MARKETPLACE (Minnesota Public Radio), November 1, 2005, Tuesday

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MARKETPLACE

SHOW: Marketplace 6:30 AM EST SYND

November 1, 2005 Tuesday

HEADLINE: Two members of Congress introducing a bill that will bar the Labor Department from notifying businesses before the feds come poking around

ANCHORS: KAI RYSSDAL

REPORTERS: CHERYL GLASER

BODY:
KAI RYSSDAL, anchor:
This is MARKETPLACE from American Public Media. I'm Kai Ryssdal.
If you stop to think about it, it's kind of like cheating on a test, a company knowing the answers before regulators even ask the questions. Two members of Congress introduced a bill today that will bar the Labor Department from notifying businesses before the feds come poking around. The timing is not entirely coincidental. Just yesterday, the Labor Department got some serious grief from its own inspector general for giving Wal-Mart a heads-up. MARKETPLACE's business editor Cheryl Glaser fills us in.
CHERYL GLASER reporting:
The inspector general said the deal was the result of serious breakdowns in the Labor Department. As part of the arrangement, the department agreed to notify Wal-Mart 15 days before beginning an audit or investigation. If the department found any violations, the giant retailer could avoid penalties if it fixed the problem within 10 days. Wal-Mart lawyers wrote portions of the actual agreement, and the company clinched it as part of a settlement for child labor violations. The fine in that case? 135,000 bucks.
Ms. KATE BRONFENBRENNER (Cornell): That's nothing. That's small potatoes. And to save themselves from major, major fines from having an inspector show up, that's a pretty good deal.
GLASER: Cornell labor expert Kate Bronfenbrenner says this kind of sweetheart deal is not available to other companies, and she says it undermines the whole idea of government oversight.
Ms. BRONFENBRENNER: This is a case where the Labor Department itself said, `Wait a minute. We went too far here. Even we ourselves realize that we can't get away with this.'
Professor GARY CHAISON (Clark University): Wal-Mart's just a magnet for negative publicity. Wal-Mart is not as evil as many of its detractors claim it is, but it certainly isn't as pure and good as it itself claims to be.
GLASER: Gary Chaison is a labor relations expert at Clark University. He points out that the inspector general found the deal didn't break any laws, although it did violate Labor Department rules. For Wal-Mart, the timing is lousy. An unflattering new documentary called "Wal-Mart: The High Cost of Low Price" premieres tonight.
I'm Cheryl Glaser for MARKETPLACE.