The retailer, Walmart has been in the middle of a bribery scandal involving Mexico. The reports are shady at best and it's hard to figure out exactly what's going on. It's important to know that not only is Walmart the largest retailer in the U.S., it's also the largest private employer in Mexico.
In an expose by The New York Times, it's claimed that while the company dominates the retail market south of the border, it had to bribe quite a few officials, which is a violation of both U.S. and Mexican law. Here's how the charges break down:
In 2005, an executive at Walmart de Mexico reported a massive bribery scheme that helped the company grow extremely fast by paying off officials in order to bypass laws and speed up the process of receiving permits and other authorizations. The claims were investigated by Walmart, who hired their own, private investigators to look into situation. The investigation turned up evidence of more that $24 million in possible bribes, all of which were approved in Walmart's home office in AK.
According to the Times' article, after the investigation was completed, Walmart buried the study. When asked about the accusations, Walmart public-relations chief, David Tovar said that the company is committed to getting to the bottom of the complaint. Furthermore, he said that the company is committed to having an anti-corruption program in place in every country they operate.
Although bribery is common in Mexico and many other countries, this type of conduct violates U.S. Law. Under the Foreign Corrupt Practices Act, U.S. Companies are barred from bribing officials abroad. The Justice Department will be investigating the situation and with all of the media attention surrounding the case, I'm sure that they will be under tremendous pressure to show that there are penalties and consequences for ignoring the law. In addition, the Times report claims that the problem of bribery isn't isolated in Mexico, but is a part of the company's international business plan in many countries, including Asia.
It will be interesting to see what happens with this case. One thing you can be sure of is that the company will be cleaning house and many senior executives will probably be looking for new jobs soon.
What do you think about this report?
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