The Mexican unit of U.S.-based retail giant Wal-Mart Stores Inc. said in a statement that it has provided information regarding the corruption allegations it faces and reiterated its pledge to continue cooperating with Mexican authorities.
The statement was issued Friday, a day after U.S. congressmen Elijah Cummings and Henry Waxman divulged a letter they sent to Wal-Mart CEO Mike Duke concerning allegations of systematic bribery to secure permits for a super-store on the site of Mexican ancient ruins.
That missive informed Duke that documents they obtained from a confidential source indicate he and other senior company executives, “contrary to Wal-Mart’s public statements, were repeatedly informed about bribes paid to government officials by the company’s Mexican subsidiary.
In response, Wal-Mart de Mexico y Centroamerica issued a statement indicating that the information contained in the letter from the Democratic legislators is part of an investigation that the parent company “began in the fall of 2011, through the Audit Committee of the Board of Directors.”
“That investigation is being conducted by outside legal counsel and forensic accountants, who are experts in (Foreign Corrupt Practices Act) compliance, and they are reporting regularly to the Audit Committee,” the company said.
According to the statement, “Walmart de Mexico y Centroamerica has provided information to Mexico’s Attorney General’s Office related to these allegations and continues to be committed to collaborate fully in the investigation” that the AG’s office is conducting.”
The allegations against Wal-Mart de Mexico first came to light in April 2012, when The New York Times published an article indicating the company’s largest foreign subsidiary paid bribes exceeding $24 million.
It said a former executive at the Mexican subsidiary blew the whistle, telling a Wal-Mart lawyer in September 2005 that “in its rush to build stores ... the company had paid bribes to obtain permits in virtually every corner of the country.”
The Times story also said that Wal-Mart’s own investigators subsequently unearthed evidence of “widespread corruption,” but top executives of the Bentonville, Arkansas-based company “focused more on damage control than on rooting out wrongdoing.”
The whistleblower, Sergio Cicero Zapata, who told the daily he resigned from Wal-Mart de Mexico in 2004 after organizing “years of payoffs,” identified the subsidiary’s then-chief executive, Eduardo Castro-Wright, as the “driving force” behind the bribery scheme.
But rather than being disciplined, the Times said Castro-Wright was promoted to vice chairman of Wal-Mart in 2008.
The daily said then that “bribery played a persistent and significant role in Wal-Mart’s rapid growth in Mexico, where Wal-Mart now employs 209,000 people, making it the country’s largest private employer.”
In a follow-up Dec. 17 article on the alleged corruption, the New York Times reported that Wal-Mart placed a $52,000 bribe with an official who then redrew a zoning map that had barred construction of a superstore near the archaeological zone of Teotihuacan, which includes the famed Pyramids of the Sun and the Moon.
The Times’ report, cited by Cummings and Waxman in their Jan. 10 letter to the Wal-Mart CEO, said the Teotihuacan case was part of a pattern of corrupt behavior and noted that 19 store sites across Mexico were “the target of Wal-Mart de Mexico’s bribes.”
The paper added that “Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business ... (but) was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited.”