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HOW MODERN MONEY WORKS — Economist Alan Nasser presents a slashing indictment of the vicious nature of finance capitalism; The Bio-Social Facts of American Capitalism: David Price excavates the racist anthropology of Earnest Hooten and his government allies; Is Zero-Tolerance Policing Worth More Chokehold Deaths? Martha Rosenberg and Robert Wilbur assay the deadly legacy of the Broken Windows theory of criminology; Gaming the White Man’s Money: Louis Proyect offers a short history of tribal casinos; Death by Incarceration: Troy Thomas reports from inside prison on the cruelty of life without parole sentences. Plus: Jeffrey St. Clair on how the murder of Michael Brown got lost in the media coverage; JoAnn Wypijewski on class warfare from Martinsburg to Ferguson; Mike Whitney on the coming stock market crash; Chris Floyd on DC’s Insane Clown Posse; Lee Ballinger on the warped nostalgia for the Alamo; and Nathaniel St. Clair on “Boyhood.”
American Oligarchs & the Influence They Wield

Meet the Waltons

by DAVID ROSEN

The Walton family, descendants of Wal-Mart founder Sam Walton, is American oligarchs.  Wal-Mart generates an estimated $400 billion in annual sales (U.S. sales over $274 billion, international over $135 billion), with its current stock valuation at approximately $300 billion.  The family control 50.1 percent of the company’s stock.  Based on Forbes‘ data, the Waltons are the richest family in the U.S., their collective personal wealth estimated at over $130 billion.Four Walton family members are currently in the top 10 of Forbes’ list of the richest Americans: Christy Walton ($35.4 bil), Jim Walton ($33.8 bil), Alice Walton ($33.5 bil) and Samuel Walton ($33.3 bil).

Like other plutocrats, the Walton clan lives high on the hog, with grand estates, luxury cars and major art collections.  They maintain the Walton Family Foundation that, according to the Foundation Center, had an asset value of $2 billion as of December 2012; the Gates Foundation had assets of $37.2 billion. Family members also support local, Bentonville, AK, charities, including the Crystal Bridge Museum of American Art as well as colleges and universities in Arkansas and local initiatives in Arkansas, Kansas, Missouri, Oklahoma and Texas.

But more revealing then their charitable activities is how the Waltons’ vast wealth has been used to influence critical public issues, most notably charter schools.  Walton contributions are made through: Wal-Mart employees and the company’s political action committee (PAC); through lobbying payments; and the largess of individual family members.

According to OpenSecrets, the Wal-Mart PAC dolled out $3.2 million in 2012, with money going to both Republicans and Democrats.  Total lobbying expenditures in 2013 were $7.3 million and the largest payment was to the Podesta Group, co-founded by an Obama and Clinton operative, John Podesta. The Waltons also back two key conservative think tanks, the American Enterprise Institute and the Thomas Fordham Institute.

The Walton clan and foundation have made a special commitment – not unlike the Gates – to bankroll the charter school movement.  The way each philanthropy uses it’s respective wealth to privatize public education reveals the difference between an oligarch and a plutocrat.

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Sam Walton was a self-made man, confirmation of the great American myth – anyone can succeed.   Born in 1918, he was the son of a small farmer near Kingfisher, OK, who gave up farming for a more profitable career as a farm mortgage broker.  The family was prosperous enough for Walton to graduate high school and attend the University of Missouri during the Great Depression, holding part-time jobs to make ends meet.  During WW-II, he served in the U.S. Army Intelligence Corps, reaching the rank of captain.

The post-war recovery – and family money – enabled Walton to succeed.  His first retail shop, a Ben Franklin variety store franchise in Newport, AK, was bankrolled by a $20,000 loan from his father-in-law and $5,000 from personal savings; the investment would be equal to about $300,000 in 2013 dollars.

In 1951, after he lost the first store, he opened a second franchise shop in Bentonville, renaming it the Walton’s Five and Dime.  This was followed in ’52 by his first non-franchise store in Fayetteville.  In 1961, he became the majority owner of the Bank of Bentonville, since renamed the Arvest Bank.  In ‘62, he opened the first Wal-Mart store in Rogers, AK, a stepping-stone to becoming the world’s largest retail operation, with stores in Argentina, Brazil, Canada, China, Germany, Mexico, Puerto Rico, South Korea and the UK.  (It remains unclear if Wal-Mart’s $230 million Mexican bribery scandal in 2011 is but the tip of the iceberg.)  Walton died in 1992. 

Walton’s business philosophy was simple and successful.  Go down-market and reach the largest consumer public possible.  To do this, he evolved a bulk purchasing strategy, thus forcing producers to drop their cost-of-goods so he could offer bargain prices, thus maximizing sales.  Concomitantly, he aggressively pushed an anti-union policy, employing low-wage workers with no benefits and keeping stores open later than most competitors, especially during the Christmas season.  The logic of this business philosophy was acutely expressed during the 2013 Christmas season when local Wal-Mart employees organized food-drives for themselves.

Walton’s remarkable success marks the intersection of two phenomena, a particular individual and an historical moment.  He   seemed to have a knack for retailing, the buying and selling of commercial products.  His trajectory shadows that of Richard Sears, who in 1886 began selling watches at a train station in Minnesota.  From this would emerge his legendary new-media innovation, an 80-page mail-order catalog.  In 1925, the first Sears and Roebuck first retail store opened and in 1973 they proclaimed the dominance by building, Chicago’s the Sears Tower, then the largest building in the U.S.; in 2009, it was renamed the Willis Tower.

Walton’s children inherited his massive business operation and vast wealth.  One of the slight-of-hand tricks that these 2nd-generation Walton plutocrats used was to pay little taxes in through what is known as a ”Jackie O.” trust.  It’s a scheme to pass on money tax-free to heirs.  According to Bloomberg’s Zachary Milder: “With a big enough spread between the actual performance and the IRS rate, a Jackie O. trust can theoretically save so much tax that it leaves a family richer than if it hadn’t given a dime to charity.”

* * *

The Waltons effectively leverage their enormous wealth for maximum influence.  In “Distorting Our Democracy,” the website, Walmart 1 Percent, reports that from the 2000 to the 2012 elections, the Waltons and the Walmart PAC spent nearly $17 million in federal elections; some $11.6 million went to GOP candidates and committees, including $900,000 to super PACs in the 2012, of which $400,000 went to Restore Our Future, Mitt Romney’s super PAC.

It also found that the Waltons have worked closely with the American Legislative Exchange Council (ALEC) promoting anti-immigrations legislation (in Arizona), voter-ID laws and the “Stand Your Ground” law.  It found that “from 2006-2010 alone, they gave more than $500,000 to the campaigns of ALEC alumni currently serving in Congress.”

They’ve supported candidates opposed to environmental regulations, civil rights, women’s rights (including abortion rights) and gay rights.  Wal-Mart is the nation’s largest seller of guns and ammunition and, from 2005 through 2012, its PAC donated approximately $1.7 million to NRA-endorsed candidates.

It also found that “since 2000, members of the Walton family have spent at least $24 million funding politicians, political action committees, and ballot issues at the state and local level that favor their corporate approach to school reform.”  In particularly, Walmart 1 Percent estimates “the family has dropped more than $1 billion toward efforts to ‘infuse competitive pressure into America’s K-12 education system.’”  Their efforts have been directed toward promoting charter schools, school vouchers, teaching to the test, breaking unions, merit pay for teachers and opposing early childhood programs.

A recent New York Times investigative report noted, “the size of the Walton’s foundation’s wallet allows it to exert an outsize influence on education policy as well as on which schools flourish and which are forced to fold.”  Among the education privatization groups it supports are: the Charter School Growth Fund ($101.6 mil); Teach for America ($67.2 mil); KIPP, the largest charter school networks ($58.7 mil); the Alliance for School Choice, a advocate for private school vouchers ($18.4 mil); GreatSchools Inc., an online information site ($15.5 mil); and the charter advocacy group, StudentsFirst ($8 mil).

The Waltons are quintessential oligarchs, not simply enormously wealthy plutocrats, but superrich advocates strategically employing their wealth and influence to advance an anti-democratic, rightwing agenda.

David Rosen can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com