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Report: Wal-Mart hushed up bribe network in Mexico

 
 
Reply Sun 22 Apr, 2012 10:44 am
The Associated Press
April 21, 2012
Report: Wal-Mart hushed up bribe network 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."

Wal-Mart said its latest, ongoing investigation is being handled by outside lawyers and accountants who are experts with the Foreign Corrupt Practices Act. The company also said it has tightened procedures and expanded training in Mexico to ensure compliance with the law.

The Times said its investigation uncovered a lengthy struggle at the highest levels of Wal-Mart, pitting the company's commitment to high moral and ethical standards against its relentless pursuit of growth.

Wal-Mart had sent investigators to Mexico City, where the newspaper report said they quickly discovered evidence that included a paper trail of hundreds of suspect payments totaling more than $24 million.

But according to the Times, top Wal-Mart executives kept quiet about the campaign and were more focused on damage control than on exposing the corruption. Then-CEO H. Lee Scott Jr. reportedly rebuked internal investigators at one meeting for being overly aggressive. Shortly thereafter, the newspaper said, the investigation was turned over to the general counsel for Wal-Mart de Mexico, who himself was alleged to have authorized bribes. He swiftly exonerated his fellow executives.
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BumbleBeeBoogie
 
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Reply Sun 22 Apr, 2012 11:13 am
@BumbleBeeBoogie,
Report Says Wal-Mart Hushed Bribery Campaign In Mexico
April 21, 2012
by Steve Mullis - NPR

A van covered by a mural sits parked outside a Walt-Mart Super Center in Mexico City. Wal-Mart Stores Inc. hushed up a vast bribery campaign that top executives of its Mexican subsidiary carried out to build stores across Mexico, according to a published report by the New York Times.

In a massive investigation, The New York Times reported Saturday that Wal-Mart Stores Inc. silenced a vast bribery effort that top executives of Mexican subsidiary Wal-Mart de Mexico carried out in order to build stores across the country.

According to the report:

Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico's top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart's headquarters in Bentonville, Ark. In a confidential report to his superiors, Wal-Mart's lead investigator, a former F.B.I. special agent, summed up their initial findings this way: "There is reasonable suspicion to believe that Mexican and USA laws have been violated."

The rapid growth of Wal-Mart in Mexico is so much so that now one of every five Wal-Mart stores is in the country. The Mexican subsidiary was the company's brightest success story, pitched to investors as a model for future growth, according to the report. But then confronted with the evidence of corruption, the report alleges Wal-Mart executives were more concerned with damage control than rooting out the wrongdoing.

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.

In a response to the article on Wal-Mart's website on Saturday, spokesman David Tovar said:

"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 company also said that it takes compliance with the law very seriously, and also noted that many of the "alleged activities" in the Times article occurred more than six years ago.

The report goes on to detail a lengthy battle at the top levels of Wal-Mart that pitted the company's moral and ethical guidelines against its desire for rapid growth.

Then-CEO H. Lee Scott Jr. reportedly rebuked internal investigators at one meeting for being overly aggressive. Shortly thereafter, the newspaper said, the investigation was turned over to the general counsel for Wal-Mart de Mexico, who himself was alleged to have authorized bribes. He swiftly exonerated his fellow executives.

This report contains material from The Associated Press
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hawkeye10
 
  1  
Reply Sun 22 Apr, 2012 11:57 am
And?? Did anyone seriously think it was possible to do business in Mexico without using bribes? Ditto for China and Russia.
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