Home Depot Rocked By Kickback Scandal

CBS News Has Learned That Four Managers Were Fired For Role In A Multimillion-Dollar Scheme

(CBS)  In an exclusive, CBS News has learned of a corruption scandal involving The Home Depot.

In recent weeks, four Home Depot purchasing managers were fired at a meeting at an Atlanta hotel for their role in the scandal, reports CBS News chief investigative correspondent Armen Keteyian.

The managers were allegedly paid enormous sums — totaling millions of dollars — to insure that certain flooring products made their way onto the company's shelves, which is among the most competitive retail real estate in the world.

The world's largest home improvement retailer, The Home Depot boasts more than 2,000 stores.

One source tells CBS News that CEO Frank Blake took immediate action upon learning of the scheme. On Thursday, the company is expected to hold meetings with employees to reiterate its ethical standards.

The FBI is said to be investigating and had no immediate comment.

When contacted by CBS News late Tuesday, the company confirmed the nature of the investigation and issued a statement saying it is "cooperating with authorities" and that "maintaining our ethical standards is of the utmost importance to The Home Depot."

[truthspeake2]

If it resulted in lower prices, where's the crime?

[down-ndirty]

Kickbacks are unethical, if not illegal; and they don't always, if ever, result in lower prices.

If the products were worthy, why would the manufacturers have to pay millions in kickbacks to get them on the shelves of Home Depot?

[alphaa10-2009]

truthspeake2 said, "If it resulted in lower prices, where's the crime?"
---
That GOP rationale is offered as pretext for just about anything. Don't any Bush flag wavers understand they are supposed to oppose crime, not become criminals themselves? Of course, we couldn't guess by looking at the huge Bush criminal enterprise occupying the executive office.

The first problem with crime is it defies the rule of law-- the mark of a civilized society. Unlike people who think like criminals, law abiding citizens don't believe civilization is all about money.

Besides, whom do you believe finally ended up paying for the cost of Home Depot bribes and corruption? The consumer, of course.

[bakerychef]

Kickbacks only hurt companies, never help. Home Depot stopped vendor gratuities in the early '90s. If the vendors products were any good, they would have already been on the shelf. This plan was to keep other vendors out, not help the consumer. If it was to help the consumer, no kickbacks would have ever been on the table. Glad to know that the new CEO did the right thing and let the axe fall.

I put 12 years of my life into Home Depot, I hate to see stuff like this damage a company that I worked so hard to help build. The day I began work for Home Depot, there were 118 stores and a lot of 'orange blooded employees'. I'd really like to see some 'orange blood' back in the company.

[griking]

Everything seems to be "of the utmost importance" to corporations. today it's ethical standards, tomorrow it will be customer privacy and the next it will be safety. what a crock of ***. These companies seem to have a standard template where they fill in the blanks and then release them to the press.

[republic1776]

What these guy's did was unethical.
Home Depot fired them, end of story.

It's NOT Government's business to get involved.
We are so *** close to becoming communnist's

[ehaw]

I was an employee of home depot for 3 months, till they fired me for too many points. I was hired knowing that I was a disabled vet and calling off was no problem. Until, the 90 day eval. showed too many points. I didn't want to work for peanuts anyway. Home depot sucks! They hire immigrant managers to save money. If you get hurt on the job, oh well. Don't shop there and it will disappear. Good riddens!

[swkelly1]

The reason the FBI is involved is what the story didnt state, the kickbacks were paid by companies owned by the Chinese Government

[king77shaw]

Home Cheapo is not the answer!

[richnj1]

If it resulted in lower prices, where's the crime? Posted by truthspeake2 at 07:07 PM : Jul 31, 2007

Uhhh... by definition, bribery doesn't lower prices. It is an additional cost to the vendor that is unrelated to the cost of manufacturing. Also, a bribe raises prices by potentially locking out a cheaper supplier.

[djconklin]

lawandorder7, nice display of the lack of good family values. Don't be too surprised when your side loses yet another election.

[brianp55]

Greed (like love) makes people do stupid things. They ALWAYS get caught. Home Depot is still #1 with me....but Lowes is a close second.

[jumkey]

"If it resulted in lower prices, where's the crime?"

truthspeake2

Where did it say that prices were lower because of this? And maybe you ought to direct this question at the manufacturers who were cheated out of sales (and income) because they didn't pay a bribe.
Or perhaps you should ask Home Depot management and shareholders who lost money from lower sales.

For that matter, why does any of this even need to be explained to you?

The comments on these stories make me despair that Americans have completely lost the ability to reason and are simply lead around by the nose by corporations and the media.

[jimbo554]

sigh Where would the press be without a good scandal? Much ado about not much at all. Yeah it was a bad thing, but they found out about it and they stopped it.

[billpl-2009]

I avoid Home Depot like the plague.
Only go there if I absolutely have to
and know exactly where everything I need is.

The service is so pathetically bad there that it practically takes an act of God just to find a package of screws

...but I have to admit
I really like the self-checkout

[truthspeake2]

LOL....to all you boneheaded haters out there, the current leaders of the free world seem to have set the example for bribes and kickbacks by starting a phoney war in the name of democracy, oil, and your tax dollars. Where is your outrage about that???

[nvhc]

My only concern is that the companies that were capable of paying to get their items on the shelf edged out a smaller company offering a superior product. Low price is great, but I personally would like the option to decide to pay a little more for better quality. It is only a problem because there are few places that you can find the volume and selection you get a Home Depot.

[perspex-2009]

I work for a company that supplied HD since they opened. We wer called in we were told we were losing to a Chinese company. Since we our a U.S manufacture who supplies China, we knew this wasn't right. We had to lay off many of our employees because the loss of this business. This was all done because a ex HD employee set up these Chinese Manufactures and was payed commission. Which he used to pay off buyers. We hope they find our company we would be glad to help. Many Home depot customers which our employees of our company suffered. Thats the harm! By the way we now are cleaning up this mess, we will be surprised if the buyer who put us out is not one of the buyers on the take, we have heard that the buyer who took over is being protected and has been moved. This harmed many my only hope is they are serious in getting to the bottom of this, they will find us, and we would be glad to help. HD supporter!!

[lucasnico]

you bet JIMBO, they sure did stop it. And it will never happen again!

Now, who wants to tell Jimbo another story he'll believe?

[zertrat]

Dear Billpl,
Glad to see you are a man of character. You avoid something like the plague, but you go there because you know where everything is. Uhhhh, some lying is happening here on one end or the other. We don't have to call it lying, we can call it self delusion. Denial is not a river in Egypt. Billpl, what are you trying to say? That you are yet another American totally servant to the big corporations? Do you know what the plague is like? Do you know what dog-fighting is like? Oh, well, I know where to find what I'm looking for even if the staff is sub-standard. Wow.

"I avoid Home Depot like the plague.
Only go there if I absolutely have to
and know exactly where everything I need is."

[eyedrive1]

Hmmm how many read or heard the story of the FEMA trailers that had gross amounts of formaldehyde in their counters and other particle board pieces installed. FEMA decided it was OK to slowly poisen the users of these trailers. Were those cabinets made from the same Chinese manufacturers that made the flooring in this story? Is anybody checking? And WHY is it OK to poisen people with the FEMA trailers? Someone is getting paid off, and they are in the US government! Just remember how many of our pets they killed with their contaminated pet food. Is our entire government that corrupt--makes me nervous.

[zertrat]

Jimbo, what is your view of the job of the press?

"Where would the press be without a good scandal? .... Yeah it was a bad thing, but they found out about it and they stopped it."

Who found out, who stopped it? Jimbo, are you saying that you don't want 'bad things' to be reported to the public? Are you moving to Libya anytime soon?

[zertrat]

Eyedrive,

Our government is that corrupt, absolutely. Our "government" is now just a cover for the powerful money of corporations. George Bush, Hilary Clinton, does not matter. Anybody who gets "elected" is part of the system, and the system gives less than one thousandth of a percent of a flying flork about you.

A vote counts less than your economic decisions.

[eyedrive1]

Zertrat, you are 100% correct. I guess my sarcasm was overlooked. It is a shame but what in the h*ll can we do about it?

Larry

[zertrat]

Eyedrive,
I was just contributing to your clear and cogent point. Thanks for the post. I was not dissing you at all. Your sarcasm is greatly appreciated. In replying to you, I was just agreeing.

[zertrat]

And i knew the question about "is our govt that corrupt?" was rhetorical. I was rhetoricizing.

[brianbwb-2009]

perspex,

Most likely a major shareholder of the company in China is a US government bureaucrat, engaging in a little business "on the side".

I have lived in south east Asia now for more than twenty years, and I can tell you from first hand experience that the business here receiving foreign investments are all owned by people connected to government, a truly private firm doesn't stand a chance.

I can also say that the foreign investors are by and large connected to their respective governments, usually through what the locals call the "three pillars", i.e., corruption, collusion, and nepotism. This includes the US investors.

For a real scare, check out an investment group called Trident, (I cannot be more specific, there may be more than one MNC by this name, but you will recognize it when you see it) but be careful about what you do with that info, it can get you into serious trouble. That is what you're up against.

Also check out USAID, and the investment monitors for the IMF, they are all practicing corruption, in all its' many forms.

The war can be won, but the battles must be very carefully chosen and timed.

[brianbwb-2009]

"One source tells CBS News that CEO Frank Blake took immediate action upon learning of the scheme."

Sure, he probably destroyed and or concealed any evidence that the bribe money filtered its way up to him.

Bribery works like that, the recipient gives a piece to his superior, all the way up the line, otherwise the lower level grunts would soon be richer than the upper level.

[adian1-2009]

What prevents you from disclosing the brand of the products and the name of the manufacturer?

[funktowne]

And we stand back in awe as our housing market takes the plunge....

[jmburney]

"One source tells CBS News that CEO Frank Blake took immediate action upon learning of the scheme."
Sure, he probably destroyed and or concealed any evidence that the bribe money filtered its way up to him.

brian-If you check the company history, you will find that Frank did not take over until January of this year. I doubt that there would be any reason for him to cover up anything. More than likely, he was put in the position to "do a little spring cleaning".

[funktowne]

Wow. Thanks for the liberating morning wake-up call. The administration is corrupt. The monitoring systems are corrupt. The only thing that will relieve you of your unsightly "anger-lines" , is a wholesome, down-to-earth chat with our entirely well-read, eloquent, and adequately informed president. I'm sure he'll be willing (and able) to fumble over some simple words, and cast the shadow of doubt on all the "rabid" liberals.

[gunnerv1]

The only store I go to is MENARDS (3 stores), We have 1 Lowes and 1 Home Depot, Lowes, most of the employees can't be found when you need something and don't carry the brand I want and Home Depot is just too expensive.

[jasbek]

Yeah, I agree. Apparently Billy has a brainwashed mind that thinks everything in this world that goes wrong happens through the white house. How ignorant and uneducated.

[carlylaine]

billysmith6

Are you serious?

[brianbwb-2009]

jmburney,

I humbly stand corrected.

I should have said "to his predecessors"...

[missingamerica]

Well, that's one way to ensure you get as much pay for the same amount of work as the CEO gets and gives, respectively. Cheat.

[slim1h2o]

This world sucks!

As a former Department Head of Flooring in the Largo, Florida store, it always amazed me how we seemed to have such a poor offering of flooring products. I would constantly shop the competition to see what my customers were seeing and, quite frankly, I was embarassed at what our store had to offer in comparison. Displays were weak, product range was poor and support components such as edge pieces were frequently non-existant. It's all a little clearer now.

[paganucci1]

Katie Couric:

This in regards to the Home Depot story from 7/31/2007. I would like to tell you that The Home Depot violates its own and state ethics on a daily basis. I know first hand, I have the forged performance review on myself the they forged so i would not be eligible for a transfer or pormotion after 3 and 3/4 years of working for the company. I will share the documents if you are interested.

Alex Paganucci
66 Western AVe apt2
Augusta Maine 04330
[e-mail]
1-207-749-2158

[hdchick4]

I cannot believe all of these posts! obviously none of you know squat about what is going on. And I really can't believe those of you blaming Bush - liberal idiots.
I have worked for Home Depot for eleven years, and I can tell you that Frank Blake's actions are nobel and trustworthy. He is working hard to position our company back where it was - taking care of customers - not our bottom line.
The problem with our country is that we don't appreciate hard, honest work anymore. We are to quick to criticize and point the finger than get up off our butts and do something good. All of you who are jumping down Home Depot's (and the president's ?) back are just full of liberal bull ***. You all stand on your high horse and think that the world owes you something. And when companies (big or small) try to do something good for you, you just stab them in the back with your critcism and bashing.
Just cause we are a large company, does not mean we don't care. We just wish you would care and see that we are just like you - people trying to work hard and contribute to the good of this country. Do you really think our company is a part of the governemnt. We are a group of about 210,000 normal people trying to live our dream. A little support and understanding please.

[slim1h2o]

You shouldn't publish your info like that,...you never know!...............

[condumism]

Home Depot, located smack in the middle of the Fascist South, headquarters of the lowest life forms in the USA: the SOUTHERN NEOCONS, a group most known for supporting a Nazi style government of liars in hypocrits in Washington DC!

BOYCOTT HOME DEPOT, and all other Southern FAscist Companies!

[antoniof123]

Well, now I know where not to buy flooring.

[mediabrat60]

oh, that's just great...now they will have better flooring AND the prices will go up!

[sewig1]

HDChick4, Many of the people who post here are just trying to incite outrage. Not all liberals are idiots (quite the contrary) and anyone with half a brain wouldn't try to drag Bush (much as I am personally not a fan) into this. I too work for a large, ethical company and sometimes a few rotten apples threaten to spoil the reputation of the basket. It happens. Don't let the outrageous posts get to you.

[slim1h2o]

Posted by HDChick4 at 09:01 AM : Aug 01, 2007

Get off that "work real hard and you will reap great rewards" ***, because thats all it is "C.R.A.P, get it! If you don't, you'll soon will. Just work real hard, get sick, then see what happens

[cepe10-2009]

The CEO didn't know....Again....

[hdchick4]

Posted by slim1h2o at 09:26 AM : Aug 01, 2007

----- Get off that "work real hard and you will reap great rewards" ***, because thats all it is "C.R.A.P, get it! If you don't, you'll soon will. Just work real hard, get sick, then see what happens -----

I'm truly sorry for you. Obviously you have been beat down by this world and don't understand the concept of hope.

[doggymama]

Did they get to keep the money?