The New York Times has broken news on the Wal-Mart bribery scandal in Mexico. It is abundantly clear, based on reporting, that Wal-Mart promotes a culture of corruption globally and has used it as a tool for business advantage.
In the Walton families’ quest to become such a global giant, they may have created their undoing.
They face investigations by the Securities and Exchange Commission, the Department of Justice, the United States Congress and Mexican authorities. Wal-Mart also faces investor lawsuits from pension funds.
Their troubles are tied to the decision by Wal-Mart’s most senior executives to ignore clear evidence of widespread corruption in Mexico.
The allure of building a Wal-Mart near the ancient pyramids in Teotihuacán, Mexico, and gaining access to tourists from across the globe was so strong that Wal-Mart circumvented democratic institutions and bribed the right people to get their way.
Starting with a $52,000 bribe to change the zoning map, Wal-Mart de Mexico bribed their way to get the store built despite local opposition — to the tune of over $200,000.
In the world according to Wal-Mart a few dollars slipped to the right hand is the way to expand. It has been a large part of their global corporate culture.
It is also the reason Wal-Mart is the largest private sector employer in Mexico.
The Teotihuacán example is but one of many documented incidents of bribery by Wal-Mart’s foreign operations to ensuring expansion on Wal-Mart’s terms.
When Wal-Mart’s corporate offices were tipped off to the bribery in Mexico, officers at the top of the company shut down an investigation that was initiated by more junior executives. They clearly were more interested in getting results than following the law.
It was not just local laws that corporate officers were violating; they were also systematically violating the Foreign Corrupt Practices Act which forbids American companies and our citizens from engaging in bribery.
Where Wal-Mart shut off the investigation, the Times picked it up. Their conclusion: “The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.”
Through the Fall, this space pointed out the strong ties of Karl Rove and his dark money political fund and GOP allies that are accused of violating the Foreign Corrupt Practices Act.
From Casino moguls like Sheldon Adelson and Steve Wynn to the Koch Brothers to the Walton family, some of America’s billionaires wrote the largest checks in our history to influence to 2012 elections.
Based on the reporting from Mexico, we may soon discover that these billionaires were more interested in new leadership at the Justice Department when they spent their money on outside groups this election cycle.
About Bill Buck
Bill Buck is a Democratic strategist, President of the Buck Communications Group, a media relations and new media strategies consulting business based in Washington, DC, and Managing Director of the online ad firm Influence DSP. He has over twenty years of international and national communications experience. The views and opinions expressed in this post are those of the author and do not necessarily reflect the official policy or position of CBS Local.