Wal-Mart: Lobbying Against Strengthening America’s Port Security
WAL-MART IS AMERICA’S LARGEST IMPORTER OF PORT CONTAINERS
For 2005, the year for which the most recent figures are available, Wal-Mart led the Journal of Commerce's annual Top 100 Importers rankings. Wal-Mart also led the list in 2004 and 2003. In 2005, Wal-Mart imported the equivalent of 695,000 20-foot equivalent container units (TEU). [Journal of Commerce, May 29, 2006 and Journal of Commerce, May 31, 2004]
The latest and most comprehensive figures available for comparing imports by various companies are from 2004. In 2004, as measured in 20-foot-equivalent container units (or TEUs), Wal-Mart was larger than Target, Sears/K-Mart and COSTCO combined (Journal of Commerce and the Port Import/Export Reporting Service).
Figures for 2004
| 1. Wal-Mart Stores | 576,000
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| 2. The Home Depot | 301,200
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| 3. Target Corp | 202,700
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| 4. Sears/K-Mart | 186,000
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| 5. Dole Food | 171,300
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| 6. Chiquita Brands Intl | 115,600
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| 7. Ikea Intl. | 100,000
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| 8. Lowes Cos. | 100,000
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| 9. Heineken USA | 83,400
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| 10. Costco Wholesale | 66,400
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[All Business, Oct 28, 2005]
A WAL-MART CONTAINER ARRIVES IN THE U.S. AT A RATE OF 1 EVERY 45 SECONDS.
One of every 25 containers shipped to the United States in 2005 was destined for Wal-Mart. At that ratio, Wal-Mart’s imports accounted for 695,118 cargo containers that year, with an average of one arriving to a U.S. port every 45 seconds. [Forbes, 7/5/06]
SINCE 9/11, AMERICA’S PORT’S REMAIN VULNERABLE BY ONLY INSPECTING ABOUT 5 TO 6 PERCENT OF CARGO CONTAINERS COMING INTO OUR PORTS
- Incredibly, even after 9/11, our nation’s ports remain vulnerable since only a small fraction of containers imported into the United States are actually scanned. As Senator Robert Menendez stated publicly last year, “only 5 percent of the containers passing through our ports are scanned.” [Sen. Robert Menendez, April 25, 2006]
- Even at some of the busiest ports in America, for example Long Beach and Los Angeles Harbors, only about 6% of the containers they carry are selected to be scanned on the docks with X-ray machines and hand-held radiation detectors, officials say. Then about 6% of those are selected to be unloaded for inspection at customs facilities. [Los Angeles Times, September 11, 2006]
MEMBERS OF CONGRESS AGREE THE RISK TO PORT SECURITY COULD LEAD TO THE ‘NIGHTMARE’ SCENARIO
- U.S. Rep. Jerrold Nadler: “All it takes is one atomic or radiological bomb to make 9/11 look like a firecracker [and] to bring commerce to a total halt for weeks or months while every ship is searched by hand because we don't have in place the means to scan every container. That is what this motion [to mandate 100% scanning] is about. If we really want to make this country safer, we must demand that before any container is put on a ship bound for the United States it must be scanned electronically in the foreign port.” [Jerrold Nadler, floor debate, 5/4/06]
- U.S. Rep. Ed Markey: “Now, why is [100 percent scanning of cargo] important? It is important because of all of the unsecured nuclear material in the former Soviet Union that al Qaeda can purchase, take to a port in Europe, in Asia, in Africa, and then, with a piece of paper and an ID, waive on a 10,000 or 20,000 or 30,000 pound container and, with the nuclear bomb inside of it, send that ship, that container, right to a port in the United States, to New York, to Boston, to California, to any other city in America, without being screened.” [Ed Markey, floor debate, 5/4/06]
- Sen. Charles Schumer: Concluding his comments on adopting technology used at one Hong Kong port which scans 100 percent of containers, Schumer said, “My nightmare, Mr. Chairman, has been, ever since 9/11, that somebody somehow smuggles a nuclear weapon into one of our cities -- not just a dirty bomb, but a real nuclear weapon. … It's worth a little extra effort and a few extra dollars to make sure that doesn't happen.” [Charles Schumer, Press Conference, 4/25/06]
AND PORT SECURITY EXPERTS HAVE OUTLINED THE THREAT OF UNSCANNED CONTAINERS
- "We're living on borrowed time," said Jerry Hultin, president of New York's Polytechnic University and a former Clinton administration Navy undersecretary who studies port security. "The ports have become a very appealing target." [Knight Ridder Washington Bureau, February 23, 2006]
- “’In terms of maritime security, have people done things? Yes,’ said retired Coast Guard Cmdr. Stephen E. Flynn, a consultant and expert on port security. ‘But are we keeping pace with terrorists' capabilities and the potential consequences five years after 9/11? The answer is no.’” “A key vulnerability, Flynn and others say, remains the ubiquitous cargo container, the mainstay of international commerce and a potential Trojan horse in the age of terrorism.” [Los Angeles Times, September 11, 2006]
- “In August 2006, the Rand Corporation released a report concluding that ‘a nuclear explosion at the Port of Long Beach could kill 60,000 people immediately, expose 150,000 more to radiation and cause 10 times – 10 times the economic loss of the September 11th attacks.’” [Los Angeles Times, September 11, 2006]
IGNORING THIS THREAT, WAL-MART LOBBIES MEMBERS OF CONGRESS TO RESIST TIGHTENING PORT SECURITY
Even with the tragedy of 9/11 still fresh in our minds, Wal-Mart and its retail lobby group, the Retail Industry Leaders Association (RILA), are lobbying Members of Congress to oppose 100% scanning of port containers.
- The Wall Street Journal, in a “Washington Wire” blurb March 24, 2006 made it clear: “Wal-Mart resists efforts in Congress to dramatically tighten port security in wake of Dubai-ports furor. The company argues examining all containers or even a fixed percentage of them could impede shipping and boost costs.” [Wall Street Journal, 3/24/06]
- “Wal-Mart and other big businesses have been lobbying against 100-percent scanning, alleging that it will slow their massive import operations.” [US Fed News, 4/26/06]
- The Retail Industry Leaders Association (RILA), since the attacks of Sept. 11, 2001, have consistently opposed new maritime and port security rules. Their mantra is: “Security requirements should not become a barrier to trade.”[AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- RILA sent a letter to all members of the U.S. House of Representatives opposing Congress’s attempt to mandate “100 percent scanning.” [Retail Industry Leaders Association, press release, 1/8/07]
WAL-MART USES RILA AS AN ANTI-SECURITY LOBBYING ORGANIZATION
Wal-Mart is a key member of the Washington, D.C. lobbyist group the Retail Industry Leaders Association (RILA).
- Finally, Wal-Mart, RILA and two Wal-Mart-connected law firms—Sandler Travis and Strasburger & Price—hold seats on Customs’ Commercial operations Advisory Committee (CoAC), a group of retailers, shippers and lobbyists who ensure that national security demands do not obscure the need for efficiency in the supply chain. RILA’s and Wal-Mart’s seats on the committee and subcommittees give them a chance to weaken supply chain security measures such as the Maritime Transportation Security Act, which they were unable to defeat in Congress. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
WAL-MART AND RILA: PUTTING PROFITS BEFORE AMERICAN SECURITY
- The following is RILA’s public warning to Congress from March 2006 that it should not put protection of our ports ahead of profits: “[M]ove cautiously and with careful deliberation before considering any new legislation related to the security of our nation’s seaports or commercial cargo….Congress should be careful to avoid measures that would harm global supply chain efficiency or unnecessarily delay the movement of food and cargo.” [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- RILA boasted in its 2005 lobbying report to Wal-Mart and other members about its “continued industry leadership in opposition to ill-advised and onerous port security measures (i.e., cargo fees, increased physical inspections).” In fact, beating back meaningful port security measures topped RILA’s agenda. [The New Yorker, 6/19/06]
- RILA’s top trade lobbyist on post-Sept. 11 safeguards in a 2002 Washington Post story: “We are the industry driving the U.S. economy… Any increased delays or costs would really impact” retailers such as Wal-Mart. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- RILA is a founder of the Waterfront Coalition, another retail industry lobby group dedicated to improving “the productivity, efficiency and through-put” of U.S. ports. RILA and the Waterfront Coalition collaborated in 2005 on a container transportation policy paper that runs to nearly 50 pages but says nothing—not one word—about supply-chain security. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- RILA warned Congress in 2004 that x-rays of shipping containers at U.S. ports would “cause major delays” for their goods, although a 100-percent container x-ray system in Hong Kong’s busy port won praise from security experts. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
MEANWHILE PORT SECURITY EXPERTS DISPUTE THE POTENTIAL COST TO
WAL-MART
According to Stephen Flynn, retired Commandant of the U.S. Coast Guard and senior fellow on national security Council on Foreign Relations: “The total cost of third party compliance inspections, deploying ‘smart’ containers, and operating a cargo scanning system such as the one being piloted in Hong Kong [100 percent scanning] likely reach $50 to $100 per container depending on the number of containers an importer has and the complexity of its supply chain. … Can industry afford the cost of this regime? Even if the final price tag came in at $100 additional cost per container, it would raise the average price of cargo moved by Wal-Mart or Target by only .2 percent. [Congressional Quarterly, March 28, 2006]
WAL-MART USES MONEY AND INFLUENCE TO PRESSURE POLITICIANS TO OPPOSE STRENGTHING PORT SECURITY
Wal-Mart’s and RILA’s recent investments in members of Congress with power over port and supply-chain security issues are massive and tilt heavily to Republicans.
- As of 2006, Wal-Mart had given $191,500 to current House Homeland Security Committee members since 2000—all but $9,500 of that since the September 2001 attacks. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- In the 109th Congress, eighteen of the committee’s nineteen Republican members took in $173,000—90 percent of the total—and four of the committee’s fourteen Democrats collected $18,500. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- In the past eight years, Wal-Mart’s Washington Political Action Committee put more than $360,000 into current members of the powerful House Ways and Means Committee. In the 109th Congress, twenty-three of the committee’s 24 Republicans took Wal-Mart’s money—82 percent of the total—compared to only eight of the committee’s 17 Democrats. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- Wal-Mart also has spent $63,000 on current members of the Senate Committee on Homeland Security and Governmental Affairs in the past eight years—more than two-thirds of that since September 2001. Ninety-six percent of Wal-Mart’s spending went to the committee’s Republican members. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- The Bush administration released its 2007 homeland security budget proposal at the height of the Dubai Ports World debate, eliminating grants to improve port security and increasing the C-TPAT budget by a mere 1.3 percent—a cut in real terms from the program’s 2006 budget request. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
WAL-MART USES LOBBYISTS WHO HAVE CLOSE TIES TO THE DEPARTMENT OF HOMELAND SECURITY
- Robert Bonner, former top Homeland Security official, went to work for one of Wal-Mart’s Washington lobbyists in 2005. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- Asa Hutchinson left his job as under secretary of the Department of Homeland Security to lobby for companies on security issues at Venable, one of Washington’s oldest lobbying law firms and another of Wal-Mart’s Washington partners. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- Hutchinson was connected to Wal-Mart long before he took the nation’s No. 2 security post. In his brief stint as congressman from Arkansas’ Third Congressional District—home to Bentonville and Wal-Mart’s global headquarters—Hutchinson had taken more than $12,500 from Wal-Mart’s Political Action Committee, and at least $7,000 more from top Wal-Mart executives and Walton family heirs. Wal-Mart’s previous CEO, David Glass, has been a long-time patron to Hutchinson. [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
- Hutchinson’s brief tenure at the Department of Homeland Security saw the creation of Customs’ voluntary supply-chain security program and a controversial decision not to bring criminal charges against Wal-Mart for its abuse of illegal immigrants hired to clean its stores. The workers’ lawyer said, “They generally worked seven nights a week, 364 days a year, and they were often locked in the stores.” Wal-Mart instead was fined $11 million. Wal-Mart even denied being fined, calling the payment “voluntary.” [AFL-CIO, Unchecked How Wal-Mart Uses Its Might to Block Port Security,” April 2006]
Bottom Line: Wal-Mart Wins, Americans Lose
One of the greatest threats America faces is a terrorist group slipping a bomb on container through an American port uninspected. Corporations, like Wal-Mart, should know better than to fight against strengthening America’s port security.
