- The Washington Times - Friday, March 18, 2005

Wal-Mart, the target of a federal grand jury investigation into accusations it violated immigration law by using cleaning contractors that employed illegal aliens, agreed yesterday to pay the government an $11 million settlement to close the case.

An accompanying agreement called for 12 contractors named in the probe to pay a $4 million settlement and enter corporate guilty pleas to criminal immigration charges. The Wal-Mart agreement does not require executives, directors or employees of the nation’s largest retailer to admit any wrongdoing.

Department of Homeland Security Assistant Secretary Michael J. Garcia, who heads U.S. Immigration and Customs Enforcement (ICE), called it a “landmark settlement” that represented the “two most significant enforcement actions” since laws against employing illegal aliens were enacted in 1986.

“We plan to use this settlement as a model for future cases and efforts in work site enforcement,” he said.

The Wal-Mart payment was four times larger than any other received by the government in an illegal alien employment case, but for Wal-Mart, which made $289 billion in retail sales last year, it will take about 16 hours of sales to pay it off.

Mr. Garcia, at a press conference at ICE headquarters in Washington, said the agreement also “breaks new ground” because it requires the retailer to create an internal program to ensure future compliance with immigration laws by Wal-Mart and its contractors.

“We should have had better safeguards in place to ensure our contractors were hiring only legal workers,” said Wal-Mart spokeswoman Mona Williams, adding that the company, with 1.2 million employees nationwide, now uses its own workers on the cleaning crews.

Proponents of immigration reform say the government’s failure to severely fine companies that hire illegal aliens has led to an explosion of illegal border crossers over the past decade who are regularly exploited by companies. Opponents argue the migrants take jobs that Americans will not and that are necessary for economic stability.

The grand jury probe began after ICE agents arrested 245 illegal aliens in October working as floor cleaners at 60 Wal-Mart stores in 21 states, including Maryland and Virginia.

U.S. Attorney Thomas A. Marino in Pennsylvania, whose office headed the probe, said Wal-Mart contacted authorities after the aliens were arrested and pledged its cooperation. Mr. Marino said the company vowed full compliance with U.S. immigration laws and he did not believe Wal-Mart knew that 245 of its cleaning crew members were illegal aliens.

But at the time of the October arrests, law-enforcement authorities said some Wal-Mart store managers were aware of the immigration status of the workers but did nothing about it. Grand jury subpoenas were issued for several unnamed executives and the company confirmed that it was advised in a letter that it was the “target” of the investigation.

ICE agents also searched the office of one of Wal-Mart’s executives at its Bentonville, Ark., headquarters.

The October arrests followed investigations in 1998 and 2001 in which Wal-Mart cleaning-crew contractors were shown to have hired illegal aliens. Authorities said recorded conversations of unidentified Wal-Mart executives, managers and contractors showed that immigration violations “continued to occur with direct knowledge by the Wal-Mart corporation.”

Last month, the Labor Department’s Office of Inspector General began an investigation after Wal-Mart was fined $135,540 for child labor law violations in what critics called a “sweetheart deal.” The settlement also required the department to provide 15 days of notice to Wal-Mart’s headquarters before inspecting any store.

Rep. George Miller of California, ranking Democrat on the House Education and the Workforce Committee, said the agreement allowed Wal-Mart time to hide child labor violations and discouraged whistleblowers for fear of retribution.

Wal-Mart violated the Fair Labor Standards Act by allowing 16- and 17-year-old employees in three states to operate heavy machinery.

The $135,540 fine equaled 15 seconds worth of Wal-Mart’s 2004 retail sales of more than $256 billion.

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