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Columns

Wal-Mart: Always snooping. Always

The retail chain takes surveillance to a new rung with its intelligence unit. It spies on labor organizers, shoplifters, investors and naughty executives.

By MARK ALBRIGHT
Published May 9, 2007


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The 15, 000 shareholders who flock to Wal-Mart's annual meeting June 1 may want to be keep an eye out for someone listening over their shoulder.

That's because the discount chain's store detectives are snooping for more than shoplifters and using surveillance tactics worthy of the CIA.

One reason: Wal-Mart's security apparatus is headed by Kenneth Senser, a onetime senior FBI and CIA official. And he's recruiting more former agents for a murky 400-person intelligence-gathering unit based in what's nicknamed the Bat Cave in Wal-Mart's nondescript headquarters in Bentonville, Ark.

Some of the company's rough-and-tumble tactics have made headlines:

- It taped phone calls and intercepted pager messages of a New York Times reporter to trace embarrassing leaks that plague the company.

- Fired for his work tailing the Times reporter, 19-year Wal-Mart operative Bruce Gabbard outlined to the Wall Street Journal that he was no rogue employee. He said he and others routinely snooped on the company's critics, consultants, suppliers and employees. He recalled how the company inserted an operative in a union organizing group with a wireless bug.

- Wal-Mart's advertising chief, Julie Roehm, was fired after sleuths discovered she schemed the company's frugal expense account rules for cases of vodka, luxury hotel rooms and dinners at Nobu by hiding them in ad agency bills. The sleuths found she lobbied for a job with the ad agency she hired to handle the $580-million Wal-Mart account. When she sued Wal-Mart for wrongful termination, the company dredged up what she thought were "Safe from Wal-Mart" love-note e-mails confirming her affair with an underling. Wal-Mart snoops dug up this one the old-fashioned way: from a spurned spouse.

- In the runup to the annual meeting, Wal-Mart already apologized for "threat assessment" surveillance on some of its stockholders including those sinister human rights activists at the Benedictine Sisters of Boerne, Texas who were soliciting shareholder proposals.

Wal-Mart got a judge to issue a gag order to silence the loose-lipped investigator. Then it released letters claiming the alleged rogue investigator backed off a story of eavesdropping on company boardroom chats when CEO Lee Scott was not in the room.

To be sure, hard-nosed loss-prevention departments equipped with high-tech tools are common among retail companies. That's because half of retail theft is committed by stores' own workers. In policing a business set up to buy and sell things for money, most retail security people subscribe to the philosophy: "It's not whether an employee will steal from you; it's when."

At Wal-Mart, it's usually the off-the-wall stuff that boils into issues with a life of their own.

For instance, Wal-Mart's smoldering security scandal began when Wal-Mart's own top cop - vice chairman and security chief Tom Coughlin - was fired for stealing $500, 000 by padding his expense account with items such as duck hunting boots, beer and a custom dog kennel. He's still in court after Wal-Mart refused to pay him a $15-million retirement package to go away.

At the annual meeting, however, all this dirt will take a back seat to more pressing matters.

Like explaining how Wal-Mart has grown so big that its growth rate slowed, even as revenues rose by $37-billion in 2006 - a gain bigger than all the revenue generated by Walt Disney Co. The meager 1.9 percent sales gain in U.S. stores open more than a year was the worst ever. Wal-Mart stock has not beaten the S&P 500 Index since 2003. Even as Wal-Mart gears up to launch in India, its overseas ambitions are a muddle.

The heat is rising around the charismatic Scott, 58, who presides over a company with a stock priced a third below what it was when he took over in 2000.

Against that, the spy affair is just a sideshow of Wal-Mart excess. Meanwhile, move along ...nothing happening here ... just watch your P's and Q's.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified May 8, 2007, 22:51:50]


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