?That Dog Won?t Hunt? (MJ Miller Commentary)

In Wal-Mart country, Sam Walton and others of his era often used sayings such as “that dog won’t hunt” when declaring a business idea futile or unfounded. That same phrase may best describe a recent report linking former vice chairman Tom Coughlin to bogus expense vouchers and covert union activities.

Expense Vouchers. Wal-Mart’s expense account process has electronic checkpoints that are difficult to bypass, especially if the person is not computer-savvy. System controls are used to ensure only the supervising manager electronically approves an employee’s expense voucher. This process mimics the food chain.

A vice president could not approve a vice chairman’s voucher.

Reimbursements are either electronic deposits or paper checks. Never gift cards. The controls for issuing gift cards internally are in place to prevent theft since gift cards are the same as cash.

Before electronic vouchers, the manual process had control points to prevent fraud. Was it foolproof? Probably not, but a minimum of four people would knowingly have to take part in the scam: the originator, the superior who approves the expense, an administrative assistant and an accounts payable clerk.

As Wal-Mart CEO Lee Scott recently told reporters, “…it’s the people in the home office that have time to gossip.” Submitting personal items on a business voucher would not be a secret for long in that environment.

Merchandise Ps and Qs. Suppliers often provide free samples of new products to Wal-Mart. Those who charge for samples electronically invoice the company through the accounts payable system. The invoices are internally processed to trigger payment. Manual invoices used to be allowed, typically for capital expenditures, seldom for merchandise. Of course, home shipments would cut out the payable process entirely, but several people are needed to make this happen: the requester, the buyer, the buyer’s assistant, the supplier’s sales rep and shipping manager. As with expense voucher fraud, too many people must maintain silence for this type of theft to work.

Confidants. A 30-something entry-level vice president — whose employment history includes working in a store and being a systems programmer and who is relatively new to a vice president’s position — is not a typical confidant of a seasoned vice chairman. Say it was a district executive who started with the company 31 years ago and it may be plausible, but not if he was born 31 years ago.

The Hunt Club. Just as attending cultural events is normal for city-based firms, business meetings that include hunting trips are common within the small-town company. One hopes they will eventually evolve to activities enjoyed by all participants, but this pastime is one Mr. Sam instilled and may not stop anytime soon.

The expenses related to dogs, kennels and hunting should not be viewed as unusual. Furthermore, any vice president who is responsible for selling merchandise would appreciate an executive testing a product. Imagine the internal sales potential of an executive endorsed item. Employees are customers, too.

Co-workers, Friends, the Union. Most people who know Coughlin would agree that his personality traits generate either admiration or disdain. There is not much middle ground. Coughlin is aggressively astute, and he is shrewd when it comes to business decisions and practices.

Coughlin could be the poster child for anti-unionism, but to imply that he paid union staffers is stretching logic. Why would a high-level executive willingly open an opportunity for blackmail by paying off a union staffer? Unionizing Wal-Mart is a hot topic. Information about executive clandestine involvement would be leaked immediately.

Noticeably, the UFCW is eerily quiet about the current events.

The Feds Are Coming. Maybe the feds are here. Ken Senser worked in the government intelligence community, but he changed careers last year to become Wal-Mart’s vice president of Global Security. After Senser quietly entered the retailer’s ranks, word on the street was that all telephone conversations and computer screens were being digitally recorded, and e-mails monitored for any violation of company rules. Some believe other ex-feds may have followed Senser to Wal-Mart.

The inconsistencies of the story make it difficult to believe. Someone is weaving a tale, but he failed to fully understand the intricate workings within those blue pod walls.

(MJ Miller is a freelance writer who worked 12 years for Wal-Mart Stores Inc. E-mail her at [email protected].)