Wal-Mart Extends Its Influence to Washington

When Conservation International wanted to educate the world about Brazil's indigenous Kayapo Indians, whose Amazon home is threatened by deforestation, it brought an unlikely advocate to Washington: S. Robson Walton, chairman of Wal-Mart Stores.

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A partnership between Wal-Mart, reviled by labor unions and their allies as the enemy of the little guy, and an environmental nonprofit group was unthinkable just a few years ago. Critics had long accused Wal-Mart of treating its workers badly and crushing independent businesses with its mammoth stores. Its relentless focus on low prices has been blamed for the outsourcing of manufacturing jobs and deadly pollution in underdeveloped countries. To some, Wal-Mart symbolized capitalism at its worst.

For years, the company ignored the attacks, content to hunker down at its headquarters in remote Bentonville, Ark. But as sales began to slow, efforts to expand were blocked and the chorus of critics spread to lawmakers in Washington, the retailer realized it had to act. The partnership between Walton and Conservation International is part of a radical new approach that Wal-Mart calls engaging the opposition.

The environment is the first front.

"It was never part of the conversation before," Walton said during an interview in which he was accompanied by Conservation International's chairman Peter A. Seligmann and Kayapo chief Megaron Txucarramae. "And it's part of every conversation now."

The overarching goal is to improve the company's image so it can operate unhindered by the automatic opposition its reputation has inspired. It also had a specific legislative agenda spanning issues such as normal trade relations with China and the number of hours truck drivers are allowed to work. In its attempt to make its desires known, it has transformed its lobbying force from a humble two-man shop to a $2.5 million operation that employs some of K Street's heaviest hitters.

Campaign donations from Wal-Mart's political action committee to federal candidates jumped from $135,750 during the 1998 election cycle to $1.3 million in 2006 -- the biggest increase and largest amount of any retailer or retail trade organization, according to the Center for Responsive Politics. It has added consultants ranging from a whitewater guide to a former presidential adviser to court the activist groups that have been Wal-Mart's most vocal opponents.

"You don't want Wal-Mart making policy. You want Wal-Mart running retail stores," said Andrew Ruben, the company's vice president for strategy and sustainability. "But we're not naive enough to think we can change without it."

That wasn't always Wal-Mart's philosophy. It started as a five-and-dime store in Bentonville in 1950 with a singular mission to deliver the lowest prices possible. Even after Wal-Mart became a global behemoth and its founder, Sam Walton, became one of the richest men in America, its headquarters remained in this small town. Politics was so far off Walton's radar that former Arkansas senator Dale Bumpers joked that waiting for a campaign contribution was like "leaving the landing lights on for Amelia Earhart."

"They were doing very well without any government assistance, and the government was not interfering with them too much," Bumpers said. "And I guess they felt it would be money sort of wasted."

That worked until 1999, when federal lawmakers blocked Wal-Mart's acquisition of a small thrift in Broken Arrow, Okla., over concerns that the company would use its size and low prices to dominate the industry. So that year, Wal-Mart hired its first full-time Washington lobbyist, retired Air Force Lt. Gen. Norm Lezy. In 2000, another Air Force veteran, Erik Winborn, joined the operation.

The two worked alone for the next two years, establishing roots in Washington. They first met and had breakfast with the Arkansas delegation and representatives of states where Wal-Mart had a strong presence, such as Texas and Florida. For the Republican-leaning company, talking to liberals from California and the Northeast was akin to "missionary work," said Asa Hutchinson, a Republican who represented Arkansas in the House.