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Wal-Mart defends security tactics

A fired Wal-Mart security worker confirmed a newspaper interview Wednesday in which he said he was part of a surveillance operation that spied on company workers, critics, shareholders and consultants. The company defended its security practices.
/ Source: The Associated Press

A fired Wal-Mart security worker confirmed a newspaper interview Wednesday in which he said he was part of a large surveillance operation that spied on company workers, critics, vendors and consultants. The company defended its security practices.

The world’s largest retailer declined to comment on specific allegations made by former security technician Bruce Gabbard, 44, to the Wall Street Journal in a report published Wednesday. Wal-Mart reiterated that it had fired Gabbard and his supervisor last month for violating company policy by recording phone calls and intercepting pager messages.

“Like most major corporations, it is our corporate responsibility to have systems in place, including software systems, to monitor threats to our network, intellectual property and our people,” Wal-Mart spokeswoman Sarah Clark said.

Gabbard was fired after recording phone calls to and from a New York Times reporter and intercepting pager messages.

Gabbard and his former supervisor, Jason Hamilton, who was also fired, have declined repeated requests from The Associated Press to talk about their security activities.

But in a text message to The Associated Press Wednesday, Gabbard confirmed the allegations that he was part of a broader surveillance operation approved by the company. The team, the Threat Research and Analysis Group, was a unit of Wal-Mart’s Information Systems Division.

“I can confirm everything in the WSJ story is correct except the glass wall comment which I didn’t make,” Gabbard wrote, referring to a description of the Threat Group’s glass-enclosed work area at Wal-Mart’s Bentonville, Ark., headquarters, which the Journal said employees had nicknamed “The Bat Cave.”

Wal-Mart’s Clark noted that the company had gone public with Gabbard’s phone monitoring and had self-reported the issue to federal prosecutors to determine if any laws had been broken.

“These situations are limited to cases which are high risk to the company or our associates, such as criminal fraud or security issues,” she said.

Wal-Mart’s union-backed critics, whom Gabbard identified as among the surveillance targets, accused the retailer of being “paranoid, childish and desperate.”

“They should stop playing with spy toys and take the criticism of their business model seriously. The success of the company depends on it,” said Nu Wexler, spokesman for Wal-Mart Watch. According to the Wall Street Journal report, the company found personal photos of Wexler and tracked his plans to attend Wal-Mart’s annual meeting.

Companies increasingly are monitoring their employees, said Larry Ponemon, founder of The Ponemon Institute, a research foundation that focuses on privacy and data protection practices of companies, but surveilling vendors and consultants is “beyond the realm of what legitimate companies do,” he said.

“(Wal-Mart) seems like an organization that has a culture that doesn’t trust its employees and it certainly doesn’t trust its vendors or consultants,” said Ponemon.

Gabbard told the newspaper that Wal-Mart sent an employee to infiltrate an anti-Wal-Mart group to learn if it was going to protest at the annual shareholders’ meeting and investigated McKinsey & Co. employees it believed leaked a memo about Wal-Mart’s health care plans.

The company also used software programs to read e-mails sent by workers using private e-mail accounts whenever they were hooked up to the Wal-Mart computer network, he said.

Gabbard also disclosed that Wal-Mart monitored suppliers’ use of Wal-Mart’s computer network, resulting in the discovery of a vendor downloading pornography.

Ponemon said that most of the surveillance tactics allegedly approved by Wal-Mart appear to be legal, including the dispatch of a spy to an anti-Wal-Mart gathering, since the meeting was public.

Gabbard told the Journal he recorded the calls to the New York Times reporter on his own, but added many of his activities were approved by Wal-Mart. The Journal said other employees and security firms confirmed parts of his account.

Clark said she could not comment on Gabbard’s claim of blanket approval because “that’s a pretty broad statement. We wouldn’t be able to comment on that without knowing the details he’s referring to.”

Clark declined to comment on specific allegations. But when asked about McKinsey, she said, “We continue to work closely with McKinsey and we have no evidence that anyone there ever inappropriately shared confidential information.”

Clark said the Threat Research group is no longer operating in the same manner that it did prior to the discovery of the unauthorized recording of telephone conversations.

“There have been changes in leadership, and we have strengthened our practices and protocols in this area,” she said.

Wal-Mart announced changes in the group at the time it made Gabbard’s eavesdropping and firing public.