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Wal-Mart secures gag order in security scandal

Wal-Mart has won a gag order to stop a fired security operative from talking to reporters after a string of revelations about the retailer’s large surveillance operations and its business plans, according to court papers made public on Monday.
/ Source: The Associated Press

Wal-Mart has won a gag order to stop a fired security operative from talking to reporters after a string of revelations about the retailer’s large surveillance operations and its business plans, according to court papers made public on Monday.

Wal-Mart Stores Inc. filed a lawsuit and request for a temporary restraining order directly with Circuit Court Judge John R. Scott after court hours Friday in the retailer’s home county of Benton. After-hours filing directly with a judge was rare in civil cases, Scott said.

The suit and the judge’s order granting the restraining order against Bruce Gabbard became part of the public file Monday.

In the lawsuit, Wal-Mart alleges that Gabbard has violated trade secrets law by revealing to reporters “confidential information about Wal-Mart security systems and operations” and “highly confidential information about Wal-Mart’s strategic planning”. It seeks unspecified damages.

The judge’s temporary order bars Gabbard from disclosing any further Wal-Mart trade secrets or confidential information.

The suit and restraining order were filed two days after Wal-Mart apologized to activist shareholders for Gabbard’s revelation that they were considered potential threats and ahead of a story in Monday’s editions of the Wall Street Journal on Gabbard’s claim that Wal-Mart had a super-secret “Project Red” aimed at bolstering its stagnant share price.

Wal-Mart declined to comment on the “Project Red” report except to say in a statement, “Our senior management, our board and their advisors regularly conduct thorough, strategic reviews of all aspects of our business. That’s just good governance. We look at a full range of alternatives, many of which are considered and rejected, and we will not comment specifically on any of them.”

The Interfaith Center on Corporate Responsibility, a coalition of faith-based investors that has worked with Wal-Mart since 1990 on a variety of social issues, demanded Monday that Chief Executive Lee Scott apologize formally for a memo that lists the group as a potential threat.

ICCR members have a total of more than 2 million shares in the retailer.

“More importantly, we ask CEO Lee Scott to shift shareowner resources away from these public relations activities and instead focus on the core issues ICCR and other concerned investors have been bringing to Wal-Mart for almost two decades: the human dignity inherent in each supply chain worker, in-store employee, and customer of Wal-Mart and Wal-Mart’s continuing obligation to them and to its shareowners,” the group said in a statement.

Wal-Mart’s union-backed critics said the latest revelations about Wal-Mart’s security operations and the share price project deserved congressional scrutiny.

“Given the scope of the Wal-Mart spy scandal, the time has come for congressional hearings to find out how deep this rabbit hole goes,” said Chris Kofinis, spokesman for

The restraining order suggests that Gabbard, 44, might still have Wal-Mart equipment or documents. It orders him to surrender any documents or data and a long list of “all home and work computers, personal digital assistants, hard drives, thumb drives, and all other electronic or digital media and hardcopy information.”

It also orders Gabbard to provide Wal-Mart lawyers with “the names of all persons to whom he has transmitted, since January 15, 2007, any Wal-Mart information”.

Gabbard, a 19-year Wal-Mart veteran, was fired along with his supervisor last month for allegedly recording phones calls between a reporter and company spokespeople and for intercepting pager messages between other persons. Wal-Mart said Gabbard violated its policies.

Gabbard was part of a 20-strong security team called the Threat Research and Analysis Group.

Wal-Mart made the case public last month and denied Gabbard’s claims that his actions were the result of pressure from Kenneth Senser, a former senior CIA and FBI official who has headed Wal-Mart’s office of global security since 2003. Another FBI veteran, Joseph Lewis, is head of corporate investigations under Senser.

Gabbard did not work for Senser’s department, although the company and others familiar with the case said Senser has the authority to work with staff from other divisions in carrying out investigations. Gabbard has said he felt pressured by Senser to find information leaks, while Wal-Mart has denied that those conversations alleged by Gabbard took place.

Gabbard and his former supervisor, Jason Hamilton, who was also fired, have declined repeated requests for interviews from The Associated Press.

But in a text message to The Associated Press last week, Gabbard confirmed the allegations that he was part of a broader surveillance operation against company workers, critics, vendors and consultants that he alleged were approved by the company.