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Wal-Mart's Dirty Secret Is Out

John S. Sweeney

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House Armed Services Committee Chairman Duncan Hunter, R-Calif., said it best: "(While we) talk about having strong homeland security, checking 100 percent of cargo containers. In the end, our commercial interests get ahead of us."

Those commercial interests are led by the world's largest retailer and the United States' biggest importer, Wal-Mart. Hunter let slip what is surely Wal-Mart's dirtiest secret: The company, through its Washington, D.C., lobbyist, the Retail Industry Leaders Association, has time and again since 9/11 opposed new port and supply-chain security rules that might cut into Wal-Mart's record profits. Its mantra is: "Security requirements should not become a barrier to trade."

In the past few years, Wal-Mart has:

Opposed the introduction of anti-terrorist "smart containers" and electronic seals for cargo containers coming into U.S. ports. The retail industry called them "feel good (security) measures."

Opposed independent and regular inspections of supply-chain security practices around the world.

Opposed tougher rules requiring Wal-Mart to let Customs know what it's shipping in and where it comes from.

Opposed new container-handling fees to pay for improved port security.

The corporate lobbyists at RILA boasted in a 2005 lobbying report to Wal-Mart and other retailers about its "continued industry leadership in opposition to ill-advised and onerous port security measures (i.e., cargo fees, increased physical inspections)." In fact, beating back meaningful port security measures topped RILA's agenda.

One of the United States' top port security experts, retired Coast Guard Cmdr. Stephen Flynn, puts the cost of helping protect our ports at 0.2 percent of the value of cargo in the containers. The cost to Wal-Mart would be about $36 million -- less than one-third of 1 percent of the $11.2 billion profit the company raked in last year, or several million dollars less than CEO Lee Scott's pay over the past two years.

Wal-Mart and its corporate lobbyists have instead invested heavily in the members of Congress with the most sway over ports and supply-chain security issues, as well as the Bush administration and the Republican National Committee. Compare Wal-Mart's 2003-04 Washington campaign contributions with those of Target, its chief rival: Wal-Mart spent $2.7 million, putting it third on the list of top corporate contributors. Target spent $295,000, good for 192nd place.

RILA and Wal-Mart insist that making cargo containers and supply-chains secure against terrorist attacks be voluntary. The essence of this policy is "trust, but don't verify" and that's just the way Wal-Mart and RILA want to keep it.

The successes of Wal-Mart are made doubly dangerous by the shift of manufacturing work from the United States to developing countries. Twenty years ago, Wal-Mart bought only 6 percent of its merchandise overseas. Today, "Wal-Mart and China are a joint venture, and both are determined to dominate the U.S. economy as much as they can in a wide range of industries," Duke University professor Gary Geriffi told PBS's "Frontline."

Nearly two-thirds of all Wal-Mart products come from China, Geriffi said. Most of the rest comes from 70 other countries, including Pakistan, the Philippines and Indonesia, where there's a dangerous cocktail of workers' rights abuses and lax enforcement, official corruption and active terrorist organizations.

Here are a few straightforward steps Congress needs to take: Mandate the use of "smart containers"; increase physical container inspections; invest in 100 percent screening of containers using improved technology and require CEOs to pay as much attention to the safety of their supply chains as they do their bottom line. That means requiring CEOs to certify, on pain of criminal prosecution along the lines of the Sarbanes-Oxley Act, that their supply chains are secure.

Just as Wal-Mart lays down and ruthlessly enforces its rules for its suppliers, Congress must ensure that the safety of the American people is a non-negotiable issue.

John J. Sweeney is president of the 9 million-member AFL-CIO.