Genmar's Jacobs caught in Wal-Mart crossfire
By IBI Magazine
Genmar Chairman Irwin Jacobs was named on Friday by former Wal-Mart advertising executive Julie Roehm in a lawsuit against Wal-Mart after being dismissed last December. The lawsuit is gaining notoriety within Wall Street's financial community because publicly traded Wal-Mart is the world's largest retailer. The company is also a lead sponsor for Jacobs' FLW Outdoors fishing series. Roehm alleged in a court filing in a US district court that Jacobs provided Wal-Mart CEO H. Lee Scott with "a number of yachts at preferential prices" and "a large pink diamond for his wife at a preferential price." The document also says that Jacobs hired Scott's son, Eric, for another company he owns, Jacobs Trading Company, and that is in direct conflict with Wal-Mart's ethics policies. Jacobs vehemently denies the claims. "This is beyond outrageous," he told IBI. "I've never seen anything like this in my life. I've never had anything to do with diamonds or special deals on boats. Plus, Lee Scott is as lily-white as it gets. He goes out of his way to make sure everything is above board. He's even concerned if you buy a cup of coffee for him." Jacobs said that Eric Scott is not employed by his company, but works as an outside consultant. "He is barred from anything that has to do with Wal-Mart just to avoid a conflict of interest," said Jacobs. Jacobs' name was reported in court documents filed May 25th alleging that Scott had breached Wal-Mart's internal ethics policies—the same policies that Roehm was allegedly fired for less than a year after taking the Senior Vice President of Marketing position at Wal-Mart. Roehm is seeking US$1.53 million in damages, including US$325,000 in severance pay and stock options worth US$500,000, according to court documents. Since Wal-Mart fired Roehm in 2006, the court case has produced claims and counterclaims of a love affair between Roehm and another colleague, extravagant free meals, secret job negotiations, and rides in expensive jets and sports cars. Wal-Mart spokesman John Simley said of Roehm's latest accusations: "The allegations of impropriety involving our CEO Lee Scott are untrue. This lawsuit is about Julie Roehm and her misconduct. Her document shows how weak her case is. We will address these issues in court." Jacobs said that he will sue both Roehm and her attorney if they do not issue a retraction by Thursday. "I have to assume that she feels that she has nothing to lose with this lawsuit," said Jacobs. "Not only is her information wrong, but it's clear she has no knowledge of Wal-Mart's internal buying policies." Roehm's lawsuit comes at a time when Wal-Mart is being sued by other employees for other legal issues. Over 250 complaints have been filed by employees in federal courts since January 2005. Since December 2005, juries in Pennsylvania and California have awarded Wal-Mart workers a total of US$251 million in pay and damages over claims the company broke wage laws. But the Roehm suit, while garnering public attention, is of a different nature. David Berg, a Houston attorney, told Bloomberg.com that Wal-Mart should not settle the lawsuit immediately since it would make the company ``look guilty as charged.'' ``You don't do it with a gun at your head,'' Berg said. Roehm's lawyers may find weaknesses in their own case, said Berg, making them likely to settle for less. Jacobs simply wants to have his name cleared. "Thousands of people in this industry need to know that it's not only ludicrous but absolutely outrageous for her to do this to me," he told IBI. Jacobs also told the New York Post: "I will make their lives so miserable they will wish they had never mentioned my name." He said that Genmar would likely issue a press release on the lawsuit shortly.
(30 May 2007)
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