Wal-Mart responds to report saying it squashed Mexico bribery probe

Wal-Mart responds to report saying it squashed Mexico bribery probe
A New York Times report accuses Wal-Mart of squelching a full-scale investigation into bribery allegations out of Mexico. (J.D. Pooley / Getty Images)

Wal-Mart Stores Inc. said it's a stickler for integrity, issuing a lengthy response to a New York Times article accusing the massive retailer of shutting down an investigation into alleged bribery in its Mexico operations.

"In a large global enterprise such as Walmart, sometimes issues arise despite our best efforts and intentions," the company said in a statement.


The "issues" in question: The chain's possible violation of the Foreign Corrupt Practices Act stemming from what one informant claimed was rampant bribery from Wal-Mart executives attempting to boost the company's growth in Mexico.

The huge retailer has been making a big to-do in recent years over its transformation into a conscientious global citizen, touting its eco-friendly efforts and commitment to healthful, justifiably-sourced products.

At the same time, the chain has continued to pursue ever-more growth while fending off persistent controversy. Sales across the company were up 5.9% in the last fiscal quarter to $443.8 billion. That's a 42% increase from the $312.4 billion Wal-Mart said it earned in the 2005 fiscal year, when much of the Mexican bribery was said to be occurring.

In the summer, the U.S. Supreme Court blocked a massive class-action suit from as many as 1.5 million female Wal-Mart employees alleging pay discrimination. This spring, the company has been trying to work a store into Los Angeles' Chinatown district, against much local opposition.

In the Mexican bribery case, whistle-blower and former executive Sergio Cicero Zapata said that Wal-Mart's Bentonville, Ark., headquarters nixed a full-fledged investigation into the alleged multimillion-dollar scheme and sat on Zapata's evidence rather than report it to authorities.

Wal-Mart this weekend said that it "will not tolerate noncompliance" with U.S. anti-bribery laws such as the Foreign Corrupt Practices Act, saying that it began investigating its internal observance of such rules last fall.

The probe, which Wal-Mart said involves voluntary meetings with the U.S. Department of Justice and the Securities and Exchange Commission as well as public filings, is still ongoing.

Wal-Mart also said that much of the bribery described by the New York Times was "more than six years old. The company said it has since "taken a number of actions in Mexico" to be more vigilant against corruption.

"If these allegations are true, it is not a reflection of who we are or what we stand for," according to the company.

But Wal-Mart still doesn't know exactly what happened, the company admitted.

"We don't want to speculate or weave stories from incomplete inquiries and limited recollections, as others might do," it said. "We are committed to getting to the bottom of this matter."

Watch Wal-Mart's Vice President of Corporate Communications, David Tovar, discuss the scandal below.



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