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Wal-Mart: Sweatshop Products & Labor Exploitation Wrapped in the American Flag

THE AGRIBUSINESS EXAMINER March 29, 2005, Issue #400 Monitoring Corporate Agribusiness

From a Public Interest Perspective

TO RECEIVE: Send name and address


CHRISTY HARVEY, JUDD LEGUM, JONATHAN BASKIN, WITH NICO PITNEY AND MIPE OKUNSEINDE, THE PROGRESS REPORT, AMERICAN PROGRESS ACTION FUND: Wal-Mart, which imports between 50% and 85% of its merchandise, is trying to boost sales by draping itself in the American flag. The retail giant has purchased sponsorship rights to a segment on ABC's Good Morning America called "Only in America."

The move is part of a long-standing propaganda campaign by the company to mislead consumers into believing Wal-Mart reflects American values and favors American-made products. In fact, "80% of the six thousand factories in Wal-Mart's worldwide database of suppliers are in China." If Wal-Mart were a country "it would be China's fifth-largest export market, ahead of Germany and Great Britain."

Ted Fishman, in his recent book China Inc., notes, "Wal-Mart's growth as an economic force is inseparable from China's rise as a manufacturing giant ... no company has been a bigger catalyst in pushing American ... manufactures to China." It's time to stop the deception. Sign the petition demanding ABC drop Wal-Mart as a sponsor of its "Only in America" series.

This isn't the first time Wal-Mart has tried to manipulate Americans' patriotic sentiments to improve its bottom line. In the 1990s, Wal-Mart advertised under the slogan "We Buy American, Whenever We Can." An investigation by then Dateline-NBC reporter Brian Ross exposed that campaign as a lie.

According to the December 24, 1992 New York Times, Ross's report revealed Wal-Mart stores displayed clothes manufactured in the Far East under "Made in the USA" signs and a Chinese manufacturer of Wal-Mart's was mislabeling products to avoid import quotas. Ross's NBC co-anchor Jane Pauley introduced the 1992 segment: "Why focus on Wal-Mart? Because the retail giant has carefully and consistently wrapped its image in the American flag." Thirteen years later, it is still at it.

Brian Ross, who courageously took on Wal-Mart more than a decade ago, is now the chief investigative reporter for ABC. Today, his bio page at ABC features a large advertisement for a company website called Wal-Mart Facts. At that site you can learn that Wal-Mart was awarded "the prestigious 'Corporate Patriotism Award' sponsored by the Employer for Guard and Reserve" organization.

Although it's not immediately apparent from the Wal-Mart Facts website, the "Employer for Guard and Reserve organization" is part of the federal government. So, it's not surprising that Wal-Mart received it, since Wal-Mart is Vice President Dick Cheney's favorite company.

Wal-Mart is facing "a massive class-action lawsuit brought on behalf of workers who say they were underpaid, overworked and sometimes physically injured or abused while toiling in Wal-Mart stores throughout the U.S." The suit accuses Wal-Mart "of locking workers in closed stores; forcing them to breathe hazardous fumes from industrial cleaners; supplying them with faulty or unsafe equipment, such as unguarded fans; and setting workweeks in excess of 40 hours without offering overtime pay."

The governments of Mexico and the Czech Republic have already filed briefs on the employees' behalf, alleging that Wal-Mart employees in their countries were similarly mistreated. [ March 25, 2005 ]


STEVEN GREENHOUSE, NEW YORK TIMES : Federal prosecutors and immigration officials announced yesterday that Wal-Mart Stores had agreed to pay a record $11 million to settle accusations that it used hundreds of illegal immigrants to clean its stores.

Federal investigators said they had decided not to bring criminal charges against Wal-Mart, the nation's largest retailer, because it was cooperating and had pledged strong action to prevent future employment of illegal immigrants at its 3,600 stores in the United States.

The $11 million payment was four times larger than any other single payment to the government in an illegal immigrant employment case, federal officials said. Wal-Mart, which did not admit any wrongdoing in the settlement, had $288.2 billion in sales last year. The company's stock closed at $51.45 a share yesterday, down 88 cents.

The settlement grew out of enforcement actions in which 100 janitors who were illegal immigrants were arrested in 2001 at Wal-Mart stores in Pennsylvania, Ohio, Missouri and New York, and an additional 245 were arrested in October 2003 at 60 stores in 21 states. Soon after, Wal-Mart acknowledged receiving a letter saying it was the subject of a federal grand jury investigation in Pennsylvania.

Wal-Mart has said that its executives knew nothing about the employment of illegal immigrants before the raids and that the janitors were hired by contractors that Wal-Mart used to clean its stores late at night. Company officials said they used more than 100 contractors to clean more than 700 of its stores.

"We acknowledge that we should have had better safeguards in place to ensure that our contractors were hiring only legal workers," said Mona Williams, a Wal-Mart spokeswoman.

Wal-Mart reached the settlement two months after it began a publicity campaign to portray itself as a model employer, saying that it pays higher wages than most retailers. Wal-Mart, which has 1.2 million workers in the United States, has sought to improve its image after labor unions accused it of providing poor wages and benefits and after lawyers filed class-action lawsuits, accusing it of sexual discrimination and forcing employees to work unpaid hours off the clock.

In a statement from Washington, federal officials announced that 12 janitorial contractors that worked for Wal-Mart had agreed to forfeit $4 million to the government and to plead guilty to criminal charges of employing illegal immigrants.

Many of the immigrants said they generally worked from midnight until 8 a.m. seven nights a week, cleaning and waxing floors. They came from nearly 20 countries, including Mexico, Brazil, the Czech Republic, China, Poland and Russia.

Wal-Mart officials said the $11 million was not a fine, but a voluntary payment that would be used to help ensure compliance with immigration laws. Wal-Mart has said it has cut back its use of cleaning contractors.

Joseph Hansen, president of the United Food and Commercial Workers Union, which has sought to unionize some Wal-Mart stores, said the record payment "should be a wake-up call to a corporation that has systematically bent and broken the law to increase their corporate coffers at the expense of the most vulnerable employees."

But Lilia Garcia, executive director of the Maintenance Cooperation Trust Fund, a group that monitors conditions for janitors, said the settlement was
inadequate. "The $11 million really isn't that much when you consider this was going on in 21 states," Ms. Garcia said. "It was a real pattern and practice." She said that Wal-Mart was so huge that an $11 million penalty would hardly serve as a deterrent.

Wal-Mart continues to face a federal class-action lawsuit in New Jersey asserting that it and its contractors had conspired to violate racketeering
laws. The lawsuit says that more than 10,000 illegal immigrant janitors were used at Wal-Mart stores and that they were virtually never paid time-and-a-half for overtime.

"It's outrageous that this could occur in the early 21st century," said James L. Linsey, the janitors' main lawyer in the case. "They generally worked seven nights a week, 364 days a year, and they were often locked in the stores. Now that the federal criminal investigation has been laid to rest, it's time for Wal-Mart to focus on the individuals who were systematically exploited and to consider what amount of reparations is appropriate."

Wal-Mart's lawyers have filed motions to dismiss the case, saying that the company knew nothing about the janitors' working conditions and that the independent contractors, and not Wal-Mart, were responsible for the janitors' treatment.

Ms. Williams said that Wal-Mart was cooperating fully with federal investigators because it was eager to improve working conditions for the janitors.

"We don't want these folks to be treated poorly," she said. "We're spending this money so that folks that do this can't get away with it."

The settlement permanently bars Wal-Mart from hiring illegal immigrants and directs it to establish within 18 months a mechanism to make sure that its contractors "are taking reasonable steps to comply with immigration laws."

In the settlement, Wal-Mart pledged to train all of its store managers over the next 18 months not to knowingly hire or continue to employ illegal
immigrants. Wal-Mart also agreed to continue cooperating with federal officials investigating its contractors.

The settlement was announced by Michael J. Garcia, the assistant secretary of the Department of Homeland Security who heads the Immigration and Customs Enforcement Bureau, and by Thomas A. Marino, United States Attorney for the Middle District of Pennsylvania.

They praised Wal-Mart officials for providing complete cooperation after the October 2003 raids.

Mr. Garcia said the case "breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself." [ March 19, 2005 ]