- The Washington Times - Wednesday, April 4, 2007

BENTONVILLE, Ark. (AP) — Wal-Mart’s normally low-profile security efforts were thrust into the limelight yesterday when a fired technician charged he had been part of a large surveillance operation that spied on company workers, critics, vendors and consultants.

The company defended its security practices.

The world’s largest retailer declined to comment on specific charges made by 19-year veteran Bruce Gabbard to the Wall Street Journal in a report published yesterday. Wal-Mart reiterated that it had fired Mr. Gabbard, 44, and his supervisor last month for violating company policy by recording phone calls and intercepting pager messages.

“Like most major corporations, it is our corporate responsibility to have systems in place, including software systems, to monitor threats to our network, intellectual property and our people,” Wal-Mart spokeswoman Sarah Clark said.

Mr. Gabbard was fired after recording phone calls to and from a New York Times reporter and intercepting pager messages.

Wal-Mart made the case public last month and denied Mr. Gabbard’s claims that his actions were the result of pressure from Kenneth Senser, a former senior CIA and FBI official who has headed Wal-Mart’s office of global security since 2003. Another FBI veteran, Joseph Lewis, is head of corporate investigations under Mr. Senser.

Mr. Gabbard did not work for Mr. Senser’s department, although the company and others familiar with the case said Mr. Senser has the authority to work with staff from other divisions in carrying out investigations. Mr. Gabbard has said he felt pressured by Mr. Senser to find information leaks, while Wal-Mart has denied that those conversations cited by Mr. Gabbard took place.

Mr. Gabbard and his former supervisor, Jason Hamilton, who was also fired, have declined repeated requests from the Associated Press to talk about their security activities.

But in a text message to the Associated Press yesterday, Mr. Gabbard confirmed the charges that he was part of a broader surveillance operation approved by the company. The team, the Threat Research and Analysis Group, was a unit of Wal-Mart’s Information Systems Division.

“I can confirm everything in the WSJ story is correct except the glass wall comment, which I didn’t make,” Mr. Gabbard wrote, referring to a description of the Threat Group’s glass-enclosed work area at Wal-Mart’s Bentonville, Ark., headquarters, which the Journal said employees had nicknamed “the Bat Cave.”

Wal-Mart’s Miss Clark noted that the company had self-reported the issue to federal prosecutors to determine if any laws had been broken.

Wal-Mart’s union-backed critics, whom Mr. Gabbard identified as among the surveillance targets, accused the retailer of being “paranoid, childish and desperate.”

“They should stop playing with spy toys and take the criticism of their business model seriously. The success of the company depends on it,” said Nu Wexler, spokesman for Wal-Mart Watch. According to the Wall Street Journal report, the company found personal photos of Mr. Wexler and tracked his plans to attend Wal-Mart’s annual meeting.

Companies increasingly are monitoring their employees, said Larry Ponemon, founder of the Ponemon Institute, a research foundation that focuses on privacy and data-protection practices of companies. But surveilling vendors and consultants is “beyond the realm of what legitimate companies do,” he said.

“[Wal-Mart] seems like an organization that has a culture that doesn’t trust its employees, and it certainly doesn’t trust its vendors or consultants,” said Mr. Ponemon.

Mr. Gabbard told the newspaper that Wal-Mart sent an employee to infiltrate an anti-Wal-Mart group to learn if it was going to protest at the annual shareholders’ meeting and investigated McKinsey & Co. employees it believed leaked a memo about Wal-Mart’s health care plans.

The company also used software programs to read e-mails sent by workers using private e-mail accounts whenever they were hooked up to the Wal-Mart computer network, he said.

Mr. Gabbard also disclosed that Wal-Mart monitored suppliers’ use of Wal-Mart’s computer network, resulting in the discovery of a vendor downloading pornography.

Mr. Ponemon said that most of the surveillance tactics reputedly approved by Wal-Mart appear to be legal, including the dispatch of a spy to an anti-Wal-Mart gathering, since the meeting was public.

Mr. Gabbard told the Journal he recorded the calls to the New York Times reporter on his own, but added many of his activities were approved by Wal-Mart. The Journal said other employees and security firms confirmed parts of his account.

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