Despite some expected harrumphing from the Oregonian's editorial board—which wrote an exaggerated piece this week defending Walmart as an unfairly maligned target of misguided progressives—the Portland City Council this morning unanimously and enthusiastically followed Commissioner Steve Novick's lead and agreed to stop investing city assets in Walmart.
"This may seem like a little thing," Commissioner Amanda Fritz said when voting "aye." "But what if everyone did it. Then it would be a big thing."
Novick's proposal this morning was two-fold. It would adopt city guidelines for socially responsible investments, leading up to a continually curated "do not buy" list of corporations that the council decides fall short. The other piece was creating a temporary list consisting solely of Walmart—based on Novick's sense of what those guidelines might eventually consider.
In making his case for a Walmart ban—Walmart-bashing has historically been a popular sport in some corners of city hall—Novick invoked all the usual reasons why reasonable people might try avoiding doing business with the place. A bribery case in Mexico. Tax avoidance allegations. Abuse of workers—like a decision to cut hours to avoid health care costs.
Novick makes the case that extreme tax avoidance, setting up foreign subsidiaries as part of a legal shell game to hide money, hurts Portland because it reduces money the federal government can rely on when meting out community grants for programs like affordable housing construction.
He also invoked one that, I'm sure, the laudatory O editorial would have had a field day with. Noting Walmart's massive distribution network and the powers their market dominance provides—in dictating prices and manufacturing specs to their suppliers—Novick warned us we could be staring at a "Soviet-style economy" headquartered in Arkansas instead of "in Moscow." (Presumably not the one in Idaho.)
"If you're not doing business with Walmart, for a great extent of America, you're not doing business," Novick said. "To me it is frightening for the country."
The city owns just $37 million in Walmart bonds—a fraction of its nearly $900 million in assets (assets that returned only a few million dollars in profits over the past few years). Novick's plan wouldn't ditch that money—selling Walmart's bonds, he argued, would just foist their sins upon some other buyer. Rather, it would stop the city from buying any more Walmart bonds.
Novick said he was okay leading with Walmart because of its record. An interim committee, looking at criteria including market disruption, extreme tax avoidance, and abusive labor practices, will report back to the council next year on a standing citizens committee or an outside advisor should help the council devise a larger list of verboten companies moving forward.
"There are few saints in the ranks of major corporations," he said. "We would not put companies on the "do not buy" list because at some point one of them has run afoul of one of these criteria. I felt comfortable bringing this one list to council because Walmart has a well-documented history of running afoul of several of these criteria."