December 20, 2005
Wal-Mart is target of criminal probe over waste
CHICAGO -- Wal-Mart Stores Inc. on Tuesday said federal prosecutors were investigating whether it had improperly transported returned goods, ranging from hair spray to charcoal, that are deemed hazardous waste.
In a filing with the U.S. Securities and Exchange Commission, the world's biggest retailer said it was informed by the U.S. Attorney's Office in Los Angeles that it is the target of a criminal investigation into whether it violated the Resource Conservation and Recovery Act.
According to the Wal-Mart, the government is looking into whether the company improperly used its own trucks to transport material deemed hazardous to centralized facilities, rather than using certified hazardous waste carriers to ship that material directly to designated disposal sites.
Wal-Mart's stock dipped less than 1 percent in premarket trading on the Inet electronic brokerage.
The investigation is the latest in a series of legal troubles for Wal-Mart, which is also defending the largest-ever class-action lawsuit, which charges it with discriminating against women in pay and promotions.
Wal-Mart faces dozens of lawsuits accusing it of violating wage-and-hour laws, and earlier this year settled a federal investigation into the use of illegal immigrants to clean its stores.
Wal-Mart spokeswoman Sarah Clark said a number of goods, including hair spray, paint, aerosol cans and charcoal, are classified as hazardous.
She said Wal-Mart typically loads all sorts of returned merchandise onto trucks for transport to a return center, and then puts any hazardous material on special trucks to go to disposal sites.
"The government does not challenge the manner in which we disposed of hazardous waste material ... but rather the transportation of it from stores," Clark said.
She said Wal-Mart was surprised to learn that the government thought it was violating the law, and the retailer was reviewing its transport procedures and cooperating with federal and state authorities.
The company previously disclosed that it had received a grand jury subpoena in the matter, looking at, among other things, the transportation of material from California to Nevada.
Wal-Mart said in the filing that it cannot predict any potential loss or range of losses from the probe.
Shares of Wal-Mart slipped to $48.71 on Inet from Monday's New York Stock Exchange closing price of $48.96.