager meetings released by the Center for Public Integrity and aired on Dan Rather Reports Tuesday evening, provide a rare and disturbing glimpse into the private culture of the world's largest company.

The footage features several Wal-Mart executives at various meetings using a hard sell approach to convince their managers to contribute to the company's PAC. As an incentive for PAC contributions, executives offer a 2-for-1 company donation in the managers' names to the Wal-Mart Associates in Critical Needs Fund. It's a "win-win" they say. The managers look like they care about their employees, Wal-Mart grows its PAC, and everybody goes home happy. So, what's wrong with this program? Most experts say it's legal, if not totally ethical. And, don't a lot of companies do the same thing - offer charitable contribution incentives for PAC contributions just like Wal-Mart?

Well, yes and no...and here's where it gets a little dicey. Certainly, employee incentives for PAC contributions are not new - although this is the first time we've actually seen it on video - thank you Flagler. But, the first major difference in the Wal-Mart circle of money is that typically the corporations' incentive programs include charitable contributions to independent, third party organizations such as the American Red Cross or United Way. In this case, the Wal-Mart Associates in Critical Needs Fund is a Wal-Mart-controlled foundation, which means all decisions regarding fund management and expenditures are made by Wal-Mart, not an independent organization. So, Wal-Mart gets its PAC money and it makes itself look good to its employees with its "generous" contributions to the Fund, which - unbeknownst to the employees - are based on PAC contributions. Indeed, if we are to take Becky Reithemeyer at her word, the company may base its entire contribution to the Fund on PAC contributions. Now, that's a lot of pressure to get those managers to give.

The second major difference in Wal-Mart's program is the twisted hypocrisy of using donations to the Wal-Mart Associates in Critical Needs Fund as an incentive for PAC contributions.. If 2007 typifies an average year, the Wal-Mart Associates in Critical Needs Fund helps less than 1% of Wal-Mart's 1.3 million employees, while the PAC actively fights against legislation that would help all of the low-wage, hourly workers, such as the Patient's Bill of Rights and workplace safety requirements. So, the managers are in effect giving to an organization - Wal-Mart's PAC - which fights against legislation that would protect and help the employees they manage in exchange for doling out one-time, small contributions for a tiny number of employees during a time of hardship.

Wal-Mart is absolutely playing politics here while feigning concern for its employees - at the expense of its employees. For years, Wal-Mart has promoted the idea that it has a family culture, but these videos reveal that the Walton family circle absolutely does not extend to its low-wage, hourly employees in stores across the country - employees who are struggling to make ends meet. The videos show Wal-Mart is more concerned with its image and immediate bottom line than with the company's long-term sustainability, which would have to include the well-being of its employees.

Wal-Mart has always resisted any real change to its company policy because it fears the immediate costs . The company's health care model relies on poor benefits to cut costs and it does just about anything to suppress wage costs, including forcing employees to work off the clock. But, the company is finding that lawsuits, public relations disasters, and high employee turnover cut deeply into those savings. Wal-Mart could save money in the long run - and improve the economic well-being and quality of life for its employees - by turning its attention to company policy, instead of DC lobbyists and political influence.

These latest PAC videos are just a tiny sample of the Wal-Mart video library; Wal-Mart might want to consider cutting its losses and doing the right thing.