Wal-Mart said it is investigating its operations in Mexico for possible violations of U.S. laws prohibiting the paying of bribes to foreign officials.
The admission that the investigation involves Mexico, after in December the firm acknowledged that it was investigating possible bribery, comes after The New York Times published an article on the case on Saturday.
In that article, the paper says that the company has known since 2005 about the complaints of “widespread bribery” by its employees in Mexico and that top executives in the firm covered them up.
The Times said a lawyer who was in charge of securing construction permits for Wal-Mart de Mexico provided extensive details on the bribes and said that “the campaign of bribery (was orchestrated) to win market dominance. In its rush to build stores, ... the company had paid bribes to obtain permits in virtually every corner of the country.”
According to The Times, citing e-mails and company files, the bribes exceeded $24 million and were paid to get construction permits for new stores throughout Mexico.
Initially, Wal-Mart de Mexico was touted by the firm to investors as a model of growth, the daily said, adding that currently one in every five of the company’s stores worldwide is in Mexico.
But in the face of proof of corruption, top company officials “focused more on damage control than on rooting out wrongdoing,” the article said.
In one case, then-executive director H. Lee Scott Jr. accused internal investigators looking into the bribery allegations of being too aggressive. Days later, the general counsel for the firm in Mexico took over the investigation even though he was one of the people accused of authorizing the bribes.
The general counsel exonerated the Wal-Mart executives in Mexico, but although the firm’s director of corporate investigation, a former FBI agent, found the counsel’s report on the matter “truly lacking,” company authorities considered the report to be the final word on the case.
The Times reported that its own investigation found that the bribes played a “persistent and significant” role in the firm’s growth in Mexico, where it employs 209,000 people making it the largest private employer in the country.
In a communique, Wal-Mart spokesman David Tovar said that if these allegations are true “it is not a reflection of who we are or what we stand for.”
“We are deeply concerned by these allegations and are working aggressively to determine what happened,” he added.
Meanwhile, the company is taking steps in Mexico to ensure compliance with the U.S. Foreign Corrupt Practices Act, which prohibits paying bribes to foreign officials.
“We do not and will not tolerate noncompliance with F.C.P.A. anywhere or at any level of the company,” Tovar said.