Fired Worker Claims Wal-Mart Spy Operation

Updated:2007-04-04 23:59:08

By MARCUS KABEL

Reuters

BENTONVILLE, Arkansas (April 5) - A fired Wal-Mart technician alleged the world's largest retailer has been spying on its workers, critics, vendors and consultants. The company defended its security practices.

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Wal-Mart declined to comment on specific allegations made by 19-year veteran Bruce Gabbard to the Wall Street Journal in a report published Wednesday. Wal-Mart reiterated that it had fired Gabbard, 44, and his supervisor last month for violating company policy by recording phone calls and intercepting pager messages.

"Like most major corporations, it is our corporate responsibility to have systems in place, including software systems, to monitor threats to our network, intellectual property and our people," Wal-Mart spokeswoman Sarah Clark said.

Gabbard was fired after recording phone calls to and from a New York Times reporter and intercepting pager messages.

Wal-Mart made the case public last month and denied Gabbard's claims that his actions were the result of pressure from Kenneth Senser, a former senior CIA and FBI official who has headed Wal-Mart's office of global security since 2003. Another FBI veteran, Joseph Lewis, is head of corporate investigations under Senser.

Gabbard did not work for Senser's department, although the company and others familiar with the case said Senser has the authority to work with staff from other divisions in carrying out investigations. Gabbard has said he felt pressured by Senser to find information leaks, while Wal-Mart has denied that those conversations alleged by Gabbard took place.

Gabbard and his former supervisor, Jason Hamilton, who was also fired, have declined repeated requests from The Associated Press to talk about their security activities.

But in a text message to The Associated Press Wednesday, Gabbard confirmed the allegations that he was part of a broader surveillance operation approved by the company. The team, the Threat Research and Analysis Group, was a unit of Wal-Mart's Information Systems Division.

"I can confirm everything in the WSJ story is correct except the glass wall comment which I didn't make," Gabbard wrote, referring to a description of the Threat Group's glass-enclosed work area at Wal-Mart's Bentonville, Arkansas, headquarters.

Wal-Mart's Clark noted that the company had self-reported the issue to federal prosecutors to determine if any laws had been broken.

Wal-Mart's union-backed critics, whom Gabbard identified as among the surveillance targets, accused the retailer of being "paranoid, childish and desperate."

"They should stop playing with spy toys and take the criticism of their business model seriously. The success of the company depends on it," said Nu Wexler, spokesman for Wal-Mart Watch. According to the Wall Street Journal report, the company found personal photos of Wexler and tracked his plans to attend Wal-Mart's annual meeting.

Gabbard told the newspaper that Wal-Mart sent an employee to infiltrate an anti-Wal-Mart group to learn if it was going to protest at the annual shareholders' meeting and investigated McKinsey & Co. employees it believed leaked a memo about Wal-Mart's health care plans.

The company also used software programs to read e-mails sent by workers using private e-mail accounts whenever they were hooked up to the Wal-Mart computer network, he said.

Gabbard told the Journal he recorded the calls to the New York Times reporter on his own, but added many of his activities were approved by Wal-Mart. The Journal said other employees and security firms confirmed parts of his account.

Clark said she could not comment on Gabbard's claim of blanket approval because "that's a pretty broad statement. We wouldn't be able to comment on that without knowing the details he's referring to."

Clark said the Threat Research group is no longer operating in the same manner that it did prior to the discovery of the unauthorized recording of telephone conversations.

AP Business Writer Anne D'Innocenzio in New York contributed to this report.