SAN FRANCISCO - The photograph on Home Depot's website shows 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 whistle-blower lawsuit that 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."
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Like most protectionist trade provisions, the Buy American Act has its supporters and detractors.
Proponents say it boosts the economy and preserves U.S. jobs. Critics complain it limits the government's ability to get the best price and quality, that complying with the letter of the law is difficult, given its many exemptions, and that it's difficult for large companies to follow the law with every government transaction.
Earlier this year, hardware distributor Fastenal Co. agreed to pay $6.25 million to resolve claims made after a government audit found it violated its contract with the General Services Administration by providing Chinese-made goods.
In the last six years, Staples Inc., Office Depot Inc. and OfficeMax Inc. have paid a combined $22 million to settle government claims they violated the act. In 2008, W.W. Grainger Inc. agreed to pay $6 million to settle claims it overcharged the government and provided it with Chinese and Taiwanese products in violation of the act.
At issue in the Home Depot case are GSA "schedule" contracts. Those contracts authorize any government agency to purchase tens of thousands of products from the company's website.
The suit alleges that up to half of those products are made in China and other nondesignated countries.
In court filings and a brief interview, Home Depot officials argue that they've complied fully with the terms of the contract and the Buy American Act.
"We would never knowingly sell prohibited goods under any circumstances, and we have been cooperating with the government to provide requested information," said Home Depot spokesman Stephen Holmes. "We believe the plaintiffs have an inaccurate view of the facts."
A judge has scheduled a trial for early next year.