Wal-Mart Mexico bribery scandal kept under wraps
The N.Y. Times performs a thorough investigation unraveling the misconduct
Published: Friday, May 4, 2012
Updated: Thursday, May 3, 2012 19:05
Back in September 2005, Wal-Mart de Mexico was heavily involved in an operation which consisted of bribery to win market dominance throughout the country. With interests in rapidly building stores, the company sought out and paid bribes to acquire permits in all possible cities throughout Mexico. As word spread an investigation began, but this was not made public until recently.
Red flags went up when top level Wal-Mart lawyers were notified of the possible crimes committed by those in charge of Wal-Mart de Mexico, and an investigation followed almost immediately.
“Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspected 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, Arkansas,” David Barstow, reporter at the New York Times, said.
With accruing evidence, the lead investigator sought to expand the investigation but found a wall of resistance. Wal-Mart leaders immediately cut off any further examination of the charges, fearful of the effect it would have on their profits and reputation.
Since Wal-Mart de Mexico has been the company’s biggest accomplishment and success story ever since it first entered the country, high level officials within the company were more concerned about covering up the allegations than notifying the public and punishing those who broke the law.
“Neither American nor Mexican law enforcement officials were notified. None of Wal-Mart de Mexico’s leaders were disciplined. Confronted with evidence of corruption in Mexico, top Wal-Mart executives focused more on damage control than on rooting out wrongdoing,” Barstow said.
The immediate shutdown of the investigation prompted increased suspicion, and The New York Times sent reporters and investigators into Mexico to do some exploration of their own. They conducted widespread interviews with many of the people involved in the investigation and also studied thousands of government documents related to the permits that Wal-Mart had used bribes to obtain.
“The Times’ 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,” Barstow said.
Only after learning of the Times’ investigation in Mexico this past December did Wal-Mart take action. The company began an internal investigation concerning the bribes and said that they had heard of possible problems with the way Wal-Mart de Mexico had obtained permits preceding the 2005 investigation, but they emphasized that the complications were only found in a few random cases.
In the end, the people who were involved in the investigation concluded that Wal-Mart’s leaders found a bloodlessly bureaucratic way to bury their wrongdoings, reported Barstow. Out of sight, out of mind; this was exactly what Wal-Mart officials were planning on doing all along.