Walmart Mexico Bribery
APShoppers at a Mexico City Walmart Superstore in 2011.
By Aruna Viswanatha

WASHINGTON -- Walmart Stores is paying for lawyers to represent more than 30 of its executives involved in a foreign corruption investigation, according to people familiar with the matter, an unusually high number that shows the depth of the federal probe.

The U.S. Department of Justice is investigating whether Walmart (WMT) paid bribes in Mexico to obtain permits to open new stores there, and whether executives covered up an internal inquiry into the payments. The department is also looking into possible misconduct by the world's largest retailer in Brazil, China and India.

In recent months, the U.S. government has brought in a number of senior Walmart executives for questioning, including officials from corporate headquarters in Bentonville, Ark., the sources said. The move, along with widespread publicity about the probe, appears to have prompted executives to seek their own legal representation. The sources declined to name the executives who have submitted to interviews.

Walmart confirmed that it is footing the legal bills for executives touched by the corruption probe,
but the company declined to give any specifics.

While it is common for companies in bribery investigations to cover executives' legal costs, experts said the large number of attorneys hired in the Walmart case suggests prosecutors are aggressively testing information that the company has turned over, and may be considering cases against multiple individuals.

"I've never heard of that many potential targets of an investigation no matter how big," said Richard Cassin, an anti-corruption lawyer and author of a popular blog on the law at issue, the Foreign Corrupt Practices Act.

"Those numbers suggest DOJ is really digging deep," he said.

Justice Department spokesman Peter Carr declined to comment. The investigation isn't close to a conclusion, and it isn't clear if any individuals will ultimately face criminal charges.

Walmart spokesman David Tovar said the investigation is ongoing and the company is cooperating with U.S. authorities. He said it isn't uncommon for individuals to retain counsel to advise them in such situations.

"It is inappropriate for us or others to come to conclusions until the investigation is completed," Tovar said.

The largest corporate foreign corruption case to date is Siemens' (SI) $1.6 billion settlement with the Justice Department and other authorities in 2008 over an alleged bribery scheme in Argentina. In that instance, around a dozen executives at the German engineering company had retained their own lawyers.

No individuals were initially charged, but after intense criticism from U.S. lawmakers, eight former Siemens executives and agents of the company were indicted in 2011. Most of the defendants are in Argentina or Germany, and the Justice Department has been unable to extradite them.

Mexico

The New York Times reported in April 2012 that management at Walmart de Mexico orchestrated bribes of $24 million to help grow its business there and that top brass at the U.S. parent, including former chief executive H. Lee Scott Jr., were involved in a decision to stifle an internal inquiry.

The story also alleged that Eduardo Castro-Wright, a vice-chairman of Walmart, had been a driving force behind the bribery scheme when he was chief executive of Walmex. Castro-Wright retired soon after the story was published.

Scott and Castro-Wright haven't commented publicly about the allegations.

Sources said the government has directed its attention at senior Walmart executives, but declined to name which executives are targeted. Investigators have also spoken to employees at other levels of the company, two sources said. They and other sources weren't authorized to speak publicly about the matter.

Prosecutors have also spoken to Walmart executives who have spent time in China and India, one person said.

"Given the breadth of the investigation, this case could just be of staggering proportions," said University of Richmond law professor Andrew Spalding, an expert in anti-corruption law.

While cooperating with the government probe, Walmart is trying to complete its own investigation into the matter. As part of that internal probe, Walmart in 2012 disclosed it had hired at least three law firms to assist the company.

Jones Day was leading the internal probe, Cahill Gordon & Reindel was serving as outside counsel to the audit committee, and Greenberg Traurig was outside counsel for the company's worldwide compliance review, it said at the time.

Since law firms working on the investigation for the company usually don't also represent any of its employees if there could be a conflict of interest, Walmart executives have turned to many other top law firm for advice.

The law firms hired to represent individuals include Steptoe & Johnson; Miller & Chevalier; Crowell & Moring; Shearman & Sterling; Weil, Gotshal & Manges; and Ropes & Gray.

Walmart in September disclosed that it had spent some $155 million on the probes and related compliance changes between February and July. Its total tab to date is well over $300 million.


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flagag

just another case of the obama gov't going after big business......whether it is the banks, large retailers (especially wal mart) ot the insurance companies.....allo of whom provide and create millions of jobs....but no matter....everything has to be politically correct and fair in the minds of these jokers......as reagan said
"the government IS the problem" get out of the way......stop with all the new regualtions and let free markets work...there are regs and laws on the books already.

December 04 2013 at 2:15 PM Report abuse +1 rate up rate down Reply
en4j

and who should have paid the bill, the red cross, just another pathetic attempt by the this liberal biased site to go after companies who are successful, you can see liberal written all over this article

December 04 2013 at 1:22 PM Report abuse -2 rate up rate down Reply
jdykbpl45

Much to do about nothing. Typical of the biased so called journalists, with orders from above or
their left wing background. Most corporations do this. Governments do this.

December 04 2013 at 10:57 AM Report abuse rate up rate down Reply
Don Crowe

What a big what -to-do about nothing! This is normal practice for any business in Mexico if you want to get anything done. I ran a manufacturing plant in Mexico for 10 years, every government/union agency had their hand out wanting money. If you didn't pay they some very expensive and bad things would happen to your company.

Wal-Mart was not working in the USA and when in Rome, you pay in Pesos!

December 04 2013 at 10:51 AM Report abuse +2 rate up rate down Reply
mily469

in mexico they should just call bribes lobby money or superpac money and then there will be no problem with bribes like we have here in America.

December 04 2013 at 10:40 AM Report abuse +1 rate up rate down Reply
tcroof

SOME BIG WIG PROBABLY PISSED OFF ODUMBA OR WOULDN'T SEND EXTRA MONEY FOR HIS PERSONAL USE AND NOW HE FLEXING HIS EXECUTIVE POWERS.

December 04 2013 at 10:32 AM Report abuse -2 rate up rate down Reply
Matc8s

In Mexico, we call them "bribes." In the U. S., we call them "campaign donations."

December 04 2013 at 10:31 AM Report abuse +4 rate up rate down Reply
1 reply to Matc8s's comment
jdykbpl45

Like \"face money\"/

December 04 2013 at 10:58 AM Report abuse +2 rate up rate down Reply
RouteUS66Busload

Put them 30 executives in jail where they belong or ship them to China to face firing squads including the lawyers for trying to defend executive criminals? Time to expose the upper up for putting down the lower class workers they hire?

December 04 2013 at 10:16 AM Report abuse +2 rate up rate down Reply
chain.link1

Can't pay employees a living wage, but can pay for execs illegal activities?

December 04 2013 at 10:10 AM Report abuse +3 rate up rate down Reply
pdbliz

EVAN,,,,ARE YOU ON HERE TODAY.????
did you go to church sunday.?? EVAN has 12 screen names,,so,,he can give a lot of negitives.!!!

December 04 2013 at 9:43 AM Report abuse -3 rate up rate down Reply