...and the hits just keep on coming

WASHINGTON (AP) -- A sharply divided Supreme Court on Monday upheld the constitutionality of displaying the Ten Commandments on government land, but drew the line on displays inside courthouses, saying they violated the doctrine of separation of church and state.

Sending dual signals in ruling on this issue for the first time in a quarter-century, the high court said that displays of the Ten Commandments -- like in their own courtroom frieze -- are not inherently unconstitutional. But each exhibit demands scrutiny to determine whether it goes too far in amounting to a governmental promotion of religion, the court said in a case involving Kentucky courthouse exhibits.

In effect, the court said it was taking the position that issues of Ten Commandments displays in courthouses should be resolved on a case-by-case basis.

In that 5-4 ruling and another decision involving the positioning of a 6-foot granite monument of the Ten Commandments on the grounds of the Texas Capitol, Justice Sandra Day O'Connor was the swing vote. The second ruling, likewise, was by a 5-4 margin.

Justice Antonin Scalia released a stinging dissent in the courthouse case, declaring, "What distinguishes the rule of law from the dictatorship of a shifting Supreme Court majority is the absolutely indispensable requirement that judicial opinions be grounded in consistently applied principle."

The justices voting on the prevailing side in the Kentucky case left themselves legal wiggle room, saying that some displays inside courthouses would be permissible if they're portrayed neutrally in order to honor the nation's legal history.

But framed copies in two Kentucky courthouses went too far in endorsing religion, the court held. Those courthouse displays are unconstitutional, the justices said, because their religious content is overemphasized.

In contrast, a 6-foot-granite monument on the grounds of the Texas Capitol -- one of 17 historical displays on the 22-acre lot -- was determined to be a legitimate tribute to the nation's legal and religious history.

"Of course, the Ten Commandments are religious -- they were so viewed at their inception and so remain. The monument therefore has religious significance," Chief Justice William H. Rehnquist wrote for the majority in the case involving the display outside the state capitol of Texas.

"Simply having religious content or promoting a message consistent with a religious doctrine does not run afoul of the Establishment clause," he said.

Rehnquist was joined in his opinion by Scalia, and justices Anthony Kennedy and Clarence Thomas. Breyer filed a separate opinion concurring in the result.

The rulings were the court's first major statement on the Ten Commandments since 1980, when justices barred their display in public schools. But the high court's split verdict leaves somewhat unsettled the role of religion in American society, a question that has become a flashpoint in U.S. politics.

"While the court correctly rejects the challenge to the Ten Commandments monument on the Texas Capitol grounds, a more fundamental rethinking of our Establishment Clause jurisprudence remains in order," Thomas wrote in a separate opinion.

Dissenting in the Texas case, Justice John Paul Stevens argued the display was an improper government endorsement of religion. Stevens noted in large letters the monument proclaims 'I AM the LORD thy God."'

"The sole function of the monument on the grounds of Texas' State Capitol is to display the full text of once version of the Ten Commandments," Stevens wrote.

"The monument is not a work of art and does not refer to any event in the history of the state," Stevens wrote. "The message transmitted by Texas' chosen display is quite plain: This state endorses the divine code of the Judeo-Christian God."

Justices O'Connor, David H. Souter and Ruth Bader Ginsburg also dissented.

Other cases

Also Monday, the Supreme Court rejected appeals from two journalists who have refused to testify before a grand jury about the leak of an undercover CIA officer's identity.

The cases asked the court to revisit an issue that it last dealt with more than 30 years ago -- whether reporters can be jailed or fined for refusing to identify their sources.

The justices' intervention had been sought by 34 states and many news groups, all arguing that confidentiality is important in news gathering.

Time magazine's Matthew Cooper and The New York Times' Judith Miller, who filed the appeals, face up to 18 months in jail for refusing to reveal sources as part of an investigation into who divulged the name of CIA officer Valerie Plame.

In another ruling from the court, justices ruled that Internet file-sharing services will be held responsible if they intend for their customers to use software primarily to swap songs and movies illegally.

The court rejected warnings that lawsuits will stunt growth of cool tech gadgets such as the next iPod.

The unanimous decision sends the case back to lower court, which had ruled in favor of file-sharing services Grokster Ltd. and StreamCast Networks Inc. on the grounds that the companies couldn't be sued. The justices said there was enough evidence of unlawful intent for the case to go to trial.

File-sharing services shouldn't get a free pass on bad behavior, justices said.

The Supreme Court also Monday overturned a ruling that required cable operators to open up their high-speed Internet lines to rivals.

The decision is a big victory for the Federal Communications Commission and major telecommunications companies, including Charter Communications, Time Warner Cable and SBC Communications.

On the losing side are small Internet service providers, including Earthlink, consumer rights groups, and a host of local governments.

At issue in the case, FCC v. Brand X, was whether cable operators should be required under federal law to lease their cable lines to competitors, much the way local phone companies were forced years ago to open up their lines to long-distance phone companies.

Court's ruling OKed land grab for business like Target, Home Depot, CostCo, Bed Bath & Beyond
June 24, 2005: 2:43 PM EDT
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - The Supreme Court may have just delivered an early Christmas gift to the nation's biggest retailers by its ruling Thursday allowing governments to take private land for business development.

Retailers such as Target, Home Depot and Bed, Bath & Beyond  have thus far managed to keep the "eminent domain" issue under the radar -- and sidestep a prickly public relations problem -- even as these companies continue to expand their footprint into more urban residential areas where prime retail space isn't always easily found.

Eminent domain is a legal principle that allows the government to take private property for a "public use," such as a school or roads and bridges, in exchange for just compensation.

Local governments have increasingly expanded the scope of public use to include commercial entities such as shopping malls or independent retail stores. Critics of the process maintain that local governments are too quick to invoke eminent domain on behalf of big retailers because of the potential for tax revenue generation and job creation.

The Supreme Court's decision Thursday clarified that local governments may seize people's homes and businesses -- even against their will -- for private and public economic development.

The ruling would seem to offer new opportunities to retailers. However, some industry watchers caution that with Thursday's decision thrusting the eminent domain issue into the national spotlight, companies using eminent domain risk a very public backlash.

Craig Johnson, president of retail consulting group Customer Growth Partners, said that retailers shouldn't interpret the high court's decision to be a green light to aggressively expand even into those neighborhoods where a big-box presence is unwelcome.

"Even with the Supreme Court's decision potentially in their favor, smart retailers would rather go into communities wearing a white hat rather than a black one," said Johnson.

The appropriate move for companies would be to selectively use eminent domain as a last resort, he said, not as a first course of action. "I think companies have learned a few lessons from Wal-Mart's public relations struggles," he said.

According to industry watchers, retailers face a different type of expansion problem on the East Coast versus the West Coast.

"On the West Coast, land availability takes a back seat to labor union issues and that's why Wal-Mart has consistently run into problems in California," Johnson said. "On the East Coast, because of population density it's very hard to get big open space and the zoning is more restrictive," Johnson said.

Industry consultant George Whalin said that's one reason that Target, the No. 2 retailer behind Wal-Mart,  has resorted to using eminent domain to set up shop in a few East Coast markets.

Target and Wal-Mart could not immediately be reached for comment.

"Wal-Mart and Target have both been criticized for their eminent domain use," said Burt Flickinger, a consultant with the Strategic Resources Group.

Meanwhile, eminent domain opponents called the high court ruling a "big blow for small businesses."

"It's crazy to think about replacing existing successful small businesses with other businesses," said Adrian Moore, vice president of Los Angeles-based Reason Public Policy Institute, a non-profit organization opposed to eminent domain.

"There are many, many instances where we've found that the cities that agreed to eminent domain use not only destroyed local businesses but the tax revenue that the local government had hoped to generate did not come to pass," Moore said.

But at least one retail industry analyst sees things a little differently.

"Expanding for big box store is a challenge, especially in the Northeast. Therefore, retailers will have to devise a strategy for using eminent domain," said Candace Corlett, retail analyst with WSL Strategic nRetail.

"Local communities may oppose Wal-Mart and Target coming to their area but as consumers, they also want to shop at these stores and they complain when they don't have these stores nearby," she said. "The fact is that shoppers ultimately vote with their dollars and retailers are very well aware of that."

House not for sale

Can the government force you to sell your house in the name of new development? January 6, 2005: 12:30 PM EST By Sarah Max, CNN/Money staff writer

Salem, Ore. (CNN/Money) – The neighborhood of Fort Trumbull in New London, Conn., isn't on the National Register of Historic Places. But it is historically significant to the people who live there. Wilhelmina Dery, 87, was born in her century-old house near the Thames River. Her son, Matt, and daughter-in-law, Suzanne, live next door with their teenage son, Andrew. Among their most precious possessions: the garden planted by Matt's grandmother, and the kitchen doorway where they've charted Andrew's height over the years. The Derys' neighbors have their own, similar stories. Bill Von Winkle bought his first building in the neighborhood 20 years ago, and went to work making sandwiches in the downstairs deli and renovating the upstairs apartments. Susette Kelo meticulously restored her small pink Victorian house. So when the New London Economic Development Corporation, a non-profit organization appointed by the city, approached about 70 property owners in Fort Trumbull about selling their homes to make space for a luxury hotel, condominiums and office space, these and a handful of other owners declined. Their property, they said, is not for sale. In November 2000, however, the city invoked eminent domain – a government right to seize property for public use – and sent out condemnation notices to owners refusing to sell. The city planned to pay the owners fair market value, take possession of the buildings and tear them down. According to Daniel Krisch, one of the attorney's representing New London and its economic development arm, the city had several good reasons for razing the well-kept middle class neighborhood to replace it with a new, private development. Krisch contends that the new development would create jobs, boost tax revenue, improve the city's infrastructure and provide public access to the river. It's for the benefit of the entire community, he said. Taking for the greater good In February, the Institute for Justice, a libertarian public interest law firm that is representing seven Fort Trumbull owners for free, will argue in the U.S. Supreme Court that the city of New London has abused its use of eminent domain. The case, Kelo v. City of New London, will decide whether the U.S. Constitution's definition of "public use" includes private developments like condos and casinos. The decision will have implications through the country. The Institute for Justice argues that displacing property owners for private development is not legal. "The Constitution says [eminent domain] should be used for a public use -- a road, a court house, a military base. Not a Wal-Mart," said Scott Bullock, a senior attorney with the institute. According to a study of court papers and published accounts covering a five-year period, the institute found more than 10,000 examples of property being condemned under eminent domain for the benefit of private parties. The city of New London and other cities using eminent domain in the interest of urban renewal argue that such private projects are for public use, even if the public only benefits indirectly. "This is a tool that is important to local governments because it allows them to revitalize areas that otherwise would not get revitalized," said Tom Grundhoefer, general counsel for the League of Minnesota Cities, which is filing a "friend of the court" brief on behalf of New London. Cities want to attract new businesses and developers to their urban centers rather than contributing to sprawl by building in the suburbs, he said. But they can only do so if they can get existing owners to sell. "Often times there might be one or two owners who will not go along with the voluntary sales situation," he said. "The question comes up, 'Do you stop the entire project because one or two won't sell, or do you use eminent domain to encourage that activity?'" Encourage isn't a word that Joy and Carl Gamble of Norwood, Ohio associate with eminent domain. The retirees are scheduled to be evicted from their home of 35 years in early February to make way for Rookwood Exchange, a $125 million development with offices, shops, housing and restaurants. In this case, the city of Norwood voted to exercise eminent domain after a study -- which was funded by the developers of Rookwood Exchange -- determined that the Gamble's neighborhood is blighted. "Blight 50 years ago entailed serious problems and neglect," said Bullock, citing cracked sidewalks and weeds as examples of blight given in the study. Now, he said, blight is just an excuse for the government to take land from one party and give it to another. "The easy story is to wrap the Gambles in the American flag and say, 'It's not right,'" said Richard Tranter, an attorney representing Rookwood Partners, adding that it's not unusual for cities to ask developers to pay for studies and other expenses related to development. "But it's not that easy." Norwood is a doughnut hole in the middle of Cincinnati that is about to declare a fiscal emergency, according to Tranter. What's more, the Gamble's neighborhood is cut off from the rest of the city by a major freeway and roads feeding into that freeway. "With the exception of the Gambles, every resident is saying they want to get out of the neighborhood," he said. "An 80-year old blind widow called it a blessing." Tranter says the developer has signed contracts with 65 residents to buy their property for no less than 25 percent above market value, pending the outcome of the Gamble's appeal. Still, the Gambles don't want to sell for any price. "We're very proud of this house. It's extremely well built," said Joy. "We raised our children here. All of our memories are here," she said. "We don't want to move, especially for a shopping mall."

...first medical marijuana now THIS:

By HOPE YEN
The Associated Press
Thursday, June 23, 2005; 6:29 PM

WASHINGTON -- Cities may bulldoze people's homes to make way for shopping malls or other private development, a divided Supreme Court ruled Thursday, giving local governments broad power to seize private property to generate tax revenue.

In a scathing dissent, Justice Sandra Day O'Connor said the decision bowed to the rich and powerful at the expense of middle-class Americans.

The 5-4 decision means that homeowners will have more limited rights. Still, legal experts said they didn't expect a rush to claim homes.

"The message of the case to cities is yes, you can use eminent domain, but you better be careful and conduct hearings," said Thomas Merrill, a Columbia law professor specializing in property rights.

The closely watched case involving New London, Conn., homeowners was one of six decisions issued Thursday as the court neared the end of its term. The justices are scheduled to release their final six rulings, including one on the constitutionality of Ten Commandments displays on public property, on Monday.

Justice John Paul Stevens, writing for the majority, said New London could pursue private development under the Fifth Amendment, which allows governments to take private property if the land is for public use, since the project the city has in mind promises to bring more jobs and revenue.

"Promoting economic development is a traditional and long accepted function of government," Stevens wrote, adding that local officials are better positioned than federal judges to decide what's best for a community.

He was joined in his opinion by other members of the court's liberal wing _ David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer, as well as Reagan appointee Justice Anthony Kennedy, in noting that states are free to pass additional protections if they see fit.

The four-member liberal bloc typically has favored greater deference to cities, which historically have used the takings power for urban renewal projects.

At least eight states _ Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington _ forbid the use of eminent domain for economic development unless it is to eliminate blight. Other states either expressly allow a taking for private economic purposes or have not spoken clearly to the question.

In dissent, O'Connor criticized the majority for abandoning the conservative principle of individual property rights and handing "disproportionate influence and power" to the well-heeled.

"The specter of condemnation hangs over all property," O'Connor wrote. "Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

Connecticut resident Susette Kelo and others in the lawsuit pledged to continue their fight. Nationwide, more than 10,000 properties were threatened or condemned in recent years, according to the Institute for Justice, a Washington public interest law firm representing the New London homeowners.

"It's a little shocking to believe you can lose your home in this country," said resident Bill Von Winkle, who said he would keep fighting the bulldozers in his working-class neighborhood. "I won't be going anywhere. Not my house. This is definitely not the last word."

But Connecticut state Rep. Ernest Hewett, who as a city council member approved the development, said, "I am charged with doing what's best for the 26,000 people that live in New London. That to me was enacting the eminent domain process designed to revitalize a city ... with nowhere to go."

New London once was a center for the whaling industry and later became a manufacturing hub. More recently the city has suffered the kind of economic woes afflicting urban areas across the country, with losses of residents and jobs.

City officials envision a commercial development including a riverfront hotel, health club and offices that would attract tourists to the Thames riverfront, complementing an adjoining Pfizer Corp. research center and a proposed Coast Guard museum.

New London was backed in its appeal by the National League of Cities, which argued that a city's eminent domain power was critical to spurring urban renewal with development projects such Baltimore's Inner Harbor and Kansas City's Kansas Speedway.

Under the ruling, residents still will be entitled to "just compensation" for their homes as provided under the Fifth Amendment. However, Kelo and the other homeowners had refused to move at any price, calling it an unjustified taking of their property.

The case is Kelo et al v. City of New London, 04-108.

Rumor is afoot that Hollywood is taking another crack at the Broadcast Flag on Capitol Hill, this time by sneaking a Flag provision into an appropriations bill before the Senate.

If what we hear is true, the provision will be introduced before a subcommittee tomorrow and before the full appropriations committee on Thursday. That gives us 48 hours to stop it.

EFF's action alert, geared to people with senators on the committee, is here. Public Knowledge also provides a number of excellent talking points in an email urging readers to phone their senators:

* There has been No Debate in the Appropriations Committee over the Broadcast Flag.

* Broadcast Flag is Not Narrow: There is no "narrow" way to implement the broadcast flag scheme because it necessarily puts the FCC in the role of gatekeeper, having to approve and certify every technology that might carry DTV -- computers, cellphones, gameboys, etc. As proof of the broad scope of the flag, when petitioned to exempt lawful uses of digital television, the FCC declined saying "practical and legal difficulties of determining which types of broadcast content merit protection from indiscriminate redistribution and which do not."

* Causes Consumer Confusion and Will Slow DTV Transition: At a time when Congress is concerned about making television sets obsolete at the end of the DTV transition, the flag would similarly render obsolete much consumer equipment because commonly used devices will not work together unless all use the same copy protection technology. The flag will not help the transition to DTV, and indeed might harm it because it makes consumers' TVs less functional than before.

* Limits Fair Use: As the May 11, 2005 Congressional Research Service report noted, the flag will prevent important fair uses, like the ability of teachers to engage in distance learning and the ability of individuals to email fair use portions of works to themselves and others.

* Not about P2P: The infringement associated with Revenge of the Sith and other movies that have appeared online has absolutely nothing to do with the flag. Rather, the flag is about protecting supposedly "free" over the air digital television. MPAA provided no evidence that this content was being pirated nor would it be anytime in the near future.

* Content Already Shown in HD with NO PROTECTION: In contrast to the argument that broadcasters won't put on "high value" content, we note that most prime time television is already broadcast in HDTV, without protection. Viacom threatened in 2002 to withhold programming, but did not do so and is now one of the leading producers of HDTV.

* Court Spoke to the Merits: The D.C. Circuit's broadcast flag decision was not merely "procedural." In ruling that the FCC did not have the authority to impose a broadcast flag scheme, the Court was ruling on the scheme's merits -- namely, that it is so far reaching in its scope that it would permit the FCC, in the words of one judge at oral argument, to regulate "washing machines."

Wal-Mart recently launched a multi million-dollar advertising campaign to silence its critics and hide the truth about the company.  The following are the REAL facts about Wal-Mart.

Below the Poverty Level. In 2002, the federal poverty line for a family of three was $15,020 (Department of Health and Human Services.) Using the above estimates, a vast majority of Wal-Mart employees would be eligible for government programs. By paying wages that are below the poverty line and therefore forcing employees to rely on government welfare programs, Wal-Mart shifts costs to taxpayers, communities, and responsible employers.

Determining Real Wal-Mart Wages. Wal-Mart does not report an average wage covering all of its hourly employees. The average supermarket employee makes $10.35 per hour (Charles Williams, “Supermarket Sweepstakes: Traditional Grocery Chains Mull Responses to Wal-Mart’s Growing Dominance,” The Post and Courier (Charleston, SC) 16E, 11/10,03). Sales clerks at Wal-Mart, on the other hand, made only $8.23 per hour on average, or $13,861 per year, in 2001. Some estimate that average “associate” salaries range from $7.50 to $8.50 per hour (“Unaffordable Health Care, Low Wages, Sexual Discrimination – the Wal-Mart Way of Life,” http://www.ufcw.org/workplace..., 1/26/04). With an average on-the-clock workweek of 32 hours, many workers take home less than $1,000 per month (Doug Dority, “The People’s Campaign: Justice@Wal-Mart,” Air Line Pilot 55, 2/03). Even the higher estimate of a $13,861 annual salary fell below the 2001 federal poverty line of $14,630 for a family of three (Anthony Bianco and Wendy Zellner, “Is Wal-Mart Too Powerful?” Business Week 100, 10/6/03).

This payroll analysis also reports that sales associates, which is by far the most common job classification, earn on average $8.23 per hour for annual wages of $13,861. This is about 15 percent less than the annual average of $16,202. Based on these figures, sales associates work approximately 32 hours per week on average. Cashiers, which is the second most common job, earn approximately $7.92 for annual wages of $11,948. This is about 26 percent less than the annual average of $16,202. Based on these figures, cashiers work approximately 29 hours per week on average. Combined, sales associates and cashiers account for more than a third of all Wal-Mart jobs (Drogin 2003).

Wal-Mart and family budgets. The federal poverty line is used to determine eligibility for government programs and is based solely on food costs and the share of income families spent on food in the 1950's. Therefore, the federal poverty line underestimates the current cost to live. “Basic family budget” estimates are more accurate by reflecting the income a family needs for a safe and decent standard of living. “Basic family budgets” calculate the costs for every major budget item, including housing, childcare, healthcare, food, transportation, and taxes. Using government data, the Economic Policy Institute (EPI) estimated that the national median family budget in the United States for a two person family (one-parent and one-child) in 1999 was $23,705 (“Poverty and Family Budgets” online at www.epinet.org).

Wal-Mart’s average annual wages clearly fall below this basic threshold. In fact, Wal-Mart’s average wages would not even adequately support a two-person family in rural North Dakota, which was the most inexpensive place to live in with a basic family budget of $17,067.

High Turnover Results in Lower Wages. The Company reports that its U.S. turnover in 2002 was 45%. Based on these figures, 500,000 U.S. employees will leave the Company in 2003, and 540,000 new employees will need to be hired just to maintain the existing size of their labor force. In past years, turnover was even more extreme — in 1999, Company turnover was 70 percent (“Is Wal-Mart Too Powerful?”, Business Week, 10/6/03).

Managers forced to lower wage costs by deleting hours or forcing employees to work off the clock. Joyce Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart “threatened to write up managers if they didn’t bring the payroll in low enough.” Depositions in wage and hour lawsuits reveal that company headquarters leaned on management to keep their labor costs at 8% of sales or less, and managers in turn leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheets.

Off the clock work. In Oregon, 400 employees in 27 stores sued the company for unpaid, off-the-clock overtime. In their suit, the workers explained that managers would delete hours from their time records and tell employees to clean the store after they clocked out. In December 2002, a jury found in favor of the workers (Associated Press, “Federal Jury Finds Wal-Mart Guilty in Overtime Pay Case,” Chicago Tribune, Business 3, 12/20/03).

Union retail wages raise community living standards. A study by the Institute of Women’s Policy Research (IWPR) of government-collected industry data reports that unionized retail food employees earn on average a third more in wages than their non-union counterparts (“The Benefits of Unionization for Workers In The Retail Food Industry,” IWPR 2002). In fact, cashiers on average earned 52% more.

One southern California study showed that in 1999 an area union retail worker earned on average $15.57 an hour and a total annual pay of $32,386-- not even including benefits. Taking benefits into account, a union retail worker earned an additional $2.68 per hour in employer health care and pension contributions for a total average of $18.25 an hour or $37,960 annually ( “The Impact of Big Box Stores in S. California,” Dr. Marlon Boarnet).

According to data released by the Bureau of Labor Statistics in January 2004, union workers earn median weekly salaries of $760, compared to non-union workers’ median weekly salaries of $599 – a difference of over 26%. In the supermarket industry, the union difference is even more pronounced, with union members making 30% more than non-union workers. (Bureau of Labor Statistics, Department of Labor, "Union Members in 2003," Table 1 (January 21, 2004)

The world’s largest and richest retailer can afford wage increases. Wal-Mart could pay each employee a dollar more per hour if it increased its prices by a half-penny per dollar. For instance, a $2.00 pair of socks would then cost $2.01. This minimal increase would annually add up to $1,800 for each employee (UFCW estimate using the Drogin 2003 study).

Wal-Mart Health Care

Lack of Health Care Coverage for Employees. More than 60% of Wal-Mart's employees - 600,000 people - are not covered by the company’s health plan. Fewer than half – between 41 and 46% – of Wal-Mart’s employees are insured by the company’s health care plan, compared nationally to 66% of employees at large firms like Wal-Mart who receive health benefits from their employer (AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured, at 1 (October 2003).

• Employees must pay $218 per month for family health care coverage from Wal-Mart.
  
• In Wal-Mart's employee health plan, deductibles range from $350 to as high as $3,000 for family coverage.
  
• Employee premiums increased in 2002 by 30% for all of the Wal-Mart employee health plan options.
  
• Wal-Mart further restricted the number of associates eligible for coverage by requiring fulltime associates to work 6 months before becoming eligible to purchase Wal-Mart health insurance. The company also raised the number of hours new employees must work from 28 to 34 hours per week to be eligible to purchase the expensive health care coverage.

Below Industry Standards. Wal-Mart’s spending on health care for its employees falls well below industry and national employer-spending averages. A Harvard Business School case study on Wal-Mart found that, in 2002, Wal-Mart spent an average of $3,500 per employee. By comparison, the average spending per employee in the wholesale/retailing sector was $4,800. For U.S. employers in general, the average was $5,600 per employee (Panjak Ghemawat, Ken Mark, and Stephen Bradley, “Wal-Mart Stores in 2003,” case study, Harvard Business School, 1/30/04).

Far fewer Wal-Mart employees elect to take coverage than the national average. For all firms offering health-care coverage, on average, 67% of their employees are being covered by their health insurance plan (Kaiser/HRET Employee Health Benefits Survey 2002). In contrast, based on the Company figures, only about 47% of Wal-Mart’s employees are covered by the Company’s health care plan-- which is nearly a third less than the national average (“Basic Health being abused, some say,” AP, 3/28/03).

According to a Company spokesperson, Wal-Mart makes the health care coverage available to around three out of four employees, which is near the national average (“Basic Health being abused, some say,” AP, 3/28/03, Kaiser/HRET Employee Health Benefits Survey 2002).

However, compared to the national average, far fewer eligible Wal-Mart employees elect to pay for the overly expensive and inadequate health care coverage. On average, for firms that offer health care coverage, 84% of eligible employees elect to take coverage (Kaiser/HRET Employee Health Benefits Survey 2002). In Wal-Mart, according to a Company spokesperson, only 62% of employees elect to take coverage— which is a quarter less than the national average (“Basic Health being abused, some say,” AP, 3/28/03).

Wal-Mart's health plan is too expensive for the large majority of its employees. Fewer Wal-Mart employees elect health care coverage than the national average, largely because the Company plan is too expensive. Employees must pay on average $208 per month for family health care coverage from Wal-Mart, which is one-fifth of an average employee’s wages. In Wal-Mart's employee medical plan, deductibles range from $350 for single coverage to as high as $3,000 for family coverage (Wal-Mart Summary Plan Description [SPD] 1/2004).

Wal-Mart has had a decade of premium increases that have been more than double the rate of health care inflation. According to the Bureau of Labor Statistics, the measure of medical inflation in the CPI has increased just under 50% since 1993 while at the same time the premiums paid by Wal-Mart associates have increased from 104% to 244% depending on the rate (Bureau of Labor Statistics and Wal-Mart plan documents).

Wal-Mart’s health care premiums increased by 30% just in 2002, nearly triple the national average increase of 11%. In 2003, Wal-Mart’s health care premiums rose another 18% which was once again higher than the national average increase (Wal-Mart's Open Enrollment Bulletin 9/01 and 9/02, Kaiser/HRET 2002 and 2003).

In 1999, employees paid 36% of the costs. In 2001, the employee burden rose to 42%. Nationally, large-firm employees pay on average 16% of the premium for health insurance. Unionized grocery workers typically pay nothing (AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured, 10/03).

Wal-Mart employees who utilize their health care confront high deductibles and co-payments. A single worker could end up spending around $6,400 out-of-pocket – about 45% of her annual full-time salary – before seeing a single benefit from the health plan (AFL-CIO, Wal-Mart: An Example of Why Workers Remain Uninsured and Underinsured, 10/03).

Wal-Mart continues to further restrict health care coverage eligibility. In 2002, Wal-Mart further restricted the number of associates eligible for coverage by requiring full-time associates to work 6 months before becoming eligible to purchase Wal-Mart health insurance. Part-time workers need to wait two years for health care insurance. Moreover, part-time workers are ineligible for dependent coverage. In 2002, the Company raised the bar for new full-time workers from 28 to 34 hours per week to be eligible to purchase the health care coverage (Open Enrollment Bulletin 9/01).

Wal-Mart does not offer quality health care coverage. Wal-Mart is currently a defendant in a class-action lawsuit by female employees who challenged the Company’s policy of excluding contraceptive coverage in it its health insurance plan. The Wall Street Journal reports that four out of five employees in the U.S. covered by self-funded health plans get contraceptive-drug benefits (“Wal-Mart Cost-Cutting Finds Big Target in Health Benefits”, Wall Street Journal, 9/30/03). As part of the lawsuit a Company spokesperson explained in September 2002 that, “[Wal-Mart’s health insurance plan] is oriented toward catastrophic coverage, with very little in the way of preventative benefits, regardless of gender,” (Daily Labor Report, 9-9-02).

Wal-Mart’s shifts its insurance costs directly to communities. More than a half-million Wal-Mart workers are forced to get health insurance coverage from the government or through spouses’ plans-- or live without any health insurance. Company spokesperson Sarah Clark explains that only 50% of its employees are covered by Wal-Mart’s company plan with 40% of its employees, or approximately 400,000 employees, getting coverage through government programs such as Medicare, other employers, spouses, or parents (“Wal-Mart's impact on job market in question,” Gainesville Sun, 7/7/2003). This leaves 10% of their employees, or approximately 100,000 workers, not being covered by any health care and likely relying on expensive emergency room care to receive service.

By not offering adequate health care coverage, Wal-Mart shifts the cost of health care to taxpayers and other employers which drives up the health costs for all of us. In fact in February 2003, the state of Washington, which faces significant budget deficits, found that Wal-Mart had the most employees enrolled in their state Basic Health Care plan. This government program is intended to provide health care for the working poor. This led State Rep. Steve Conway to ask, “Why should they [Wal-Mart] be shifting their health-care responsibilities to the state?" (“Basic Health being abused, some say,” AP 3/28/03).

Union Members Receive Better Health Care. For UFCW members, approximately 80% of members working in supermarkets are covered by fully employer-paid health benefit plans. Sixty% of union workers have medical care benefits on the job, compared to only 44% of non-union workers. (Bureau of Labor Statistics, Department of Labor, “Employee Benefits in Private Industry, 2003,” Table 1 (September 17, 2003).

Wal-Mart could easily provide affordable health care for employees. One% of the Walton family wealth would provide adequate health care for all employees.

Wal-Mart Non-Health Care Benefits

Wal-Mart fails to provide a secure retirement benefit for its employees. Wal-Mart sponsors two retirement plans — a profit sharing plan and 401(k) plan — neither of which guarantee workers a fixed monthly pension benefit. In addition, the Company has shifted risks to employees by concentrating in its own stock.

Wal-Mart shares little of their profits with employees. Wal-Mart has stated that it has contributed around 4 percent of its earnings to its combined profit sharing and 401(k) accounts. For 2003, this would come out to a $302 a year contribution per employee or a $25 a month contribution, or around $6 a week, or around 17 cents an hour for a full time employee.

Betting your retirement on one stock is a dangerous policy. Contrary to the notion that Wal-Mart stock is the ticket to becoming a millionaire, the reality is that Wal-Mart’s stock price goes up and down like other companies. In fact, from January 2000 to January 2003, the average adjusted share price of Wal-Mart’s stock lost nearly a fifth of its value (Standard & Poors Historical Stock Prices). By being concentrated in one security, employees retirement plans are subject to the whims of one stock rather than having the safety of a diversified portfolio.

Wal-Mart is against employee input about their own retirement plans. Wal-Mart opposed a Senate bill that would have given employees more say over their retirement plans. Introduced in the wake of the Enron debacle, where workers lost pensions because of excessive investment in Enron stock, this legislation would help employees diversify their 401(k) and profit-sharing investments.

In keeping with the Bentonville-knows-best mentality, Wal-Mart simply mouths standard employer arguments, such as the cost of communicating choices, while boasting of its world leadership in information technology. “We have 650,000 associates out of about a million in the country that participate in our [401(k)] plan,” said one Wal-Mart spokesperson. “We have about 11,000 in Bentonville, but the rest of our people are in stores -- 2,700, across the country. The cost of election would outweigh the benefits" (“Wal-Mart opposes legislation on stock,” Arkansas Gazette, 4/3/02).

Union members receive better non-health care benefits. For instance, 72% of union workers have guaranteed pensions with defined benefits, while only 15% of non-union workers enjoy such retirement security. (Bureau of Labor Statistics, Department of Labor, “Employee Benefits in Private Industry, 2003,” Table 1, 9/17/03).

Wal-Mart Anti-Union Policy

In the last few years, well over 100 unfair labor practice charges have been lodged against Wal-Mart throughout the country, with 43 charges filed in 2002 alone. Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board. (International Confederation of Free Trade Unions (ICFTU), Internationally Recognised Core Labour Standards in the United States: Report for the WTO General Council Review of the Trade Policies of the United States (Geneva, January 14-16, 2004).

In 2000, when a small meatcutting department successfully organized a union at a Wal-Mart store in Texas, Wal-Mart responded a week later by announcing the phase-out of its in-store meatcutting company-wide. Pan Demetrakakes, "Is Wal-Mart Wrapped in Union Phobia?" Food & Packaging 76 (August 1, 2003). Rather than comply, Wal-Mart is appealing this decision. (Dan Kasler, "Labor Dispute Has Historical Precedent," Scripps Howard News Service (November 3, 2003).

Wal-Mart has issued "A Manager's Toolbox to Remaining Union Free," which provides managers with lists of warning signs that workers might be organizing, including "frequent meetings at associates' homes" and "associates who are never seen together start talking or associating with each other." The "Toolbox" gives managers a hotline to call so that company specialists can respond rapidly and head off any attempt by employees to organize. (Wal-Mart, A Manager’s Toolbox to Remaining Union Free at 20-21.

Wal-Mart & Gender Discrimination

Despite having a primarily female workforce, Wal-Mart’s management continues to fail to treat women fairly. Approximately 700,000 women work for Wal-Mart which makes the Company the largest private sector employer of women in the United States (Drogin 2003). Wal-Mart is currently being sued for gender discrimination in promotion and pay, in what would be the largest class action lawsuit in United States history (www.walmartclass.com).

Largest class-action law suit in history. In 2001, six women sued Wal-Mart in California claiming the company discriminated against women by systematically denying them promotions and paying them less than men. The lawsuit has expanded to potentially the largest class action in U.S. history – on behalf of more than 1 million current and former female employees. While two-thirds of the company's hourly workers are female, women hold only one-third of managerial positions and constitute less than 15% of store managers (Neil Buckley and Caroline Daniel, “Wal-Mart vs. the Workers: Labour Grievances Are Stacking Up Against the World’s Biggest Company,"” Financial Times 11, 11/20/03). The suit also claims that women are pushed into "female" departments and are demoted if they complain about unequal treatment. One plaintiff, a single mother of four, started at Wal-Mart in 1990 at a mere $3.85 an hour. Even with her persistent requests for training and promotions, it took her eight years to reach $7.32 an hour and seven years to reach management, while her male counterparts were given raises and promotions much more quickly. For this plaintiff, annual pay increases were as little as 10 cents and never more than 35 cents per hour (Sheryl McCarthy, "Wal-Mart – Always Low Wages for Women!" Newsday, 5/1/03).

Despite being more experienced and qualified, women are severely under-represented as managers. A statistical analysis of Wal-Mart payroll records shows that despite making up 72% of the hourly workforce, women only account for 33% of managers and only 15% of store managers. This is all despite women having on average longer seniority and higher merit ratings than their male counterparts. Ultimately, instead of moving up, women are concentrated and stuck in the lowest paying jobs, comprising 92% of cashiers and 76% of sales associates (Drogin 2003).

Wal-Mart women workers earn less than men for the same work. For the same job classification, women earn from 5% to 15% less than men, even after taking into account factors such as seniority and performance. This equates to nearly 40 cents less per hour for hourly workers or nearly $5,000 per year for managers. This divide in pay has been growing over time (Drogin 2003).

Wal-Mart women face harassment and promotion barriers. In one woman’s testimony, a female assistant manager in a Virginia store realized that women employees consistently made less than male employees in the same position. When she complained, she had three different supervisors tell her that it was because men “had families to support.” When she expressed a desire to move into higher management positions she was required to commit, in writing, to working overnight for a full two years-- which was neither a commitment nor a task required for men seeking higher positions. After working as an assistant manager for seven years, she was never promoted to a higher position (“Declaration of Kim McLamb in Support of Plaintiffs’ Motion for Class Certification,” Betty Dukes et al Vs. Wal Mart Stores, US District Court Case No. C-01-2252). These patterns of discrimination in promotion and pay were found in all regions where Wal-Mart operates in the United States (Drogin 2003).

Costs to Taxpayers

Due to low pay and lack of health care, Wal-Mart employees are eligible for federal assistance. The estimated total amount of federal assistance for which Wal-Mart employees were eligible in 2004 was $2.5 billion (“Harper’s Index,” Harper’s Magazine, Vol. 310, No. 1858, 3/2005)

According to a study by the Institute for Labor and Employment at the University of California-Berkeley, California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart in that state alone.[Sylvia Chase, “The True Cost of Shopping at Wal-Mart,” Now with Bill Moyers, Transcript (December 19, 2003).] In fact, Wal-Mart personnel offices, knowing employees cannot afford the company health plan, actually encourage employees to apply for charitable and public assistance, according to a recent report by the PBS news program Now With Bill Moyers.

Public Subsidies. For instance, the Southern California Association of Governments calculated that the Southern California wage multiplier was 2.08, meaning that for every $1 reduction in wages, the community lost an additional $1.08 in indirect impacts. The study done in Southern California calculated that, if area grocery workers were paid Wal-Mart wages, more than $1.6 to $3 billion per year would be lost (“The Impact of Big Box Stores in S. California,” Dr. Marlon Boarnet).

It is common for Wal-Mart, the world’s largest corporation, to expect and receive taxpayer-backed subsidies for building stores and distribution centers (“Millions in subsidies paid for Wal-Mart jobs”, Palm Beach Post, 8/30/2003). Economic development through taxpayer-backed incentives is a questionable policy. In fact, the National Governor’s Association passed a resolution stating that “The Governors believe that the public and private sectors should undertake cooperative efforts that result in improvements to the general economic climate rather than focus on subsidies for individual projects and companies.”

After conducting its own study, the Palm Beach Post reported that Wal-Mart has directly received at the minimum $150 million in direct incentives from municipal, county, state, and even federal governments to open 47 distribution centers in 32 states. The Palm-Beach Post reports that this figure is only a start--- and likely grows by tens of millions when less quantifiable breaks such as government bond financing and enterprise zones are taken into account (Palm Beach Post, 8/30/2003).

For example, the Palm-Beach Post reports that in Lewiston, Maine, provided Wal-Mart with $17 million in state and local incentives in February 2002 for a 400,000-square-foot food distribution center that is to employ 150 workers when it opens in 2005. The incentive package included free land and water and sewer improvements (Palm Beach Post, 8/30/2003).

For more information on taxpayer-backed subsidies and corporate accountability, visit Good Jobs First at www.goodjobsfirst.org.

The Democratic Staff of the Committee on Education and the Workforce estimates that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year – about $2,103 per employee. Specifically, the low wages result in the following additional public costs being passed along to taxpayers:

• $36,000 a year for free and reduced lunches for just 50 qualifying Wal-Mart families.
  
• $42,000 a year for Section 8 housing assistance, assuming 3% of the store employees qualify for such assistance, at $6,700 per family.
  
• $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 employees are heads of household with a child and 50 are married with two children.
  
• $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with an average of 2 children.
  
• $108,000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP), assuming 30 employees with an average of two children qualify.
  
• $9,750 a year for the additional costs for low income energy assistance.

_Wal-Mart freely acknowledges shifting its health care costs to taxpayers and responsible employers. A company spokesman said, "[Wal-Mart employees] who chose not to participate in [Wal- Mart's health plan] usually get their health care benefits from...the state or federal government" (UPI, 12/2/98).

Community Impact

Lower wages mean less money for the community. Experts explain that the surrounding community suffers when employers pay low wages. When an employer pays low wages to its employees, the employees have less money to spend on goods and services in the community, which in turn reduces the income and spending of others in the community. In other words a reduction in wages has a multiplier impact in the surrounding area.

Iowa Study. One of the most cited studies on Wal-Mart's impact on local communities was performed by economist Kenneth Stone at Iowa State University in 1993. Stone looked at the impact of Wal-Mart on small towns in Iowa. He found a 3% spike in total retail sales in communities immediately after a Wal-Mart opened. But the longer term effects of Wal-Mart were disastrous for nearby independent businesses. Over the course of the next several years, retailers' sales of mens' and boys' apparel dropped 44% on average, hardware sales fell by 31%, and lawn and garden sales fell by 26%. Likewise, a Congressional Research Service report in 1994 explained that Wal-Mart uses a saturation strategy with store development. In other words, it builds stores in nearby connected markets in order to stifle any competition in the targeted area by the size of its presence. [Jessica Hall and Jim Troy, “Wal-Mart Go Home! Wal-Mart’s Expansion Juggernaut Stumbles as Towns Turn Thumbs Down and Noses Up,” Warfield’s Business Record 1 (July 22, 1994)]

By not offering adequate pensions along with wages, Wal-Mart shifts retirement cost onto communities. When employees retire without adequate savings and benefits, they are less able to pay for health care, housing, and food. Communities and taxpayers bear the cost as retirees make up the difference through programs such as Medicaid. Other employees, recognizing the inadequate retirement benefit, may be forced to continue working past retirement age, increasing their risk for injury, and increasing the chance that they will end up in a hospital at community expense.

Wal-Mart has vacated stores in hundreds of communities. The Dallas Morning News reports that Wal-Mart Realty, the real estate division of Wal-Mart, explained that the Company's rapid expansion of Supercenters, which are discount stores combined with a full-size grocery store, and Sam's Clubs, which are membership warehouse clubs, has contributed to hundreds of vacated stores for lease or for sale across the country (“Wal-Mart site: Use as is or rebuild?”, Dallas Morning News, 2/20/02). When Wal-Mart decides to convert a discount store into a larger Supercenter, it is often cheaper or easier simply to relocate entirely. In fact, retail expert David Brennan, associate professor of marketing at the University of St. Thomas, in St. Paul, Minn, notes that Wal-Mart stores relocate so regularly that, “it is not uncommon to relocate right across the street" (“Home Depot to Move from Old to New Store Next Door,” Providence News-Journal, 8/17/03).

Other experts point out the economic volatility of the discount retail industry leads to a greater chance of vacancy: “Big box retailers will most likely enter a community, boosting overall retail sales and tax revenues, only to be among the first to consolidate or fold when conditions begin to change” (“The Impact of Big Box Stores in S. California, ” Dr. Marlon Boarnet).

Wal-Mart’s stores are uselessly large for other tenants. An average discount store is 96,883 square feet, which is the size of two football fields. Wal-Mart’s Supercenters are on average nearly twice as large at 186,495 square feet. Sam’s Clubs are on average 125,000 square feet or the size of three football fields (Wal-Mart Annual Report 2003). Wal-Mart plans on relocating or expanding 140 Supercenters and 20 Sam’s Clubs in 2004 (Wal-Mart Press Release 10-03).

It is not easy to fill a vacated Wal-Mart store. Few non-retail companies need the large space of an empty Wal-Mart store. Real estate brokers explain that Wal-Mart will not sell or lease these empty stores to what it considers as competitors. A president of a major real estate developer in Dallas explained that when Wal-Mart moves out of a store, “They're not going to be very receptive to any retailer going into it and even if they sell it, they might put a non-compete clause in there. Why would they want more competition when they're fixing to build a mega-million store around the corner. They're going to be very protective of who goes in there” (Dallas Morning News 2/20/02 Wal-Mart site: Use as is or rebuild?). A president of a real estate brokerage firm in New York City succinctly explained, “They're not going to lease to Kmart” (Arkansas Democrat-Gazette, 1/28/01).

These relocations add up to millions of vacant square feet. In 1999, Paul Carter, the President of Wal-Mart Realty, reported that Wal-Mart will “vacate about 5 to 6 million square feet this year” (“Wal-Mart, Communities Find Uses for Stores,” New Orleans Times-Picayune 4/8/1999). This amounts to Wal-Mart vacating more retail space in 1999, than the entire 110-story Sears Tower. These vacated stores accumulate each year. In 2001, the Arkansas Democrat-Gazette reported that Wal-Mart controlled around 30 million square feet of vacant retail space through ownership or leases (Arkansas Democrat-Gazette, 1/28/01). To put it another way, Wal-Mart has enough empty retail shells to fill all of the offices of the Pentagon-- five times over. In fact, in 2003, The Orlando Sentinel reported that Wal-Mart was trying to lease 400 vacant stores (“Many Smaller Retailers to Feel Effects of Kmart Closures”, Orlando Sentinel, 2/3/2003). This represents more than a tenth of its entire store base.

Hundreds of jilted communities are left paying the price. A vacant property drains the value from the surrounding area, whether it be commercial or residential. For instance, in Elizabethtown, Kentucky, Wal-Mart deserted an 83,000 square foot discount store for a larger Supercenter. The empty discount store has remained empty four years later and counting. The property manager of the former Wal-Mart location explained that Wal-Mart ignored the property, “Wal-Mart walked off and didn't seem to care what happened to the store they're still paying rent on...the disarray of the way the store looked on the inside, it looked like a disaster.” Ultimately, the manager explained that, “It leaves the perception that we're not taking care of things out here, and that's not the case at all” (Arkansas Democrat-Gazette, 1/28/01).

The Los Angeles City Council commissioned a report in 2003 on the effects of allowing Wal-Mart Supercenters into their communities. The report, prepared by consulting firm Rodino and Associates, found that Supercenters drive down wages in the local retail industry, place a strain on public services, and damage small businesses.

The findings of the Rodino report are alarming. The labor impacts of a Wal-Mart Supercenter on low-income communities include:

• "Big box retailers and superstores may negatively impact the labor market in an area by the conversion of higher paying retail jobs to a fewer number of lower paying retail jobs. The difference in overall compensation (wages and benefits) may be as much as $8.00."
  
• "Lack of health care benefits of many big box and superstore employees can result in a greater public financial burden as workers utilize emergency rooms as a major component of their health care."
  
• "A study conducted by the San Diego Taxpayers Association (SDCTA), a nonprofit, nonpartisan organization, found that an influx of big-box stores into San Diego would result in an annual decline in wages and benefits between $105 million and $221 million, and an increase of $9 million in public health costs. SDCTA also estimated that the region would lose pensions and retirement benefits valued between $89 million and $170 million per year and that even increased sales and property tax revenues would not cover the extra costs of necessary public services."
  
• "[The threat of Wal-Mart's incursion into the southern California grocery market] is already triggering a dynamic in which the grocery stores are negotiating with workers for lowered compensation, in an attempt to re-level the `playing field.'
  
• "One study of superstores and their potential impact on grocery industry employees found that the entry of such stores into the Southern California regional grocery business was expected to depress industry wages and benefits at an estimated range from a low of $500 million to a high of almost $1.4 billion annually, potentially affecting 250,000 grocery industry employees ... [T]he full impact of lost wages and benefits throughout Southern California could approach $2.8 billion per year." [Rodino Associates, Final Report on Research for Big Box Retail/Superstore Ordinance, prepared for Industrial and Commercial Development Division, Community Development Department, at 18-20 (October 28, 2003).]

Wal-Mart & Child Labor

In January 2004, the New York Times reported on an internal Wal-Mart audit which found "extensive violations of child-labor laws and state regulations requiring time for breaks and meals."[Steven Greenhouse, “In-House Audit Says Wal-Mart Violated Labor Laws,” New York Times 16A (January 13, 2004).] One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times.[Steven Greenhouse, “In-House Audit Says Wal-Mart Violated Labor Laws,” New York Times 16A (January 13, 2004).]

According to the New York Times report: "Verette Richardson, a former Wal-Mart cashier in Kansas Ci ty, Mo., said it was sometimes so hard to get a break that some cashiers urinated on themselves. Bella Blaubergs, a diabetic who worked at a Wal-Mart in Washington State, said she sometimes nearly fainted from low blood sugar because managers often would not give breaks."[Steven Greenhouse, “In-House Audit Says Wal-Mart Violated Labor Laws,” New York Times 16A (January 13, 2004).]

A store manager in Kentucky told the New York Times that, after the audit was issued, he received no word from company executives to try harder to cut down on violations: "There was no follow-up to that audit, there was nothing sent out I was aware of saying, `We're bad. We screwed up. This is the remedy we're going to follow to correct the situation.'"[Steven Greenhouse, “In-House Audit Says Wal-Mart Violated Labor Laws,” New York Times 16A (January 13, 2004).]

Wal-Mart & Illegal Immigrants

In March 2005, Wal-Mart agreed to pay $11 million to settle federal allegations it used illegal immigrants to clean its stores.

Since 1997, federal authorities have uncovered the cases of at least 250 illegal immigrants who were employed by janitor contracting services and hired by Wal-Mart in 21 states. Many of the janitors - from Mexico, Russia, Mongolia, Poland and a host of other nations - worked seven days or nights a week without overtime pay or injury compensation. Those who worked nights were often locked in the store until the morning.

The U.S. Department of Justice is quietly shopping around the explosive idea of requiring Internet service providers to retain records of their customers' online activities.

Data retention rules could permit police to obtain records of e-mail chatter, Web browsing or chat-room activity months after Internet providers ordinarily would have deleted the logs--that is, if logs were ever kept in the first place. No U.S. law currently mandates that such logs be kept.

In theory, at least, data retention could permit successful criminal and terrorism prosecutions that otherwise would have failed because of insufficient evidence. But privacy worries and questions about the practicality of assembling massive databases of customer behavior have caused a similar proposal to stall in Europe and could engender stiff opposition domestically.

By Nolan Finley / The Detroit News

Faced with two bad choices, I'd druther kids celebrate their 21st birthdays with a bag of pot than by pouring 21 shots of cheap liquor down their gullets.

Again, both are poor choices. But a poor choice made with alcohol is far more lethal than one made with marijuana.

Binge drinking, drunken driving and booze-induced recklessness continue to leave empty seats in college and high school classrooms.

Marijuana has its own set of negatives, but it is rarely directly connected to a teen death.

And yet we treat marijuana as public enemy No. 1 when it comes to children. At the same time, we welcome a stream of beer commercials into our homes and don't blink when liquor companies sponsor spring break blowouts.

Parents who roll their eyes and giggle when young Johnny stumbles home tipsy go into complete despair when they find a baggie in a dresser drawer.

It's a very expensive hypocrisy. State and federal governments spend $8 billion a year on the war on marijuana.

The latest education campaign will spend another $125 million to convince children that pot will rot their brains.

We should save our money. Teen pot use is as cyclical as the auto industry. Some decades it goes up, some it goes down, with no correlation to spending on anti-drug programs.

Nearly 40 percent of teens say they've tried marijuana, the same percentage as the general population. While hopefully teens understand that pot isn't good for them, they know first-hand that it is no more harmful -- and perhaps less so -- than loading up on vodka.

Trying to convince them otherwise will just make them ignore warnings about the more dangerous drugs.

Before dismissing me as a leftover '60s pothead, let me say I have no interest in marijuana, even if it were legal.

But I am a taxpayer who expects a return on his investment. The drug war is delivering none.

Nobel Prize winner Milton Friedman joined 500 respected economists last week in endorsing a Harvard University study that said federal and state governments could realize a $14 billion gain by regulating and taxing marijuana as a legal product.

There is a growing acceptance that this war is not only unwinnable, it is irrational.

Despite spending $35 billion a year to battle illegal narcotics, drug use here is about the same as in the European countries with more liberal drug laws.

But still we fight on. Last week, the U.S. Supreme Court handed a major victory to drug warriors by declaring federal authorities can prosecute those who grow and use marijuana for medical purposes.

The ruling fits the national ideology that in the name of the drug war, the Constitution can be tossed on the garbage heap.

But nothing will keep desperate people from seeking relief, or teens from experimenting.

The war against pot is lost.

Surrendering isn't a defeat. It simply ends our national hypocrisy and leaves more money for more pressing battles.

by Jason Della Rocca

Thirty years into their popular existence and videogames continue to get beat up by the media, by politicians, and by activists purportedly out to save our culture. Thirty years is too long for videogames to continue to be constantly forced on the defensive. The old fights haven't gone away, and now more than ever it is time that creators collectively take a stand for our art form, our industry, and the careers we've built over a lifetime.

Simply put, there's crazy stuff going on out there. Thailand has recently implemented a 10 p.m. curfew on playing games in cafes. Germany 's notorious "index" of blacklisted titles continues to grow. Greece tried to ban all digital game playing in one fell swoop. Afghanistan has shut down every last cybercafe as a means to preserve its cultural morals. And the state of Washington is set on protecting the health and safety of its law enforcement officials by regulating game sales to minors. Sadly, I could go on.

The perception that games are "bad" for us stubbornly persists, and we have yet to find effective ways to change people's minds on this issue. Game makers may be biased toward games' "good" qualities, but you'd be surprised how many developers simply don't care about the issue of public perception, don't have an informed opinion, or believe it is all a big waste of time - even to the extent of questioning the need to fight government regulations.

Sure, the headlines make us look bad: "Government working to protect; industry fighting for right to corrupt." Many of us are not comfortable confronting that image. The following are several common misperceptions developers hold about regulation and what our role, as creators, should be in fighting it.

"Government regulation is no big deal, they're just reinforcing industry ratings." Wrong. None of the proposed bills are based on the ESRB ratings system. In fact, it's unconstitutional for the U.S. government to regulate or enforce a private ratings system. As such, each bill aims to set its own moral barometer and establish often vague metrics for what is acceptable for everyone to purchase and play. Dancing around a state-by-state patchwork of content restrictions and peculiarities would be prohibitive not only for developers, but also for time-deprived parents and retailers (who are already working with an existing rating system).

"Law X or Y don't seem so harmful, but fighting all of them makes us look bad." Each law and court case sets a precedent for the next. The St. Louis case where Judge Stephen Limbaugh ruled that games do not express ideas inspired both the Washington State bill and the reissue of Rep. Joe Baca's (D-Calif.) "Protect Children from Video Game Sex and Violence Act" in Congress. While Limbaugh's ruling was later overturned on appeal, reaffirming that games do express ideas and should be protected by the First Amendment, at least another dozen similar bills are in the works. For example, the state of South Carolina is looking to go one step further than Washington and regulate the sale of games depicting violence against law enforcement officials to all consumers, not just minors. That means you.

"This doesn't affect me, it's the publisher's problem." Wrong again. While most publishers usually handle rating submissions and take the brunt of any backlash, the system has direct impact on developers. If retailers are unwilling to stock games with certain types of content (such as violence against law enforcement officials) for fear of running afoul of the law, publishers will not have an outlet to sell such games and will therefore not fund game developers to make them. This is commonly referred to as the "chilling effect" of regulation. So, tough luck for any developer hoping to create the next crime-caper masterpiece.

"I don't like or make violent games, so regulation is O.K. for me." Standing up for creative freedom isn't about fighting for the rights of any one specific game or developer. We need to stand up for the medium as a whole. Who are we (or anyone else for that matter) to judge what is good or bad for others? While I may not personally agree with some design choices, I strongly believe in developers' freedom of expression. Where will it end? The government's current fascination with violence may soon expand and put your nonviolent game square in their viewfinder. Case in point, an Australian minister wants to ban Project Gotham Racing 2 (rated E for everyone, containing no violence) because he fears it will promote reckless driving in the streets of Sydney!

"Politicians are acting in their constituents' best interest, and there's nothing I can do." Historically, censorship and regulation have never truly been about the best interest of the people. If there's any doubt that some of these constituencies seem self-contradictory on the issue of violence, consider that it is legal for a minor to own a handgun if under the supervision of a guardian in Washington State and there are no laws requiring trigger locks to prevent a child from accidentally discharging a loaded weapon - and those are just two examples of many.

In light of these facts, it's clear that rolling over is the worst possible course of action for developers seeking to protect their craft and livelihoods.

Fortunately, there are several small and immediate steps we can all take. For starters, stay informed on the topic and read the news. You can head out to a local IGDA chapter meeting to discuss these issues with your peers. Try to attend at least one GDC session on these issues. The ESA also has a grassroots database where you can sign up to follow what's going on in your town or state. Finally, write a friendly letter to your local and federal representatives explaining how you see your profession.

In the bigger picture, resolve to push boundaries and innovate. Higher courts are reinforcing our view that games are an expressive medium worthy of the same free speech protections as other forms of art and entertainment. Let us not lose that respect nor give them excuses to question it. We need not put a stop to games with violence, but we need other avenues beyond violence as a design crutch.

Finally, have self-respect. As we all know, developing a game is a massively complex and creative endeavor. Take a stand when friends and family come down hard on games (yes, that means another attempt at explaining to your parents what exactly it is you do for a living). Better yet, don't back down when your cornered. Because the best defense is a good offense, the IGDA has prepared a simple set of key points every developer can use to talk him- or herself out of a corner.

Videogames belong at center stage.

(A version of this article first appeared in the October issue of Game Developer magazine.)

Trusted Computing Platforms | Siani Pearson | An accessible introduction to a new industry standard that is a breakthrough in the field of computer security. The text explains platforms, explores implications and provides illustrated examples using a variety of scenarios relevant to everyday business usage.

1984 | George Orwell | The year is 1984; the scene is London, largest population center of Airstrip One. Airstrip One is part of the vast political entity Oceania, which is eternally at war with one of two other vast entities, Eurasia and Eastasia. At any moment, depending upon current alignments, all existing records show either that Oceania has always been at war with Eurasia and allied with Eastasia, or that it has always been at war with Eastasia and allied with Eurasia. Winston Smith knows this, because his work at the Ministry of Truth involves the constant "correction" of such records. "'Who controls the past,' ran the Party slogan, 'controls the future: who controls the present controls the past.'"

Practical Cryptography | Bruce Schneier | Security is the number one concern for businesses worldwide. The gold standard for attaining security is cryptography because it provides the most reliable tools for storing or transmitting digital information. Written by Niels Ferguson, lead cryptographer for Counterpane, Bruce Schneiers security company, and Bruce Schneier himself, this is the much anticipated follow-up book to Schneiers seminal encyclopedic reference, Applied Cryptography, Second Edition (0-471-11709-9), which has sold more than 150,000 copies.

Secrets and Lies | Bruce Schneier | Whom can you trust? Try Bruce Schneier, whose rare gift for common sense makes his book Secrets and Lies: Digital Security in a Networked World both enlightening and practical. He's worked in cryptography and electronic security for years, and has reached the depressing conclusion that even the loveliest code and toughest hardware still will yield to attackers who exploit human weaknesses in the users. Schneier advocates swift detection and response to an attack, while maintaining firewalls and other gateways to keep out the amateurs.

Applied Cryptography | Bruce Schneier | Cryptographic techniques have applications far beyond the obvious uses of encoding and decoding information. For Internet developers who need to know about capabilities, such as digital signatures, that depend on cryptographic techniques, there's no better overview than Applied Cryptography, the definitive book on the subject. Bruce Schneier covers general classes of cryptographic protocols and then specific techniques, detailing the inner workings of real-world cryptographic algorithms including the Data Encryption Standard and RSA public-key cryptosystems.

Brave New World | Aldous Huxley | "Community, Identity, Stability" is the motto of Aldous Huxley's utopian World State. Here everyone consumes daily grams of soma, to fight depression, babies are born in laboratories, and the most popular form of entertainment is a "Feelie," a movie that stimulates the senses of sight, hearing, and touch. Huxley foreshadowed many of the practices and gadgets we take for granted today--let's hope the sterility and absence of individuality he predicted aren't yet to come.

WASHINGTON (AP) -- The FBI missed at least five opportunities before the September 11 attacks to uncover vital intelligence information about the terrorists, and the bureau didn't aggressively pursue the information it did have, the Justice Department's inspector general says in a newly released critique of government missteps.

The IG faulted the FBI for not knowing about the presence of two of the September 11 terrorists in the United States and for not following up on an agent's theory that Osama bin Laden was sending students to U.S. flight training schools. The agent's theory turned out to be precisely what bin Laden did.

"The way the FBI handled these matters was a significant failure that hindered the FBI's chances of being able to detect and prevent the September 11 attacks," Inspector General Glenn Fine said.

When the bureau did discover the presence of hijackers Nawaf al Hazmi and Khalid al Mihdhar in the United States shortly before the attacks, "the FBI's investigation then was conducted without much urgency or priority," the report concluded.

The five missed opportunities in regard to the two hijackers stemmed from information-sharing problems between the FBI and CIA and problems inside the FBI's counterterrorism program.

The report gave an hour-by-hour description of how CIA and FBI agents assigned to the CIA's bin Laden unit on Jan. 5, 2000, reviewed incoming cables containing a substantial amount of information about Mihdhar, including that he was traveling and that he had a U.S. visa. According to internal e-mail traffic cited by the report, the deputy chief of the CIA's bin Laden unit never gave the necessary approval for disseminating the information about Mihdhar to the FBI. Less than two weeks later, Mihdhar was in California.

The CIA shares information with the FBI and other agencies through Central Intelligence reports, or CIRs, and such a document was drafted about Mihdhar on Jan. 5, 2000, at the CIA by an FBI employee working at the spy agency's bin Laden unit. The deputy chief of the bin Laden unit and a CIA desk officer who was following the issue told investigators "they did not recall the CIR, any discussions about putting it on hold or why it was not sent."

"When we interviewed all of the individuals involved with the CIR, they asserted that they recalled nothing about it," the report stated.

The report, a year old, is only now being released because of a court fight with lawyers for imprisoned terrorist conspirator Zacarias Moussaoui over how much of it should be disclosed. The report's findings mirror other investigations by Congress and an independent commission into why the U.S. government failed to thwart the attacks.

Without elaboration, the report faults the bureau for a lack of public candor.

"Shortly after the attacks, the FBI indicated that it did not have any information warning of the attacks," the report said. "However, information was soon discovered that had been in the possession of the FBI and the intelligence community before Sept. 11 that related to the hijacking of airplanes by extremists or that involved the terrorists who committed the Sept. 11 attacks."

The bureau said it has taken substantial steps to deal with the issues the IG raised.

Today, "no terrorism lead goes unaddressed," and new policies are in place to share information among intelligence agencies, the FBI said.

The report was especially critical of the bureau for not knowing about the presence of two of the 19 hijackers who were living openly in San Diego in 2000 and who "should have drawn some scrutiny from the FBI," the report said.

The two Saudis, al Hazmi and al Mihdhar, rented a room in home of a longtime FBI terrorism informant, and they also befriended a fellow Saudi who had drawn FBI scrutiny in the past.

If the focus of the FBI bureau in San Diego on counterterrorism and al Qaeda had occurred earlier "there would have been a greater possibility, though no guarantee, that Hazmi's and Mihdhar's presence in San Diego may have come to the attention of the FBI before Sept. 11," the report said.

The head of the San Diego FBI office responded that the report greatly exaggerates the possibility that local agents could have prevented the attacks.

The informant identified the two men to his FBI handler only by their first names, and the report criticizes the handler as "not particularly thorough or aggressive" in following up.

The two men also befriended Omar al-Bayoumi, a Saudi who had established himself in the area. The FBI briefly investigated him in 1998 when the manager of his apartment complex reported that al-Bayoumi had received a suspicious package, had strange wires in his bathroom and hosted frequent weekend gatherings of Middle Eastern men. The FBI closed its inquiry the following year, a decision the report found appropriate.

The IG also reviewed the FBI's handling of Moussaoui, who was in custody before the attacks. Those portions of the document were deleted because Moussaoui, who pleaded guilty in April, faces a sentencing proceeding next year that will put him on trial for his life.

COLUMBUS, Ohio (CNN) -- President Bush on Thursday called on Congress to reauthorize the 16 provisions of the USA Patriot Act that are slated to expire at the end of the year, calling them "practical, important and ... constitutional."

"Congress needs to renew them all and, this time, Congress needs to make the provisions permanent," Bush told an audience of about 150 officers at the Ohio State Highway Patrol Academy in Columbus.

Bush said the act, passed six weeks after the September 11, 2001, terrorist attacks, "closed dangerous gaps in America's law enforcement and intelligence capabilities."

He said that authorities have used the act to bring terrorism charges against 400 people, with more than half of those charges leading to convictions.

Since its passage, "America's law enforcement and intelligence personnel have proved that the Patriot Act works, that it was an important piece of legislation," Bush said.

He credited the act with helping federal, state and local law enforcement authorities "break up terror cells in New York and Oregon and Virginia and in Florida."

He added, "The Patriot Act has accomplished exactly what it was designed to do: it has protected American liberty and saved American lives."

Specifically, the act broke down a "bureaucratic wall" between law enforcement and intelligence that has resulted in better sharing of information, he said.

Further, the act allowed agents to set up "roving wire taps," which let authorities monitor the communications of terrorist suspects who use different cell phones without requiring they first obtain separate authorizations to tap each phone.

And the act allows Internet providers to help law enforcement officials trace threatening e-mails without risking a lawsuit, Bush said.

Bush noted that Congress oversees the application of the act, and he said he would soon name five people to serve on a federal board created by Congress to ensure that Americans' privacy and civil liberties are respected.

"Sen. Dianne Feinstein worked with civil rights groups to monitor the use of the Patriot Act; here's what she said: 'We've scrubbed the area, and I have no reported abuses,'" Bush said.

"Remember that the next time you hear someone make an unfair criticism of this important, good law."

The Democrat from California did indeed make that comment about a year ago, after the American Civil Liberties Union approached her for support in opposing the act, said Howard Gantman, a spokesman for Feinstein.

"We basically said we've very much like to hear about specifics," Gantman said. "The ACLU then, for really over a year, had no specific abuses they could point to. On their behalf, I'd say one of their problems, like us, is we have a helluva time getting information from the Justice Department about what was going on there."

The ACLU, in a posting on its Web site, said the Bush administration and former Attorney General John Ashcroft "essentially refused to describe how it was implementing the law; it left numerous substantial questions unanswered, and classified others without justification.

"In short, not only has the Bush administration undermined judicial oversight on government spying on citizens by pushing the Patriot Act into law, but it is also undermining another crucial check and balance on surveillance powers: accountability to Congress and the public."

By GINA HOLLAND Associated Press Writer

The Associated Press

WASHINGTON Jun 6, 2005 — People who smoke marijuana because their doctors recommend it to ease pain can be prosecuted for violating federal drug laws, the Supreme Court ruled Monday, overriding medical marijuana statutes in 10 states.

The court's 6-3 decision was filled with sympathy for two seriously ill California women who brought the case, but the majority agreed that federal agents may arrest even sick people who use the drug as well as the people who grow pot for them.

Justice John Paul Stevens, an 85-year-old cancer survivor, said the court was not passing judgment on the potential medical benefits of marijuana, and he noted "the troubling facts" in the case. However, he said the Constitution allows federal regulation of homegrown marijuana as interstate commerce.

The Bush administration has taken a hard stand against state medical marijuana laws, but it was unclear how it would respond to the new prosecutorial power. Justice Department spokesman John Nowacki would not say whether prosecutors would pursue cases against individual users.

In a dissent, Justice Sandra Day O'Connor said the court's "overreaching stifles an express choice by some states, concerned for the lives and liberties of their people, to regulate medical marijuana differently."

The women who brought the case expressed defiance.

"I'm just going to keep doing what I'm doing. I don't really have a choice but to, because if I stop using cannabis, I would die," said Angel Raich of Oakland, Calif., who suffers from ailments including scoliosis, a brain tumor, chronic nausea, fatigue and pain. She says she smokes marijuana every few hours.

Diane Monson, an accountant who lives near Oroville, Calif., has degenerative spine disease and grows her own marijuana plants. "I'm going to have to be prepared to be arrested," she said.

The ruling does not strike down California's law, or similar ones in Alaska, Colorado, Hawaii, Maine, Montana, Nevada, Oregon, Vermont and Washington state. However, it may hurt efforts to pass laws in other states because the federal government's prosecution authority trumps states' wishes.

With virtually no public discussion or debate, Congress earlier this month enacted the “REAL ID” legislation championed by House Judiciary Committee Chairman James Sensenbrenner (R-WI). Among its many provisions are sweeping changes to the process by which states issue driver’s licenses. States will now require individuals to prove they are in the country legally, and states will also be required to authenticate identity documents. Each state’s database of drivers will be accessible to every other state. If states do not comply, their licenses will no longer be accepted for federal purposes (including boarding a plane and entering a federal building). The new law also includes provisions that increase the burden of proof on asylum seekers entering the United States, permits the Secretary of Homeland Security to waive all federal laws in constructing fences along the border, expands the definition of “terrorist activity,” and restricts immigrants’ access to federal court.

Supporters of the law claim the law will combat terrorism by fighting document fraud and reducing the prospect that terrorists can remain in the United States without detection. The law, however, has spurred a firestorm of controversy from many quarters, including state governments decrying the bill as a costly unfunded mandate, immigrant rights groups predicting immigrants will be unfairly targeted under the law, and privacy and civil liberties advocates fearing the creation of a de facto national ID card. Serious questions remain whether REAL ID is the right approach to reducing fraud and securing identification systems after 9/11. Consider the following:

• REAL ID would not have prevented 9/11. The 9/11 hijackers entered the U.S. with proper immigration documents, were “legal immigrants” when they received driver’s licenses, and possessed valid foreign passports that allowed them to board an airplane. The 9-11 Commission did not recommend that undocumented immigrants be denied licenses and did not endorse the provisions in REAL ID. [CQ, Nov. 21, 2004; 9/11 Public Discourse Project: Driver’s Licenses, 9-11 and Intelligence Reform]
  
• Initial estimates of the cost of compliance to state governments is $500-$750 million, but the actual cost is likely to be much higher. The estimated cost of compliance for the state of Virginia alone is $237 million. [National Conference of State Legislatures; Washington Post, May 14, 2005; Roll Call, May 9]
  
• More than 600 organizations, dozens of newspapers editorials, and state officials from both parties oppose REAL ID. Gov. Mike Huckabee (R-AR) said the bill “forces entry-level state employees ... to be INS agents. That's totally ridiculous. The states are going to have to enforce [immigration] laws that the federal government doesn't have the will to do." Several states are actively considering not complying with the law, or perhaps filing suit to prevent the law from being implemented. The federal government should be encouraging cooperation with its homeland security partners, not imposing unreasonable mandates on the states. [www.unrealidea.org; National Immigration Forum: Editorials and Op Eds on the REAL ID Act; Roll Call, May 9]
  
• Sen. Lamar Alexander (R-TN) said REAL ID will turn “state driver’s license examiners into CIA agents.” The Washington Post predicted the law will “turn motor vehicle departments across the country into de facto enforcers of immigration law.” [Washington Post, Mar. 30; Washington Post, May 6]
  
• REAL ID gutted the work of a broad-based committee at the Dept. of Transportation that was well on its way to developing and implementing regulations to establish national standards for the states. The bipartisan committee, created by the intelligence reform act passed by Congress last December, included the necessary stakeholders—governors, state legislatures, law enforcement, civil liberties and immigration groups, AAA, and motor vehicle departments. [Time, May 9; NY Times, May 3]
  
• 220 million driver’s licenses are issued by the states. One state legislator has said receiving a driver’s licenses is perhaps “the most basic interaction between a state and its citizens.” REAL ID will impose a serious burden on tens of millions of law-abiding citizens and immigrants alike while failing to seriously address the pressing issues of illegal immigration and document fraud. [Letter from National Governors Association and American Association of Motor Vehicle Administrators, Feb. 8; Newsday, Apr. 28]
  
• REAL ID could lead to the creation of a national ID card as all states are required to link their databases electronically. The Wall Street Journal has warned that driver’s licenses could turn into “de facto national ID cards” and “a kind of domestic passport that U.S. citizens would be asked to produce for everyday commercial and financial tasks.” [NY Times, Mar. 6, 2005; WSJ, Feb. 19]

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