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A Culture of Corruption

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Wal-Mart, like Bank of America and Goldman Sachs in the banking industry and AIG in insurance, is notoriously synonymous with suspect shady business practices in the big box store industry.

According to a story broken in The New York Times yesterday, Wal-Mart has secretly and internally been embroiled in a vast bribery case in Mexico since 2005 involving its subsidiary Wal-Mart de Mexico.

In September 2005, a former Wal-Mart de Mexico executive Sergio Cicero Zapata sent an email to a senior Wal-Mart lawyer describing an "orchestrated campaign of bribery to win market dominance by paying bribes to obtain permits in every corner of the country". Zapata knew this as hewas the lead lawyer in obtaining construction permits in Mexico.

Shortly after the email describing the bribery became known internally by Wal-Mart's executives in the U.S., they sent an internal team of Wal-Mart investigators to Mexico. Within days the investigators discovered some $24 million in suspect payments. The probe further discovered Wal-Mart de Mexico's top execs not only knew of the bribes but did everything to conceal them from Wal-Mart's headquarters in Bentonville, Arkansas. The former FBI agent in charge of Wal-Mart's investigation, Ronald Halter, forwarded his findings to his superiors stating," There is reasonable suspicion to believe that Mexican and USA laws have been violated". He recommended the investigation be expanded.

Instead, according to the Times story, Wal-Mart's top leaders in the U.S. decided to shut it down.

No law enforcement officials in Mexico or the U.S. were notified. No Wal-Mart de Mexico leaders were disciplined and its chief executive, Eduardo Castro-Wright, the driving force behind the bribery, named in the 2005 email by Zapata, was promoted a vice chairman of Wal-Mart in 2008.

The Times discovered the leaders of Wal-Mart decided in a secret meeting in February 2006, besides shutting down its own internal investigative team, was their decision to transfer the investigation to Jose Luis Rodriquezmacedo, the general counsel of Wal-Mart de Mexico, a man who was originally named as a participant in the bribery scheme, from the email exposing the bribery, and then confirmed by Wal-Mart's original investigation team.  

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In May 2006, Rodriquezmacedo completed his "inquiry" and concluded miraculously, "no evidence" of bribes. The case has been closed ever since.

So what is one to make of the revelations obtained and published in the Times of allegations into Wal-Mart's complicity in institutionalized corruption?

It does appear bribes were paid clearly in violation of U.S. law and the "Foreign Corrupt Practices Act". Mexican laws against bribery also appear to broken. Rodriqezmacedo's "inquiry" seems a white-wash investigation and a cover up of what really transpired. Finally, what does it say of Wal-Mart promoting an executive it knew authorized the corrupt practices? These revelations make a mockery of Wal-Mart's ethics policy that says, "Never cover up or ignore an ethics problem".

With these allegations, will Wal-Mart as an institution and its executives be held to account? Will it continue to be permitted to get a leg up on its competition through corrupt practices that destroy competition? Will any of its executives face real legal action i.e. jail time; or will they and the corporation receive substantial fines along with the condition they admit to no wrong doing? Such a slap on the wrist would have them all snickering in the aisles and going their merry way to continue their nefarious pursuits.

If the past is prologue, Wal-Mart as happened with its other corporate behemoth brethren, will have nothing to worry about, another monopolistic miscreant giant too big to fail and largely held unaccountable for its sins.

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dglefc22733@aol.com

Retired. The author of "DECEIT AND EXCESS IN AMERICA, HOW THE MONEYED INTERESTS HAVE STOLEN AMERICA AND HOW WE CAN GET IT BACK", Authorhouse, 2009

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