A senior Wal-Mart lawyer claims the company’s largest foreign subsidiary, Wal-Mart de Mexico, engaged in widespread bribery totaling over $24 million, The New York Times reported.
Wal-Mart de Mexico reportedly used bribes to obtain permits all over the country to build stores quickly and dominate the market. When Wal-Mart’s headquarters in Bentonville, Ark., was informed of the suspicions of bribery, an investigation was launched which unearthed that there was “reasonable suspicion to believe that Mexican and USA laws have been violated,” wrote the top investigator in a confidential report, according to The Times.
But Wal-Mart shut down the investigation, did not inform law enforcement in Mexico or the United States, and did not discipline any of the employees involved in the scandal, according to The Times.
Wal-Mart said today though that it has been investigating the situation since last fall.
“In the fall of last year, the Company, through the Audit Committee of the Board of Directors, began an extensive investigation related to compliance with the [U.S. Foreign Corrupt Practices Act (FCPA)],” said David Tovar, Wal-Mart’s Vice President of Corporate Communications, in a statement.
The Times claims Wal-Mart informed the U.S. Justice Department that it had begun to investigate possible violations of the FCPA only after the company learned of the Times’ reporting in Mexico.
Tovar said that because the investigation is ongoing, the company cannot respond to the allegations in detail.
“We are working hard to understand what occurred in Bentonville more than six years ago and are committed to conducting a complete investigation before forming conclusions. We don’t want to speculate or weave stories from incomplete inquiries and limited recollections, as others might do.”
The FCPA prohibits US companies from bribing officials in other nations to get business.