Always More Lobbying. Always.

Wal-Mart, Under Fire, Builds a Lobbying Team Befitting a Giant

Posted June 3, 2005 at 6:07pm

After weeks of secretive meetings, retailing behemoth Wal-Mart has tapped Lee Culpepper, the National Restaurant Association’s chief lobbyist, to lead its fast-growing government-affairs outpost in the nation’s capital.

“It’s the No. 1 company in the world and is doing nothing else than running a business and helping folks buy quality products at lower prices,” said Cassidy & Associates’ Jim Hirni, an outside lobbyist for Wal-Mart. “All that gets you in Washington is attacked by everybody else. Wal-Mart has been under constant attack for the past two years, by the unions, its competitors, by those that oppose capitalism. … The office [previously] wasn’t set up to handle that attack.”

Culpepper emerged from a handful of finalists, all of whom had GOP ties, according to those familiar with the process.

Ray Bracy, Wal-Mart’s vice president of federal and international public affairs, worked closely with a search firm, J. Naylor Cope Co. He vetted candidates, conducted interviews and ran the Washington, D.C., office in the interim, traveling frequently between the District and the home office in Bentonville, Ark.

“We needed to be and wanted to establish a presence that was more in common with our prominence in the business environment,” said Bracy, a former executive for Boeing who has been with Wal-Mart Stores Inc. for three years.

Wal-Mart’s former top lobbyist Erik Winborn resigned from the company in early March.

In January, under Winborn, Wal-Mart’s office had three people. Now, with the hire of Culpepper, the office is up to nine people. By the end of summer, Bracy said it will have as many as 14.

Culpepper, Bracy said, has a personality that fits with Wal-Mart’s culture. “Lee is a very down-to-earth guy — what you see is what you get,” he said. “He is honest and has integrity.”

An inner circle including Bracy and three of Wal-Mart’s outside consultants interviewed the finalists. Those lobbyists were Hirni, a conservative Republican who worked for Senate Majority Leader Bill Frist (R-Tenn.); Aubrey Rothrock III, a longtime Patton Boggs lawyer and lobbyist; and moderate Democrat Jarvis Stewart, who runs his own lobbying firm, Stewart Partners.

To keep a lid on who was considered for the job, the outside lobbyists brought the finalists to an out-of-the-way 11th-floor suite in Cassidy’s building on 13th Street Northwest. The consultants did not have veto power or the ability to make an offer.

Hirni said Wal-Mart, which had focused previously on minding its business affairs, now, under Bracy’s leadership and with the hire of Culpepper, has a blueprint in place to make its presence felt in Washington.

Hirni credits Bracy for spurring the turnaround. “Ray was the guy who came in and said, ‘We’re going to be a leader in this town.’ He has put the framework in place for Lee.”

Stewart, a former chief of staff to Rep. Harold Ford Jr. (D-Tenn.), added that Culpepper has ties not only to the Republican leadership but also to the more liberal Congressional black and Hispanic caucuses. Those are key constituents for Wal-Mart, as blacks and Latinos make up a large share of the company’s employees and customers.

Culpepper, Stewart said, is “the type of Republican who understands the value of building consensus on both sides of the aisle.” He added that Culpepper’s learning curve will be short on many of the issues Wal-Mart cares about, including labor and employment policy and health care, because they have also been priorities of the National Restaurant Association.

Culpepper, 42, joined the restaurant trade group in 1993. At the University of Georgia, he was involved in GOP politics. When he came to Washington, Georgia Republicans on Capitol Hill didn’t have openings, and they suggested he apply instead to work with then-Sen. Sam Nunn, a conservative Democrat.

Culpepper later served as legislative director to Rep. Richard Ray (D-Ga.), a former chief of staff for Nunn. Both Nunn and Ray hailed from Perry, Ga., Culpepper’s hometown.

“Because of my background, I’m real comfortable working both sides of the aisle,” Culpepper said.

But Culpepper, who starts his new job next month, doesn’t shy away from partisan politics, either.

In the previous election cycle he was one of several well-connected business lobbyists who joined in taking on the Senate Minority Leader Tom Daschle (D) by actively supporting his opponent, former Rep. John Thune (R-S.D.), who won the race.

According to two sources familiar with Wal-Mart’s business — but not any of the lobbyists who specifically represent the company — the corporation’s top D.C. job comes with fewer perks than many comparable positions. They both said the company was looking to find someone worth a half million dollar annual salary but was willing to pay, at most, $400,000.

Culpepper declined to comment on his compensation package, but he said he took the job because “it’s the opportunity of a lifetime.”

Other sources said Wal-Mart’s top executives pride themselves on frugality. They usually fly coach and bunk same-gender colleagues in shared rooms of budget-rate hotels.

Culpepper said Wal-Mart’s culture fits with his own. “I don’t need to go stay in fancy hotels and drive fancy cars,” he said. “I’m just comfortable I guess being plain.”

Wal-Mart, though, has one of the largest corporate political action committees in any industry sector and has an interest in almost all of the major fights on Capitol Hill. When it comes to mobilizing grass-roots pressure on Members, Wal-Mart has an edge because it has a store in all but a dozen Congressional districts.

Culpepper said he plans to spend much of his time understanding how the company works and getting to know its employees in Arkansas, so he can translate its message to Washington.

Wal-Mart and Culpepper have a tall order. The company faces an employment-discrimination lawsuit, public relations problems and opponents who are happy to pile on charges of corporate misdeeds.

“Unions have declared us enemy No. 1,” Bracy said. “We have to be reputation warriors and have got to set the record straight.”

Wal-Mart has even given rise to Wal-Mart Watch, a new group started with seed money from the Service Employees International Union. It also gets funding from women’s and environmental groups. The watch organization has a dozen D.C.-based employees and a budget in the millions.

In early May, the SEIU sent a letter to members of the Congressional Black Caucus rebuking the lawmakers for their meetings with Wal-Mart. Members of the CBC said they would continue dialog with unions and business interests such as Wal-Mart, despite the pressure.

“I think it’s a critical time for Wal-Mart,” said Tracy Sefl, Wal-Mart Watch’s communications director. “So many things are culminating for them in really a perfect storm of bad PR. They are being investigated by a federal grand jury. Their earnings reports have been disappointing. They are facing lawsuits.”

Culpepper said the challenges helped attract him to the position.

“When I began meeting the people at Wal-Mart, it really made me want to go out and share with people what a great company it is,” he said. “It’s a story that hasn’t been told as effectively as it could have been.”

Indeed, Wal-Mart’s entry into Washington started a bit sheepishly. The company hired its first full-time federal government relations employee, retired Air Force Gen. Norm Lezy, just six years ago. Later it brought on Winborn. Lezy has since retired.

Recent hires in the fast-expanding office include PAC director Sean Bresett, who came from the National Restaurant Association; Tres Bailey, a former aide to then-Rep. Charlie Stenholm (D-Texas); and Mary Elizabeth Tillman, a former staffer for Rep. Howard Coble (R-N.C.).

Bracy said he and Culpepper, who will report to Bracy, will expand the office the Wal-Mart way. “We’ll be very frugal. We won’t have a huge shop, but a lot of talent,” he said.

The company, whose D.C. office has been in leased space in the Venable law firm’s digs across from the MCI Center, is now building out a modest space in the same building.

Bracy said the company is also bolstering its state-level lobbying and must be engaged in the political process, in part, because it paid $4.1 billion in federal taxes last year.

“Taxation,” he said, “should also come with representation.”