Fired Wal-Mart security technician tells of spying operation

BENTONVILLE, Ark. - Wal-Mart's normally low-profile security efforts were thrust into the limelight yesterday when a fired technician alleged he had been part of a large surveillance operation that spied on company workers, critics, vendors and consultants.

The company defended its security practices.

The world's largest retailer declined to comment on specific allegations made by 19-year veteran Bruce Gabbard to the Wall Street Journal in a report published yesterday. Wal-Mart reiterated that it had fired Gabbard, 44, and his supervisor last month for violating company policy by recording phone calls and intercepting pager messages.

"Like most major corporations, it is our corporate responsibility to have systems in place, including software systems, to monitor threats to our network, intellectual property, and our people," Wal-Mart spokeswoman Sarah Clark said.

Gabbard was fired after recording phone calls to and from a New York Times reporter and intercepting pager messages.

Wal-Mart made the case public last month and denied Gabbard's claims that his actions were the result of pressure from Kenneth Senser, a former senior CIA and FBI official who has headed Wal-Mart's office of global security since 2003. Another FBI veteran, Joseph Lewis, is head of corporate investigations under Senser.

Gabbard and his former supervisor, Jason Hamilton, who was also fired, have declined repeated requests from the Associated Press to talk about their security activities.

But in a text message to the Associated Press yesterday, Gabbard reiterated his allegation that he was part of a broader surveillance operation approved by the company. The team, the Threat Research and Analysis Group, was a unit of Wal-Mart's Information Systems Division.

Clark, the Wal-Mart spokeswoman, said the company had reported the issue to federal prosecutors to determine if any laws had been broken.

She said the Threat Research group was no longer operating in the same manner that it did before the discovery of the unauthorized recording of telephone conversations.

"There have been changes in leadership, and we have strengthened our practices and protocols in this area," she said.

Wal-Mart's union-backed critics, whom Gabbard identified as among the surveillance targets, accused the retailer of being "paranoid, childish and desperate."

Companies increasingly are monitoring their employees, said Larry Ponemon, founder of the Ponemon Institute, a research foundation that focuses on privacy and data-protection practices of companies. Surveilling vendors and consultants, he said, is "beyond the realm of what legitimate companies do."

Gabbard told the Wall Street Journal that Wal-Mart sent an employee to infiltrate an anti-Wal-Mart group to learn if it was going to protest at the annual shareholders' meeting and investigated McKinsey & Co. employees it believed leaked a memo about Wal-Mart's health-care plans.

Gabbard also said Wal-Mart monitored suppliers' use of the company's computer network, resulting in the discovery of a vendor's downloading pornography.

Gabbard told the Journal he recorded the calls to the New York Times reporter on his own, but added that many of his activities were approved by Wal-Mart. The Journal article said other employees and security firms confirmed parts of his account.

Clark said she could not comment on Gabbard's claim of blanket approval, because "that's a pretty broad statement. We wouldn't be able to comment on that without knowing the details he's referring to."

Clark declined to comment on specific allegations. But when asked about McKinsey, she said: "We continue to work closely with McKinsey, and we have no evidence that anyone there ever inappropriately shared confidential information."