New York seeks Wal-Mart records on alleged surveillance

The New York City Comptroller demanded Wal-Mart Stores Inc records dating from 2002 to determine whether the retailer performed illegal surveillance on shareholders who submitted proxy petitions.
In a letter to Wal-Mart Corporate Secretary Thomas Hyde dated June 21, Comptroller William Thompson said he has "a credible basis to believe that certain employees, directors or agents of Wal-Mart have improperly expended corporate assets in connection with conducting surveillance, investigations or 'threat assessments' of proponents of shareholder proposals."
Wal-Mart spokesman John Simley said that since the company received the comptroller's letter late on Friday, it still needed time to read it.
"We will respond to the comptroller as appropriate," Simley said. The comptroller, who is the investment advisor for New York City's pension funds, wants to inspect and copy all books and records referring to the proponent of any shareholder proposal submitted to Wal-Mart between 2002 and the present.
As noted in Thompson's letter, news of the alleged surveillance was first reported on April 4 by the Wall Street Journal. On April 20, Wal-Mart sent shareholders a letter saying it had conducted a "lengthy internal investigation" and denied the surveillance had occurred, Thompson recounted.
However, Wal-Mart's letter included an internal email from January which stated: "Typically, we send this list (of shareholder proposals) in advance so that someone ... can do some preliminary background work on the potential threat assessment for the annual shareholders' meeting," Comptroller Thompson said.
Wal-Mart has said the only information sought or obtained about the proponents of shareholder proposals was acquired through Internet searches and "other readily available public sources and only when the shareholder had a known or suspected history of disrupting meetings or staging disruptive protests."
In March, the retailer said it fired a security worker for what it said were unauthorised recordings of calls to and from a New York Times reporter and the intercepting of text messages.
Thompson said the New York funds, which together hold about 7.6 million shares of the world's largest retailer, wish to inform other shareholders of any information about Wal-Mart's surveillance efforts, to communicate with Wal-Mart directors on such efforts, and to consider whether to submit shareholder proposals about the issues raised by those efforts.