Walmart And Katrina--Heroic Or Opportunistic?

Conventional wisdom has been that the true friends of New Orleans and other parts of the Gulf Region during the federal flood and the onslaught of Katrina and Rita were not FEMA or any other organization of the federal government. They include several big-box stores including a much-maligned Walmart. But there's far more to this story than meets the eye. More below the fold.....

When Bush was busy celebrating McCain's 100th birthday and then fiddling as New Orleans drowned, and BushCo's officials were busy sitting on their hands and figuring out how best to blame Louisiana Gov. Blanco and New Orleans Mayor Nagin for the disaster, and relief supplies supposedly had been held up from reaching the area (including Walmart supplies!) by a mean-spirited federal bureaucracy, Walmart has been praised as having been heroically busy engaging in relief activities.

In the first two and a half weeks following Katrina, Wal-Mart shipped 2,500 containers to the region and delivered another 517 containers post-Rita. Wal-Mart also set up satellite links for its stores that lost phone or Internet service so that they could stay connected to headquarters; Wal-Mart stores in areas that were without power for weeks were able to keep generators in stock.

Here are some examples of Walmart's efforts, which are why it's being touted as a place to go for disaster relief:

A Kenner, La., employee used a forklift to knock open a warehouse door to get water for a retirement home.
A convoy of Wal-Mart trucks carrying supplies for victims of Hurricane Katrina waits to enter New Orleans three days after the storm hit.

In Marrero, La., employees allowed police officers to use the store as a headquarters and a sleeping place, as many had lost their homes.

In Waveland, Miss., assistant manager Jessica Lewis ran a bulldozer through her store to collect basics that were not water-damaged, which she then piled in the parking lot and gave away to residents. She also broke into the store's locked pharmacy to supply critical drugs to a hospital.

And according to the Washington Post,

Wal-Mart's response to Katrina -- an unrivaled $20 million in cash donations, ...truckloads of free merchandise, food for 100,000 meals and the promise of a job for every one of its displaced workers -- has turned the chain into an unexpected lifeline for much of the Southeast and earned it near-universal praise....

However, this article says Walmart in essence saw Katrina as an opportunity to improve its image. The article's author notes that a Walmart whose image had rapidly been going downhill hired the Edelman public-relations firm, and that

When Hurricane Katrina hit, the Edelman teams sprang into action. Initially, Wal-Mart's old stingy inclinations surfaced. The company contributed a measly $2 million to relief efforts and indicated that workers at stores shut down by the storm would receive only three days of additional pay. Yet it quickly switched gears. A few days later, on September 5, Lee Scott was on hand to make a $15 million contribution when former Presidents Bush and Clinton announced the launch of their private fundraising campaign for hurricane victims. Both Bush Senior and Clinton (whose wife Hillary, now a U.S. Senator from New York, used to serve as a director of Wal-Mart while she was a corporate lawyer in Arkansas) sang the praises of the company for its cash donation. Clinton also commended Wal-Mart for announcing that employees forced to flee their home because of the hurricane would be rehired at their new location.

The article adds that Walmart, which has made far more in profits than it has donated, has used the needs in the Gulf Region as an opportunity to profit as well as a marketing opportunity and a public relations coup. Several examples are cited--including when

a FEMA official spent some $66,000 on relief supplies during a single shopping trip to a Wal-Mart store in Louisiana.

Says the New York Times,

The $66,000 Wal-Mart bill, the company says, was for a truckload of goods ordered directly from the retailer's headquarters in Bentonville, Ark., but attributed to the La Place store for accounting purposes. A television set and a sofa on the Forest Service list were for out-of-town firefighters to rest between grueling runs...

Walmart, flush with cash from previous corporate welfare, found barely a dent in its gains.

The giant distribution centers in Louisiana and Mississippi that were mobilized to provide aid were-like virtually every one of the company's warehouses-built with government subsidies. The 20-year-old facility in Brookhaven, Mississippi received more than $1.5 million in infrastructure assistance and millions more (the exact amount is unknown) in tax breaks. The newer facilities in Louisiana got much more. The distribution center in Opelousas, which opened in 1999, received an estimated $33 million in tax breaks and infrastructure help. The one in the town of Robert, opened in 2001, enjoyed subsidies of more than $21 million. In other words, each of these two Louisiana distribution centers received more or less the same amount in government assistance as Wal-Mart has spent on hurricane relief. The company is still far ahead of the game-even without considering the rest of the more than $1 billion it has received in development subsidies across the United States.

So, in light of what happened during and after Katrina, Rita, and the federal flood, should Walmart have done any less? No--in fact, don't buy (pun intended) the idea that Walmart was a hero of Katrina. And in fact, Walmart should have done more.