Wal-Mart Extends Its Influence to Washington

Hutchinson used to play tennis with Walton but only once received a campaign donation from him: a $500 check with a note saying it was all Walton could afford. Years later, when Lezy and Winborn knocked on his door for help, Hutchinson showed them around the Hill and became an ally in their quest for normal trade relations with China and trade agreements in Latin America.

[an error occurred while processing this directive]

Wal-Mart also opposed legislation that it said would have increased litigation for companies that administer their own health benefit plans, and it joined a coalition of businesses to overturn ergonomics regulations. As its Washington presence grew, it lobbied for government to work with business on more affordable health care and supported a cap-and-trade program for greenhouse gas emissions. This is a remarkable change for a company that so cherished its silence.

"When they became the largest retailer . . ., a target was put on their back. They couldn't just any longer quietly exist," Hutchinson said. "The world changed, and Wal-Mart had to change with it."

Some lawmakers are still wary of having their names associated with the company. During her 2006 Senate reelection campaign, Hillary Rodham Clinton returned $5,000 to Wal-Mart's political action committee, citing differences with the company, despite having served on its board from 1986 to 1992. This spring, Clinton was noticeably absent from a reception Wal-Mart sponsored to celebrate a documentary about female senators.

Still, she has accepted $19,190 in donations from Wal-Mart executives and employees this year -- more than half of the total Wal-Mart employees have given to all presidential candidates, according to campaign finance records.

Wal-Mart's latest lobbying disclosures show that the company has eight in-house registered lobbyists and retains about a dozen outside firms. According to the Center for Responsive Politics, Patton Boggs signed Wal-Mart as a client in 2000 and has since received $1.8 million, the most of any firm. Washington heavyweight Cassidy & Associates began working for Wal-Mart three years ago and has gotten $640,000. (Both Winborn and Lezy have left Wal-Mart.)

Yet Wal-Mart's $2.5 million in lobbying expenditures in 2006 is small potatoes for a company with annual revenue of about $350 billion. By comparison, General Electric had revenue of $163 billion and spent $21 million on lobbying last year.

Although Wal-Mart has the largest political action committee of any retailer, its opponents outspend it in political donations. In the 2006 election cycle, Wal-Mart gave $1.3 million to federal campaigns, most of them Republican. The Service Employees International Union and the United Food and Commercial Workers, two of the country's largest labor groups, together spent $2.9 million and are ranked among the top all-time donors to the Democrats.

Two years ago, the SEIU and the UFCW launched campaigns against Wal-Mart -- Wal-Mart Watch and Wake Up Wal-Mart, respectively. They criticized the company's health-care plan, saying it charged high deductibles and pushed workers onto state-funded plans. They were behind high-profile but unsuccessful efforts in several states, including Maryland, to pass legislation to force Wal-Mart to spend more on its benefits. The groups also leaked embarrassing Wal-Mart documents, organized protests, and recruited Democratic presidential candidates Barack Obama and John Edwards to criticize Wal-Mart.

"Wal-Mart is willing to spread its money wherever it thinks it can buy protection for its poor business practices," said David Nassar, executive director of Wal-Mart Watch.

In response, the formerly media-shy company hired the public relations firm Edelman, created a "war room" staffed with former political operatives at its headquarters and dispatched its executives to Washington to meet with lawmakers. And it began looking at the environment as an issue on which it could play offense.

Environmental activists debated which side to join. They worried that Wal-Mart encouraged shoppers to drive long distances and pushed manufacturing jobs to countries with lax environmental regulations. Some, like the Sierra Club, argued that Wal-Mart's social problems were inextricably linked with its environmental ones and refused to work with it.