August 22, 2008

New York City agrees to pay protesters $2 million

An injured and bleeding anti-war protester is arrested on 56th ...

An injured and bleeding anti-war protester is arrested on 56th street in New York on April 7, 2003.
(Chip East/Reuters)

NEW YORK (Reuters) - New York City has agreed to pay a $2 million settlement to protesters arrested during a 2003 rally against the Iraq war who said their civil rights had been violated, lawyers for both sides said on Tuesday.

The 52 plaintiffs in the lawsuit were among 94 protesters arrested on April 7, 2003, during a demonstration at the midtown Manhattan offices of the Carlyle Group, a private equity firm with holdings in the defense sector.

"The New York Police Department violated core constitutional rights when it arrested a group of peaceful demonstrators who were lawfully protesting against the commencement of the Iraq war and those who stood to profit from it," said Sarah Netburn, a lawyer for the protesters.

In a statement, a lawyer for New York City confirmed the size of the settlement.

"This settlement was reached without any admission of liability on behalf of the city and the individual defendants," said Susan Halatyn, senior counsel in the Special Federal Litigation Division for New York City.

"Although defendants believe that they would ultimately have prevailed at a trial, the costs of going forward weighed in favor of a settlement at this time."

Two of the protesters, Eva Hageman and Sarah Kunstler, went to trial on charges of disorderly conduct and were acquitted by a jury, said a lawyer for the New York-based Center for Constitutional Rights, which brought the case.

Charges against the remaining protesters were dismissed without a trial, CCR said.

The settlement, which includes attorney's fees, will be divided evenly among the plaintiffs, lawyers said.

(Reporting by Edith Honan, editing by Michelle Nichols and Cynthia Osterman)

New Guidelines Would Give F.B.I. Broader Powers


WASHINGTON — A Justice Department plan would loosen restrictions on the Federal Bureau of Investigation to allow agents to open a national security or criminal investigation against someone without any clear basis for suspicion, Democratic lawmakers briefed on the details said Wednesday.

The plan, which could be made public next month, has already generated intense interest and speculation. Little is known about its precise language, but civil liberties advocates say they fear it could give the government even broader license to open terrorism investigations.

Congressional staff members got a glimpse of some of the details in closed briefings this month, and four Democratic senators told Attorney General Michael B. Mukasey in a letter on Wednesday that they were troubled by what they heard.

The senators said the new guidelines would allow the F.B.I. to open an investigation of an American, conduct surveillance, pry into private records and take other investigative steps “without any basis for suspicion.” The plan “might permit an innocent American to be subjected to such intrusive surveillance based in part on race, ethnicity, national origin, religion, or on protected First Amendment activities,” the letter said. It was signed by Russ Feingold of Wisconsin, Richard J. Durbin of Illinois, Edward M. Kennedy of Massachusetts and Sheldon Whitehouse of Rhode Island.

As the end of the Bush administration nears, the White House has been seeking to formalize in law and regulation some of the aggressive counterterrorism steps it has already taken in practice since the Sept. 11 attacks.

Congress overhauled the federal wiretapping law in July, for instance, and President Bush issued an executive order this month ratifying new roles for intelligence agencies. Other pending changes would also authorize greater sharing of intelligence information with the local police, a major push in the last seven years.

The Justice Department is already expecting criticism over the F.B.I. guidelines. In an effort to pre-empt critics, Mr. Mukasey gave a speech last week in Portland, Ore., describing the unfinished plan as an effort to “integrate more completely and harmonize the standards that apply to the F.B.I.’s activities.” Differing standards, he said, have caused confusion for field agents.

Mr. Mukasey emphasized that the F.B.I. would still need a “valid purpose” for an investigation, and that it could not be “simply based on somebody’s race, religion, or exercise of First Amendment rights.”

Rather than expanding government power, he said, “this document clarifies the rules by which the F.B.I. conducts its intelligence mission.”

In 2002, John Ashcroft, then the attorney general, allowed F.B.I. agents to visit public sites like mosques or monitor Web sites in the course of national security investigations. The next year, Mr. Bush issued guidelines allowing officials to use ethnicity or race in “narrow” circumstances to detect a terrorist threat.

The Democratic senators said the draft plan appeared to allow the F.B.I. to go even further in collecting information on Americans connected to “foreign intelligence” without any factual predicate. They also said there appeared to be few constraints on how the information would be shared with other agencies.

Michael German, a lawyer with the American Civil Liberties Union and a former F.B.I. agent, said the plan appeared to open the door still further to the use of data-mining profiles in tracking terrorism.

“This seems to be based on the idea that the government can take a bunch of data and create a profile that can be used to identify future bad guys,” he said. “But that has not been demonstrated to be true anywhere else.”

The Justice Department said Wednesday that in light of requests from members of Congress for more information, Mr. Mukasey would agree not to sign the new guidelines before a Sept. 17 Congressional hearing.

August 2, 2008

“The Connection Has Been Reset”



China’s Great Firewall is crude, slapdash, and surprisingly easy to breach. Here’s why it’s so effective anyway.

 by James Fallows

Many foreigners who come to China for the Olympics will use the Internet to tell people back home what they have seen and to check what else has happened in the world.

James Fallows explains how he was able to probe the taboo subject of Chinese Internet censorship.

The first thing they’ll probably notice is that China’s Internet seems slow. Partly this is because of congestion in China’s internal networks, which affects domestic and international transmissions alike. Partly it is because even electrons take a detectable period of time to travel beneath the Pacific Ocean to servers in America and back again; the trip to and from Europe is even longer, because that goes through America, too. And partly it is because of the delaying cycles imposed by China’s system that monitors what people are looking for on the Internet, especially when they’re looking overseas. That’s what foreigners have heard about.

They’ll likely be surprised, then, to notice that China’s Internet seems surprisingly free and uncontrolled. Can they search for information about “Tibet independence” or “Tiananmen shooting” or other terms they have heard are taboo? Probably—and they’ll be able to click right through to the controversial sites. Even if they enter the Chinese-language term for “democracy in China,” they’ll probably get results. What about Wikipedia, famously off-limits to users in China? They will probably be able to reach it. Naturally the visitors will wonder: What’s all this I’ve heard about the “Great Firewall” and China’s tight limits on the Internet?

In reality, what the Olympic-era visitors will be discovering is not the absence of China’s electronic control but its new refinement—and a special Potemkin-style unfettered access that will be set up just for them, and just for the length of their stay. According to engineers I have spoken with at two tech organizations in China, the government bodies in charge of censoring the Internet have told them to get ready to unblock access from a list of specific Internet Protocol (IP) addresses—certain Internet cafés, access jacks in hotel rooms and conference centers where foreigners are expected to work or stay during the Olympic Games. (I am not giving names or identifying details of any Chinese citizens with whom I have discussed this topic, because they risk financial or criminal punishment for criticizing the system or even disclosing how it works. Also, I have not gone to Chinese government agencies for their side of the story, because the very existence of Internet controls is almost never discussed in public here, apart from vague statements about the importance of keeping online information “wholesome.”)

Depending on how you look at it, the Chinese government’s attempt to rein in the Internet is crude and slapdash or ingenious and well crafted. When American technologists write about the control system, they tend to emphasize its limits. When Chinese citizens discuss it—at least with me—they tend to emphasize its strength. All of them are right, which makes the government’s approach to the Internet a nice proxy for its larger attempt to control people’s daily lives.

Disappointingly, “Great Firewall” is not really the right term for the Chinese government’s overall control strategy. China has indeed erected a firewall—a barrier to keep its Internet users from dealing easily with the outside world—but that is only one part of a larger, complex structure of monitoring and censorship. The official name for the entire approach, which is ostensibly a way to keep hackers and other rogue elements from harming Chinese Internet users, is the “Golden Shield Project.” Since that term is too creepy to bear repeating, I’ll use “the control system” for the overall strategy, which includes the “Great Firewall of China,” or GFW, as the means of screening contact with other countries.

In America, the Internet was originally designed to be free of choke points, so that each packet of information could be routed quickly around any temporary obstruction. In China, the Internet came with choke points built in. Even now, virtually all Internet contact between China and the rest of the world is routed through a very small number of fiber-optic cables that enter the country at one of three points: the Beijing-Qingdao-Tianjin area in the north, where cables come in from Japan; Shanghai on the central coast, where they also come from Japan; and Guangzhou in the south, where they come from Hong Kong. (A few places in China have Internet service via satellite, but that is both expensive and slow. Other lines run across Central Asia to Russia but carry little traffic.) In late 2006, Internet users in China were reminded just how important these choke points are when a seabed earthquake near Taiwan cut some major cables serving the country. It took months before international transmissions to and from most of China regained even their pre-quake speed, such as it was.

Thus Chinese authorities can easily do something that would be harder in most developed countries: physically monitor all traffic into or out of the country. They do so by installing at each of these few “international gateways” a device called a “tapper” or “network sniffer,” which can mirror every packet of data going in or out. This involves mirroring in both a figurative and a literal sense. “Mirroring” is the term for normal copying or backup operations, and in this case real though extremely small mirrors are employed. Information travels along fiber-optic cables as little pulses of light, and as these travel through the Chinese gateway routers, numerous tiny mirrors bounce reflections of them to a separate set of “Golden Shield” computers.Here the term’s creepiness is appropriate. As the other routers and servers (short for file servers, which are essentially very large-capacity computers) that make up the Internet do their best to get the packet where it’s supposed to go, China’s own surveillance computers are looking over the same information to see whether it should be stopped.

The mirroring routers were first designed and supplied to the Chinese authorities by the U.S. tech firm Cisco, which is why Cisco took such heat from human-rights organizations. Cisco has always denied that it tailored its equipment to the authorities’ surveillance needs, and said it merely sold them what it would sell anyone else. The issue is now moot, since similar routers are made by companies around the world, notably including China’s own electronics giant, Huawei. The ongoing refinements are mainly in surveillance software, which the Chinese are developing themselves. Many of the surveillance engineers are thought to come from the military’s own technology institutions. Their work is good and getting better, I was told by Chinese and foreign engineers who do “oppo research” on the evolving GFW so as to design better ways to get around it.

Andrew Lih, a former journalism professor and software engineer now based in Beijing (and author of the forthcoming book The Wikipedia Story), laid out for me the ways in which the GFW can keep a Chinese Internet user from finding desired material on a foreign site. In the few seconds after a user enters a request at the browser, and before something new shows up on the screen, at least four things can go wrong—or be made to go wrong.

The first and bluntest is the “DNS block.” The DNS, or Domain Name System, is in effect the telephone directory of Internet sites. Each time you enter a Web address, or URL—, let’s say—the DNS looks up the IP address where the site can be found. IP addresses are numbers separated by dots—for example,’s is If the DNS is instructed to give back no address, or a bad address, the user can’t reach the site in question—as a phone user could not make a call if given a bad number. Typing in the URL for the BBC’s main news site often gets the no-address treatment: if you try, you may get a “Site not found” message on the screen. For two months in 2002, Google’s Chinese site,, got a different kind of bad-address treatment, which shunted users to its main competitor, the dominant Chinese search engine, Baidu. Chinese academics complained that this was hampering their work. The government, which does not have to stand for reelection but still tries not to antagonize important groups needlessly, let back online. During politically sensitive times, like last fall’s 17th Communist Party Congress, many foreign sites have been temporarily shut down this way.

Next is the perilous “connect” phase. If the DNS has looked up and provided the right IP address, your computer sends a signal requesting a connection with that remote site. While your signal is going out, and as the other system is sending a reply, the surveillance computers within China are looking over your request, which has been mirrored to them. They quickly check a list of forbidden IP sites. If you’re trying to reach one on that blacklist, the Chinese international-gateway servers will interrupt the transmission by sending an Internet “Reset” command both to your computer and to the one you’re trying to reach. Reset is a perfectly routine Internet function, which is used to repair connections that have become unsynchronized. But in this case it’s equivalent to forcing the phones on each end of a conversation to hang up. Instead of the site you want, you usually see an onscreen message beginning “The connection has been reset”; sometimes instead you get “Site not found.” Annoyingly, blogs hosted by the popular system Blogspot are on this IP blacklist. For a typical Google-type search, many of the links shown on the results page are from Wikipedia or one of these main blog sites. You will see these links when you search from inside China, but if you click on them, you won’t get what you want.

The third barrier comes with what Lih calls “URL keyword block.” The numerical Internet address you are trying to reach might not be on the blacklist. But if the words in its URL include forbidden terms, the connection will also be reset. (The Uniform Resource Locator is a site’s address in plain English—say,—rather than its all-numeric IP address.) The site FalunGong .com appears to have no active content, but even if it did, Internet users in China would not be able to see it. The forbidden list contains words in English, Chinese, and other languages, and is frequently revised—“like, with the name of the latest town with a coal mine disaster,” as Lih put it. Here the GFW’s programming technique is not a reset command but a “black-hole loop,” in which a request for a page is trapped in a sequence of delaying commands. These are the programming equivalent of the old saw about how to keep an idiot busy: you take a piece of paper and write “Please turn over” on each side. When the Firefox browser detects that it is in this kind of loop, it gives an error message saying: “The server is redirecting the request for this address in a way that will never complete.”

The final step involves the newest and most sophisticated part of the GFW: scanning the actual contents of each page—which stories The New York Times is featuring, what a China-related blog carries in its latest update—to judge its page-by-page acceptability. This again is done with mirrors. When you reach a favorite blog or news site and ask to see particular items, the requested pages come to you—and to the surveillance system at the same time. The GFW scanner checks the content of each item against its list of forbidden terms. If it finds something it doesn’t like, it breaks the connection to the offending site and won’t let you download anything further from it. The GFW then imposes a temporary blackout on further “IP1 to IP2” attempts—that is, efforts to establish communications between the user and the offending site. Usually the first time-out is for two minutes. If the user tries to reach the site during that time, a five-minute time-out might begin. On a third try, the time-out might be 30 minutes or an hour—and so on through an escalating sequence of punishments.

Users who try hard enough or often enough to reach the wrong sites might attract the attention of the authorities. At least in principle, Chinese Internet users must sign in with their real names whenever they go online, even in Internet cafés. When the surveillance system flags an IP address from which a lot of “bad” searches originate, the authorities have a good chance of knowing who is sitting at that machine.

All of this adds a note of unpredictability to each attempt to get news from outside China. One day you go to the NPR site and cruise around with no problem. The next time, NPR happens to have done a feature on Tibet. The GFW immobilizes the site. If you try to refresh the page or click through to a new story, you’ll get nothing—and the time-out clock will start.

This approach is considered a subtler and more refined form of censorship, since big foreign sites no longer need be blocked wholesale. In principle they’re in trouble only when they cover the wrong things. Xiao Qiang, an expert on Chinese media at the University of California at Berkeley journalism school, told me that the authorities have recently begun applying this kind of filtering in reverse. As Chinese-speaking people outside the country, perhaps academics or exiled dissidents, look for data on Chinese sites—say, public-health figures or news about a local protest—the GFW computers can monitor what they’re asking for and censor what they find.

Taken together, the components of the control system share several traits. They’re constantly evolving and changing in their emphasis, as new surveillance techniques become practical and as words go on and off the sensitive list. They leave the Chinese Internet public unsure about where the off-limits line will be drawn on any given day. Andrew Lih points out that other countries that also censor Internet content—Singapore, for instance, or the United Arab Emirates—provide explanations whenever they do so. Someone who clicks on a pornographic or “anti-Islamic” site in the U.A.E. gets the following message, in Arabic and English: “We apologize the site you are attempting to visit has been blocked due to its content being inconsistent with the religious, cultural, political, and moral values of the United Arab Emirates.” In China, the connection just times out. Is it your computer’s problem? The firewall? Or maybe your local Internet provider, which has decided to do some filtering on its own? You don’t know. “The unpredictability of the firewall actually makes it more effective,” another Chinese software engineer told me. “It becomes much harder to know what the system is looking for, and you always have to be on guard.”

There is one more similarity among the components of the firewall: they are all easy to thwart.

As a practical matter, anyone in China who wants to get around the firewall can choose between two well-known and dependable alternatives: the proxy server and the VPN. A proxy server is a way of connecting your computer inside China with another one somewhere else—or usually to a series of foreign computers, automatically passing signals along to conceal where they really came from. You initiate a Web request, and the proxy system takes over, sending it to a computer in America or Finland or Brazil. Eventually the system finds what you want and sends it back. The main drawback is that it makes Internet operations very, very slow. But because most proxies cost nothing to install and operate, this is the favorite of students and hackers in China.

A VPN, or virtual private network, is a faster, fancier, and more elegant way to achieve the same result. Essentially a VPN creates your own private, encrypted channel that runs alongside the normal Internet. From within China, a VPN connects you with an Internet server somewhere else. You pass your browsing and downloading requests to that American or Finnish or Japanese server, and it finds and sends back what you’re looking for. The GFW doesn’t stop you, because it can’t read the encrypted messages you’re sending. Every foreign business operating in China uses such a network. VPNs are freely advertised in China, so individuals can sign up, too. I use one that costs $40 per year. (An expat in China thinks: that’s a little over a dime a day. A Chinese factory worker thinks: it’s a week’s take-home pay. Even for a young academic, it’s a couple days’ work.)

As a technical matter, China could crack down on the proxies and VPNs whenever it pleased. Today the policy is: if a message comes through that the surveillance system cannot read because it’s encrypted, let’s wave it on through! Obviously the system’s behavior could be reversed. But everyone I spoke with said that China could simply not afford to crack down that way. “Every bank, every foreign manufacturing company, every retailer, every software vendor needs VPNs to exist,” a Chinese professor told me. “They would have to shut down the next day if asked to send their commercial information through the regular Chinese Internet and the Great Firewall.” Closing down the free, easy-to-use proxy servers would create a milder version of the same problem. Encrypted e-mail, too, passes through the GFW without scrutiny, and users of many Web-based mail systems can establish a secure session simply by typing “https:” rather than the usual “http:” in a site’s address—for instance, To keep China in business, then, the government has to allow some exceptions to its control efforts—even knowing that many Chinese citizens will exploit the resulting loopholes.

Because the Chinese government can’t plug every gap in the Great Firewall, many American observers have concluded that its larger efforts to control electronic discussion, and the democratization and grass-roots organizing it might nurture, are ultimately doomed. A recent item on an influential American tech Web site had the headline “Chinese National Firewall Isn’t All That Effective.” In October, Wired ran a story under the headline “The Great Firewall: China’s Misguided—and Futile—Attempt to Control What Happens Online.”

Let’s not stop to discuss why the vision of democracy-through-communications-technology is so convincing to so many Americans. (Samizdat, fax machines, and the Voice of America eventually helped bring down the Soviet system. Therefore proxy servers and online chat rooms must erode the power of the Chinese state. Right?) Instead, let me emphasize how unconvincing this vision is to most people who deal with China’s system of extensive, if imperfect, Internet controls.

Think again of the real importance of the Great Firewall. Does the Chinese government really care if a citizen can look up the Tiananmen Square entry on Wikipedia? Of course not. Anyone who wants that information will get it—by using a proxy server or VPN, by e-mailing to a friend overseas, even by looking at the surprisingly broad array of foreign magazines that arrive, uncensored, in Chinese public libraries.

What the government cares about is making the quest for information just enough of a nuisance that people generally won’t bother. Most Chinese people, like most Americans, are interested mainly in their own country. All around them is more information about China and things Chinese than they could possibly take in. The newsstands are bulging with papers and countless glossy magazines. The bookstores are big, well stocked, and full of patrons, and so are the public libraries. Video stores, with pirated versions of anything. Lots of TV channels. And of course the Internet, where sites in Chinese and about China constantly proliferate. When this much is available inside the Great Firewall, why go to the expense and bother, or incur the possible risk, of trying to look outside?

All the technology employed by the Golden Shield, all the marvelous mirrors that help build the Great Firewall—these and other modern achievements matter mainly for an old-fashioned and pre-technological reason. By making the search for external information a nuisance, they drive Chinese people back to an environment in which familiar tools of social control come into play.

Chinese bloggers have learned that if they want to be read in China, they must operate within China, on the same side of the firewall as their potential audience. Sure, they could put up exactly the same information outside the Chinese mainland. But according to Rebecca Mac­Kinnon, a former Beijing correspondent for CNN now at the Journalism and Media Studies Center of the University of Hong Kong, their readers won’t make the effort to cross the GFW and find them. “If you want to have traction in China, you have to be in China,” she told me. And being inside China means operating under the sweeping rules that govern all forms of media here: guidance from the authorities; the threat of financial ruin or time in jail; the unavoidable self-censorship as the cost of defiance sinks in.

Most blogs in China are hosted by big Internet companies. Those companies know that the government will hold them responsible if a blogger says something bad. Thus the companies, for their own survival, are dragooned into service as auxiliary censors.

Large teams of paid government censors delete offensive comments and warn errant bloggers. (No official figures are available, but the censor workforce is widely assumed to number in the tens of thousands.) Members of the public at large are encouraged to speak up when they see subversive material. The propaganda ministries send out frequent instructions about what can and cannot be discussed. In October, the group Reporters Without Borders, based in Paris, released an astonishing report by a Chinese Internet technician writing under the pseudonym “Mr. Tao.” He collected dozens of the messages he and other Internet operators had received from the central government. Here is just one, from the summer of 2006:

17 June 2006, 18:35
From: Chen Hua, deputy director of the Beijing Internet Information Administrative Bureau
Dear colleagues, the Internet has of late been full of articles and messages about the death of a Shenzhen engineer, Hu Xinyu, as a result of overwork. All sites must stop posting articles on this subject, those that have already been posted about it must be removed from the site and, finally, forums and blogs must withdraw all articles and messages about this case.

“Domestic censorship is the real issue, and it is about social control, human surveillance, peer pressure, and self-censorship,” Xiao Qiang of Berkeley says. Last fall, a team of computer scientists from the University of California at Davis and the University of New Mexico published an exhaustive technical analysis of the GFW’s operation and of the ways it could be foiled. But they stressed a nontechnical factor: “The presence of censorship, even if easy to evade, promotes self-censorship.”

It would be wrong to portray China as a tightly buttoned mind-control state. It is too wide-open in too many ways for that. “Most people in China feel freer than any Chinese people have been in the country’s history, ever,” a Chinese software engineer who earned a doctorate in the United States told me. “There has never been a space for any kind of discussion before, and the government is clever about continuing to expand space for anything that doesn’t threaten its survival.” But it would also be wrong to ignore the cumulative effect of topics people are not allowed to discuss. “Whether or not Americans supported George W. Bush, they could not avoid learning about Abu Ghraib,” Rebecca Mac­Kinnon says. In China, “the controls mean that whole topics inconvenient for the regime simply don’t exist in public discussion.” Most Chinese people remain wholly unaware of internationally noticed issues like, for instance, the controversy over the Three Gorges Dam.

Countless questions about today’s China boil down to: How long can this go on? How long can the industrial growth continue before the natural environment is destroyed? How long can the super-rich get richer, without the poor getting mad? And so on through a familiar list. The Great Firewall poses the question in another form: How long can the regime control what people are allowed to know, without the people caring enough to object? On current evidence, for quite a while.


James Fallows is an Atlantic national correspondent; his blog is at



U.S. agents can seize travelers' laptops

WASHINGTON (Reuters) - U.S. federal agents have been given new powers to seize travelers' laptops and other electronic devices at the border and hold them for unspecified periods the Washington Post reported on Friday.


Under recently disclosed Department of Homeland Security policies, such seizures may be carried out without suspicion of wrongdoing, the newspaper said, quoting policies issued on July 16 by two DHS agencies.

Agents are empowered to share the contents of seized computers with other agencies and private entities for data decryption and other reasons, the newspaper said.

DHS officials said the policies applied to anyone entering the country, including U.S. citizens, and were needed to prevent terrorism.

The measures have long been in place but were only disclosed in July, under pressure from civil liberties and business travel groups acting on reports that increasing numbers of international travelers had had their laptops, cellphones and other digital devices removed and examined.

The policies cover hard drives, flash drives, cell phones, iPods, pagers, beepers, and video and audio tapes -- as well as books, pamphlets and other written materials, the report said.

The policies require federal agents to take measures to protect business information and attorney-client privileged material. They stipulate that any copies of the data must be destroyed when a review is completed and no probable cause exists to keep the information.

(Reporting by Paul Eckert, editing by Alan Elsner)

Wal-Mart Warns of Democratic Win



Wal-Mart Stores Inc. is mobilizing its store managers and department supervisors around the country to warn that if Democrats win power in November, they'll likely change federal law to make it easier for workers to unionize companies -- including Wal-Mart.

In recent weeks, thousands of Wal-Mart store managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if stores were to be unionized.

According to about a dozen Wal-Mart employees who attended such meetings in seven states, Wal-Mart executives claim that employees at unionized stores would have to pay hefty union dues while getting nothing in return, and may have to go on strike without compensation. Also, unionization could mean fewer jobs as labor costs rise.


The actions by Wal-Mart -- the nation's largest private employer -- reflect a growing concern among big business that a reinvigorated labor movement could reverse years of declining union membership. That could lead to higher payroll and health costs for companies already being hurt by rising fuel and commodities costs and the tough economic climate.

The Wal-Mart human-resources managers who run the meetings don't specifically tell attendees how to vote in November's election, but make it clear that voting for Democratic presidential hopeful Sen. Barack Obama would be tantamount to inviting unions in, according to Wal-Mart employees who attended gatherings in Maryland, Missouri and other states.

"The meeting leader said, 'I am not telling you how to vote, but if the Democrats win, this bill will pass and you won't have a vote on whether you want a union,'" said a Wal-Mart customer-service supervisor from Missouri. "I am not a stupid person. They were telling me how to vote," she said.

"If anyone representing Wal-Mart gave the impression we were telling associates how to vote, they were wrong and acting without approval," said David Tovar, Wal-Mart spokesman. Mr. Tovar acknowledged that the meetings were taking place for store managers and supervisors nationwide.

Wal-Mart's worries center on a piece of legislation known as the Employee Free Choice Act, which companies say would enable unions to quickly add millions of new members. "We believe EFCA is a bad bill and we have been on record as opposing it for some time," Mr. Tovar said. "We feel educating our associates about the bill is the right thing to do."

Other companies and groups are also making a case against the legislation to workers. Laundry company Cintas Corp., which has been fighting a multiyear organizing campaign by Unite Here, relaunched a Web site July 14 called CintasVotes. The site instructs visitors to take action by telling members of Congress to oppose the legislation.

"We feel it's important that our employee partners fully understand the implications that the Employee Free Choice Act could have on their work environment and benefits," said Heather Trainer, a Cintas spokeswoman.

Business-backed organizations are also running ads aimed at building opposition to the bill, including the Coalition for a Democratic Workplace, which counts several hundred industry associations as members. Another group, the Employee Freedom Action Committee, is run by former tobacco lobbyist Rick Berman. The groups, which aren't affiliated with each other, say they have a total of $50 million in funding. Neither will disclose which companies or individuals have provided funding.

The U.S. Chamber of Commerce has made defeat of the legislation a top priority. In the past six months, it has flown state and local Chamber members to Washington to lobby members of Congress. On Thursday, the Chamber began airing a television ad in Minnesota and plans to run ads in other states as part of a broader campaign.

The bill was crafted by labor as a response to more aggressive opposition by companies to union-organizing activity. The AFL-CIO and individual unions such as the United Food and Commercial Workers have promised to make passage of the new labor law their No. 1 mission after the November election.

First introduced in 2003, the bill came to a vote last year and sailed through the Democratic-controlled House of Representatives, but was blocked by a filibuster in the Senate and faced a veto threat by the White House. The bill was taken off the floor, and its backers pledged to reintroduce it when they could get more support.

The November election could bring that extra support in Congress, as well as the White House if Sen. Obama is elected and Democrats extend their control in the Senate. Sen. Obama co-sponsored the legislation, which also is known as "card check," and has said several times he would sign it into law if elected president. Sen. John McCain, the likely Republican presidential nominee, opposes the Employee Free Choice Act and voted against it last year.

Wal-Mart's labor-relations meetings are led by human-resources managers who received training from Wal-Mart on the implications of the Employee Free Choice Act.


[Shift in Support]








Fine Legal Line

Wal-Mart may be walking a fine legal line by holding meetings with its store department heads that link politics with a strong antiunion message. Federal election rules permit companies to advocate for specific political candidates to its executives, stockholders and salaried managers, but not to hourly employees. While store managers are on salary, department supervisors are hourly workers.

However, employers have fairly broad leeway to disseminate information about candidates' voting records and positions on issues, according to Jan Baran, a Washington attorney and expert on election law.

Both supporters and opponents of the Employee Free Choice Act believe it would simplify and speed labor's ability to unionize companies. Currently, companies can demand a secret-ballot election to determine union representation. Those elections often are preceded by months of strident employer and union campaigns.

Under the proposed legislation, companies could no longer have the right to insist on one secret ballot. Instead, the Free Choice, or "card check," legislation would let unions form if more than 50% of workers simply sign a card saying they want to join. It is far easier for unions to get workers to sign cards because the organizers can approach workers repeatedly, over a period of weeks or months, until the union garners enough support.

Employers argue that the card system could lead to workers being pressured to sign by pro-union colleagues and organizers. Unions counter that it shields workers from pressure from their employers.

On June 30 the National Labor Relations Board ruled that Wal-Mart illegally fired an employee in Kingman, Ariz., who supported the UFCW and illegally threatened to freeze merit-pay increases if employees voted for union representation. The decision came eight years after the organizing campaign failed, and four years after the case was originally heard.

"We've always maintained the termination was not related to the union and that there was nothing unlawful about an answer provided an associate about merit pay," said Mr. Tovar, the Wal-Mart spokesman. "Following the decision, we were considering offering reinstatement, but that is on hold, since the [union] appealed the decision."

Unions consider the Employee Free Choice Act as vital to the survival of the labor movement, which currently represents 7.5% of private-sector workers, half the percentage it did 25 years ago. The Service Employees International Union said the legislation would enable it to organize a million workers a year, up from its current pace of 100,000 workers a year.

The Underdogs

The business-backed lobbying groups are running ads in states where a win by a Democratic Senate candidate would boost support for the legislation in the Senate, saying the loss of secret ballots exposes workers to bullying labor bosses. In one, they use an actor from the "Sopranos" TV series about mob life to hammer home their point.

Business groups say they're the underdogs since they will be outspent by unions by a wide margin. Labor has pledged to spend $300 million on the election and securing passage of the Employee Free Choice Act, compared with under $100 million by business groups, according to Steven Law, chief legal officer of the U.S. Chamber of Commerce. The Chamber's strategy is to focus on the Senate, where labor needs eight more supporters of the legislation to reach the 60 votes needed to overcome a filibuster.

"This is a David-and-Goliath confrontation, but we believe we'll have enough stones in the sling to knock this out," said Mr. Law.

Wal-Mart is a powerful ally. Through almost all of its 48-year history, Wal-Mart has fought hard to keep unions out of its stores, flying in labor-relations rapid-response teams from its Bentonville, Ark., headquarters to any location where union activity was building. The United Food and Commercial Workers was successful in organizing only one group of Wal-Mart workers -- a small number of butchers in East Texas in early 2000. Several weeks later, the company phased out butchers in all of its stores and began stocking prepackaged meat. When a store in Canada voted to unionize several years ago, the company closed the store, saying it had been unprofitable for years.

Labor has fought back with a campaign to portray Wal-Mart as treating its workers poorly. The UFCW helped employees file a series of complaints about the company's overtime, health-care and other policies with the National Labor Relations Board. Dozens of class-action lawsuits were filed on behalf of workers, many of which are still winding their way through the courts.

Wal-Mart has been trying to burnish its reputation by improving its worker benefits and touting its commitment to the environment. On the political front, it's hedging its bets, spreading its financial contributions on both sides of the political divide.

Twelve years ago, 98% of Wal-Mart's political donations went to Republicans. Now, as the Democrats seem poised to gain control in Washington, 48% of its $2.2 million in political contributions go to Democrats and 52% to Republicans, according to the Center for Responsive Politics, a nonpartisan organization that tracks political giving.