US federal investigators looking into allegations of corruption by Wal-Mart in Mexico have found, instead, millions of dollars in bribes the big-box retail giant paid to officials in India.
These bribes were “widespread” but were paid in “small amounts” and mostly to “local officials”, The Wall Street Journal said in a report on Monday.
No officials were identified in the report, which did specify though, that most of the bribe was paid in amounts between $200 (R 13,000 at current rates) and $5 (R 325).
When “added together they totaled millions of dollars”, the Journal said, adding, they were paid mostly for speeding up customs clearances and real-estate permits.
But the Journal said these bribes are unlikely to lead to any sizable penalty against Wal-Mart as those are linked to profits and the company hardly makes any money in India.
US department of justice refused to comment. “This remains an active, ongoing investigation, so we’ll decline further comment,” Peter Carr, a spokesman for the department, told Hindustan Times
“We are cooperating fully with the government in this matter and can’t comment further... For Walmart, compliance with the US Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws is a key priority. We work closely with third-party compliance experts on support and training as we continuously review and strengthen our programs around the world,” said Rajneesh Kumar, vice-president & head, corporate affairs, Walmart India.
Wal-Mart entered India in 2007 in partnership with Sunil Mittal’s Bharti Enterprises with an ambitious plan to start the kind of big-box retail stores it is known for the world over.
But it gave up in 2013, bought out Bharti’s share and turned into a members-only cash-and-carry wholesale chain, which is how it continues, with no word on its retail plans.
US federal investigators began looking into allegations of bribery by Wal-Mart in Mexico three years ago, based on reports by The New York Times that went on to win a Pulitzer.
But they found no major offenses, only small ones that, the Journal said citing sources, “could be resolved with a fine and no criminal charges” against company officials.
They found plenty of payments made in India, instead, which could bring bribery charges against Wal-Mart officials under America’s Foreign Corrupt Practices Act.
There was no information on the number of Indian officials bribed by the company, or their identity or whether they were employed with state or central governments.
There was a controversy some years ago over reports of Wal-Mart spending $25 million on lobbying US government and congress to pressure India to liberalize multi-brand retail.
Some in India took it to mean Wal-Mart spent that money on bribing Indian officials, when the company actually spent it on lobbying American officials, which is legal in the US.
The Indian government has spent millions lobbying US congress and administration — $1800,000 a quarter for last some years, to Barbour Griffith and Rogers, a lobbying firm.