As Wal-Mart stock continues to drop, and Wal-Mart’s CEO’s salary continues to drop, the company is now ensnared in yet another headline controversy, this time involving the former #2 Executive at the retailer, and $500,000 in allegedly misspent funds. This week Wal-Mart admitted that it is being investigated by a federal grand jury and the U.S. Justice Department. Federal prosecutors asked the retailer to hand over documents related to Tom Coughlin, the former Vice Chairman of Wal-Mart’s board of directors, and the man often at CEO Lee Scott’s right hand during the company’s Saturday Morning Meetings. Coughlin was reportedly forced out of the company when Wal-Mart passed the documents over to federal investigators. Media reports have suggested that Coughlin used company funds to engage in anti-union activities. Coughlin reportedly used the money to pay union members who agreed to identify pro-union Wal-Mart workers. Wal-Mart warns its managers to be on the lookout for “salts”, workers who the union has planted in the store to begin union organizing. But the company denies that money was used to pay off union spies. Coughlin left Wal-Mart’s board in March, just as the company was notifying the Securities and Exchange commission that it was providing documents to federal investigators. Wal-Mart went further, and suspended Coughlin’s benefits, costing him as much as $9.8 million in stock options.
Tom Coughlin is the Wal-Mart employee who uttered my all-time favorite company quip. In an article published in the Wal-Mart World company newsletter, Coughlin was quoted as saying: “At Wal-Mart we make dust. Our competitors eat dust.” It now appears that Wal-Mart is making more dust — but this time its Coughlin who is eating Wal-Mart’s dust.