At Wal-Mart, Clin­ton didn’t up­set any carts

As a board mem­ber, she touted women and the en­vi­ron­ment but didn’t fight anti-union ef­forts.

Los Angeles Times - - Front Page - By Stephen Braun

ben­tonville, ark. — At a Demo­cratic pres­i­den­tial de­bate last month, Sen. Hil­lary Rod­ham Clin­ton de­scribed Wal-Mart, the world’s largest re­tail com­pany, as a “mixed bless­ing.” She spoke from ex­pe­ri­ence.

From 1986 to 1992, Clin­ton was a mem­ber of its board of direc­tors, care­fully nav­i­gat­ing through a spate of in­ter­nal pol­icy con­cerns that now weigh on WalMart’s cor­po­rate im­age.

For­mer Wal-Mart Stores Inc. board mem­bers and ex­ec­u­tives re­call Clin­ton as a po­lit­i­cally nim­ble in­sider who cau­tiously tried to nudge the com­pany to­ward hir­ing more fe­male ex­ec­u­tives and en­vi­ron­men­tally friendly prac­tices, to lim­ited ef­fect, while re­main­ing silent as Wal-Mart pur­sued anti-union strate­gies.

Four times a year, Clin­ton would leave Lit­tle Rock, driven by Arkansas state troop­ers and some­times ac­com­pa­nied by her hus­band, then-Gov. Bill Clin­ton, for a three-hour ride to Ben­tonville, the north­west Arkansas com­pany town that sprouted up around Wal-Mart’s head­quar­ters.

While her hus­band tended to state du­ties, she joined all-day Wal-Mart board meet­ings chaired by the firm’s bil­lion­aire pa­tri­arch, Sam Wal­ton, and at­tended by Wal­ton’s fam­ily mem­bers, direc­tors and top ex­ec­u­tives. Crowded with the oth­ers

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[ around metal fold­ing ta­bles in the kitchen of a con­verted ware­house — a no-frills board room se­lected by “Mr. Sam” him­self — Clin­ton as­sumed the role of loy­al­ist re­former, mak­ing the case for mea­sured change with­out rock­ing the boat.

She voted on com­pany poli­cies and joined sev­eral ad­vi­sory com­mit­tees dur­ing a pe­riod that was a turn­ing point for the firm as it trans­formed rapidly from a re­gional chain of cut-rate stores to a world­wide re­tail pow­er­house. Her Wal-Mart ten­ure ex­posed Clin­ton to the in­ner work­ings of a mega-cor­po­ra­tion, and fore­shad­owed an im­pulse in her po­lit­i­cal ca­reer to both prod and ac­com­mo­date big busi­ness.

“She brought a prag­matic un­der­stand­ing of how life works,” said Robert K. Rhoads, a Fayet­teville, Ark., at­tor­ney who was Wal-Mart’s gen­eral coun­sel and the board’s cor­po­rate sec­re­tary. “She was a real savvy board mem­ber and one smart lawyer.”

Wal-Mart crit­ics say her pres- ence brought lit­tle last­ing change to the firm. And for­mer ex­ec­u­tives say she was not a voice for bold re­form.

“She was not a dis­senter,” said Don­ald G. Soderquist, WalMart’s for­mer chief op­er­at­ing of­fi­cer and the board’s vice chair­man dur­ing Clin­ton’s ten­ure. “She was a part of those de­ci­sions.”

Cor­po­rate direc­tors are ob­li­gated to “pro­tect share­holder value, pure and sim­ple,” said Charles El­son, di­rec­tor of the Univer­sity of Delaware’s John L. Wein­berg Cen­ter for Cor­po­rate Gov­er­nance. If Clin­ton was brought on to the Wal-Mart board as a “change agent,” El­son said, “she shouldn’t have been put on there in the first place.”

The New York sen­a­tor’s for­mer re­la­tion­ship with the com­pany poses a mixed bless­ing for her pres­i­den­tial run. The phe­nom­e­nal growth of Wal-Mart’s em­pire across the coun­try has been a boon to con­sumers, but it has also drawn fierce fire from la­bor or­ga­niz­ers who ac­cuse the re­tail be­he­moth of union-bust­ing tac­tics, poor wages and health­care ben­e­fits, and mis­treat­ment of fe­male work­ers.

A re­quest to in­ter­view Sen. Clin­ton was turned down by her cam­paign, but spokesman Howard Wolf­son said: “Wal-Mart is now one of the coun­try’s largest em­ploy­ers, and Mrs. Clin­ton still be­lieves it is im­por­tant to try to in­flu­ence the de­ci­sions they make be­cause they can af­fect so many peo­ple. Sen. Clin­ton has made clear that Wal-Mart has an obli­ga­tion to pro­vide good health ben­e­fits and good wages to its work­ers. Wal-Mart work­ers should be able to union­ize and bar­gain col­lec­tively.”

Wal-Mart looms as one of la­bor’s lit­mus tests for Demo­cratic pres­i­den­tial can­di­dates. One top la­bor po­lit­i­cal di­rec­tor ex­pressed doubt that Clin­ton’s 20-year-old Wal-Mart board ten­ure would be a “make or break” fac­tor, but can­di­dates have re­peat­edly been asked about their stands on WalMart dur­ing re­cent AFL-CIO union fo­rums.

La­bor lead­ers said Clin­ton was ques­tioned about Wal-Mart in Jan­uary when she met with top of­fi­cials of the United Food and Com­mer­cial Work­ers, the union at the fore­front of na­tional ef­forts to or­ga­nize Wal-Mart work­ers. A UFCW of­fi­cial said “she made a pre­sen­ta­tion and was asked about Wal-Mart,” but would not give de­tails on the ses­sion.

Clin­ton of­ten touted WalMart with­out reser­va­tion. But as the la­bor-backed cam­paign against Wal-Mart in­ten­si­fied in re­cent years, she has tem­pered her pub­lic en­thu­si­asm, even giv­ing back a $5,000 po­lit­i­cal do­na­tion from Wal-Mart’s po­lit­i­cal ac­tion com­mit­tee in 2005.

Clin­ton amassed nearly $100,000 worth of Wal-Mart stock as a di­rec­tor, much of which she and her hus­band placed in 1993 into a blind trust that they still main­tain.

She is not the only Demo­cratic can­di­date with Wal-Mart ties. Dur­ing his Se­nate term, John Ed­wards dis­closed own­ing be­tween $1,000 and $100,000 in com­pany stock. Illi­nois Sen. Barack Obama’s wife, Michelle, serves on the board of a WalMart sup­plier. And Sen. Christo­pher J. Dodd of Con­necti­cut ac­cepted $5,000 from Wal-Mart’s PAC in 2004.

De­tails of Clin­ton’s ac­tiv­i­ties as a Wal-mart di­rec­tor have been scant. She cov­ered her Wal-Mart ten­ure in a sin­gle para­graph in her au­to­bi­og­ra­phy, “Liv­ing His­tory,” say­ing Wal­ton taught her about “cor­po­rate in­tegrity and suc­cess.”

Pressed dur­ing the April 26 de­bate whether Wal-Mart was a “good thing or a bad thing for the United States,” Clin­ton did not men­tion her board role. She praised the firm’s rural roots and its mis­sion to “stretch the dol­lar,” but said the com­pany’s growth had “raised se­ri­ous ques­tions about the re­spon­si­bil­ity of cor­po­ra­tions.”

Re­spond­ing to her re­mark, Wal-Mart Pres­i­dent H. Lee Scott Jr. told the As­so­ci­ated Press: “We’re mak­ing progress on all the things that the sen­a­tor talked about and have a great deal of pride in our his­toric re­la­tion­ship with her.”

But the com­pany de­clined to com­ment “about board dis­cus­sions or what our direc­tors said dur­ing board meet­ings or the re­la­tion­ship be­tween Sen. Clin­ton and other direc­tors or with the com­pany.”

Clin­ton, then a lawyer with the Rose Law Firm in Lit­tle Rock, joined the board in Novem­ber 1986. She was the first wo­man on the board, brought on by Wal­ton to di­ver­sify an all-male in­ner cir­cle, mostly South­ern­ers and po­lit­i­cal con­ser­va­tives. Dur­ing a 2004 speech, Clin­ton re­called that Wal­ton had phoned her and said: “They tell me I have to have a wo­man on the board. Do you want to be her?”

“They,” ac­cord­ing to sev­eral board mem­bers, were Wal­ton’s late wife, He­len, and his daugh­ter, Alice Wal­ton, now the world’s wealth­i­est wo­man. Sam Wal­ton died in 1992.

One for­mer Wal-Mart board mem­ber, who spoke on con­di­tion of anonymity, said Sam Wal­ton did not want direc­tors with a po­lit­i­cal or ide­o­log­i­cal agenda. But “Alice and He­len had spent time with Bill and Hil­lary and they were im­pressed,” the for­mer di­rec­tor said.

Clin­ton’s board ap­point­ment pro­vided a wel­come in­come boost. Clin­ton’s com­pen­sa­tion as a Rose part­ner had di­min­ished af­ter her hus­band be­came gov­er­nor and she was forced to cur­tail her lu­cra­tive le­gal work be­fore state agen­cies. Wal-Mart paid her $18,000 a year, $1,500 for each meet­ing she at­tended and steady in­cre­ments of stock that even­tu­ally to­taled 1,600 shares.

As­signed to work on the di­ver­sity is­sue that pre­oc­cu­pied Wal­ton’s wife and daugh­ter, Clin­ton joined an ad­vi­sory com­mit­tee that Wal­ton had as­signed to draft rec­om­men­da­tions on pay par­ity and hir­ing women and mi­nori­ties as ex­ec­u­tives.

Rhoads said he and Clin­ton flew to New York to con­sult with a firm that helped cor­po­ra­tions re­cruit more fe­male direc­tors. But Tom Seay, a for­mer WalMart vice pres­i­dent who was on the ad­vi­sory com­mit­tee, said that her “in­volve­ment was lim­ited” and that Wal-Mart staffers did “most of the heavy lift­ing.”

The ad­vi­sory group ended up sug­gest­ing men­tor­ing pro­grams and in­ter­nal women’s groups, ideas that did lit­tle to im­prove con­di­tions for Wal-Mart’s fe­male work­force, crit­ics say. The com­mit­tee’s ex­is­tence — and Clin­ton’s role on it — was not pre­vi­ously ac­knowl­edged by com­pany of­fi­cials, said Joseph T. Sell­ers, one of the lawyers be­hind a class ac­tion law­suit against Wal-Mart on be­half of women claim­ing dis­crim­i­na­tion.

“There was no change for the bet­ter dur­ing that pe­riod for women at Wal-Mart,” Sell­ers said. “If there was change, it was min­i­mal. No­body knew about it or else it was just too sub­tle to rec­og­nize.”

The class ac­tion suit is pend­ing, and could af­fect up to 1.6 mil­lion cur­rent and for­mer work­ers.

On the board, Clin­ton im­pressed other out­side direc­tors brought in by Wal­ton. “She stayed pretty much in the back­ground. But she was an ad­vo­cate for women, qui­etly and ef­fec­tively,” said Toys “R” Us founder Charles Lazarus, who be­came a di­rec­tor in 1984.

Clin­ton was able to co­ex­ist with the board’s male, largely South­ern cul­ture. One di­rec­tor, Texas busi­ness­man Robert Ded­man, of­ten made po­lit­i­cally in­cor­rect jokes, prompt­ing Clin­ton to “roll her eyes,” re­called Rhoads.

Union ac­tivism was a prob­lem for Wal-Mart as it ex­panded into la­bor strongholds such as Mis­souri and Illi­nois. Since 1970, Sam Wal­ton had worked closely with Omaha lawyer John E. Tate to ward off union­iza­tion us­ing an ag­gres­sive cam­paign of re­wards and tough talk.

Bob Ortega, au­thor of “In Sam We Trust,” a his­tory of WalMart, said work­ers were pro­vided with in­cen­tives such as stock pur­chase pro­grams and bonuses for ef­fi­ciency while the firm sent in teams of lawyers and ex­ec­u­tives to stiffen re­sis­tance to union or­ga­niz­ing ef­forts.

Al­though the de­tails of WalMart’s anti-union ef­forts were rarely broached dur­ing board meet­ings, Tate said re­cently, Clin­ton “clearly knew the com­pany’s rep­u­ta­tion.” Tate said that when he “made pre­sen­ta­tions on what we were do­ing” dur­ing board meet­ings, Clin­ton did not raise ob­jec­tions.

Soderquist agreed, say­ing there was “no sign that she had any crit­i­cism.”

Nor did she ob­ject, Tate said, when he was brought in by Wal­ton in 1988 as an ex­ec­u­tive vice pres­i­dent and a di­rec­tor, a step that re­quired board ap­proval.

Tate and Soderquist, like other Wal-Mart ex­ec­u­tives from that era, are loyal Repub­li­cans who do­nated more than $20,000 apiece to the party and its can­di­dates in the 1990s and 2000s. But both praise Clin­ton’s per­for­mance as a board mem­ber. Soderquist re­calls her as a “very pos­i­tive mem­ber of Wal-Mart’s board,” while Tate said she was a well-re­spected” at­tor­ney who showed a “broad un­der­stand­ing” of the law.

Sev­eral la­bor of­fi­cials said re­cently that the fact Clin­ton was on the board when Wal-Mart was mount­ing union-bust­ing tac­tics could pose a predica­ment as they mull pres­i­den­tial en­dorse­ments.

Nu Wexler, a spokesman for Wal-Mart Watch, one of sev­eral union-backed groups press­ing for change at the com­pany, said that any Demo­cratic can­di­date’s ties to Wal-Mart would prob­a­bly be ex­am­ined, but he added: “I sus­pect that unions are far more in­ter­ested in her plan for uni­ver­sal health­care than her board ser­vice 15 years ago.”

Jonathan Tasini, ex­ec­u­tive di­rec­tor of the La­bor Re­search Assn. and a Se­nate pri­mary ri­val of Clin­ton in 2006, coun­tered that ac­tivists would con­tinue to raise ques­tions even if union lead­ers sidestepped the is­sue. “She has never an­swered fully what she did or did not do on the board of Wal-Mart,” Tasini said.

Clin­ton’s clear­est im­pact, for­mer com­pany col­leagues said, was on en­vi­ron­men­tal is­sues. Clin­ton asked Wal­ton to put her on an en­vi­ron­men­tal ad­vi­sory com­mit­tee, and Wal­ton agreed, re­called Paul Higham, a for­mer Wal-Mart ex­ec­u­tive who also was on the panel.

The com­mit­tee soon in­cluded two old friends from the Clin­tons’ 1972 stint with the Ge­orge McGovern pres­i­den­tial cam­paign in Texas — for­mer Texas Land Com­mis­sioner Garry Mauro and Roy Spence, an Austin ad­ver­tis­ing man who han­dled WalMart’s ac­count and now is work­ing on Clin­ton’s cam­paign ads. Higham said Clin­ton played a crit­i­cal role in get­ting Wal-Mart to press its sup­pli­ers to use pack­ag­ing that was eas­ily re­cy­cled. The group also spurred more re­cy­cling pro­grams and ar­chi­tec­tural al­ter­ations that saved en­ergy in many stores, Higham said.

But the com­mit­tee tailed off soon af­ter Clin­ton’s de­par­ture from Wal-Mart in 1992.

Dur­ing a car ride through Ben­tonville af­ter one com­mit­tee meet­ing in early 1992, Clin­ton con­fided in Mauro and Spence that her hus­band would run for pres­i­dent. That meant, she told them, that she would have to step down from the Wal-Mart board to de­vote full time to the cam­paign. She left that spring.

Mauro stayed on, ex­pect­ing the firm would con­tinue sort­ing through ideas. But the board mem­ber who re­placed her was “a pretty far-right guy who didn’t have the per­sonal com­mit­ment she had,” Mauro re­called. “We had two or three meet­ings and then the com­mit­tee just kind of went away.” stephen.braun@la­times.com Times re­searcher John Beck­ham con­trib­uted to this re­port.

As­so­ci­ated Press

IN 1992: Hil­lary Rod­ham Clin­ton speaks dur­ing her hus­band’s pres­i­den­tial cam­paign. She left Wal-Mart’s board soon af­ter.

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