Report: Feds Targeting Walmart With Criminal Investigation In Wake Of Bribery Claims

A new report says the U.S. Justice Department is taking allegations of Walmart bribery in Mexico very seriously, and have started a criminal investigation. And just as that news hits comes a story that the company has created a Global Foreign Corrupt Practices Act Compliance Officer. Coincidence? We think not.

Bloomber cites a person familiar with the probe, while also running a story about the FCPA compliance officer who will oversee five international compliance officers. The Justice Department is looking into whether or not Walmart violated the law, after an April 21 New York Times article laid out a story of not only widespread bribery by Walmart de Mexico to obtain permits, but a cover-up at the executive level.

Walmart is also conducting its own review of the allegations. If those investigations find that senior managers were lacking in their actions regarding any kind of bribery or covering up of bribes, Walmart might see a few heads roll and face penalties from the government.

“The penalties paid by companies in settling these types of FCPA investigations have grown significantly larger in recent years,” said Jeffrey Lehtman, a Washington-based partner with the law firm of Richards Kibbe & Orbe LLP. “Depending on the facts uncovered, companies like Wal-Mart can expect the penalties to be incredibly high.”

Walmart may have been trying to save its skin when it announced in December 2011 that they were looking into whether they were in compliance with the FCPA. The New York Times says that action came as Walmart got wind of the newspaper’s investigation into bribery allegations. As for whether or not that will help it look pretty in the federal investigation is anyone’s guess.

Wal-Mart Said to Be Subject of U.S. Criminal Probe [Bloomberg]


Edit Your Comment

  1. Cat says:

    Bribery? Illegal shenanigans? In Mexico? Say it isn’t so!

    Bribery is standard operating procedure in just about any country that those greasy Spaniards laid their hands on.

    • Loias supports harsher punishments against corporations says:

      I do hope that lovely tidbit was snark.

      Japan actually has a common business practice that makes working there difficult for U.S. companies. In Japan, it is generally expected to offer gifts in exchange for setting up meetings and doing other aspects of business. In Japan this is a commonality in their culture, but it fits the U.S. and European definitions of bribery. So, it becomes extremely difficult for U.S. companies to get a foothold in Japan without violating their own soverign laws.

    • SecretShopper: pours out a lil' liquor for the homies Wasp & Otter says:

      It’s not grease, its just a swarthy “glow”

      /just playing along, don’t think anyone is greasy

  2. comatose says:

    Where I work (gov contractor), they pound this stuff into heads and we take classes, see videos, role play, etc. I would have thought that Walmart had some level of this if just small.

    Also, I don’t understand what the US gov cares about this at all outside of the US especially for a commercial company. I hate that there’s laws about stuff we can’t do in other international locations when that location has no laws. We’re not even on US ground for christ sake. I had a near kidnapping experience in a not so fun filled African nation and the US was of zero use to us there. /tirade off

    • RandomLetters says:

      The US gov cares because Walmart has deep deep pockets and they’re looking to get thier hands into them. Thats all there is to that.

    • Cat says:

      I hate that there’s laws about stuff we can’t do in other international locations when that location has no laws.

      Exactly – for example, prostitution is legal in Columbia. Why get your panties in a bunch? I understand that it “could” have caused a security problem, but the investigation and media frenzy is over the top.

    • Loias supports harsher punishments against corporations says:

      The U.S. requires companies registered in the U.S. to follow U.S. laws, even if those are in conflict or exceed the laws of other countries.

      In other words, you can’t break U.S. business laws in other countries just because it’s legal in those countries.

      • chargernj says:

        to bad they don’t apply the same standards to workplace safety, environmental standards, or minimum wage.

    • iesika says:

      With bribery as the example – that’s illegal in most countries. That doesn’t mean it’s uncommon or that the law is properly enforced, but it’s usually illegal.

  3. milehound says:

    Walmart’s reported antics with foreign officials are small beer compared to those of News International, according to the Leveson Inquiry in the UK. When are the Feds going to go after Murdoch & Co.?

  4. RobHoliday says:

    What would be more shocking, if there was an American company in Mexico that WAS NOT involved in bribing local officials. This is Mexico, the most corrupt country in North America.

  5. TheMansfieldMauler says:

    Back in college business classes having to do with accounting and finance, we were taught how to account for bribes, graft and other nefarious payouts in foreign countries. It was known and taught that it was a cost of doing business in many cases.

    Now those professors would probably get a visit from DHS for teaching the same thing.

    • Bsamm09 says:

      GAAP and IFRS as well as the tax code have provisions for accounting for this. I wonder if it is actually used because it would draw attention to illegal actions. For the auditing side I can see if these payments are classified in wrong accounts in amounts large enough to materially misstate the financial statements as to require a qualified (but, for) opinion, an adverse opinion, withdraw from the engagement or a disclaimer of opinion.

  6. CommonSense(ಠ_ಠ) says:

    Um… my coworker is from mexico. He has only been in the US about 3 years.
    He was in management at various automotive factories over about 20 years after college.

    Bribes are part of doing business in Mexico. If you dont pay them your business will not survive, even if you are a large international company.
    If Walmart refused to pay the bribes their business would shut down in mexico from delivery trucks being robbed, to workers being threatened, to customers being threaten, utilities being shutoff, stores being robbed, stores being vandalized, blockaids on the roads to their stores, etc.

    It the US wants to get invovled with the normal business practices of Mexico they will have to go to war with the Mexican government and cartels to stop it.

    • Gorbachev says:

      Bribes made by US companies are illegal in Mexico and more importantly in US, even if they’re made in a foreign country.

      Whether or not “bribes are just the way you do things in Mexico” is completely irrelevant.

      • CommonSense(‡≤†_‡≤†) says:

        Sorry, but technically in Mexico what Walmart did was not a “bribe”.
        It is the cost of doing business in Mexico. You must pay “fees” to the people in power in the towns or you will not be allowed to operate your business.

        So in the US if you dont pay your taxes and you get shut down does that make those taxes a bribe???
        Sorry but Walmart did nothing wrong. If they can’t pay the “fees” then they cannot operate in Mexico.

        Every US company in Mexico pays out “fees” to the local cartels, police, and whoever else is in power to ensure they can operate peacefully in Mexico.
        They usually do this by paying contractors.
        If they have to pay $10K to a cartel or get shut down, they will write up an invoice for HVAC repair for $10K and give $10K cash to the cartel. On their books it looks like they paid a repair company.
        You would be suprised at how many things need to be repaired monthly at a US company in Mexico.

  7. Jawaka says:

    The US can investigate and fine Walmart for something they did in Mexico:?

    Wouldn’t it be Mexico’s responsibility to determine if any of their their laws were broken and then file charges if there were?

  8. JonBoy470 says:

    This is ridiculous… While I concede that Mexico would be a better place if corruption wasn’t endemic there, it’s not like even Walmart has the clout to go in simultaneously effect wholesale change of their culture and succeed as a capitalist enterprise. Walmart is in the business of selling cheap crap from China, not reforming Mexican society. Bribery is how you get things done in Mexico (or China, India, Iraq or any number of other $#!+hole countries). Deal.

    The entire Foreign Corrupt Practices Act is retarded. All it does is make American companies less competitive overseas when coming up against companies not held to the same standard. Yes, it increases international “faith in the integrity of American business” which just makes us look like dumbasses to those who don’t play by the rules. Walmart shareholders should be happy that Walmart was greasing palms to get more stores open south of the border…

  9. DZ says:

    While stationed in Panama, they called it “plata”…wonder if it’s the same in Mexico? They should arrest them for buying too much from China, too!

  10. zombie_batch says:

    With Wal-Mart, you get what you pay for. This is what low prices pay for. You can’t have your cake and eat it too.

  11. chargernj says:

    Why is it illegal for American companies to offer bribes in foreign nations, but it’s considered anti-business to expect American companies operating overseas to adhere to American pollution standards, workplace safety regulations, and minimum wage requirements?