Corrupt Wal-Mart: Bribery Goes Unchecked While Corporate HQ Focuses on PR, Breaks International Laws

More gross insider info about corrupt mega-corporation Wal-Mart: the New York Times has run an extended expose about how, faced with charges that Wal-Mart de Mexico used bribery and other tactics to force its own "market dominance," the company spent more time fixing its public image than actually fixing the problem. Which is to say: they likely broke the law in both the United States and Mexico, but neglected to stop it:

Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark. In a confidential report to his superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent, summed up their initial findings this way: “There is reasonable suspicion to believe that Mexican and USA laws have been violated.”

The lead investigator recommended that Wal-Mart expand the investigation.

Instead, an examination by The New York Times found, Wal-Mart’s leaders shut it down.

Neither American nor Mexican law enforcement officials were notified. None of Wal-Mart de Mexico’s leaders were disciplined. Indeed, its chief executive, Eduardo Castro-Wright, identified by the former executive as the driving force behind years of bribery, was promoted to vice chairman of Wal-Mart in 2008. Until this article, the allegations and Wal-Mart’s investigation had never been publicly disclosed.

The piece goes on to discuss an internal power struggle and fear that criticism would sink their stock prices; then-CEO H. Lee Scott Jr. shifted the internal investigation to counsel in Wal-Mart de Mexico, who was ironically the same person who allowed the bribes. Clearly, that didn't go anywhere, even after the corporation's internal investigator derided the investigation documents from Mexico. But the whistleblower, former executive Sergio Cicero Zapata, detailed how Wal-Mart de Mexico bribed officials at the local and national level in order to increase its growth in that country, where now one in five Wal-Mart stores are located. The accusations are explosive, though not surprising given Wal-Mart's aggressive and unethical corporate behavior across the board. Still, the evidence is particularly damning considering corporate headquarters in Arkansas has known about the violations since 2005, and yet only seemed to act when they were told the New York Times was working on an expose.


Mr. Cicero said that while bribes were occasionally paid before Mr. Castro-Wright’s arrival, their use soared after Mr. Castro-Wright ascended to the top job in 2002. Mr. Cicero described how Wal-Mart de Mexico’s leaders had set “very aggressive growth goals,” which required opening new stores “in record times.” Wal-Mart de Mexico executives, he said, were under pressure to do “whatever was necessary” to obtain permits.

In an interview with The Times, Mr. Cicero said Mr. Castro-Wright had encouraged the payments for a specific strategic purpose. The idea, he said, was to build hundreds of new stores so fast that competitors would not have time to react. Bribes, he explained, accelerated growth. They got zoning maps changed. They made environmental objections vanish. Permits that typically took months to process magically materialized in days. “What we were buying was time,” he said.

Major allegations, and the report goes much deeper. Read the full piece at the New York Times.



AlterNet / By Julianne Escobedo Shepherd

Posted at April 23, 2012, 4:03am

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