Home Depot Rocked By Kickback Scandal
CBS News Has Learned That Four Managers Were Fired For Role In A Multimillion-Dollar Scheme
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Play CBS Video Video Home Depot Kickback Scandal CBS News has learned that Home Depot fired four managers for taking payments to place products on store shelves. Chief Investigative Reporter Armen Keteyian reports.
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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."
© MMVII, CBS Interactive Inc. All Rights Reserved.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."





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See all 92 CommentsHome Depot could be a shining example of a business as it once was.
If Home Depot once again puts customer service ahead of everything else then it will once again be a winner in everyone's eyes- including the stockholders.
Home Depot... are you listening????
SO, when something like this happens, the Purchasing Management taking bribes in " the millions of dollars", the hourly people are a tad upset.
Name-calling, slurs and epithets are not constructive and don't get you taken seriously. You're definitely not going to win anybody over to your way of thinking!
Honestly, I'm not sure why sites like these have started adding message boards. They rarely add anything intelligent and useful to the story.
Your opinion is based on surmise. There's not enough information in the story to make an intelligent conclusion.
There must be a lot more to it than what is said in the story for the FBI to be involved.
So, surmise all you want. You and everyone else on this topic is just guessing.
Chew on this: HD paid Bob Nardelli $210 million in severence pay in spite of the FACT that HD stock actually DECLINED during the biggest real estate boom in American history. During this same period, Lowe's stock TRIPLED because their profits rose a lot faster.
Nardelli didn't do anything wrong; he just got what he asked for.
3. This final example is just like the story mentioned in this article. Vendors/manufacturers pay thousands of dollars for each item to be carried at a particular retailer. The term is called "buy-in". It requires money from a specific budget of the manufacturer called "Market Development Funds". There are legitimate funds spent on brining an item to market and there are the somewhat fine lines that can be crossed, (as in this case with Home Depot), but these lines are crossed every day. Home Depot was just caught (by the media) in the act.
That's retailing in America for you!
1. People get upset at Walmart for its imports of cheap Chinese products made from "sub-standard" working conditions ('sub-standard' of what?). But has anyone ever taken a look at the TVs sold at Best Buy? Or the laptop computers from Comp USA? Or even your friggen iPod?! Those items are not made in the gool 'ol USA! Can we say China and/or Taiwan!
2. EVERY RETAILER REPACKAGES AND RESELLS ITEMS THAT WERE RETURNED FROM CUSTOMERS AFTER THEY HAD BEEN OPENED! There are very few situations where that's not the case. Returns cost each retailer millions of dollars, especially from the not-so-honest customers. However, it's a necessary evil in order to provide a decent level of "customer service". To minimize the cost of the returns, if an item is returned with the entire contents of the package, and the packaging shows minimal to no signs of 'tampering', then the retailer re-shrinkwraps or repackages the item to be sold new once again.
Posted by HDChick4
*** are you talking about? This (moderate) lib was defending HD. Get off your effing high horse . . . .
Posted by down-ndirty
Ok, where is everybody purchasing their high horses from Lowes or HD?
Posted by rushlimpdrug at 02:10 PM : Aug 01, 2007
.................
Nah, the high horses are at WalMart.... $49.99
Made in China, and contains lead paint!
(But many people still ride them, day after day after day).
what a shame.
Posted by HDChick4
*** are you talking about? This (moderate) lib was defending HD. Get off your effing high horse . . . .
Posted by down-ndirty
Ok, where is everybody purchasing their high horses from Lowes or HD?
Posted by jeepmanjr at 11:46 AM : Aug 01, 2007
I guess I've been trolled. LOL!!! The only connection I got on "home depot" and "illegal aliens" was illegal aliens gathering outside HD hoping to find day work.
Is that what you call "supporting, aiding, and abetting?"
I don't support illegal aliens but that's stretching it a little...
In fact, I did find this: "...we see local officials in L.A. and Austin calling out for Home Depot to provide, get this folks...shelters, land, and portable facilities for these criminals..." Source: Pete Fisher
"local officials!!" I would be that most of them are members of "AZTLAN."
Google it!!
Posted by jeepmanjr at 11:46 AM : Aug 01, 2007
Well, when Bush makes them legal then HD and the illegals won't have anything to worry about.
Cheap labor = low prices? Right?? No?? Dang...
Posted by mo005 at 10:12 AM : Aug 01, 2007
Ooops...finger was faster than my brain...
Exactly. Bought a Karcher pressure washer at Lowes and I'm on the third factory replacement. Store wouldn't touch it. The original lasted several month but only because I didn't use it much. The second and third lasted about two weeks each. The last one just arrived and I don't expect it to last. Design problem...can't take its own pressure inside.
When the warranty runs out and they stop replacing it I'll got to HD and get a Toro...
You bet! So is supporting, aiding and abetting illegal aliens. Don't believe it? Google it up. Think about THAT the next time you spend a buck at the HD!
Posted by mo005 at 10:12 AM : Aug 01, 2007
Home Depot fired these guys because they want their cut and they weren't getting it, it's that simple.
Posted by arealtexan at 09:48 AM : Aug 01, 2007
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You're not telling us anything new. HD fired these guys because they were stealing money that should have gone to the company.
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