Wal-Mart may settle immigration case
NEW YORK -- Wal-Mart Stores Inc., the world's number one retailer, is in talks with the US Attorney for the Middle District of Pennsylvania to settle an investigation into whether it knowingly hired contractors who used illegal immigrants to clean its stores.
Any settlement payment would not have a material effect on financial results, Arkansas-based Wal-Mart said in a Securities and Exchange Commission filing.
In November, Wal-Mart said it was the target of a federal grand jury probe into possible immigration-law violations in connection with the October arrest of more than 250 janitorial workers employed by outside contractors. They worked for cleaning crews at about 61 Wal-Mart stores.
"In the grand scheme of the size of this company it became more of a headline issue than a real cost issue," said Don Gher, who helps manage about $550 million at Bellevue, Wash.-based Coldstream Capital Management, including about 79,000 Wal-Mart shares. "It's more headline than real substance."
Any company that knowingly hires illegal workers faces fines of as much as $10,000 for each worker, federal officials have said. Wal-Mart wouldn't be liable if the retailer wasn't aware of the practice by companies hired to do the work. Wal-Mart has said it contracts for such janitorial services at more than 700 of its roughly 3,400 US stores.
Wal-Mart spokesman Gus Whitcomb wasn't immediately able to comment. Assistant US attorney Wayne Samuelson did not immediately respond to a voice-mail message left at his Williamsport, Pa., office after hours.
The arrests of the cleaning workers, carried out under the supervision of the Department of Homeland Security's Immigration and Customs Enforcement, came after an audit of Social Security numbers submitted by the workers to determine whether the numbers were used for more than one person.
Wal-Mart uses about 100 companies to provide services such as cleaning floors and parking lots. That frees up Wal-Mart workers to stock shelves and help customers. The decision to hire an outside company depends on how busy the store is and usually rests with the store manager, Wal-Mart has said.
Shares of Wal-Mart rose 23 cents to $53.25 yesterday in New York Stock Exchange composite trading. They have risen less than 1 percent this year. 