Wal-Mart Spends $230 Million on Mexican Bribery Investigation

by Mark Friedman  on Monday, Jun. 10, 2013 12:00 am  

This is one of Wal-Mart’s locations in Mexico, where the company has come under scrutiny for allegedly paying more than $24 million in bribes so stores could open faster.

A DOJ spokesman referred questions about its practices to its website. And Wal-Mart didn’t respond to emailed questions.

$24 Million in Bribes Alleged

In April 2012, The New York Times reported the details that alleged Wal-Mart’s Mexican division paid more than $24 million in bribes so stores could be opened faster than if the company had gone through normal government channels.

Wal-Mart Mexico “had taken steps to conceal [the payments] from Wal-Mart’s headquarters in Bentonville,” according to the Times article.

The article also said Wal-Mart learned of the allegations in 2005, but didn’t pursue them. The article was the basis for several lawsuits filed by shareholders.

Wal-Mart said in a news release in April 2012 that it had been working on compliance with the FCPA and had “a rigorous process in place to quickly and aggressively manage issues like this when they arise.

“We will not tolerate noncompliance with FCPA anywhere or at any level of the company,” the news release said. “We are confident we are conducting a comprehensive investigation and if violations of our policies occurred, we will take appropriate action.”

How the Investigations Work

It’s unclear what Wal-Mart’s investigation involves, but a company’s internal investigation is usually conducted by outside lawyers and accountants. Their goal is to determine what happened by interviewing employees and anyone who might have been involved, Henning, of Wayne State University Law School, said in the email to Arkansas Business.

“The hope is that the company will find out about all the possible wrongdoing and report that to the government,” Henning said.

The faster the company conducts its investigation, and shows that it has changed its ways, the cheaper it will be for the firm, said Bud Cummins, general counsel for the Circumference Group of Little Rock and the former U.S. Attorney for the Eastern District of Arkansas.

By cooperating with the government, the company will possibly see a reduced fine, if one is called for, because the government didn’t have to work so hard to get the information, Cummins said.

 

 

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