Wal-Mart battle takes cue from politics

WASHINGTON — There is no candidate. There are no ballots. There won't be an Election Day. And yet it may be the hottest, highest-stakes political contest in America today.

It's the campaign against Wal-Mart.

A year-old effort to force the nation's No. 1 private employer to change its business practices has evolved into a Washington-style brawl: tens of millions of dollars spent by Republican and Democratic political consultants using polling, micro-targeting, ads, e-mails, direct mail, grass-roots organizing and strategic "war rooms" to ply their trade in the corporate world.

Their fight involves some of society's most vexing trends, including the rising cost of health care, the painful realities of globalization and the waning relevance of organized labor.

"Our opponents have organized the likes of a political campaign against us," said Bob McAdam, vice president of corporate affairs at Wal-Mart. "It would be nonsense for us not to respond in a similar fashion."

Wal-Mart's main opponents are the Service Employees International Union, which started Wal-Mart Watch, and the United Food and Commercial Workers International Union (UFCW) , which funds a separate campaign called WakeUpWalMart.com

After failing to organize employees of Wal-Mart Stores with traditional tactics, the unions decided to use modern campaign and communications methods to drag the company into the public square and to try to shame them into change.

Both groups have hammered the world's largest retailer about its wages, employee health insurance, treatment of workers and proclivity for buying non-U.S. goods. Wal-Mart has responded with counterattacks and a multimillion-dollar campaign to polish its image.

On both sides are some of the best political strategists money can buy.

WakeUpWalMart.com is run by Paul Blank, political director for Howard Dean's 2004 Democratic presidential campaign, and Chris Kofinis, who helped draft retired Army Gen. Wesley Clark into that race.

Their campaign has all the markings of the Dean and Clark insurgencies: a snappy Web site, volunteer action lists and an issues-based, grass-roots campaign.

Among those lined up against the company at Wal-Mart Watch are Jim Jordan, campaign manager for 2004 Democratic presidential nominee John Kerry; and Terry Holt, a spokesman for the 2004 Bush-Cheney campaign.

Odd bedfellows: a Republican working for unions against Wal-Mart.

"Wal-Mart is giving capitalism a bad name," Holt said. "It's lost touch with its small-town roots and has become a company that is depending on corporate welfare ... and an all-too-cozy relationship with China."

Under fire, Wal-Mart turned to Reagan adviser Michael Deaver, Bush-Cheney political director Terry Nelson and several Democrats, among them civil-rights leader Andrew Young and campaign strategist Leslie Dach.

More odd bedfellows: Democrats working for Wal-Mart against organized labor.

"We were being attacked. We wanted to hire people who knew how to respond," said Wal-Mart's McAdam, formerly a GOP aide on Capitol Hill and political strategist for the tobacco industry.

WakeUpWalMart.com claims 212,000 supporters who can be mobilized with a computer stroke to recruit members and be at media events to shine a bad light on the Bentonville, Ark., company.

A goal of the UFCW is to show Wal-Mart's 1.3 million U.S. employees — many of whom have a low opinion of unions or fear retribution if they organize — that unionized labor can change their workplace and lives for the better.

"For years, labor leaders were fighting Wal-Mart the old way, but times have changed," Kofinis said. "Instead of organizing workers, they're trying to organize the nation" against Wal-Mart.

In its own way, this campaign over Wal-Mart is as important as the congressional races this year.

Bringing Wal-Mart to heel with 21st-century tactics would signal a fresh approach for organized labor after a decades-long decline in membership.

At stake for Wal-Mart is the future course of a company with $312.4 billion in sales in the fiscal year that ended Jan. 31. Its stock has fallen 20 percent over the past two years, and the company has had trouble sustaining its historically high rates of profit growth.

Analysts say bad publicity from the union-backed campaigns may be hurting Wal-Mart, although unrelated business pressures are also a factor.

Wal-Mart denies the union-backed campaign has hurt its bottom line. But the company sees the effort as a threat.

After the Maryland Legislature passed a labor-backed bill requiring companies — Wal-Mart in particular — to spend more on workers' health insurance, the Arkansas company came out with improvements in its health-care coverage.

Amid criticism, Wal-Mart also has announced plans to:

• Help competing local companies stay in business.

• Expand its share of the Hispanic market.

• Sell more environmentally friendly products.

• Increase diversity in its work force.

A multimillion-dollar advertising campaign featuring testimonials of happy customers and employees cast Wal-Mart as a good corporate citizen.

Nelson was hired to wage a grass-roots campaign by recruiting Wal-Mart shoppers and local leaders sympathetic to the corporation's cause.

In the union camp, both groups send opposition research on Wal-Mart to reporters, e-mail supporters and stage events such as rallies and documentary-film screenings.

They have had an impact.

Maryland-style health-care bills have been introduced in more than 30 states. Democratic candidates in Ohio, Arizona and Pennsylvania have spoken out against Wal-Mart, as have elected officials in Wisconsin, Georgia, Connecticut and several other states.

Then there is Sen. Hillary Rodham Clinton.

The potential 2008 presidential candidate served on Wal-Mart's board for six years when her husband was governor of Arkansas. Just two years ago, the New York Democrat called her time on the board "a great experience in every respect."

But now she does not want anything to do with the company. Her re-election campaign returned a $5,000 contribution from Wal-Mart, citing "serious differences with current company practices."