Corporations Behaving Badly, Wal-Mart Edition

Okay, young Galts: how is the free hand of the market supposed to help us here:

Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark. In a confidential report to his superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent, summed up their initial findings this way: “There is reasonable suspicion to believe that Mexican and USA laws have been violated.”

The lead investigator recommended that Wal-Mart expand the investigation.

Instead, an examination by The New York Times found, Wal-Mart’s leaders shut it down.

Neither American nor Mexican law enforcement officials were notified. None of Wal-Mart de Mexico’s leaders were disciplined. Indeed, its chief executive, Eduardo Castro-Wright, identified by the former executive as the driving force behind years of bribery, was promoted to vice chairman of Wal-Mart in 2008. Until this article, the allegations and Wal-Mart’s investigation had never been publicly disclosed.

I love this story. It has all the hallmarks of modern corporate malfeasance: the crooked top executive who gets a promotion instead of a pink slip; the corporation more worried about bad PR than lawbreaking. And let’s not overlook the nice little side story: the former FBI agents trained at taxpayer expense, now in the employ of a private corporation which is fighting tooth and nail against taxes. Ah your modern titans of capitalism! These are the people we’re supposed to be bending and scraping before, the glorious “job creators” who need a big tax cut so we can continue to allow them a free rein to rule over us. All we need now is for the Tea Party to advocate repealing the Foreign Corrupt Practices Act, calling bribery a natural part of a free market system.

This story is a must-read. The level and scope of the bribery and ensuing coverup is truly astonishing, and goes all the way to the company’s top executives, including its CEO. It will be interesting to see what kind of fallout there is.


Filed under corporations, Wal-Mart

16 responses to “Corporations Behaving Badly, Wal-Mart Edition

  1. Roadmaster1968

    Have boycotted MallWart since ’05.

  2. First!

    Obviously a hit piece by Socialist Solyndra employees bitter about their constant shaming by the right wing media. Ergo…there will be no consequences. (Though there may be a fun congressional investigation-CSPAN needs content)

    P.S. Happy Earth Day!

  3. John R in SIA

    There was a time when such conduct would have been seen by the leaders of Wal-Mart as a direct offense against the memory of the company’s founder, Sam Walton, and everything he and millions of associates had created. In fact, in the not-too-distant past, a former Wal-Mart executive had been discovered to have basically committed embezzlement of company funds; he over-compensated himself for travelling expenses and a whole laundry list of other similar offenses. Upon learning of his actions, the board’s then-Chairman and CEO told the former executive that he could resign or be terminated. He left.

    Now we hear of these events in Mexico. The actions of the executive(s) of Wal-Mart de Mexico are not only illegal in both the U.S. and Mexico (since Wal-Mart Mexico is part of the larger Wal-Mart Stores, Inc., a U.S.-based company, they are subject to the restrictions of the Foreign Corrupt Practices Act, which make illegal bribes and other similar payments made to further a company’s business interests), but are also an immense betrayal of the millions of individuals who work for Wal-Mart Stores, Inc. That the executives of the parent company in Bentonville, Arkansas not only knew of this, but squashed any further investigation, indicates that a company that used to be considered a hallmark of appropriate, ethical and moral corporate behavior has relegated itself to being just another greedy, unethical and immoral multi-national corporation. If anyone at Wal-Mart de Mexico, or Wal-Mart Stores, Inc. believes for one second that Sam Walton would have stood-by while this kind of conduct took place and not acted decisively is deluding themselves.

    I do not naively nor blindly believe that the Wal-Mart of the past was without fault. But I do know, without any doubt in my mind, that the Wal-Mart of today is significantly different than the same company of earlier decades. I can only imagine how offended current Wal-Mart associates are. As a former associate and member of management for the company, I KNOW I am offended. The executives responsible for the briberies, and those at the parent corporate headquarters who knew of their conduct and took great efforts to cover it up, should immediately be removed from their positions, forfeiting any and all severance and pension compensation. And those individuals who take those positions within the company should move to forward any and all evidence gathered by the Wal-Mart investigator to the U.S. and Mexican governments for official government investigation and hopeful prosecution.

  4. I have not shopped at WallyWorld in many years for many reasons. And the reasons include how terribly it/they mistreat their employees here and overseas, how it/they censor books they sell to only feature those ‘love the GOP/TEAs books, and basically it/they only sells bad quality stuff, usually from CHINA. I think it is a great thing that their corporate greed is being exposed!

  5. “That the executives of the parent company in Bentonville, Arkansas not only knew of this, but squashed any further investigation, indicates that a company that used to be considered a hallmark of appropriate, ethical and moral corporate behavior has relegated itself to being just another greedy, unethical and immoral multi-national corporation. ”

    I have not considered Walmart as anything but a rapine, price-cutting retailer since I first was introduced to their predatory commercial hegemony in the early 80’s.

    There is a Wal-mart in the town I live in and one that is about 13 miles away. The store that is closer to Syracuse (not in the town I live in) is CHEAPER to shop in, because they have a little competition at the other location. I certainly don’t see Mr. Sam as the paragon of virtue that you do, but even he might blanch at such blatantly unfair business practices.

    Walmart is not just anti-union, they have engaged in ongoing violations of both the letter and spirit of U.S. labor laws for both treatment of their non-unionized workforce and retaliation against those employees who seek to become part of a collective bargaining unit. Walmart, while making $billions for its shareholders, particularly the top 1%ers, refuses responsibility for the social costs, including healthcare expenses of its workforce. The company deserves to be fined into penury–like that would ever happen.

  6. This activity by Walmart here and in Mexico is symptomatic with what ails corporate America. They seem to think that Gordon Gecko was correct, “Greed is good!”

    It is sad that so many of the successful seem that accumulating wealth for the sake of wealth is a virtue. More surprising is how many American’s vote against their own interests by supporting Republicans. Uh oh……..another post on another day.

  7. It’s called doing business in mexico. Congress gets insider stock tips that yield yearly returns that wold make bernie madoff blush and they’re talking about corruption!

    How many people died from Wal Marts alleged bribery of government officials in mexico?

    If you don’t like Wal mart that’s fine but this is silly.