Wal-Mart Accused Of Covering Up Millions Paid In Bribes To Mexican Officials

Wal-Mart Stores Inc. has been accused over the years of everything from stripping employees of basic benefits to seeking to destroy critical historical areas. Now, however, the company faces a criminal investigation and a call for a U.S. congressional investigation. The company is accused of giving millions in bribes to Mexican officials to build stores. The company is accused failing to notify the police after it uncovered the bribes in an internal investigation.

Wal-Mart is accused of shutting down its own internal probe after its lead investigator told them of the criminal conduct. Senior executives at Wal-Mart were informed in 2005, when a former executive of its largest foreign subsidiary, Wal-Mart de Mexico, came forward with evidence of the bribery campaign. The executive — a lawyer — sent emails and tried follow up conversations to address the pattern of bribes to secure permits.

Here is a remarkable fact. Wal-Mart is now the country’s largest private employer with 209,000 employees and one of every five stores now is in that country.

Wal-Mart spokesman David Tovar insisted “If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.” The problem is that the company is accused of shutting down the internal investigation and failing to reveal the evidence of bribery. Top executives were reportedly aware and are implicated in the scandal. Indeed, then-CEO H. Lee Scott Jr. reportedly rebuked internal investigators at one meeting for being overly aggressive.

This is the type of criminal case that can cause extensive damage to a corporation, much like the News Corp surveillance scandal. The notoriously cheap company will now find itself in the position of having to pay for individual counsel for executives to avoid conflicts of interest and spend millions in responding to U.S and Mexican investigators.

Source: Yahoo

15 thoughts on “Wal-Mart Accused Of Covering Up Millions Paid In Bribes To Mexican Officials”

  1. Based on the past couple of years, the only pertinent question is how long it will take Obama and his DOJ and the various faux Democrat and/or Republican created “commissions” to cover this up.

  2. In the US, Wal-Mart is the one that wants to bribed. They shake down state and local governments for tax breaks to build stores they’d probably want to build anyway. They shakedown suppliers, threatening to buy other brands’ products and the deals lead to offshoring of jobs in order to avoid losses. Thedre’s a certain amount of karma here, but it shouldn’t avert us from the good professor’s observation about W-M’s obviously shady motives. And, yes, bribery is common in foreign countries, but not everyone gets sucked-in like Wal-Mart, but then hard-nosed types are often the easiest marks for the oldest scams in the book.

  3. OT but related. Bribery, internal displacement and government enforcement of corporate aims are built into the process of ‘expansion’, WalMart’s stated aim of the illegal activity. We here in St. Louis and environs do it with eminent domain. Different strokes for different folks/countries. Land grabs, big and small, aren’t the oldest profession but they’re close.

    Long but enlightening article:
    “Meet The Millionaires And Billionaires Suddenly Buying Tons Of Land In Africa”:


    “Massive Land Grabs in Africa by U.S. Hedge Funds and Universities”:


    (Farming, farming is the oldest profession.)

  4. I do not know whether to cut Walmart any slack or not. As a consultant, I became aware of several countries in which it was literally impossible to do business or sell product without bribing government officials to do their job.

    In Italy, they called it “expediting fees,” and you paid an “expediting agent” that would “shepherd” your application through the Italian government bureaucracy. You literally could not do so much as rent an office or get a telephone installed without paying an expediting fee.

    I am not sure we are that much different, in charging property taxes, inspection fees, tariffs, building permits, requiring insurance for liability on products, sales taxes, energy usage taxes, etc.

    Some companies look at these “expediting fees” like any other taxes and fees. There is the difference that the fees end up in the hands of individuals, not governments. But I still don’t know whether to cut Walmart slack on this one.

  5. If you think about it walmart can only continue to make money only if it grows…. If they have stagnant sales the company as a whole is in the hole…. It is the largest pyramid scheme in business saved only by banking… But walmart does actually do some good by creating some jobs…… It keeps the supply chain of commerce going…… Where banking is just predatory……

  6. If citizens would band together and unite on an important issue like getting a Walmart into the town or county for the betterment of all and would pay some money to effectuate the will of the people then that use of money woould be protected speech and could not be outlawed by some stupid statute which called it a bribe. And, if this dog seems facetious to you then look at the Supreme Court case called, of all things, Citizens United. So, shareholders of Walmart or wannabes, today is the day to buy shares. Get in line behind some guy named Scalia. If Walmart shares are down after thirty days then I will be in a pickle. Someone has already threatened to put a collar on me.

  7. “Wal-Mart spokesman David Tovar insisted “If these allegations are true, it is not a reflection of who we are or what we stand for.”

    All evidence to the contrary. Wal-Mart has established a long and pervasive history of avarice driven practices. I have not shopped there for a while and discourage others from doing the same. I hope they are investigated thoroughly. Unfortunately, with their ties to those in power, I doubt anything will come of it.

  8. It seems extraordinary that a business would have to pay a bribe in order to aquire numerous contiguous parcels of land, build roads, utilities, sewers and construct a huge store and parking lot amidst residential dwellings, whether in Hoboken or Mexico. This does happen in the United States does it not. A bribe by anyother name….. Let us consult the boys and girls on K Street in Washington DC and see how they chimne in. Does anyone feel shock that a bribe would be necessary in either Mexico or Hoboken? And I mean no offense to Mexico to compare it to Hoboken.

  9. “The blockbuster allegations of bribery in Wal-Mart’s Mexico operations, already a public relations nightmare for the company, just got a little worse: the issue has now entered the political realm.

    Two senior Democratic congressmen, Howard Waxman and Elijah Cummings, have announced their intent to launch a probe into the allegations. But that’s only part of the company’s problem.

    The siting of a Wal-Mart within New York City limits was already a contentious point in local politics; not long after the bribery story was published in the New York Times, the pols running in New York’s 6th Congressional District rushed to take advantage of the opportunity.

    From Liz Benjamin’s State of Politics blog:

    Two of the four Democrats running in NY-6 – Assemblywoman Grace Meng and Assemblyman Rory Lancman – were endorsed by two related unions that have been leading the charge against Wal-Mart’s effort to build a store in NYC.

    Local 338 RWDSU/UFCW is backing Lancman, who has been outspoken in his opposition to Wal-Mart.

    (UPDATE: To be clear, RWDSU itself, not just the local, has also endorsed Lancman. And RWDSU President Stuart Appelbaum emailed: “We welcome everyone to the Wal-Mart Free NYC fight. Some people like Rory Lancman have been there for years, others have to be reminded – but all are welcome”).

    UFCW Local 1500 is backing Meng.

    When he announced the endorsement, the union’s president, Bruce Both, said Meng had “pledged her support for our Union’s effort to hold Walmart accountable for reckless corporate policies that effect the worker families, small business owners, and women that live in the 6th Congressional,” adding: “Our Union believes that Grace will help unify an ethnically diverse community around the most pressing issue facing our Unions membership: keeping New York City Walmart free.”

    Yesterday, Lancman took to Twitter to decry Wal-Mart, writing: “Whether it’s through politically motivated ‘philanthropy,’ campaign contributions or outright bribes, NYC is not for sale.”

    With no candidate in the heavily Democratic district defending the retail giant, the allegations aren’t going to drive the outcome of the primary. Still, as long as they are surfacing in congressional races, Wal-Mart is the big loser.”

  10. Corporations are people my friend! How large a prison will we need to build to hold Wally-Mart while he(? she? transgender?) serves time?

  11. After Its Subsidiary Bribed Mexican Officials, Wal-Mart Lobbies To Weaken Anti-Bribery Laws
    This story was originally published at Republic Report.

    A blockbuster New York Times story published this weekend details how the Mexican subsidiary of retail giant Wal-Mart paid $24 million in bribes to Mexican officials — and subsequently top Wal-Mart officials allegedly decided to cover up these offenses.

    The details of Wal-Mart’s complicity in bribery are shocking, but there is one important element that the Times did not report.

    While Wal-Mart’s largest subsidiary spent millions of dollars systematically bribing Mexican officials, the company back home has been working, through big business groups like the U.S. Chamber of Commerce, to weaken the Foreign Corrupt Practices Act (FCPA), which renders it illegal for corporations to bribe officials in foreign countries.

    The Chamber of Commerce made a major push in late 2010 to severely curtail the power of the FCPA. One of the revisions the business lobby wanted was to limit a parent company’s civil liability for the acts of a subsidiary. This lobbying also came shortly after it was revealed that the Chamber had been getting foreign funding from overseas corporations.

    In addition to being a member of the U.S. Chamber of Commerce, Wal-Mart is also represented by the Retail Industry Leaders Association (RILA). RILA has taken aim at the FCPA as well. The RILA and Chamber both held a “roundtable discussion” on parts of the FCPA that they’d like to see weakened just two weeks ago.

    To recap, this episode is an important anecdote about how corruption in America works today. First, a powerful corporation realizes that bribery is a part of its business model in some part of the world. Then, it tries to cover up aforementioned bribery. In case that doesn’t work, the corporation spends big back home to weaken laws against bribery. Finally, if all of that doesn’t work, and intrepid reporters at a place like the New York Times discover the wrongdoing, the corporation’s tactic is to deny that it had any ill intent at all.

    “If these allegations are true, it is not a reflection of who we are or what we stand for,” spokesman David Tovar told the press. “We are deeply concerned by these allegations and are working aggressively to determine what happened.”

    Given how aggressively Wal-Mart targeted the one law that would hold them accountable, one has to wonder if they’re more concerned by what they did or by the possible chance that they will actually be punished for it.

    By Zaid Jilani | Sourced from Republic Reports
    Posted at April 23, 2012, 12:22 pm


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