BENTONVILLE, Ark. – Last November, Thomas M. Coughlin, Wal-Mart Stores Inc.'s vice chairman, approached a lieutenant with an unusual request. He wanted Jared Bowen to approve around $2,000 in expense payments without any receipts.

Mr. Bowen, then a 31-year-old vice president, recalls that Mr. Coughlin briefly mentioned the money had been used for a "union project."

[...]

The tale involves another mystery: the "union project." Mr. Coughlin told several Wal-Mart employees that the money was actually being used for antiunion activities, including paying union staffers to tell him of pro-union workers in stores, according to people familiar with the matter. The fake invoices, Mr. Coughlin told these people, were simply a roundabout way of compensating him for out-of-pocket expenses in his antiunion campaign.

If Mr. Coughlin did pay union staffers for information, it would represent a criminal offense under the federal Taft-Hartley Act and ratchet up debate over the retail giant's labor policies. Wal-Mart has vigorously opposed unions since the time of Mr. Walton, who founded the company in 1962. That stance has roiled the retail industry as competing companies with unionized workers have tried to slash wages and benefits in an attempt to keep up with Wal-Mart's rock-bottom prices.

People familiar with the matter say that Mr. Coughlin is expected to use the "union project" as part of his defense to the charges about misappropriation of funds. These people give an explanation that wouldn't necessarily involve criminal activity: The payments went to former, rather than current, union people who had information about union activities at Wal-Mart. Even such payments, if made, could raise legal questions. According to Fred Feinstein, the former general counsel of the National Labor Relations Board, they could violate the National Labor Relations Act and carry civil penalties.

However, it remains unclear whether any payments were made or whether the union project existed. It is possible that Mr. Coughlin's talk of antiunion work was a cover story to conceal misuse of Wal-Mart funds for personal or other purposes.

[...]

Mr. Coughlin embraced another longtime Wal-Mart tradition: antiunionism. Led by the United Food and Commercial Workers International Union, labor organizers have tried for years to unionize Wal-Mart's U.S. workers, who currently number 1.3 million, but they have met with fierce and well-organized opposition. Whenever Wal-Mart headquarters gets word that union sentiment is growing in one of its stores, it quickly dispatches a "labor team" to the site. A Wal-Mart spokeswoman says the team, which includes a company lawyer, makes sure that store managers obey laws on organizing.

A group of meatcutters at a Wal-Mart in Texas voted to unionize in 2000. Several weeks later the retailer announced it was introducing a new nationwide policy of stocking only prepackaged beef and would no longer need butchers. This month, Wal-Mart is set to close a store in Canada that voted to unionize. Wal-Mart says the store is not profitable....