Home Depot accused of defying 1933 law

Associated Press

SAN FRANCISCO

The photograph on Home Depot’s website shows a line of smiling soldiers unloading a truck stacked with power tools and other company wares.

The company says this shows “federal dollars go farther at The Home Depot.” San Francisco Attorney Paul Scott says the photo also shows the company providing Chinese-made products in violation of the Buy American Act, and the U.S. Department of Justice is investigating.

A federal judge in April refused Home Depot Inc.’s bid to toss a whistleblower lawsuit Scott and other attorneys filed against the Atlanta-based company. Now the country’s largest home-improvement retailer is the latest company accused of running afoul of the Buy American Act, a 1933 law aimed at protecting U.S. jobs. The law requires that all materials used in construction of public projects originate in the United States or “designated countries.”

Like most protectionist trade provisions, the Buy American Act has its supporters and detractors.

Proponents support the act as a way to boost the economy and preserve U.S. jobs. Critics complain the law limits the government’s ability to make the best purchase on price and quality. Further, they argue that complying with the letter of the law is difficult, given the many exemptions and the reality that the component parts of many products originate in multiple countries. In addition, the law’s critics say it’s especially difficult for large companies such as Home Depot that carry thousands of products to ensure it follows the law with every government transaction.

The law has been through many revisions, and trade agreements with Canada, Israel and several other countries allow for use of material made in those countries. In the decades after its enactment, the law was little used. But with the explosion of international trade, a number of companies have been accused of violating the Buy American Act over the last several years.