The government still beating down Whole Foods

When I was in Whole Foods two days ago picking up a King Cake, I ran into a cooking classmate of mine who is a chef at the grocery store. I asked what was going on with the Whole Foods-Wild Oats-FTC thing. Sadly, my classmate wasn’t sure of anything (or if he was, wouldn’t divulge) but said he heard something about settling the case.   

Sure enough, last week Whole Foods CEO John Mackey told an audience at Yale that the company was close to an agreement with the Federal Trade Commission, and the FTC confirmed that Whole Foods had approached it with an offer. Not only does Whole Foods want to put the matter behind it and move forward, but the legal fees are killing the company. Yesterday the publicly held Whole Foods said that FTC-related legal costs were 5 cents a share for the quarter, which would put them at more than $7 million.

One of the things that puzzled me in the last post I did on Whole Foods was why the FTC would have such a bone to pick with Whole Foods. A little sleuth work shows it has to do with “rahodeb.”

That was Mackey’s call name on Yahoo’s Financial Discussion Boards (Deb is his wife’s name) where, over a period of seven years, he put on his bad idea jeans and wrote 1,400 pseudo-anonymous posts promoting Whole Foods, slandering Wild Oats and claiming to be George W. Bush.

It doesn’t make any sense to me either that a CEO would have that much time to start flame wars on discussion boards, but that’s what Mackey did and after the SEC ruled he didn’t do anything illegal the FTC is making him pay for doing something inappropriate. If the two sides don’t come to a deal, then they’ll meet with a judge in April.

The FTC has all the legal help in the world so it can keep the case going for years if it wants. But now that Obama is in office, it seems the FTC would have more important things to do than harassing Whole Foods. Like say, finding a chairman.