http://www.nytimes.com/2006/09/08/bu...08walmart.html

September 8, 2006

Wal-Mart Finds an Ally in Conservatives

By MICHAEL BARBARO and STEPHANIE STROM

"As Wal-Mart Stores struggles to rebut criticism from unions and Democratic
leaders, the company has discovered a reliable ally: prominent conservative
research groups like the American Enterprise Institute, the Heritage
Foundation and the Manhattan Institute.

Top policy analysts at these groups have written newspaper opinion pieces
around the country supporting Wal-Mart, defended the company in interviews
with reporters and testified on its behalf before government committees in
Washington.

But the groups - and their employees - have consistently failed to disclose
a tie to the giant discount retailer: financing from the Walton Family
Foundation, which is run by the Wal-Mart founder Sam Walton's three
children, who have a controlling stake in the company.

The groups said the donations from the foundation have no influence over
their research, which is deliberately kept separate from their fund-raising
activities. What's more, the pro-business philosophies of these groups often
dovetail with the interests of Wal-Mart.

But the financing, which totaled more than $2.5 million over the last six
years, according to data compiled by GuideStar, a research organization,
raises questions about what the research groups should disclose to newspaper
editors, reporters or government officials. The Walton Family Foundation
must disclose its annual donations in forms filed with the Internal Revenue
Service, but research groups are under no such obligation.

Companies and such groups have long courted one another - one seeking
influence, the other donations - and liberal policy groups receive
significant financing from unions and left-leaning organizations without
disclosing their financing.

But the Walton donations could prove risky for Wal-Mart, given its
escalating public relations campaign. The company's quiet outreach to
bloggers, beginning last year, touched off a debate about what online
writers should disclose to readers, and its financing to policy groups could
do the same.

Asked about the donations yesterday, Mona Williams, a spokeswoman for
Wal-Mart, said, "The fact is that editorial pages and prominent columnists
of all stripes write favorably about our company because they recognize the
value we provide to working families, the job opportunities we create and
the contributions we make to the community we serve."

At least five research and advocacy groups that have received Walton Family
Foundation donations are vocal advocates of the company.

The American Enterprise Institute for Public Policy Research, for example,
has received more than $100,000 from the foundation in the last three years,
a fraction of the more than $24 million it raised in 2004 alone.

Richard Vedder, a visiting scholar at the institute, wrote an opinion
article for The Washington Times last month, extolling Wal-Mart's benefits
to the American economy. "There is enormous economic evidence that Wal-Mart
has helped poor and middle-class consumers, in fact more than anyone else,"
Mr. Vedder wrote in the article, which prominently identified his ties to
institute.

But neither Mr. Vedder nor the newspaper mentioned American Enterprise
Institute's financial links to the Waltons. Mr. Vedder, a professor at Ohio
University, said he might have disclosed the relationship had the American
Enterprise Institute told him of it. "I always assumed that A.E.I. had no
relationship or a modest, distant relationship with the company," said Mr.
Vedder, who has written a forthcoming book about the company. The book, he
said in an interview yesterday, would eventually contain a disclosure about
the Walton donations to the institute.

A spokesman for the Walton Family Foundation, Jay Allen, said there was no
organized campaign to build support for Wal-Mart among research groups. All
of the foundation's giving, he said, is directed toward a handful of
philanthropic issues, including school reform, the environment and the
economy in Northwest Arkansas, where Wal-Mart is based. "That is the spirit
and purpose of their giving," Mr. Allen said.

Mr. Allen said the foundation, which had assets of $608.7 million in 2004,
the last year for which data is available, has never asked the research
groups to disclose the donations because "the family leaves it up to the
individual organization to decide."

Those groups, for the most part, say they have decided not to share the
information with their analysts or the public.

For example, Sally C. Pipes, the president of the Pacific Research
Institute, a free-market policy advocate, has written several opinion
articles defending Wal-Mart in The Miami Herald and The San Francisco
Examiner.

A month after a federal judge in California certified a sex discrimination
lawsuit against the company as a class action in 2004, Ms. Pipes wrote an
article in The Examiner criticizing the lawyers and the women behind the
suit. "The case against Wal-Mart," she wrote, "follows the standard feminist
stereotype of women as victims, men as villains and large corporations as
inherently evil."

The article did not disclose that the Walton Family Foundation gave Pacific
Research $175,000 from 1999 to 2004. Ms. Pipes was aware of the
contributions, but said the money was earmarked for an education reform
project and did not influence her thinking about the lawsuit. Asked why she
typically did not disclose the donations to newspapers, she said: "It never
occurs to me to put that out front unless I am asked. If newspapers ask, I
am completely open about it."

The lack of disclosure highlights the absence of a consistent policy at the
nation's newspapers about whether contributors must tell editors of
potential conflicts of interest.

Juan M. Vasquez, the deputy editorial page editor of The Miami Herald, which
ran an opinion article praising Wal-Mart by Ms. Pipes of Pacific Research,
said his staff researches organizations that write opinion articles,
including their financing. But that does not always require asking if the
organization has received money from the subject of an article, he said.

The New York Times has a policy of asking outside contributors to disclose
any potential conflicts of interest, including the financing for research
groups.

Several of the research groups noted that their mission is to be an advocate
for free market policies and less government intrusion in business. "Those
aims are pro-business, so it's not surprising that companies would be
supporters of our work," said Khristine Brookes, a spokeswoman for the
Heritage Foundation.

Last year, for instance, The Baltimore Sun published an op-ed article by Tim
Kane, a research fellow at Heritage, in which he criticized Maryland's
efforts to require Wal-Mart to spend more on health care. He objected to the
move on the grounds that it was undue government interference in the free
market, a traditional concern of Heritage.

"The existence of Wal-Mart dented the rise in overall inflation so much that
Jerry Hausman, an economist from the Massachusetts Institute of Technology,
is calling on the federal government to change the way it measures prices,"
Mr. Kane wrote. "Translation: Wal-Mart is fighting poverty faster than
government accountants can keep track."

Ms. Brookes pointed out that the $20,000 Heritage has received from the
Walton Family Foundation since 2000 amounts to less than 1 percent of its
$40 million budget.

Ms. Brookes said it was unlikely that researchers and analysts at Heritage
were even aware of the foundation's contributions. "Nobody here would know
that unless they walked upstairs and asked someone in development," she
said. "It's just never discussed."

She said Heritage did not accept money for specific research. "The money
from the Walton Family Foundation has always been earmarked for our general
operations," she said. "They've never given us any funds saying do this
paper or that paper."

A spokeswoman for the American Enterprise Institute said the group did not
comment on its donors. The group's focus on Wal-Mart has been notable. In
June, the editor in chief then of the group's magazine, The American
Enterprise, wrote a long essay defending Wal-Mart against critics. The
editor, Karl Zinsmeister, now the chief domestic policy adviser at the White
House, said the campaign against the company was "run by a clutch of
political hacks."

Conservative groups are not the only ones weighing in on the Wal-Mart
debate. Ms. Williams of Wal-Mart noted labor unions have financed
organizations that have been critical of Wal-Mart, like the Economic Policy
Institute, which received $2.5 million from unions in 2005.

In response, Chris Kofinis, communications director for WakeUpWalmart.com,
an arm of the United Food and Commercial Workers Union that gives money to
liberal research groups, said: "While we openly support the mission of
economic justice, Wal-Mart and the Waltons put on a smiley face, hide the
truth, all while supporting right-wing causes who are paid to defend
Wal-Mart's exploitative practices."

The lack of a clear quid pro quo between research groups and corporations
like Wal-Mart makes the issue murky, said Diana Aviv, chief executive of the
Independent Sector, a trade organization representing nonprofits and
foundations. "I don't know how one proves what's the chicken and what's the
egg," she said.

Last year, the National Committee for Responsive Philanthropy, a research
and watchdog group, published a report, "The Waltons and Wal-Mart:
Self-Interested Philanthropy," that warned of the potential influence their
vast wealth gives them.

But Rick Cohen, executive director of the group, said he was more concerned
about the role the Walton foundation's money might play in shaping public
policy in areas like public education, where it has supported charter
schools and voucher systems.

"These are certainly not organizations created and controlled by the
corporation or the family and promoted as somehow authentic when they aren'
t," Mr. Cohen said. "More important, I think, is the disclosure of the
funding in whatever's written, a sort of disclaimer."

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