Whistleblower Drives Office Depot to YouTube

 

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Office Depot posts YouTube video that calls out fired employee

By Allison Ross

Palm Beach Post Staff Writer

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Updated: 9:58 p.m. Monday, Feb. 15, 2010

Posted: 5:45 p.m. Monday, Feb. 15, 2010

BOCA RATON — Fighting media reports and stories of contract mispricing, Office Depot has released a YouTube video attacking the credibility of one of the company’s biggest detractors.

Boca Raton-based Office Depot Inc. (NYSE: ODP, $6.17) has been plagued for months with questions about its pricing policies on government contracts.

“We ask you to make your own judgment on Office Depot based on your own experiences,” Steve Schmidt, president of the company’s business solutions division, said in the 6 1/2-minute video, posted last week.

“We do not claim to be perfect,” he said. “To the extent that there was any improper pricing, Office Depot is committed to correcting the situation.”

Allegations of contract impropriety have been prompted in part by complaints from a former Office Depot employee, David Sherwin of Fort Myers, who managed government contracts for the retailer for 11 years.

Attorneys general in six states — Florida, Colorado, Missouri, California, Ohio and Texas — are investigating the company’s pricing practices, Office Depot revealed in July.

Several counties and public school districts in Florida and elsewhere have also done audits of their office supply contracts, some of them finding discrepancies in their charges. Last month, the city of Naples received a $12,000 refund from Office Depot after it says it was switched to a more costly pricing option without its authorization. The Lee County School District received $297,000.

In the video, Schmidt describes Sherwin’s accusations as “outrageous,” calling him a “disgruntled former employee” who has teamed with Office Depot’s competitors to provide “false and misleading allegations.”

Office Depot said that it began a review of its pricing policies “well before” Sherwin was fired for sending profane e-mails to management and before Sherwin made his allegations of fraud. Instead, the company argues that many of the contract problems arise from the contracts that Sherwin handled.

Schmidt remains fairly stoic throughout the video, which features him in an office, facing the camera. At one point, he shakes his hands emphatically, admonishing viewers not to “fall for (Sherwin’s) claims that he’s a whistle blower.”

Viewer comments were disabled for the YouTube video. As of Monday afternoon, it had been viewed fewer than 400 times.

Sherwin called the video an “act of desperation.”

“Sure I was disgruntled, if the definition of disgruntled means they refuse to take part in fraudulent schemes to rip off the taxpayers,” Sherwin said in an e-mail. Office Depot spokeswoman Mindy Kramer said in an e-mail that the YouTube video was intended to “set the record straight” and get Schmidt’s message out to a broader audience of the company’s stakeholders.

Office Depot will report fourth-quarter results Feb. 23.

SOURCE The Palm Beach Post

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