Columns » Warwick Sabin

We're getting a Supercenter

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Sources tell me Wal-Mart is preparing to open a government affairs office in Little Rock to lobby state legislators.

This is big news on a variety of levels, beginning with the implicit acknowledgement that the retail giant is like a stranger in its own home state.

A 3-1/2-hour drive separates Wal-Mart’s Bentonville headquarters from the state Capitol, and it takes even less time to make the trip on one of the company’s many corporate jets. But Wal-Mart has decided it is necessary to be the only Arkansas business with a separate Little Rock office devoted solely to maintaining its in-state political relationships.

The operation will be directed by Laurie Smalling, who was an aide to former U.S. Rep. Jay Dickey before joining Wal-Mart’s Washington, D.C., office as manager of public affairs.

In fact, Smalling witnessed first-hand the expansion of Wal-Mart’s federal lobbying efforts, which were practically non-existent 10 years ago. The company finally opened a small D.C. political shop in 1999, but it waited five years before hiring several well-known and experienced lobbyists to join its operation there.

"The increased federal presence is driven by an increase in issues that affect our everyday operations," Smalling told the Arkansas News Bureau in January 2004, explaining the additions to the staff.

At the same time, Wal-Mart and the Walton family decided to invest heavily in federal campaign contributions. According to a July 2005 article in the New Republic magazine: "Giving about 80 percent to Republicans, [Wal-Mart] laid out $1.67 million in the 2004 cycle, more than triple its 2000 spending, and far more than other Fortune 500 leaders. … What’s more, the Walton family, which still controls about 40 percent of the company, has quickly become a major force in Washington in its own right. The Waltons gave millions to conservative candidates and groups in 2004, including $2.6 million to Progress for America, a GOP 527 organization. Aubrey Rothrock III, a partner at star lobbying shop Patton Boggs, works for both the Walton family and Wal-Mart. Overall, according to USA Today, the Walton family spent $3.2 million on lobbying, candidates, and conservative causes during the 2004 cycle, more than twice what it spent in the previous two elections combined."

The lesson to take away from Wal-Mart’s Washington experience is not the partisan favoritism, even though it’s not totally irrelevant. Don’t forget that the Republicans controlled the Congress during that time, and then-House Majority Leader Tom DeLay had instituted strict rules giving special treatment to lobbyists and corporations that contributed only to the GOP. So Wal-Mart was mainly just playing the game, and when the company turns its attention to the mostly Democratic Arkansas legislature, its short-term partisan leanings will likely be very different.

No, the more important point to draw from the D.C. example is simply that Wal-Mart will do what is necessary to secure influence and get what it wants.

And in a state where legislative votes are routinely won with free beer and a buffet, the prospect of the world’s largest corporation focusing its unlimited resources on shaping public policy is breathtaking.

It’s not like Wal-Mart doesn’t already have clout at the Arkansas legislature. Bentonville state Rep. Horace Hardwick does the company’s and the family’s bidding, including sponsoring a 2005 bill designed solely to exempt Alice Walton from paying sales tax on multimillion-dollar paintings she is acquiring for her new museum. Hardwick’s colleagues raised no objections, no doubt because they have a soft spot for fine art.

Now, with a Little Rock office set to open, Wal-Mart will be in an even stronger position to enact favorable measures and head off undesirable laws, such as those that would require the company to contribute more to its employees’ health care (as Maryland passed) or impose zoning and development restrictions (as exist in several states).

And we shouldn’t overlook the Walton family’s public education agenda, toward which they have spent millions of tax-deductible dollars through their charitable foundation to underwrite charter schools, merit pay initiatives and an entire Department of Education Reform at the University of Arkansas. Why wouldn’t they eventually try to get their policy preferences written into law?

With an enhanced focus on the Arkansas legislature — where money buys influence and power is rarely challenged — who could possibly stop them?

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