Tag Archives: Walmart Watch

Informal Workers: When No One Watching, No One Cares – Walmart & Domestics

New Orleans  In the modern workforce economy of informal workers, contingent employees, and endless layers of subcontracting, both domestically and internationally, the obvious conclusion is that when no one is watching, no one cares, and, perhaps worse, no one is ever accountable.  This is not just a “race to the bottom,” but deliberate strategies to conceal, avoid, and operate with impunity in the most predatory fashion possible.

On the Walmart Watch

In the ashes of the Bangladesh fire with the obvious physical evidence of Faded Glory clothing in their hands, as reported by the Times, Walmart was not able to continue to insist on yesterday’s lie that the Tazreen factory was NOT working for them.  The latest spin in perhaps even more pernicious than an outright lie!

On Monday, Walmart said that the ‘Tazreen factory was on longer authorized to produce merchandise for Walmart,’ but confirmed that one of its suppliers had ‘subcontracted’ work to the factory without authorization.  The company said that it was immediately terminating its relationship with the supplier.

So this is how it all works.  Walmart of course doesn’t manufacture anything directly so all of its suppliers are essentially subcontractors.  It goes unsaid whether subcontracted work from one of its contractors ever requires “authorization” from Bentonville.  But, hey, let the good times roll, who cares, Walmart thinks it can walk away despite all of the evidence to the contrary by simply firing an unnamed, unknown fall guy, “the supplier.”  Meanwhile the Clean Clothes Campaign tallied the deaths by fire in Bangladesh textile mills at 500 over the last 6 years, making it impossible to believe that even in Bentonville, Arkansas, there was not an acute understanding that the risk of fires in these plants was not always omnipresent.  Come on, man!

            Almost as amazing was another business based story on the release of a study called “Home Economics:  The Invisible and Unregulated World of Domestic Work.”  In what must be one of the least surprising conclusions ever produced by any foundation funded study in the history of such animals, the surveys exhaustively found that the workers were underpaid.  Heck, they didn’t even make a living wage!  Hello?!?  Invisible?  Unregulated?  That’s the point of informal labor, friends, not the surprise behind it.

Steven Greenhouse from the Times tries to pull one story out of the obvious from Barbara Young, an organizer for the domestic workers alliance.

Ms. Young said she once asked her employer to take out money to contribute to Social Security for her.  But at the end of the year, she recalled, the husband in the house returned that money, saying he had not bothered to pay it into Social Security.

Well, at least there is some surprise here.  It’s amazing that the “husband in the house” bothered to tell her that he had not paid and even more amazing that he “returned that money.”  Of course it is not surprising that the employer did not want to pay the matching contributions and payroll taxes either.

In 1980, ACORN’s Household Workers Organizing Committee (HWOC) based in New Orleans won and settled a lawsuit for domestic housekeepers that that required the IRS to notify employers who were actually paying social security that they also had to pay the federal minimum wage that covered such workers for the first time in 1978.  This is almost the definition of a Pyrrhic victory since the vast majority of employers were simply paying neither the minimum wage nor Social Security despite the requirements.  Little has changed in the intervening years.

Too bad the Ford Foundation, Open Society Foundation, and the Alexander Soros Foundation didn’t step up to the plate and actually move their funds to support the National Domestic Workers’ Alliance to do real organizing, rather than a survey proving the obvious and easily observable fact that domestic workers in the home are underpaid, blah, blah, blah.

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With a Corporate Culture Built on Bribery, Walmart Was Running with Plenty to Hide

Walmart Store in Mexico City

New Orleans  We told you so!  We just couldn’t be heard clearly enough over the roaring engines of the corporate spinning machinery of Walmart in September 2005.

Let’s set the stage exactly.  In Florida at the sharp point of the organizing engagement at Walmart as the curtain was being pulled down by all of the top corporate management from Lee Scott, the CEO on down, we were convening the first Sitefighters’ Conference in St. Petersburg, Florida bringing together Walmart Watch, Wake-up Walmart, and all of the other key players around the country to strategize on how to bring community, workplace, and political pressure to force some accountability on the company.  Walmart Watch, a coalition driven by SEIU, and Wakeup Walmart, the UFCW’s effort to tackle the company on the web, were nicking the company regularly in the papers, and our efforts through our community-labor alliance, WARN (Walmart Alliance for Reform Now) and direct organizing of workers in the Walmart Workers Association were showing good results.

At that same time in September 2005 when Walmart was trying to garner good publicity for its logistical response to Hurricane Katrina on the Gulf Coast, the internal reality was “duck and cover:”

In September 2005, a senior Wal-Mart lawyer received an alarming e-mail from a former executive at the company’s largest foreign subsidiary, Wal-Mart de Mexico. In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country.

The lengthy New York Times piece by David Barstow gives an amazing inside look at how Walmart was working from the bunkers of Bentonville and the impact our work was having:

Under fire from labor critics, worried about press leaks and facing a sagging stock price, Wal-Mart’s leaders recognized that the allegations could have devastating consequences, documents and interviews show. Wal-Mart de Mexico was the company’s brightest success story, pitched to investors as a model for future growth. (Today, one in five Wal-Mart stores is in Mexico.) Confronted with evidence of corruption in Mexico, top Wal-Mart executives focused more on damage control than on rooting out wrongdoing.

In one meeting where the bribery case was discussed, H. Lee Scott Jr., then Wal-Mart’s chief executive, rebuked internal investigators for being overly aggressive. Days later, records show, Wal-Mart’s top lawyer arranged to ship the internal investigators’ files on the case to Mexico City. Primary responsibility for the investigation was then given to the general counsel of Wal-Mart de Mexico — a remarkable choice since the same general counsel was alleged to have authorized bribes.

The level of bribes?  $24,000,000 has been documented.  Most were paid through an elaborate network of fixers (gestores). 

All of the top brass at Walmart knew the score.  Lee Scott slowed the investigation down and punted it back.  Michael Duke, who was their international man at the time, and the executive of our ACORN International’s India FDI Watch Campaign was checkmating in India to stop their expansion there,  knew the whole deal and is now the Walmart CEO.  The head of the “ends justify the means” team for Walmart in Mexico fueling the fire of corruption, Eduardo Castro-Wright, is now the retiring Vice-Chairman of Walmart.

Lee Scott

As the whistleblower allegations finally found traction, the company filed a vague “play pretend” notice with the FCC without identifying that the problem was in Mexico and still claiming there would be no “material impact” to its results.  Now of course there will be full scale investigations in Mexico and in the United States for violations of both countries laws.  In the US these bribes by Walmart are clear criminality under the Foreign Corrupt Practices Act.  It is hard to imagine a clearer case of situations where top executives should be held accountable (Scott, Castro-Wright, Dukes, etc) and face criminal charges and potentially jail.  In Mexico the detailed annotations on the invoices indicating the officials who were bribed could absolutely lead to jail time as the scandal widens.

An international corporate culture based on bribery also makes us wonder whether the same system has been active in their work to expand and find a foothold in India where their efforts and others to modify the restrictions on foreign direct investment in multi-brand retail have been huge political issues in recent months, bringing government to a standstill at some points.

All of this is huge and demands sweeping action.

Click to read the entire  Times story.

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