E-Paper
Probing bribery allegations at Mexico unit: Wal-Mart
Wal-Mart, the world’s largest retailer, said it is probing allegations its managers in Mexico employed a widespread campaign of bribery to secure and expand the company’s presence in the country.
Wal-Mart, the world’s largest retailer, said it is probing allegations its managers in Mexico employed a widespread campaign of bribery to secure and expand the company’s presence in the country.
“This work is ongoing and continues today,” David Tovar, vice president of corporate communications, said in a statement late Saturday following a report by The New York Times that unearthed illicit payments and an apparent effort to cover them up.
“We don't have a full explanation of what happened,” the spokesman added.
The Times report alleged that Wal-Mart was made aware of the bribery campaign by Wal-Mart de Mexico, the retail giant's largest non-US subsidiary, to win market dominance and to keep the effort hidden from US headquarters.
When it was revealed however there was a failure to investigate or remedy fully.
In 2005, a high-ranking company attorney received an email from a former Wal-Mart de Mexico executive first revealing the clandestine campaign which aimed to rapidly expand throughout the country, according to the Times.
When the Arkansas-based US retailer sent investigators to Mexico City they quickly uncovered widespread bribery, the Times said. An internal probe found a paper trail, said the report, amounting to over $24 million in suspected payments.
In a report back to headquarters, the Wal-Mart’s top investigator said there was "reasonable suspicion to believe that Mexican and USA laws have been violated,” said the Times.
While the lead investigator urged a broader probe, however, an examination by the Times found Wal-Mart's leaders shut it down, and that there was a failure to alert either US or Mexican authorities to the matter.
Top Wal-Mart de Mexico executive Eduardo Castro-Wright, found to be a leader of the bribery campaign, was elevated to vice chairman of Wal-Mart in 2008, the paper noted.
