WSJ: A Wal-Mart Legend's Trail of Deceit

Petty Cash

A Wal-Mart Legend's Trail of Deceit

Mr. Coughlin Told Others Bogus Expenses Hid Plot Against Unions
Retailer Disputes His Claim

By JAMES BANDLER and ANN ZIMMERMAN
Staff Reporters of THE WALL STREET JOURNAL
April 8, 2005; Page A1

(snip)

Documents reviewed by The Wall Street Journal suggest that Mr. Coughlin, 55 years old, periodically had subordinates create fake invoices to get Wal-Mart to pay for his personal expenses. The questionable activity appears to involve dozens of transactions over more than five years, including hunting vacations, a $1,359 pair of alligator boots custom-made for Mr. Coughlin and a $2,590 dog pen for Mr. Coughlin's Arkansas home.

(snip)

For a man of Mr. Coughlin's means -- his total compensation topped $6 million last year -- the alleged abuses seem surprisingly petty. In a terse announcement, Wal-Mart said it found questionable transactions totaling between $100,000 and $500,000. The tale involves another mystery: the "union project." Mr. Coughlin told several Wal-Mart employees that the money was actually being used for antiunion activities, including paying union staffers to tell him of pro-union workers in stores, according to people familiar with the matter. The fake invoices, Mr. Coughlin told these people, were simply a roundabout way of compensating him for out-of-pocket expenses in his antiunion campaign.

If Mr. Coughlin did pay union staffers for information, it would represent a criminal offense under the federal Taft-Hartley Act and ratchet up debate over the retail giant's labor policies. Wal-Mart has vigorously opposed unions since the time of Mr. Walton, who founded the company in 1962. That stance has roiled the retail industry as competing companies with unionized workers have tried to slash wages and benefits in an attempt to keep up with Wal-Mart's rock-bottom prices.

(snip)

Wal-Mart's director of corporate communications, Mona Williams, said in a statement yesterday that the company conducted a "thorough internal investigation" of the assertions about union payments and "found no evidence whatsoever to support it. To the contrary, the evidence shows that corporate funds were misappropriated and used for the personal benefit of specific individuals." Ms. Williams also said: "Neither Mr. Coughlin nor anyone else at Wal-Mart was ever authorized by the company to make payments to anyone about union activity." She said the company reported the assertion about union payments to the U.S. attorney and asked for an investigation. Ms. Williams said Wal-Mart wouldn't comment beyond the statement.

(snip)

When Mr. Coughlin resigned, Wal-Mart cited "alleged unauthorized use of corporate gift cards" as one explanation. According to people familiar with the matter, Mr. Coughlin had subordinates obtain free Wal-Mart gift cards, which he used to shop at Wal-Mart stores. It's not clear how much money was involved in this activity or whether it had anything to do with the supposed union project. Mr. Coughlin at one point was considered a candidate to become Wal-Mart's chief executive. As the No. 2 man, he ran the U.S. retail arm of the company. When he visited individual stores, employees often asked him for his autograph.

(snip)

Mr. Coughlin was an outspoken critic of corporate chicanery. "Anyone who is taking money from associates and shareholders ought to be shot," he told the Cleveland Plain Dealer in 2002. "That greed will catch up to you." Mr. Coughlin embraced another longtime Wal-Mart tradition: antiunionism. Led by the United Food and Commercial Workers International Union, labor organizers have tried for years to unionize Wal-Mart's U.S. workers, who currently number 1.3 million, but they have met with fierce and well-organized opposition. Whenever Wal-Mart headquarters gets word that union sentiment is growing in one of its stores, it quickly dispatches a "labor team" to the site. A Wal-Mart spokeswoman says the team, which includes a company lawyer, makes sure that store managers obey laws on organizing.

(snip)

Write to James Bandler at james.bandler@wsj.com and Ann Zimmerman at ann.zimmerman@wsj.com

URL for this article:
http://online.wsj.com/article/0,,SB111291400324201359,00.html

wal mart must have a certain amount of these in each store that they give away. i have ran across some of these free gift cards give aways..some have been really interesting....