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WASHINGTON — Wal-Mart Stores Inc. is flexing its muscles in the early days of the Obama administration, spending $4.1 million on lobbying in the first half of the year to influence policy on such key issues as health care reform and a bill that would boost unionizing efforts.
This story first appeared in the July 22, 2009 issue of WWD. Subscribe Today.
The first-half lobbying expenditures illustrate how concerned the retail giant, which has historically had stronger Republican allies, is about participating in helping craft policy in a Democratic administration where its opponent on most issues, organized labor, seemingly has an ally in President Obama.
The dramatic difference in its lobbying focus is seen in the amount Wal-Mart spent in the first half of former President George W. Bush’s second term. Wal-Mart spent only $840,000 in the first six months of 2005, compared with the $4.1 million in the same period this year.
Lobbying expenditures, filed on a quarterly basis, were taken from Congressional records. They cover a portion of a company’s or trade associations’ lobbyists’ salaries as well as any money spent on preparing for a meeting with members of Congress and related travel.
Wal-Mart has taken on a big role in Washington in the health care debate, one of Obama’s signature issues. Its recent endorsement of employer mandates created a rift with the largest retail lobbying association in Washington, the National Retail Federation.
Wal-Mart’s proactive support and lobbying on health care has won it points with the administration and even among some labor groups, which have traditionally been critical of its employee standards. But the retail giant has also devoted a significant amount of time and money trying to defeat the Employee Free Choice Act, a bill that would boost unionizing efforts and which Wal-Mart has been against over the years.
A Wal-Mart spokeswoman in the company’s Washington lobbying office said, “The difference over four years is an increased awareness that we need to engage lawmakers on what we are doing, whether it is what we are doing on health care, the benefits we provide to associates or the ideas we have on reform. We realized there was a lot of misinformation on the Hill about our business and our benefits and other people were telling our story. Now we’re going to be a little more committed to telling our own story.”
She said the company has spent time and resources on becoming a “resource” for lawmakers interested in everything from environmental sustainability to job creation and health care benefits.
“Members [of Congress] are looking to us to tell them what is going on in the economy, what we see in our stores and what customers are telling us,” she said.
Wal-Mart’s top three issues thus far have been health care reform, environmental and energy legislation and job creation. One divisive issue expected to heat up this fall is the Employee Free Choice Act, and Wal-Mart has dedicated a lot of resources to defeating it.
“We’ve been clear that we think card check or Employee Free Choice is a bad bill,” the spokeswoman said. “We haven’t been shy in telling members of Congress we think it is a bad bill and why we think that. It is because we want our associates and other employees to have a right to a secret ballot.”
The retail industry’s top two trade and lobbying associations — the NRF and the Retail Industry Leaders Association, of which Wal-Mart is a member — have poured money into shaping the policy debate over three key issues: health care reform, defeat of the Employee Free Choice Act and cracking down on interchange fees — hidden fees credit card companies such as MasterCard and Visa charge merchants every time a consumer purchases a product with their cards.
RILA spent $910,000 on lobbying the administration and Congress in the first half of the year, compared with $100,000 in the same period in 2005.
“Right now we are facing more challenges than we have traditionally,” said Katherine Lugar, executive vice president of public affairs for RILA. “We’re trying to make sure we position ourselves correctly and be impactful in the debate.”
She said trade associations typically spend more money and time lobbying during the first year of a new administration.
She said RILA’s top three lobbying priorities are health care reform, the credit card fees and defeating the Employee Free Choice Act. The bill, aimed at dramatically reforming the way unions organize, has caused a major rift between the business community, including Wal-Mart, which is spending millions of dollars to defeat it, and organized labor, which has called the bill its top legislative priority.
“[The Employee Free Choice Act] remains a real threat to this industry, and we’ve been direct in our opposition to it,” said Lugar. “Health care we see as both an opportunity and a threat,” adding the association has concerns about the scope of employer mandates, as well as cost containment.
The NRF, which opposes any type of employer mandate and has taken on Wal-Mart over the issue in health care legislation, spent $940,000 in the first half of the year, compared with $680,000 in the first half of 2005.
Steve Pfister, NRF’s chief lobbyist and senior vice president for government relations, said the organization’s overriding priority is lobbying against employer mandates in health care legislation. In addition, the Employee Free Choice Act and interchange fees round out the top three issues for which NRF is trying to shape the debate. He said the Obama administration has “come out of the box probably faster than any administration I have ever seen on such a wide range of issues.”
With the dramatic change in political tone in the White House, other apparel companies, retailers and industry trade groups have also spent more this year to lobby for their cause.
Target Corp., a RILA member, spent $550,000 in the first half of the year compared with $100,000 in the same period in 2005. Among the issues Target highlighted in government lobbing forms were pushing for legislation aimed at cracking down on organized retail crime, backing a bill that would extend more protections to credit card holders, fighting the Employee Free Choice Act and crafting a health care reform bill to its liking.
Limited Brands Inc., which belongs to the NRF and RILA, has kept its lobbying expenses relatively steady, spending $330,000 this year versus $360,000 in the same period in 2005. Limited said it had devoted its resources to a proposal to amend the Consumer Product Safety Act and reform the commission overseeing the safety of imported consumer products, tax issues related to international business transactions and burdensome Customs enforcement provisions.
The AFL-CIO has spent $1.08 million so far this year versus $1.16 million in 2005, the year of the congressional battle over the Central American Free Trade Agreement.
“Employee Free Choice Act and health care reform are our top two major initiatives,” said Thea Lee, policy director at the AFL-CIO. “That is where most of our energy is going.”
Lee said labor groups are encouraged by having a Democrat in the White House and Democratic majorities in the House and Senate. “We haven’t had that in quite some time,” she said.
Trade issues also factor heavily into the union’s lobbying activities, Lee said.
Trade is also on the front burner of the American Apparel & Footwear Association, which spent $453,216 in the first half of the year on lobbying, compared with $380,000 in the first half of 2005.
“We have a big section on trade and a lot on product safety, as well as some government procurement issues and the design piracy bill,” said Stephen Lamar, executive vice president of the AAFA.
Among the key trade issues AAFA has been working on is the Affordable Footwear Act, a bill that would eliminate tariffs on certain types of footwear imports.
“Certainly, with a new administration and Congress, you have to spend a lot of time educating people on the issues,” Lamar said. “We’ve got this joke that this is the fire-hose Congress. There are so many issues coming at the same time — tax reform, trade, intellectual property, health care and the environment.”