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HindustanTimes Thu,28 Aug 2014

Wal-Mart cornered in Mexico

David Barstow and Alejandra Xanic von Bertrab, Hindustan Times  Mexico, December 18, 2012
First Published: 22:04 IST(18/12/2012) | Last Updated: 22:06 IST(18/12/2012)

Wal-Mart longed to build in Elda Pineda's alfalfa field. It was an ideal location, just off this town's bustling main entrance and barely a mile from its ancient pyramids, which draw tourists from around the world. With its usual precision, Wal-Mart calculated it would attract 250 customers an hour if only it could put a store in Pineda's field.

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There was just one problem.

After years of study, the town's elected leaders had just approved a new zoning map. The leaders wanted to limit growth near the pyramids, and the 2003 zoning map prohibited commercial development on Pineda's field — seemingly dooming Wal-Mart's hopes.

But Wal-Mart executives were not about to be thwarted. Records and interviews show that they decided to undo the damage with one well-placed $52,000 bribe.

The plan was simple. The zoning map would not become law until it was published in a government newspaper. So Wal-Mart de Mexico arranged to bribe an official to change the map before it was sent to the newspaper. Sure enough, when the map was published, the zoning for Pineda's field was redrawn to allow Wal-Mart's store.

The store opened for Christmas 2004, affirming Wal-Mart's emerging dominance in Mexico. And the story of the altered map remained a secret.

The secret held even after a former Wal-Mart lawyer contacted Wal-Mart executives in Bentonville, Arkansas, and told them how Wal-Mart de Mexico routinely resorted to bribery. His detailed account raised alarms at the highest levels of Wal-Mart and prompted an internal investigation — though Wal-Mart has refrained from comment on its conduct in Teotihuacán.

Wal-Mart has been under growing scrutiny since The Times disclosed its corruption problems in Mexico, where it is the largest private employer, with 221,000 people working in 2,275 stores, supermarkets and restaurants.

In the US, the Justice Department and the Securities and Exchange Commission are investigating possible violations of the Foreign Corrupt Practices Act, the federal law that makes it a crime for American corporations or their subsidiaries to bribe foreign officials. Mexican authorities and Congressional Democrats have also begun investigations, and Wal-Mart has been hit by shareholder lawsuits from several major pension funds.

Wal-Mart declined to discuss its conduct in Teotihuacán while it is continuing its own investigation. The company has hired hundreds of lawyers, investigators and forensic accountants who are examining all 27 of its foreign markets. It has already found potentially serious wrongdoing, including indications of bribery in China, Brazil and India. Several top executives in Mexico and India have been suspended or forced to resign in recent months.

“We are committed to having a strong and effective global anticorruption program everywhere we operate and taking appropriate action for any instance of noncompliance,” said David W Tovar, a Wal-Mart spokesman.


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