Today, Wal-Mart de Mexico ("Walmex") is one of Wal-Mart's most profitable units.
In The New York Times of April 22, 2012, a former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country. The former executive gave names, dates and bribe amounts. He knew so much, he explained, because for years he had been the lawyer in charge of obtaining construction permits for Wal-Mart de Mexico.
In September 2005, 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.
Is Bribery an Ethical Condition of Doing Business in the Global Economy?
Violations of the Foreign Corrupt Practices Act, a federal law that makes it a crime for American corporations and their subsidiaries to bribe foreign officials is to be enforced by the Justice Department. Yet, the Times's examination found credible evidence that bribery played a persistent and significant role in Wal-Mart's rapid growth in Mexico, where Wal-Mart now employs 209,000 people, making it the country's largest private employer.
A person familiar with the thinking of those overseeing the bribery investigation said Wal-Mart would have reacted “like a chicken on a June bug” had the allegations concerned the United States. But some executives saw Mexico as a country where bribery was embedded in the business culture. It simply did not merit the same response.
“It’s a Mexican issue; it’s better to let it be a Mexican response,” the person said, describing the thinking of Wal-Mart executives.
In the midst of this debate, Ms. Maritza I. Munich, then general counsel of Wal-Mart, submitted her resignation, effective Feb. 1, 2006. In one of her final acts, she drafted a memo that argued for expanding the Mexico investigation and giving equal respect to Mexican and United States laws. “The bribery of government officials,” she noted dryly, “is a criminal offense in Mexico.”
“Given the serious nature of the allegations, and the need to preserve the integrity of the investigation,” Ms. Munich wrote, “it would seem more prudent to develop a follow-up plan of action, independent of Walmex management participation.”
In the end, people involved in the investigation said, Wal-Mart’s leaders found a bloodlessly bureaucratic way to bury the matter. But in handing the investigation off to one of its main targets, they disregarded the advice of one of Wal-Mart’s top lawyers.
“The wisdom of assigning any investigative role to management of the business unit being investigated escapes me,” Ms. Munich wrote in an e-mail to top Wal-Mart executives. The investigation, she urged, should be completed using “professional, independent investigative resources.”
Source: The New York Times, April 22, 2012
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