SPRINGFIELD, Mo. – A pair of senior Wal-Mart (WMT)executives knew cleaning contractors were hiring illegal immigrants, many of whom were housed in crowded conditions and sometimes slept in the backs of stores, according to a federal agency's affidavit.
The affidavit, unsealed last week, was part of an investigation of Wal-Mart by federal immigration officials that led to the 2003 raid on 60 Wal-Mart stores in 21 states, and the arrests of 245 illegal workers. The retailer agreed to pay $11 million in March to settle the case. It has maintained that top executives neither knew of nor encouraged the practice, but that is contradicted by the newly released documents.
The affidavit was filed by the Bureau of Immigration and Custom Enforcement to secure search warrants for a 2003 raid on Wal-Mart Stores Inc. headquarters in Bentonville, Ark.
The document was unsealed Nov. 2 by a U.S. district judge in Fayetteville, Ark. at the request of a New York attorney representing more than 200 former employees in a civil lawsuit against the world's largest retailer.
In the affidavit, investigators said testimony and taped conversations from 2003 showed two executives at Wal-Mart headquarters knew that contractors and subcontractors cleaning its stores in several states employed illegal immigrants from eastern Europe and elsewhere.
The lawyer who asked that the affidavit be unsealed said it shows Wal-Mart knew it had illegal janitors in its stores.
"The sworn testimony (in the affidavit) establishes that top Wal-Mart executives conspired with contractors to exploit undocumented immigrants," said James L. Linsey, a New York attorney leading a class-action lawsuit on behalf of former janitors.
Wal-Mart denied there was any incriminating evidence in the affidavit and said the comments by executives that it contained were "bits and pieces of information from larger conversations."
"As we have maintained all along, no company senior official had any direct knowledge that undocumented workers were working in our stores," Wal-Mart spokesman Marty Heires said in an e-mail to The Associated Press.
According to the affidavit, one cleaning contractor, Christopher Walters, told INS investigators that his company, IMC Associates of St. Louis, had been dropped by Wal-Mart in 1997 after INS raids in the St. Louis area found illegal workers cleaning the retailers' stores.
Walters told the INS that a Wal-Mart vice president, identified in the affidavit as Leroy Schuetz and Leroy Shutz, advised him to set up multiple subsidiaries so that if one of them were found using illegal workers, he could continue to do business with the retailer through the others.
The affidavit said another conversation took place in April 2003 at Wal-Mart headquarters between Steve Bertschy, a Wal-Mart vice president who managed maintenance of all Wal-Mart stores, and two contractors accompanied by an undercover INS investigator.
After one of the contractors repeatedly mentioned that many cleaning subcontractors were known to be using illegal immigrants at Wal-Mart stores, the affidavit said Bertschy commented: "And they load them up into one or two apartments and they take a family of five and pay them $1,000 a week, that's probably a dollar an hour if they're there seven days a week and they're not paying taxes because they're not getting paid a fair rate compared to U.S. standards, then they start stealing from the store to make up the difference."
Bertschy did not immediately return a call seeking comment. Schuetz could not be reached for comment.
Federal raids later found immigrants crowded into small apartments or trailers in sleeping bags and, in some cases, sleeping in the backs of Wal-Mart stores, carrying their personal belongings from job site to job site.