A coalition of groups is asking federal officials to investigate Walmart for misuse of a company charity set up to help its low-income workers. The company is using the charity to drum up contributions to the political action committee it uses to influence elections and curry favor with politicians, a scheme that violates the federal ban on corporate money going to PACs, according to a Federal Election Commission (FEC) complaint the groups filed Monday.
Walmart solicits donations to its political action committee (PAC) from management employees by promising to double-match those donations with gifts to the Walmart Associates in Critical Need Fund. Public Citizen, Common Cause, and the labor organizers of OUR Walmart are asking the elections board to put an end to that practice.
The FEC has previously approved similar arrangements, Public Citizen government affairs lobbyist Craig Holman said in an interview, but with very specific rules that Walmart has abandoned. Companies had permission to offer an exact 1-to-1 match and were expected to allow the employee who made the political contribution to pick the charity that the company would fund.
“Walmart has taken that program and just gone way beyond the parameters,” Holman said. “They now offer a 2-for-1 match, which really undermines the voluntary-ness of making a political contribution. And secondly, Walmart selects the charity, and they selected their own charity.” A Walmart spokeswoman told the Wall Street Journal that it “is confident its matching program is lawful.”
The Critical Need Fund that benefits from Walmart’s unusual effort to lure employees into helping it pay for political campaigns received $5.3 million from Walmart employees in 2013, according to the FEC complaint. It got an additional $3.6 million from Wal-Mart’s corporate treasury.
Walmart’s PAC has spent more than $2.5 million on direct campaign contributions each federal election cycle dating back to 2004 and a total of $16.4 million since 2002, according to the Center for Responsive Politics, which labels the company a Heavy Hitter among political influencers.
The employee charity spent over $10 million helping staff in 2012 and nearly $14 million in 2013, according to federal tax forms. The documents offer just a fleeting understanding of what criteria the Associates in Critical Need Fund uses to determine who gets money and when. “The fund provides monetary support to associates or their dependents when they experience extreme economic hardship due to situations outside of their control, including natural disasters,” the form says.
It’s unclear how Walmart defines “extreme economic hardship” or determines whether or not such hardship is the employee’s fault or caused by something they couldn’t control. The company pays its frontline employees so little and gives them so few hours that most of them rely upon public assistance programs to support themselves and their families. (Its executives, by contrast, receive multi-million-dollar bonuses that are also subsidized by taxpayers.)
A single 300-person Supercenter pulls down between $900,000 and $1.7 million in public benefits each year. There are nearly 3,300 such Supercenters in the U.S. and another 900 other Walmart stores, which pushes the total cost to taxpayers for Walmart’s wage and hour policies up into the billions of dollars.
Walmart could pay all of its employees enough to escape the food stamps rolls by raising its prices just 1.4 percent, according to one analysis. It prefers to rely on charities like the one that induces managers to give to its political arm and to run a food drive during the holidays to help its own workers.
“From the description I’ve seen on Walmart’s webpage, it sounds like a worthwhile charity,” Public Citizen’s Holman said. “However it is entirely run and controlled by Walmart, so it becomes a self-serving entity as part of this program.”