Wal-Mart Execs Knew of Illegal Workers, U.S. Says

Two senior Wal-Mart Stores Inc. 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 had agreed in March to pay $11 million to settle the case but said top executives neither encouraged nor knew of the practice.

The document was unsealed Wednesday by a U.S. district judge in Fayetteville, Ark., at the request of a New York attorney representing more than 200 former janitors in a civil suit against the retailer.

In the affidavit, investigators said testimony and taped conversations from 2003 showed that 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 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 for the former janitors.

According to the affidavit, one cleaning contractor, Christopher Walters, told investigators that his company, IMC Associates of St. Louis, had been dropped by Wal-Mart in 1997 after Immigration and Naturalization Service raids found illegal workers in the retailer’s stores.

Walters told the INS that a Wal-Mart vice president, Leroy Schuetz, had advised him to set up multiple subsidiaries so that if one of them was found using illegal workers, he could continue to do business with the retailer through the others.

Wal-Mart denied that there was incriminating evidence in the affidavit.