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Wal-Mart says fired employee not a 'whistleblower'

Posted on: Friday, 15 July 2005, 09:13 CDT

CHICAGO (Reuters) - Wal-Mart Stores Inc. said a former employee who brought a whistleblower lawsuit against it was fired because he helped a former vice chairman misappropriate funds.

In a filing with the U.S. Labor Department released on Thursday, the world's biggest retailer publicly detailed for the first time its claims that former Vice Chairman Thomas Coughlin misappropriated hundreds of thousands of dollars from the company to buy personal items, including customized dog kennels, vacations, food, clothing and liquor.

Coughlin resigned in March following an internal investigation into improper use of gift cards and other expenses. Through his lawyers, he has denied the allegations.

The retailer said Jared Bowen, who was fired on March 30 and has since filed a whistleblower lawsuit, was "involved in an extensive scheme to misappropriate corporate assets for the personal benefit of Tom Coughlin." Bowen headed a department that approved expenses.

Bowen's attorney, Steve Kardell, said he would comment later on Friday. In his lawsuit, Bowen said he was fired after reporting questionable expenses.

Wal-Mart contends that Bowen reported two improper expense vouchers only after several of Coughlin's friends were investigated and fired.

Wal-Mart's 25-page filing details what the retailer called a more than 10-year "fraudulent scheme" in which Coughlin misappropriated money to pay for personal expenditures "ranging from the petty to the extravagant."

Wal-Mart said Coughlin spent more than $30,000 in company funds on a hunting lease, $10,000 on a customized hunting vehicle, and $8,500 for an all-terrain vehicle.

"The scheme depended on subordinates who were willing to follow Coughlin's instructions even when they knew their conduct violated Wal-Mart policies and controls," the filing said.

Wal-Mart said many of those subordinates were in the company's operations development department, which Bowen headed at the time he was fired.

The retailer said the incident that ultimately led to Coughlin's resignation and Bowen's firing involved 51 Wal-Mart gift cards of $100 each that Coughlin asked Bowen to buy as a reward to "All-Star" employees for superior performances.

Wal-Mart alleges that Coughlin instead used the cards himself to buy items ranging from 12-gauge shotguns to a Celine Dion CD.

Wal-Mart contends that Bowen cooperated with Coughlin because the previous department head had told him he could become an officer of the company if he helped the Coughlin.

The retailer said Coughlin presented one of the gift cards to buy contact lenses at a Wal-Mart store in January 2005. The employee who handled the transaction called Wal-Mart's Bentonville, Arkansas, headquarters to get help from someone familiar with the gift card program.

The Bentonville staffer noticed that the card had been activated under a code for top-performing "All-Stars," who are normally lower level employees, and she couldn't understand why a top executive like Coughlin would have received it.

That employee reported the incident.

Source: REUTERS

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