EthicsBite™

Walmart was in the news this week big time. First an extensive report in Sunday’s New York Times examined the company’s Mexico subsidiary, painting a picture of corruption and bribery related to the approvals required for opening new stores in Mexico. The article presented the case that the top echelon of Walmart initially investigated the matter then decided to turn the case over to the very executive(s) who were being investigated by their internal team. The net result was that nothing was ever released on this story until the Times’ investigation, which took place a few years later.

Faced with the Times’ story, the company announced it was re-opening the examination. Significantly, the key figure in the Mexico saga, Eduardo Castro-Wright, then chief executive of the Mexican subsidiary, was promoted to be in charge of all of the U.S. stores and is now a Vice-Chairman of the corporation, according to the New York Times.

Now two Congressmen have decided to launch an investigation and the Washington Post reported that Walmart participated in “an aggressive and high-priced lobbying campaign to amend”  the Foreign Corrupt Practices Act, the very law that applies to this situation.  The Post also reported that Walmart may have been under investigation by the Department of Justice since late last year.

This will be a significant story in the months ahead. Stock in the company’s Mexican subsidiary was down around 5% on the Monday after the New York Times broke its story.