May 26, 2007 / 12:32 AM / 12 years ago

Former Wal-Mart exec accuses CEO of ethics breach

LOS ANGELES (Reuters) - A fired Wal-Mart Stores Inc. (WMT.N) marketing executive has accused the retailer’s chief executive of violating its ethics policy by accepting discounts on yachts, diamonds and personal gifts from vendors and others eager to work with the company.

A file photo of shoppers at a Wal-Mart in Fairfax, Virginia November 24, 2006. A fired Wal-Mart marketing executive has accused the retailer's chief executive of violating its ethics policy by accepting discounts on yachts, diamonds and personal gifts from vendors and others eager to work with the company. REUTERS/Larry Downing

Wal-Mart and former marketing communications chief Julie Roehm have both filed suits over her December dismissal after less than a year at the world’s largest retailer.

Roehm sued for breach of contract. In a March countersuit, Wal-Mart accused her of accepting gifts from an advertising agency that was later chosen to handle the retailer’s ad account. It also accused her of misusing company travel funds on business trips with a subordinate with whom, it said, she was romantically involved.

In papers filed on Thursday in Detroit federal court, Roehm said it was Wal-Mart’s top brass who violated the company’s strict ethics rules.

Chief Executive H. Lee Scott had received “preferential prices” on yachts and “a large pink diamond for his wife” through his relationship with businessman Irwin Jacobs, she said. One of Jacobs’ companies, Jacobs Trading Co., has the exclusive right to buy unsold Wal-Mart merchandise.

“Scott... maintains a relationship with Mr. Jacobs that is beyond a business relationship, using private airplanes provided by Mr. Jacobs to travel to Mr. Scott’s personal vacation residences,” the filing said.

Roehm also accused a group of executives, including the company’s executive vice president of marketing, John Fleming, of violating the ethics policy by accepting $300 tickets and back stage passes to an Eagles rock concert during a meeting with vendors in Barcelona, Spain.

“This lawsuit is about Julie Roehm and her misconduct. Her document shows how weak her case is,” John Simley, a Wal-Mart spokesman, responded on Friday in a statement. “We will address these issues in court. Certainly we dispute the allegations involving our CEO and Irwin Jacobs.”

Later in the day, Wal-Mart said the allegations of impropriety involving its CEO were untrue.

Jacobs was not immediately available for comment.

Also in Thursday’s filing, Roehm denied accusations that she used a review of advertising agencies to pursue a job at one of those agencies. She also denied accepting gifts from an agency, saying a dinner Wal-Mart accused her of accepting improperly consisted of “small, White Castle-sized burgers.” She added that the agency was supposed to bill Wal-Mart back for her portion of the meal.

Roehm also denied that either she or Sean Womack, the employee with whom she is accused of having a romantic relationship, misused business trips for personal reasons.

Additional reporting by Dane Hamilton in New York

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