Wal-Mart building political muscle

State's battles with retail giant increasingly moving to ballot box

By DALE KASLER

Sacramento Bee

SACRAMENTO - The company's name wasn't on the ballot, but that seemed like a technicality.

Proposition 72 became a sort of unofficial referendum on Wal-Mart Stores Inc. -- and demonstrated how the mega-retailer from Arkansas is becoming a powerful force in California business and politics.

Wal-Mart contributed almost $650,000 to the campaign against Proposition 72, which would have required employers to pay for their workers' health insurance. Wal-Mart's efforts helped defeat the measure by a 51-49 percent margin, although the pro-72 side was hoping the outcome would change as the last remaining votes are counted.

The company said it got involved only because the proposition's backers, including organized labor, ran TV ads slamming Wal-Mart's health-care benefits. They ''tried to make this debate all about Wal-Mart,'' said company spokeswoman Cynthia Lin.

But Proposition 72 was only the latest example of Wal-Mart's uncanny ability to stir the pot in California.

Wal-Mart's expansion throughout California often brings lawsuits and protests from unions and community activists upset with Wal-Mart's relatively low pay scale, anti-union stance and its ability to crush the local retailing competition with its relentless discounting. Its entrance into the state's grocery business prompted executives of existing supermarkets to demand concessions from their unionized workers. That sparked the big Southern California supermarket strike and has caused Northern California contract talks to drag on for months.

Now the fights are increasingly moving to the ballot box.

In March Wal-Mart spent more than $1 million to successfully persuade Contra Costa County voters to kill an ordinance that would have effectively banned Wal-Mart Supercenters -- the company's combination supermarket and department stores. It even dabbled in grassroots politics by signing up 10,000 East Bay shoppers for something called the ''Wal-Mart Customer Action Network.'' It sent them fliers and other materials as the election approached.

Wal-Mart doesn't always win. The $1 million it spent on a March initiative in Inglewood was in vain; voters rejected a ballot measure that would have permitted Wal-Mart to build a Supercenter without undergoing the usual environmental reviews.

Tuesday's election brought more Wal-Mart spending and more mixed results. Besides Proposition 72, the company spent $95,000 to successfully defeat a ballot initiative that would have made it tougher to build a Supercenter in Lodi. It spent $36,000 supporting two pro-company candidates for the Antioch City Council, plus a candidate for Antioch mayor, although two of its three candidates lost.

Wal-Mart's fights are mostly over so-called ''big box'' ordinances that generally limit the volume of groceries and other non-taxable items that can be sold in stores with more than 200,000 square feet of selling space. The ordinance's backers say giant supermarkets create enormous burdens on traffic and infrastructure without generating enough tax revenue -- but the effect of the laws is to lock out Wal-Mart's Supercenters.

There are two Supercenters in California, in La Quinta and Stockton, and the company says it will build a total of 40 over five years.

Wal-Mart has gotten involved in other political matters in California as well. In the past two years it has donated $153,000 to the state Republican Party. It spent $100,000 in March successfully fighting Proposition 56, which would have made it easier for the Legislature to raise taxes. It's donated $10,000 to Gov. Arnold Schwarzenegger and smaller amounts to other candidates, mostly Republicans.

Proposition 72, though, represented the first real statewide fight over Wal-Mart and came as the big retailer is just beginning to flex its political and business muscles in California.

The company operates more than 180 stores in California and figures to add a lot more. Given the state's population and Wal-Mart's growth strategies in other states, California could easily see twice as many Wal-Marts.

Unable so far to organize Wal-Mart's work force, union officials have believed that a mandatory health-coverage law could at least slow the retailer's advance through California by putting unionized retailers on a more equal footing with Wal-Mart in terms of operating costs.

The proposition ''was motivated by an interest in leveling the playing field,'' said spokeswoman Ellen Anreder of the United Food and Commercial Workers, which represents employees at Raley's, Safeway Inc. and other supermarket chains.

Jacques Loveall, executive vice president of UFCW Local 588 in Roseville, has called on the state to pass laws governing pay and benefits as a means of slowing the Wal-Mart juggernaut.

SB2, the legislative precursor to Proposition 72, was ''a good place to start,'' Loveall wrote in a message posted on the union's Web site.

''It is time to work for statewide laws that protect California's economy from the worst depredations of Wal-Mart and its imitators,'' he added.

Proposition 72 would have required employers to pay at least 80 percent of their workers' health-care costs. The initiative's supporters ran TV ads citing a University of California at Berkeley, study that was critical of Wal-Mart's pay and benefits. The study said California taxpayers spend $32 million a year on health-care benefits for Wal-Mart workers because the company's health plan is so inadequate.

''Proposition 72 guarantees Wal-Mart and other large employers insure their workers and pay at least 80 percent of the premiums so we don't have to,'' the ads said. ''Healthcare for workers, not handouts for Wal-Mart.''

Wal-Mart's Lin said the Berkeley study was ''bogus, biased'' and said the company's health plan is fair.

Because of the company's size, ''we're an easy target,'' she said. ''We were unfairly targeted by these ads.''