Wal-Mart: Theft or union-busting?

At minimum, Wal-Mart has a corporate culture in which the No. 2 executive’ story that he needed company cash for illegal union-bashing was convincing to his subordinates.

It’s hard to tell whether the former #2 executive at Wal-Mart was, as he claims, running a secret and illegal program of making cash payments to interfere with union organizing drives, or, as the company claims, pretending that he was running such a program to cover up thefts from the company.

Assume for the moment that the company’s story is the correct one. What that tells us is that, the notion that the #2 executive was running a secret and illegal program of making cash payments to interfere with union organizing drives was sufficiently plausible within the Wal-Mart corporate culture that the executive (1) chose that — as opposed, say, to political contributions — as his cover story and (2) was able to persuade subordinates of the truth of that story.

You can, if you like, choose to believe that those cultural facts about Wal-Mart might be true in a world in which, in fact, Wal-Mart was doing nothing illegal to smash unions. If you believe that, may I interest you in a dozen bottles of Dr. Kleiman’s Patented Snake Oil, guaranteed to cure whatever ails you?

The Wall Street Journal, from behind its subscription barrier, reports that the 31-year-old executive who blew the whistle on Coughlin has been fired. Coughlin, of course, was allowed to resign.

Is that proof of the company’s guilt? No. But it sure changes the odds, doesn’t it?

One other fact stands out: Coughlin, who was earning (in some extended sense of that term) $6 million a year from Wal-Mart, is accused of stealing something between $100,000 and $500,000, all of it in merchandise rather than cash. Yes, it’s possible he’s just the sort of petty crook who gets off on having his $1300 hornback alligator skin boots paid for by his employer under a phony invoice. But it seems more natural to believe that Coughlin was in fact reimbursing himself for what he thought were legitimate, if illegal, corporate expenses.

Wal-Mart has no doubt done marvellous things for American consumers and for Chinese workers. But I think I’ll keep shopping at Costco.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com