Watchdog Groups, Employee-Shareholders File FEC Alleging that Walmart is Running Illegal PAC Scheme

Originally posted on Making Change at Walmart

10689753_892828714078360_4790382431542889762_nGroups are alleging that Walmart illegally pushes associates into contributing to its political action committee, circumventing a federal law that bars companies from putting corporate funds into political campaigns.

Public Citizen, Common Cause and two Walmart employees and shareholders filed a charge with the Federal Elections Committee today. In the complaint, the two employee-shareholders, Cynthia Murray and Evelyn Cruz, allege in detail a program in which Walmart reportedly solicits the company’s managers to donate to Walmart’s PAC. In exchange, Walmart reportedly pledged to donate twice the amount of those contributions to its Associates in Critical Need Trust.

This complaint argues that this program is illegal under the Federal Election Campaign Act, which bars companies from making contributions to federal candidates, parties, or PACs.

Craig Holman, government affairs lobbyist for Public Citizen noted that “WalMart is attempting to evade this law by providing a 2-to-1 charitable match from corporate coffers for any campaign contribution to its PAC from company managers. That flouts the law by using substantial corporate money to reward campaign contributors.”

In the past, the FEC has approved some charitable matching schemes, but those programs have been limited to a 1-to-1 match or less, with each donor choosing the benefitting charity-not the company as in this case.

The likes of this funding scheme by Walmart has never been approved by the FEC.  Here, the reportedly 200% matching rate provides such a powerful incentive that the campaign contributions lose their “voluntary” nature.  And these corporate contributions reportedly made exclusively to Walmart’s own charity, along with the campaign contributions to Walmart’s PAC, are simply self-serving for the company.

Murray, who has worked at a Walmart store in Laurel, Md., for 15 years and owns shares in the company, pointed out that such schemes are a fundamental challenge to our country’s democracy:

“Multibillion-dollar corporations like Walmart are able to skirt the rules that the rest of us follow. With the majority of Walmart workers being paid less than $25,000, it’s not surprising that Walmart needs to set up a fund to help employees in need. Most of us are in need every day. With more than $16 billion in annual profits, Walmart can afford to pay us more instead of paying expensive lawyers to help them manipulate electoral laws and taxpayers.” 

Like Murray said, data from Open Secrets shows that since the 2000 election cycle, Walmart’s PAC has spent over $13 million on federal elections, which has gained the company outsized influence on our democratic process.

Common Cause President Miles Rapoport says “It’s breathtaking. Walmart is running a cynical and likely illegal scheme to get its underpaid workers to help the company leverage its economic power in the political sphere.” The actions that warranted the FEC charge fall in line with Walmart’s chronically bad behavior when it comes to pushing others down and bending and breaking rules to get ahead.

Additionally, the Walmart PAC has given more than $2.5 million to members of the U.S. House of Representatives who opposed increasing the minimum wage to $10.10 last year. Among House members who voted on the proposed minimum wage increase, nearly two-thirds of the Walmart PAC’s contributions went to those who voted no. The Washington Post has reported that Walmart’s lobbying disclosures suggest it started lobbying last year on the minimum wage and Fair Minimum Wage Act, despite public statements that it is “neutral” on the issue.

Reportedly pressuring already financially-strapped employees for political donations and lobbying against increasing the minimum wage tell us one thing: it’s clear that Walmart truly doesn’t care about the well-being of its associates.

To see the FEC complaint, click here.