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Wal-Mart Shut Down Allegations of Widespread Bribery in Mexico

Wal-Mart Shut Down Allegations of Widespread Bribery in Mexico
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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.” 

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Photo of Wal-Mart supercenter store in Mexico City by Enriquecornejo via Wikimedia Commons

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54 comments

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6:16AM PDT on Mar 30, 2013

David F. You just keep on defending walmart unethical and sleazy way of running small businesses out. There are really good reasons why walmart is despised today and that is one of them.

6:13AM PDT on Mar 30, 2013

Walmart has not been ethical or moral since Sam Walton died. it is the tragic truth of what happens when a man who built a company on a vision. Only for the vision to become distorted and used for profit in a company that is now corporate instead of family.

8:38PM PDT on May 4, 2012

No surprise...

11:19AM PDT on Apr 25, 2012

interesting but not surprising

11:30AM PDT on Apr 24, 2012

Marg, This country has a history of people losing their jobs to someone else that is more efficient and works smarter. That is always good for everyone in the long run. If mom and pop stores cannot economically compete with Wal-Mart then they need to find a specialty product that Wal-Mart doesn’t sell or find something else to do to make a living. There were mass protest when hundreds of thousands of people lost their jobs to a machine that could pick and clean cotton. The cotton picking industry collapsed almost overnight when the combine went into production. Families suffered in the short run, but in the long run those people found better jobs. The same thing happened with all industries like typewriters, and robotics in the auto industry, ect, ect. Automation and efficiency gives all classes of people TIME. Wal-mart does it better for less money, what could be a better contribution to anyone then time.

8:43AM PDT on Apr 24, 2012

“much publicized commitment to the highest moral and ethical standards against its relentless pursuit of growth.” These must be the same moral and ethical standards they support by donating to the Republicans.
And publicized by whom, Wal Mart? The people at Wal Mart have no ethics or they wouldn't hire people and pay them as little as they do. They know most of the people they hire are desparate for a job, they higher a lot of older workers. Have you ever been in a Wal Mart, I have and the employees look beaten. I can save anywhere from $20. to $50. on my grocery bill there, but I can't stand the companies practices so I don't shop there. And I really am trying to avoid Made in China products.

6:05AM PDT on Apr 24, 2012

Now that the facts are out it is up to Congress and the Attorney General to act. Even if the bribes took place in another country they are illegal here in the U.S. under for the foriegn corrupt practices act. i won't hold my breath waiting for any action to take place in the near future as Walmart knows where all the skeletons are buried in this country too.

5:21AM PDT on Apr 24, 2012

David F. Tell it to all the small business owners that did not outsource and went out of business because they couldn't compete and all the towns that went bankrupt and became ghost towns! Tell it to the people who lost their factory jobs and manufacturing jobs and all the factories that lost their business because Wall mart drove such a hard bargain they couldn't afford to pay decent wages to their employees and went bankrupt!

4:50AM PDT on Apr 24, 2012

Bribery is how business is down in Mexico, and having done business in Mexico I preferr it. Cuts through the bureaucracy's and allows you to get it done. In the US only the rich are allowed to bribe

10:35PM PDT on Apr 23, 2012

Bribery is the curse which eat up the society and the poor people suffer

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