"Have you been to Bentonville?"
It's a question more and more businesspeople ask each other these days, and increasingly the answer is yes. This hamlet of 25,000 in Northwest Arkansas is, of course, the home of Wal-Mart, the world's largest company, and as such has become a mandatory destination for hordes of vendors, contractors, and salesmen. As you might imagine, growing pains abound. The road from the airport is a curvy country lane that runs a dozen miles with at least three 90-degree turns. There are no big hotels in town. And between the endless construction projects and the choked streets, it can sometimes take you 15 minutes to go a mile or two. Then there's Wal-Mart headquarters, which sits amid the sprawl--a faded, one-story, red brick building that looks like a book depository for the board of education.
Bentonville is also home to the Walton family--the widow and offspring of Sam Walton. They control about 39% of Wal-Mart stock, worth some $90 billion, which makes them by far the richest family in the U.S. The Waltons keep a very low profile, though, and you'd be hard-pressed to find any signs of their great wealth here. Several months ago, strolling around downtown Bentonville, I came upon a plain old brick building. It faces a boarded-up building across the street, and has no sign on the door. I walked into the lobby and down the hall to a directory in a glass case. The listings were cryptic in their simplicity: "WEI--218, WFF--217," which, having done some research, I could decipher to mean that Walton Enterprises Inc. (the family office) and the Walton Family Foundation are on the second floor. There was also "Arvest Marketing--310" (Arvest is the Waltons' bank company) and "Community Publishers--318" (their newspaper company). You could take an old elevator, but most prefer to walk. Upstairs, in a warren of shopworn offices, resides the nerve center of the biggest fortune in the U.S.
If Wal-Mart, with its quarter-trillion dollars in annual sales, is almost unimaginably massive, then the Waltons' great wealth is its equal in a parallel universe of private fortunes. The Walton family is as rich as Bill Gates and Warren Buffett combined. Amid all the talk about how rich Teresa Heinz Kerry is, consider that the Walton family is 117 times wealthier. The Waltons' $90 billion fortune is equivalent to the GDP of Singapore. It's bigger than IBM's annual revenues. The dividend stream from the family's holdings produces nearly $880 million annually. It's likely that only the Rockefellers--before John D. gave away much of his fortune --were wealthier. And that's after adjusting for inflation. In sheer dollar terms, the Waltons are far richer.
It is reasonable, and useful, to consider the Waltons' combined wealth this way because the family members act and think collectively. They are constantly in contact with each other and with family advisors, and they meet three times a year to discuss and manage their fortune. Because they hold such a huge stake in Wal-Mart, the Waltons have a large, if quiet, influence on our economy and society. They have a say in more than a million jobs in this country. (What if the family, for instance, urged the company to give up the fight with unions in California and pull out of the Golden State?) The Waltons' decisions could also affect hundreds of billions of dollars in investors' stock portfolios and retirement accounts. In the future, their impact could be much greater. The Waltons' philanthropy is a giant just beginning to stir. What the family does with its great wealth--think Rockefellers again for a moment--could leave a lasting mark on the nation.
In time, the Waltons will almost certainly join the ranks of instantly recognizable American family names like Morgan, Mellon, and Getty. At this point, though, they are still in the early stages of their great wealth. Wal-Mart went public 34 years ago and didn't become a juggernaut until the '90s. Family members didn't grow up rich. They were small-town kids whose dad happened to own a handful of successful stores. The big money didn't come into their lives until they were adults--which has been a blessing: This is the kind of outrageous fortune that can tear families apart.
Most of us are familiar with Mr. Sam--that is, Samuel Moore Walton, Wal-Mart Stores' founder. Born in 1918 in the dusty community of Kingfisher, Okla., he had accumulated the biggest family fortune in America by the time he died in 1992. Today Mr. Sam still looms over his clan, starting with the fact that its vast wealth is the product not just of his business acumen but also of his foresight. Put it this way: When Sam Walton died, it was hardly a taxable event. Sam had set up his ownership of Wal-Mart's stock in a family partnership that largely avoided estate taxes. So at the time of Sam Walton's death, each of his four children held 20% of Walton Enterprises, while Sam owned 10%, as did his wife, Helen. She inherited his partnership stake tax-free.
But who are these heirs? What do they do with all that money? What are they like? Well, in many respects they are like Sam. The family is still in its filial generation of billionaires and feels the pull of Sam's plain living and frugality. The Waltons are understated and seek to keep their influence mostly hidden. And yet they are slowly being drawn to the creature comforts--private jets, houses in tony Western towns, vintage sports cars--that their station in life affords them.