May 25th, 2007

Roehm: Wal-Mart Execs Took Gifts

By Aaron Baar

Julie Roehm, Wal-Mart’s former svp, marketing communications, said the retailer’s ethics policy isn’t as stringent as the company would have people believe.

In her most recent court filing, Roehm said executives at the Bentonville, Ark., company “do not abide by Wal-Mart’s allegedly ‘firm’ policy forbidding conflicts of interest.” The filing, made yesterday in Detroit, refutes most of the points Wal-Mart made in its response to her wrongful termination lawsuit.

Roehm filed the original suit last December; Wal-Mart issued its counterclaim in March.

As evidence of her latest claims, Roehm cited a relationship between current Wal-Mart president and CEO H. Lee Scott and Irwin Jacobs, who owns Jacobs Trading Co., which purchases unsold Wal-Mart merchandise.

“Mr. Jacobs also owns or owned interests in approximately 12 boat manufacturing companies, and as part and parcel of Mr. Scott’s relationship with him, over the span of several years, Mr. Scott has purchased from Mr. Jacobs’ companies a number of yachts at preferential prices,” according to Roehm’s filing. She also asserts that Scott bought jewelry for his wife at “preferential prices,” accepted trips on Jacobs’ private jet and that Scott’s son left Wal-Mart to take a job at Jones Trading.

“This lawsuit is about Julie Roehm and her misconduct,” said a company representative in a prepared statement. “Her document shows how weak her case is. We will address theese issues in court. Certainly, we dispute the allegations involving our CEO and Irwin Jacobs.”

Roehm and one of her subordinates, Sean Womack, who was vp, communications architecture, were fired last December for allegedly violating the company’s ethics policy by accepting gifts from potential vendors and having an affair, which is forbidden among managers and subordinates at the company.

Their dismissals led Roehm to file a lawsuit claiming wrongful termination—which in turn has led to an escalating war of words and legal filings.

In court papers, Roehm also claimed that other executives at Wal-Mart—including former evp, marketing John Fleming, vp, marketing Steve Bratspies and onetime vp, merchandising David Porter—violated company policy by flying to Spain to meet potential vendors and accepted tickets, backstage passes and souvenirs to an Eagles concert. “None of the officers ever returned” those gifts, Roehm said in the filing.

She also denied any allegations of an improper personal relationship with Womack. In countering one cited instance, where a co-worker allegedly saw her and Womack in a comprising position at a bar, Roehm asserted that the two were talking while she waited in line to use the restroom. “At no point did Mr. Womack ‘pin’ Roehm against the wall in an ‘intimate pose,’” she stated in the filing, countering Wal-Mart’s earlier assertions.

Roehm also denied having an affair with Womack, but acknowledged exchanging e-mails with him about his marital problems. “Despite Wal-Mart’s accusations about the Womacks’ intimate personal relationship, Mr. and Mrs. Womack remain married,” according to the filing.

Roehm also denied showing onetime account winner DraftFCB any favoritism during a review of Wal-Mart’s $570 million ad account, asserting that the agency was the nearly unanimous selection of the review team.

She also claimed that she hosted representatives of Wal-Mart’s current shop, The Martin Agency, at her home when their plane was delayed and that her boss, John Fleming, received a weekly accounting of all e-mails she sent to agencies involved in the pitch process.

According to the filing, Fleming—who was on the review committee— also favored DraftFCB and said that incumbent agency GSD&M “‘did not stand a chance’ because a change was needed at Wal-Mart.” He also said contender Ogilvy & Mather’s ideas were too “Target-like,” according to court papers.

Roehm also asserted that neither she nor Womack sought employment with DraftFCB during the pitch. She described meetings, such as a dinner at the Penninsula hotel, as purely business related and said she stressed the agency bill her back for the expenses she incurred in accordance with Wal-Mart’s ethics policy. She did state, however, that Womack met with DraftFCB CEO Howard Draft to seek “personal advice on marriage issues, in light of Mr. Draft’s personal experience.”

Roehm also addressed the infamous Nobu 57 dinner. In the filing, Roehm admitted to sitting on then DraftFCB chief growth officer Tony Weisman’s lap for a “group photo,” but denied spending “any extended amount of time there” or that she was eating off his plate.

She also said her comments at an AdForum event hosted by DraftFCB at the same time were not perceived by attendees as overtly favoring the agency during the review, and that “no-one at Wal-Mart had ever told Roehm that her appearance at the event ‘cast a shadow over Wal-Mart’s review.”

In sum, Roehm asserted that Wal-Mart created a pretext for firing her “so that it can avoid difficult questions about its fundamental unwillingness to change its corporate culture and modernize its marketing strategies.’”

According to the filing, she said she was praised for her job performance and given a public role at the company up until the point she was terminated.


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