Wal-Mart faces allegations of bribery in Mexico

A demonstrator shouts slogans during a protest against the World Bank, in front of a Walmart store in Cancun, Mexico. Now, Wal-Mart's subsidiary in Mexico is facing a scandal involving bribery.

Jeremy Hobson: We'll start this morning with some serious accusations against the world's largest retailer. The New York Times reports that Wal-Mart's Mexican subsidiary paid millions of dollars in bribes in order to put its stores all over Mexico -- and the Times says Wal-Mart's top executives knew about it.

Wal-Mart says it's investigating, as Marketplace's Nancy Marshall-Genzer reports.


Nancy Marshall-Genzer: The Times says Wal-Mart paid out more than $24 million in bribes. According to the report, the money went to local officials in Mexico. Months or even days after the alleged payments, zoning permits for new stores appeared. And bureaucratic barriers melted away. Wal-Mart didn't tell the Justice Department about the reported bribes until after being contacted by the Times.

Mike Koehler teaches business law at Butler University. He's an expert on the Foreign Corrupt Practices Act, which makes it illegal for U.S. companies to bribe foreign officials. Koehler says federal investigators could use that law to expand their probe.

Mike Koehler: They will be curious as to whether the conduct was isolated or whether this is how Wal-Mart obtained foreign licenses and permits all over the world.

Koehler says Wal-Mart will now have to spend millions of dollars more on its own bribery investigation, that could take years. But eventually, Koehler expects Wal-Mart to settle with the Justice Department.

In Washington, I'm Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...