Wal-Mart Stores Inc. (WMT) curtailed an internal investigation into allegations of bribery by executives at the retailer’s Mexican subsidiary instead of broadening the probe, the New York Times reported.
The newspaper detailed the company’s 2005 investigation by examining hundreds of internal company documents, as well as more than 15 hours of interviews with former Wal-Mart de Mexico executive Sergio Cicero Zapata, who recounted years of payoffs to government officials.
The Times said it looked at thousands of government documents related to store permit requests throughout Mexico and found many instances of permits being granted within weeks or days of Wal-Mart de Mexico’s payments to two outside lawyers who gave cash to the officials.
Wal-Mart decided in February 2006 to turn the investigation over to the then general counsel of the Mexican subsidiary, Jose Luis Rodriguezmacedo Rivera, the newspaper said. Rodriguezmacedo finished the probe within weeks, concluding there was no evidence of bribes paid to Mexican government officials, the Times said. Rodriguezmacedo declined to comment to the newspaper.
In December, Wal-Mart said it began an internal probe into whether some of its actions violated U.S. anti-corruption laws after learning of the Times investigation, the Times said. The company is investigating permitting, licensing and inspections of stores, according to a regulatory filing, and disclosed the probe to the U.S. Department of Justice and the Securities and Exchange Commission.
Wal-Mart spokesman David Tovar told the newspaper that the Mexican unit and the handling of the 2005 allegations are a major focus of its investigation. He said the company is taking steps to ensure compliance with the U.S. Foreign Corrupt Practices Act.
Wal-Mart de Mexico, in a statement today, said it’s committed to complying with the laws in the countries where it operates and the story’s allegations, “if true, do not accurately reflect Walmart de Mexico y Centroamerica’s culture.”
In another statement issued after the Times story was published online this afternoon, the Arkansas-based company said, “We will not tolerate noncompliance with FCPA anywhere or at any level of the company.” The company said it has taken steps to insure stronger FCPA compliance, including training and enhanced auditing procedures.
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