NYT: Wal-Mart Allegedly Used Bribery to Get its Way in Mexico

Tuesday, 18 Dec 2012 11:01 AM

By Michael Kling

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Wal-Mart allegedly engaged in systematic and aggressive use of bribery to build stores in Mexico, an expose by The New York Times reveals.

When zoning rules prevented it from building a store near ancient pyramids in Teotihuacan, Wal-Mart de Mexico, Wal-Mart's largest foreign subsidiary, used a $52,000 bribe to prevent the rules from becoming law.

When a former Wal-Mart de Mexico lawyer showed top Wal-Mart executives the bribery practices, the company conducted an internal investigation but shut it down without notifying authorities, even though its investigation confirmed the lawyer's allegations, according to The Times.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

Mexican officials investigated corruption allegations, but were unaware of the lawyer's information, so concluded their efforts without finding any wrongdoing.

The Times said it found 19 store sites where the company paid bribes. And the payments worked, repeatedly winning needed permits.

In one case, it allegedly used bribes totaling $341,000 to build a Sam’s Club store in Mexico City without any government approvals — even so much as a traffic permit. In another, it allegedly made illicit payments totaling $765,000 to build a refrigerated distribution center in an environmentally sensitive flood basin, The Times reports.

In the Teotihuacan case, local Mexican officials wanted to change the area's zoning plan to protect the pyramids and ease traffic crowding at the entrance to the culturally important site. Several bribes totaling over $200,000 changed the new zoning map, according to The Times.

The U.S. Justice Department and Securities and Exchange Commission are investigating the company for possibly breaking U.S. laws by bribing foreign officials, and shareholders and several pension funds have lodged lawsuits against the company, the Times notes.

The allegations have been part of the company's investigation of potential violations of the U.S. Foreign Corrupt Practices Act, David Tovar, Wal-Mart's vice president of corporate communications, said in a statement.

“The Audit Committee of the board, comprised entirely of independent directors, is overseeing the investigation. We are also continuing to cooperate with the Department of Justice and the Securities and Exchange Commission on this matter,” he said.

"A thorough and independent investigation will take time to complete," Tovar added. "We wish we could say more, but we will not jeopardize the integrity of the investigation."

Editor's Note:
Startling Proof of the End of America’s Middle Class. Details in the Video

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