Monday, March 13, 2006

NEW YORK — With retail giant Wal-Mart under fire to improve its labor and health care policies, one Democrat with deep ties to the company — Sen. Hillary Rodham Clinton — has started feeling her share of the political heat.

Mrs. Clinton served on Wal-Mart’s board of directors for six years when her husband was governor of Arkansas. The Rose Law Firm, where she was a partner, handled many of the Arkansas-based company’s legal affairs.

She had kind words for Wal-Mart as recently as 2004, when she told an audience at the convention of the National Retail Federation that her time on the board “was a great experience in every respect.”

But in recent months, as the company has become a target for Democratic activists, she has largely steered clear of any mention of Wal-Mart. Late last year, Mrs. Clinton’s re-election campaign returned a $5,000 contribution from Wal-Mart, citing “serious differences with current company practices.”

As Mrs. Clinton sheds her Arkansas past and considers a 2008 presidential run, the Wal-Mart issue presents a dilemma: how to reconcile the political demands she faces today with her history at a company on which many American consumers depend but many Democratic activists revile.

“The interesting question is not just Hillary Clinton’s history at Wal-Mart, but why it’s delicate for her to talk about Wal-Mart,” said Charles Fishman, author of “The Wal-Mart Effect,” a book about the company’s impact on the national economy. “Plenty of Democrats denounce Wal-Mart, but there are also plenty of people who need it, love it and rely on it.”

When Wal-Mart’s founder, Sam Walton, tapped Mrs. Clinton to be the company’s first female board member in 1986, Wal-Mart was a fraction of its current size, with $11.9 billion in net sales.

Today, Wal-Mart is the world’s largest retailer and largest private employer, with more than $312 billion in sales last year and 1.3 million employees in the U.S. alone. But the company has drawn intense scrutiny for its labor practices, from its wages and health care coverage to its resistance to unionization.

Throughout the 1980s, both Bill and Hillary Clinton nurtured relationships with Mr. Walton, who was a conservative Republican and by far Arkansas’ most influential businessman.

The Clintons also benefited financially from Wal-Mart. Mrs. Clinton was paid $18,000 each year she served on the board, plus $1,500 for each meeting she attended.

By 1993, she had accumulated at least $100,000 in Wal-Mart stock, according to Mr. Clinton’s federal financial disclosure that year. The Clintons also flew free on Wal-Mart corporate planes 14 times in 1990 and 1991 in preparation for Mr. Clinton’s 1992 presidential bid.

Bob Ortega, author of “In Sam We Trust,” a history of Wal-Mart, said Mrs. Clinton used her position to prod Mr. Walton to hire an outside firm to track the company’s progress in hiring women and minorities.

But critics say there was little tangible change at Wal-Mart during Mrs. Clinton’s tenure, despite her apparent prodding.

“There’s no evidence she did anything to improve the status of women or make it a very different place in ways Mrs. Clinton’s Democratic base would care about,” said Liza Featherstone, author of “Selling Women Short: The Landmark Battle for Workers’ Rights at Wal-Mart.”

But Mrs. Clinton, who as first lady proposed a wide-ranging but ultimately unsuccessful plan to reshape the nation’s health care system, has had little to say about Wal-Mart’s health care record.

“That was a long time ago,” she said recently when asked whether she had done anything about the company’s health care policies while she served on its board.

Mrs. Clinton and her advisers continue to insist that Wal-Mart has fundamentally changed since her time on the board. “Wal-Mart was a different company then, and the country was not facing the same health care challenges we face today,” communications director Lorraine Voles said.

cAssociated Press Writer Marcus Kabel contributed to this report.

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