Democratic Trend Draws More Wal-Mart Dollars

Former Arkansas Governor and 2008 presidential hopeful Mike Huckabee recently offered some succinct advice to understanding politics in his new role as a contributor and host on FoxNews.

“Follow the money,” he said.

Huckabee wasn’t breaking any news about American politics with that statement, of course, but campaign donation records for the 2008 election cycle offer a pronounced affirmation of it as the “smart money” flows into Democratic coffers.

The political action committees for Wal-Mart Stores Inc. and Tyson Foods Inc. have dramatically altered the direction of their dollars this year with high-stakes issues affecting their companies to be decided by the next Congress and President.

According to the Center for Responsive Politics, the Wal-Mart and Tyson PACs donated 76 percent and 62 percent of their contributions, respectively, to Republican candidates at the federal level in the four election cycles from 2000-2006. The American Trucking Association PAC had an even greater ratio of 82 percent to the GOP.

In 2008, Tyson’s giving has completely flipped, with 61 percent to the Democrats, Wal-Mart’s has narrowed to just 53 percent favoring the GOP and the ATA has made a 40 percent swing toward the Democrats.

This article will examine issues facing both Wal-Mart and its consumers while the Northwest Arkansas Business Journal’s Oct. 20 issue will explore the issues in the 2008 election affecting J.B. Hunt Transport Services Inc. and Tyson.

Wal-Mart has donated $5.5 million through its PAC since 2000, and the $1.67 million donated in 2004 — 68 percent going to the GOP — nearly quadrupled its donations from four years earlier. Through June 30, Wal-Mart has steered $930,200 to federal candidates.

Tyson has donated $657,410 since 2000, including $136,659 so far in 2008.

University of Arkansas assistant professor of political science Andrew Dowdle said the shift is to be expected.

“That ends up representing what the companies’ guess is about who is going to control Congress and the White House,” he said. “When the Democrats had control of Congress in the 1980s, they stepped up efforts to give more money to them through PACs and they were wildly successful.

“Once the Republicans took over [Congress] in 1994, you saw a reversion back to traditional patterns.”

Business giving is much more pragmatic than ideological PACs such as the National Rifle Association or the National Organization for Women.

“Their giving is constant; it’s not affected by who is in control of Congress,” Dowdle said. “Business-oriented PACs are more likely to vary in their giving versus labor PACs who are consistent in their giving to Democratic candidates.”

Indeed, while Wall Street interests are nearly always identified with the GOP, donations from the financial services, insurance and real estate sectors favor the Democrats in 2008.

Though plagued by liquidity and credit issues, Wall Street has found $59.8 million for Democratic causes through Sept. 2, more than double the $24.5 million the party received during all of the 2004 cycle.

The GOP, which received $33.8 million from those sectors in 2004, trails the Democrats in 2008 with $54.5 million.

The CRP database of top donor organizations since 1989 shows 12 of the top 20 are labor unions, which favor Democrats with 90 to 98 percent of their dollars; Goldman Sachs checks in at No. 4 and Citigroup at No. 15.

However, while Citi’s donations have been split 50-50, Goldman Sachs — whose former CEO Henry Paulson is now the Treasury Secretary — has sent 63 percent of its $29.5 million in donations to Democrats.

GOP dissatisfaction with Paulson and his proposal was one of the factors that helped kill the rescue plan in the House of Representatives on Sept. 29.

“Over the course of the last 10 years or so, we’ve seen a more bi-partisan Wall Street,” Dowdle said. “That plays into some of the distance between Wall Street and the GOP. There may be a long-term trend of the Republicans moving in a populist direction.”

Wal-Mart Women

Like “NASCAR Dads” and “Security Moms” before them, the hot swing demographic in 2008 is the “Wal-Mart Mom.”

While candidates try to woo this critical block of voters defined as white women age 25-44 who live in non-urban areas and have a household income of less than $75,000 per year, Wal-Mart as a company has seen its status as a hot-button issue fade this year.

The company, a popular target for criticism from Democratic interests and especially labor unions during most years, was only briefly a factor in the 2008 Democratic primary. Sen. Barack Obama chastised rival Sen. Hillary Clinton during a debate for sitting on Wal-Mart’s board of directors from 1986-92 and made a point of saying he chooses not to shop at the store.

But now, with the economy struggling, more consumers are seeking out Wal-Mart to meet their needs. Surveys by Wal-Mart showed that 91 percent of Wal-Mart mom shoppers have a favorable impression of the company and two-thirds say they are more likely to shop there than six months ago.

“It’s been very telling,” Dowdle said. “Once you reach the general election, the Wal-Mart rhetoric ends up disappearing. Once you end the Democratic primary, you have to appeal to a larger pool of people and the rhetoric gets tamped down.”

Polling data conducted by both Republican and Democratic organizations commissioned by Wal-Mart from the swing states of Florida, Colorado, Ohio, Nevada and Virginia showed that 47 percent of Wal-Mart shoppers favor Obama versus 42 percent for Sen. John McCain.

However, Wal-Mart moms favor McCain by 50-47 and Wal-Mart women by 49-46. Wal-Mart women also have greater favorable/unfavorable views of McCain and running mate Alaska Gov. Sarah Palin. McCain enjoys a +11 favorable rating and Palin a +18. Obama’s favorable rating is +4 and his running mate Sen. Joe Biden’s is +12.

Wal-Mart moms lean conservative, with 41 percent identifying themselves as such and 44 percent as a Republicans compared to 34 percent as Democrats.

Soft, or undecided voters, are also Wal-Mart shoppers according to the company’s polling. In the five swing states surveyed, between 64 percent (Virginia) and 73 percent (Florida) of undecided voters are Wal-Mart shoppers.

Dowdle called Wal-Mart’s release of the polling data “fairly smart public relations.”

“They are reminding candidates that Wal-Mart has bipartisan support,” he said.

At Wal-Mart’s annual shareholder convention in Fayetteville this June, CEO Lee Scott said the company — awash in favorable press for its sustainable movement and $4 generic drug program — had offered itself as a partner to the next President to tackle some of those big issues.

“We are a bipartisan company,” said Wal-Mart spokesman David Tovar. “We give to elected officials and members of Congress from both sides of the aisle, to officials who are looking to partner with us on health care reform, job training, sustainability and so on.

“It’s interesting that our customers are sort of in the middle of the debate about some important issues and the economy is the No. 1 issue. We as a company are seen as someone that is interested in finding solutions to problems that face the country by driving costs down. I think elected officials will want to partner with us going forward to solve these issues.”

With possibly the most transformational labor legislation since the early 20th century pending in Congress, Wal-Mart is going to need all the support it can muster.

Strongly Opposed

The labor movement is a longtime foe of Wal-Mart, which for decades has taken aggressive steps to stop the unionization of its more than 1.5 million associates in North America. It got rid of all its butchers in the United States after one Texas store organized its meat cutters and the company closed down a Canadian store after a successful vote to organize.

Organized labor has declared that its top priority for the next Congress — expected to contain an expanded Democratic majority in both houses — is the passage of the Employee Free Choice Act.

According to the CRP, labor PACs have contributed $47.2 million through Sept. 2 with 91 percent going to Democrats.

The Employee Free Choice Act, also known as the “card check” law, would eliminate the secret ballot for workers to decide upon organizing. Instead, to form a union, only a majority of employees would have to sign a card indicating they want to organize. Critics, which include the U.S. Chamber of Commerce, say this bill will open the door for unions to intimidate fellow workers to sign cards and goes against an essential right of Americans to cast votes in private.

“Wal-Mart is one of many businesses large and small that are opposed to the card check legislation,” Tovar said. “It would take away employees’ fundamental right to a secret ballot whether they want union representation.

“We believe every employee should have a right to make private and informed decision regarding union representation.”

U.S. Representative, who represents Northwest Arkansas John Boozman said he is adamantly opposed to the card check bill.

“The title given to this piece of legislation is misleading,” Boozman wrote. “[It] would strip away the right to a secret ballot of workers, allow union representatives to collect signatures to certify the union, and take away the right of organized workers to vote on their own collectively-bargained contracts.

“Furthermore, the EFCA would automatically mandate union representation if an agreement cannot be reached within ninety days. I am very much opposed to the anti-secret ballot card check union bill.”

The group Wake-Up Walmart has filed a complaint with the Federal Election Commission after news surfaced in the Wall Street Journal that Wal-Mart supervisors were being advised that if Democrats won in November the consequences for Wal-Mart would be adverse.

Tovar couldn’t comment on the ongoing process other than to say the company received a letter from the FEC and is preparing its response.

In examining Wal-Mart’s donations to federal candidates in 2008, a strategy to preserve the possibility of a GOP filibuster to block the bill in the Senate is clear.

Wal-Mart has given just more than half of its contributions to the House of Representatives to Democrats. In the Senate, 83.5 percent of its $140,000 in donations has gone to the GOP, which currently holds 49 seats and can effectively block most legislation with 60 votes required to end a filibuster.

Of the 35 Senate races to be decided Nov. 4, the GOP holds 23 of the seats and Wal-Mart has targeted some of its largest donations to those in the tightest races. Incumbent John Sununu of New Hampshire, locked in a tough battle with Jeanne Shaheen, has received the most with $10,000. That’s the same amount to GOP Sens. Susan Collins of Maine and Gordon Smith of Oregon, who are also in tight races in so-called “blue” states.

Another GOP incumbent in a Democratic state is Sen. Norm Coleman of Minnesota, who is battling former Saturday Night Live writer Al Franken. He received $9,000 from the Wal-Mart PAC.

Arkansas Sens. Blanche Lincoln and Mark Pryor, who are both up for re-election, have received $2,000 and $3,000, respectively, from Wal-Mart.

Not surprisingly, Pryor and Lincoln are two of only four Democratic senators who are not listed as co-sponsors of the “card check” law, according to the AFL-CIO Web site.

Spokeswoman Lisa Ackerman said Sen. Pryor “doesn’t believe [the bill] is perfect” and he will consider amendments “to make it better” if and when it is brought before the Senate.

With down-the-line opposition by the GOP, the Democrats will need to flip nearly half the Republican incumbents for a filibuster-proof majority.

“[Wal-Mart] has a lot of reason to believe they can play effective defense,” Dowdle said.

Next issue: Tyson Foods and J.B. Hunt.