business news in context, analysis with attitude

The Wall Street Journal this morning reports in a page one story that Wal-Mart has sued Bruce Gabbard – the security employee who was fired for surreptitiously taping phone calls between company executives and a reporter for the New York Times - accusing him of leaking information to the Journal last week about the extent of its corporate espionage activities. A judge granted a temporary restraining order barring Gabbard from disclosing confidential information.

However, this morning’s Journal contains some remarkable tidbits, such as:

• Gabbard was responsible for taping board of directors meetings at Wal-Mart after CEO Lee Scott was excused from the room.

• Wal-Mart had a “secret plan,” called “Project Red,” which considered spinning off the company’s Sam’s Club warehouse stores. “So secret was Project Red that its reports were encrypted, and consultants who worked on it last fall toiled in a locked office that was swept for electronic bugs,” the Journal writes. “But this weekend, it turned out that computer hard drives Wal-Mart believes contain Project Red information” were in Gabbard’s car.

• Wal-Mart’s board reportedly debated – and ultimately rejected – a proposal that would have had the company settling a multimillion-dollar gender bias lawsuit.

But the general focus of the Journal story is not so much on the information that Gabbard had access to, but how he got that access…and the implication that he may just be the most visible cog in a much more sophisticated and complex operation.
KC's View:
Where is Rose Mary Woods when you need her? (And if you are too young to get the relevance of this joke, keep it to yourself…)

We were amazed by the number of emails we received last week saying that Wal-Mart is only doing what a lot of companies do, and that it shouldn’t be held to a higher standard.

It is true that there shouldn’t be a double standard, but we are, quite frankly, appalled by what appears to be acceptable in today’s business climate. And the measure of how atrocious some of this behavior is can be seen when the activities are exposed to daylight. In the shadows, where ethics and transparency seem less important, executives may be able to convince themselves that such behavior is acceptable. But when on page one of the Wall Street Journal, it doesn’t look all that good. In fact, it looks shameful.