MAR. 18 2:34 P.M. ET Wal-Mart Stores Inc. escaped criminal charges but agreed Friday to pay $11 million, a record fine in a civil immigration case, to end a federal probe into its use of illegal immigrants to clean floors at stores in 21 states.
A dozen contractors who actually hired the laborers for work inside stores for the world's largest retailer agreed to plead guilty to criminal immigration charges and together pay an additional $4 million in fines.
"This case breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself," said Michael J. Garcia, assistant secretary for U.S. Immigration and Customs Enforcement.
Wal-Mart received a target letter from a grand jury in Pennsylvania last year and was the subject of an October raid spanning 21 states and 60 stores. The raids led to the arrest of 352 allegedly illegal immigrants.
Wal-Mart, which has 1.2 million domestic workers, had pledged its cooperation in the investigation.
"We are satisfied that this is being settled as a civil matter," Wal-Mart spokeswoman Mona Williams told The Associated Press from the company's Bentonville headquarters. "Despite a long, thorough and high-profile investigation, the government has not charged anyone at Wal-Mart with wrongdoing."
Williams, in a conference call later, made reference to Wal-Mart's "ongoing partnership with the government" and said the company is making a number of changes.
Wal-Mart no longer employs outside contractors to clean its floors. Companies that do contract work for other chores will have stricter rules to follow to win those contracts, and upper management will have to approve contracts of more than $10,000, Williams said.
The probe began in 1998 and ended with the big raids on Oct. 23, 2003.
Among those arrested in the raids were eight people who worked for Wal-Mart itself. Williams said the eight had been hired from floor cleaning companies as Wal-Mart began to clean its floors with its own workers. Williams said those workers had documents that appeared to be valid and said the law prevented the company from challenging those documents.
"We were between a rock and a hard place," she said.
Williams said no executives or mid-level managers knew the contractors had hired illegal immigrants.
Workers picked up in the October raids came from 18 different nations, including 90 from Mexico, 35 from the Czech Republic, 22 from Mongolia and 20 from Brazil, officials said.
An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee record-keeping regulations.
Once investigators moved in, Wal-Mart told its executives to preserve documents. Federal agents didn't wait and took boxes from the office of a mid-level executive at the company's Bentonville headquarters. That executive still works for the company, Williams said.
About a year before the raids, Wal-Mart had started to bring the work in-house. The company said it had used more than 100 third-party contractors to clean more than 700 stores nationwide. At present, the company has 3,703 stores in the United States.
Wal-Mart Stores had sales last year of $288.19 billion.
States in which the raids occurred include: Alabama, Arizona, Arkansas, Connecticut, Delaware, Kentucky, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
Wal-Mart shares fell 39 cents to $51.94 in afternoon trading Friday on the New York Stock Exchange.
Source: http://www.businessweek.com/ap/financialnews/D88TIQ9O1.htm?campaign_id=apn_home_down
A dozen contractors who actually hired the laborers for work inside stores for the world's largest retailer agreed to plead guilty to criminal immigration charges and together pay an additional $4 million in fines.
"This case breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself," said Michael J. Garcia, assistant secretary for U.S. Immigration and Customs Enforcement.
Wal-Mart received a target letter from a grand jury in Pennsylvania last year and was the subject of an October raid spanning 21 states and 60 stores. The raids led to the arrest of 352 allegedly illegal immigrants.
Wal-Mart, which has 1.2 million domestic workers, had pledged its cooperation in the investigation.
"We are satisfied that this is being settled as a civil matter," Wal-Mart spokeswoman Mona Williams told The Associated Press from the company's Bentonville headquarters. "Despite a long, thorough and high-profile investigation, the government has not charged anyone at Wal-Mart with wrongdoing."
Williams, in a conference call later, made reference to Wal-Mart's "ongoing partnership with the government" and said the company is making a number of changes.
Wal-Mart no longer employs outside contractors to clean its floors. Companies that do contract work for other chores will have stricter rules to follow to win those contracts, and upper management will have to approve contracts of more than $10,000, Williams said.
The probe began in 1998 and ended with the big raids on Oct. 23, 2003.
Among those arrested in the raids were eight people who worked for Wal-Mart itself. Williams said the eight had been hired from floor cleaning companies as Wal-Mart began to clean its floors with its own workers. Williams said those workers had documents that appeared to be valid and said the law prevented the company from challenging those documents.
"We were between a rock and a hard place," she said.
Williams said no executives or mid-level managers knew the contractors had hired illegal immigrants.
Workers picked up in the October raids came from 18 different nations, including 90 from Mexico, 35 from the Czech Republic, 22 from Mongolia and 20 from Brazil, officials said.
An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee record-keeping regulations.
Once investigators moved in, Wal-Mart told its executives to preserve documents. Federal agents didn't wait and took boxes from the office of a mid-level executive at the company's Bentonville headquarters. That executive still works for the company, Williams said.
About a year before the raids, Wal-Mart had started to bring the work in-house. The company said it had used more than 100 third-party contractors to clean more than 700 stores nationwide. At present, the company has 3,703 stores in the United States.
Wal-Mart Stores had sales last year of $288.19 billion.
States in which the raids occurred include: Alabama, Arizona, Arkansas, Connecticut, Delaware, Kentucky, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
Wal-Mart shares fell 39 cents to $51.94 in afternoon trading Friday on the New York Stock Exchange.
Source: http://www.businessweek.com/ap/financialnews/D88TIQ9O1.htm?campaign_id=apn_home_down
