updated 4/22/2005 5:33:45 PM ET 2005-04-22T21:33:45

A federal grand jury is reviewing allegations of misspending within Wal-Mart Stores Inc., an investigation triggered by the world’s largest retailer when it voluntarily handed over internal documents to the Justice Department, a company spokesman said.

Wal-Mart spokesman Marty Heires told The Associated Press on Friday that the company is limited in what it can say about the inquiry because the probe is being handled by a grand jury.

“We have committed fully to cooperate with the federal authorities, and we’re doing that,” Heires said.

Wal-Mart disclosed last month that it had given documents to federal prosecutors, but Friday’s word of a grand jury is a clear indication that the Justice Department is acting on the information. Former vice chairman Tom Coughlin, who was the No. 2 figure in Wal-Mart’s hierarchy before his retirement last year, left his board seat when the company said in a federal filing that it was giving investigators documents that show up to $500,000 was misspent.

Coughlin, through his attorney, has denied wrongdoing.

On Friday, Coughlin lawyer William Taylor in Washington, D.C., would not discuss the investigation. U.S. Attorney Bob Balfe’s office also had no comment.

Last week, the United Food and Commercial Workers Union filed unfair labor practice charges against Wal-Mart with the The National Labor Relations Board to force it to release documents related to the ouster of its former vice chairman and alleged anti-union efforts. It cited a Wall Street Journal article that alleged Coughlin used expense account reimbursements to make secret payments to union members willing to identify pro-union Wal-Mart workers. Wal-Mart has strongly denied any such payments were made.

In a statement released Friday, Bill McDonough, executive vice president and organizing director of the UFCW, said he was pleased that the “legal process in the Wal-Mart ’union project’ case is going forward.” He added, “The right thing for Wal-Mart to do is make all documents public.”

“It is a big positive that they are taking quick corrective action, and I think consumers and company associates will give them a lot of credit for that,” Burt Flickinger, managing director of New York-based Strategic Resources, said. “On the other side, in terms of it being a federal case, it possibly has a lot of implications with organized labor, the National Labor Relations Board and, possibly, investors.”

Earlier this year, Wal-Mart avoided federal criminal charges in a case in Pennsylvania in which the company was accused of using illegal immigrants to clean floors in stores in 21 states. Wal-Mart cooperated in that probe, but drew an $11 million fine, a record for a civil immigration case. A grand jury reviewed that case, too.

“By cooperating, it certainly helps,” Flickinger said. “In the Pennsylvania (Wal-Mart) case, the fine was relatively small compared to the size of the company.”

Coughlin was on Wal-Mart’s board until March 25, when he resigned as the company revealed in filing with the Securities and Exchange Commission that it had forwarded to federal prosecutors information on alleged improper spending. Last week, in another filing, Wal-Mart disclosed that it suspended Coughlin’s benefits, potentially costing him $9.8 million in stock options.

Heires would not say whether documents or Wal-Mart employees have been subpoenaed by the grand jury. He said he did not know how long the panel had been reviewing the Wal-Mart case.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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