If you are not a fan of Wal-Mart, here is yet another reason to be wary of the mega-retailer. A New York Times investigation has found that, after being informed about extensive bribery and corruption in its operations in Mexico, the top levels of Wal-Mart’s management in Bentonville, Arkansas, did not notify either Mexican or American law enforcement, did not discipline any of the executives of Wal-Mart de Mexico and promoted its chief executive, Eduardo Castro-Wright, to vice-chairman of the entire company in 2008.
“Until this article, the allegations and Wal-Mart’s investigation had never been publicly disclosed,” the New York Times states.
Unnamed persons described as familiar with the investigation said that, while Wal-Mart would have acted “like a chicken on a June bug” had the corruption allegations been made about the U.S., some executives shrugged them off as a “Mexican issue” that was best treated with a “Mexican response.” The subsequent failure of Wal-Mart’s executives to address the problem and to assert that Mexico was “a country where bribery was embedded in the business culture” raises serious questions about Wal-Mart’s “much publicized commitment to the highest moral and ethical standards against its relentless pursuit of growth.”
Allegations of Bribery By Wal-Mart de Mexico
In 2005, a former Wal-Mart de Mexico executive, Sergio Cicero Zapata, sent an email to the then-general counsel of Wal-Mart International, Maritza I. Munich, in which he said that he knew of “irregularities” authorized “by the highest levels” at Wal-Mart de Mexico. Munich and Juan Francisco Torres-Landa, a prominent Harvard-trained lawyer in Mexico City, immediately debriefed Cicero, who recounted how the company — including its board chairman, its general counsel, its chief auditor and its top real estate executive — had condoned and even given the approval for bribes in order to build a record amount of new stores as quickly as possible. The bribes made it possible for Wal-Mart de Mexico to bypass zoning laws, environmental regulations and obtain government permits in days rather than in months.
Cicero, a lawyer by training, had resigned from Wal-Mart de Mexico in 2004 after he was passed over for the position of general counsel of Wal-Mart de Mexico. As he told the New York Times, he “thought… [he] deserved a medal at least” for his years of participating in the corruption.
Wal-Mart Keeps Investigation Internal
Munich sent “detailed memos” to Wal-Mart’s senior executives in Arkansas. But instead of hiring an outside law firm to investigate the allegations about some $24 million in bribery payments — as it had previously done regarding such charges of illegal practices — executives decided to undertake a limited “preliminary inquiry” by in-house investigators in 2005. Such an internal investigation was under the “direct control” of Wal-Mart’s senior management. As Munich indeed pointed out in an email, the investigation was “at the direction of the same company officer who is the target of several of the allegations.”
Disclaimer: The views expressed above are solely those of the author and may
not reflect those of
Care2, Inc., its employees or advertisers.