How gift cards helped trip up Wal-Mart aide
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Contact lenses, a $100 gift card and an alert Wal-Mart Stores Inc. employee helped trigger the forced resignation this year of Thomas M. Coughlin, the discounter's former No. 2 executive, according to a new chronology of events Wal-Mart filed yesterday with the Labor Department.
Wal-Mart has accused Mr. Coughlin, a former vice chairman, of stealing as much as $500,000 from the giant retailer in the form of bogus expenses and reimbursements along with the unauthorized use of gift cards. The high-profile case is being probed by the U.S. Attorney in Fort Smith, Ark. Mr. Coughlin, through his lawyers, has denied wrongdoing.
Yesterday's filing by Wal-Mart was an attempt to refute a claim by Jared Bowen, a former company vice president, that he was unjustly fired after blowing the whistle on Mr. Coughlin's alleged wrongdoing. In a letter to Labor Department officials from one of its outside lawyers -- Eugene Scalia, son of Supreme Court Justice Antonin Scalia -- Wal-Mart said Mr. Bowen wasn't a whistleblower and, in fact, helped Mr. Coughlin misappropriate funds.
Instead, Wal-Mart said yesterday, Mr. Coughlin was caught after a different employee blew the whistle.
According to Wal-Mart's account, Mr. Coughlin in May 2004 asked Mr. Bowen for 51 Wal-Mart gift cards, each with a value of $100. He said they would be given to that year's "All-Stars," who were generally lower-level employees recognized for superior performance.
Wal-Mart said Mr. Coughlin used the gift cards himself at Wal-Mart stores and Sam's Club outlets, at one point spending $1,000 toward three 12-gauge shotguns. A company spokeswoman said Wal-Mart was able to track all the purchases, saying Mr. Coughlin also used the cards to buy puppy chow, a Celine Dion compact disc, Stolichnaya vodka, wine, a $319 fishing license, a rifle case and a $3.54 Polish sausage.
Mr. Coughlin's downfall came, the company said, in January 2005, when he presented one of the $100 gift cards at a Wal-Mart store to buy contact lenses. After a sales clerk called the home office to inquire about the gift-card program, an alert employee noticed the card was supposed to be an All-Star award and "could not understand why Coughlin would be attempting to redeem" it. The home office employee alerted corporate fraud personnel, Wal-Mart said, triggering an internal probe.
Mr. Coughlin retired as vice chairman of Wal-Mart in January, and then was forced to resign from the board iny surprise. In a statement, his lawyers, William Taylor and Blair Brown, said the company had refused for months to release the documents, citing the ongoing federal investigation and the need for confidentiality.
First Published July 15, 2005 12:00 am
