Walmart hit by Mexico bribery claims

Walmart has been rocked by allegations that it sought to cover up a bribery campaign orchestrated by executives in Mexico to accelerate its rapid expansion in the country.

The world’s biggest retailer by sales, which has championed Mexico as one of its best performing markets, said it was “deeply concerned” by the allegations, which were made by the New York Times and relate to events six or more years ago.

The newspaper said executives at Walmart Mexico paid bribes to obtain permits for new stores and that even after Walmart investigators found evidence of wrongdoing the inquiries were shut down and law enforcement officials were not told.

Walmart said on Saturday: “If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.”

The allegations are a blow to the retailer, which is relying on emerging markets to keep sales growing. Mexico became Walmart’s first overseas market in 1991 and the country is one of its most successful, with 2,088 stores and sales of 379bn pesos ($29bn) last year.

The revelations explain Walmart’s disclosure last December that it had launched a probe into whether some employees in its international business had violated the Foreign Corrupt Practices Act, the US’s anti-bribery law.

Walmart on Saturday said it had taken several steps in Mexico to ensure stronger compliance with the anti-bribery law and added: “We will not tolerate non-compliance with FCPA anywhere or at any level of the company.”

According to the New York Times, Sergio Cicero Zapata, an employee who had been responsible for construction permits until he left Walmart in 2004, alerted the company in 2005 to illicit payments to government officials that he said he had played a part in organising.

The newspaper said that investigators subsequently sent to Mexico City by Walmart headquarters found evidence of hundreds of suspect payments adding up to more than $24m.

The lead investigator reportedly concluded that there was reason to suspect that US and Mexican laws had been broken and urged a full investigation.

Instead senior executives authorised a more limited preliminary inquiry by Walmart Mexico’s general counsel, who concluded there was no evidence of bribes, resulting in the case being closed in 2006, the New York Times said.

In its statement the company said: “We are working hard to understand what occurred in Bentonville [Walmart’s home town in Arkansas] more than six years ago and are committed to conducting a complete investigation before forming conclusions.”

“Unfortunately, we realise that, at this point, there are some unanswered questions. We wish we could say more but we will not jeopardise the integrity of the investigation.”

Additional reporting by Adam Thomson in Mexico City

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