WASHINGTON — The Bush administration came under fire from a Connecticut congresswoman Thursday, who accused Labor Secretary Elaine Chao of giving Wal-Mart Stores Inc. “a sweetheart deal” in the settlement of child labor violations.
Rep. Rosa DeLauro, (D, Conn.), speaking during a Labor Appropriations Subcommittee budget hearing, said, “I’m struck by how heavily the agreement relies on the company to do the right thing.”
The administration in February announced a settlement with the Bentonville, Ark.-based discount chain in which Wal-Mart paid a $135,540 fine for incidents involving 85 minors who illegally operated hazardous equipment, such as forklifts and compactors. Twenty-one of the cases occurred in Connecticut. Critics described the fine as too small for a company that generated $284.81 billion in revenue last year.
Democrats and organized labor groups also criticized a provision in the accord giving Wal-Mart 15 days notice before the government conducts future investigations into child labor, minimum wage and overtime violations, and another 10 days to remedy problems before the government would take action.
“This is a very good agreement,” Chao responded, saying the 15-day prior notice period was a means to immediately “stop the offending behavior.”
Chao said other child labor cases involving retailers, including a 1999 pact with Sears, Roebuck & Co. allowed the companies prior notice of investigations. She and other agency officials said advance notice is also needed for companies to gather information about allegations.
However, DeLauro and others said Wal-Mart’s case differs because it doesn’t require the retailer to undertake internal audits of its labor practices to detect child labor violations. An audit creates a paper trail by which a company would be hard-pressed to conceal problems.
Chao didn’t directly respond to DeLauro’s characterization of the settlement as “a sweetheart deal” between the administration and Wal-Mart, a contributor to Republican congressional candidates and to Bush’s two White House campaigns.
The Labor Department’s inspector general is conducting an inquiry into the Wal-Mart settlement.
A Wal-Mart spokesman said: “We’re confident that he will conclude it is fair and reasonable, and that it is the result of arms-length negotiations.…We’re not going to be distracted by the politics of the situation and instead will continue to concentrate on working collaboratively with the Department of Labor.”
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DeLauro’s complaints came as Connecticut Attorney General Richard Blumenthal conducts a separate review of whether Wal-Mart violated Connecticut child labor laws. The violations for which Wal-Mart was fined occurred in New Hampshire and Arkansas, as well as Connecticut, between October 1998 and April 2002.
The debate between DeLauro and Chao was curtailed after the secretary said she had to leave and the Republican-controlled committee adjourned. This was the second time in a week Chao was taken to task for the Wal-Mart agreement. On Tuesday, at a similar appropriations hearing in the Senate, Sen. Tom Harkin (D., Iowa), raised similar, but less pointed, criticism.