New York Times Reports That Wal-Mart Sat Silent About Wide-Scale Briberies in Mexico
Wal-Mart Stores Inc. hushed up a vast bribery campaign that top executives of its Mexican subsidiary carried out to build stores across that country, according to a published report.
The New York Times reported Saturday that Wal-Mart failed to notify law enforcement officials even after its own investigators found evidence of millions of dollars in bribes. The newspaper said the company shut down its internal probe despite a report by its lead investigator that Mexican and U.S. laws likely were violated.
The bribery campaign was reported to have first come to the attention of senior executives at Wal-Mart in 2005, when a former executive of its largest foreign subsidiary, Wal-Mart de Mexico, provided extensive details of a bribery campaign it had orchestrated to win market dominance.
The Mexican executive, previously the lawyer in charge of obtaining construction permits, said in emails and follow-up conversations that Wal-Mart de Mexico paid bribes to obtain permits throughout the country in its rush to build stores nationwide, the Times reported.
Wal-Mart’s growth in Mexico has been so rapid that one of every five Wal-Mart stores now is in that country. It is Mexico’s largest private employer, with 209,000 employees there.
The newspaper said that only after learning of its investigation did Wal-Mart inform the U.S. Justice Department in December 2011 that it had begun an internal investigation into possible violations of the Foreign Corrupt Practices Act. Under that law, it is illegal for U.S. corporations and their subsidiaries to bribe foreign officials.
Wal-Mart, which is based in Bentonville, Ark., said Saturday that it takes compliance with that law very seriously. It also noted that many of the “alleged activities” in the Times article occurred more than six years ago.
“If these allegations are true, it is not a reflection of who we are or what we stand for,” spokesman David Tovar said. “We are deeply concerned by these allegations and are working aggressively to determine what happened.”