retail news in context, analysis with attitude

The Wall Street Journal reports that a pair of Congressional Democrats investigating bribery charges made against Walmart are saying that the company's senior executives "appear to have known about bribery allegations regarding a store near Mexican pyramids in 2005, saying that was contrary to what the retailer stated last month.

"Wal-Mart rebutted the accusation, saying that the lawmakers misinterpreted its prior remarks that executives didn't know about bribery allegations, which the company said referred to an earlier time period before the store opened in 2004."

The story goes on: "In a letter, ranking Democratic members of two House committees said they possessed company emails that appeared to show executives knew of bribery allegations surrounding the permitting of the store in Teotihuacan, Mexico, located near ancient ruins.

"The emails, they wrote, appeared to contradict statements Wal-Mart made in response to a New York Times story last month that claimed the company convinced officials to allow the controversial store by bribing them.

"The emails were released by the lawmakers. One email, written by former Wal-Mart international general counsel Maritza Munich in November 2005 and sent to executives including Mr. Duke, then head of the international division, listed an array of alleged bribes a former Mexican employee claimed the company had made, including payments involving the pyramids store."

Walmart has been conducting an ongoing internal investigation into the bribery charges, while at the same time cooperating with probes by the US Department of Justice and the Securities and Exchange Commission.

The congressmen making the new charges are Rep. Elijah E. Cummings (D-Maryland), ranking member of the House Committee on Oversight, and Rep. Henry Waxman (D-California), ranking member of the Committee on Energy and Commerce.
KC's View:
This does seem to be a case of the congressmen playing "gotcha" with Walmart, and it is hard to know, because of all the various charges and dates, whether they are correct or not.

However, I continue to believe that the internal probe is more about getting stories straight than revealing previously unknown information. I'll bet you would not need a very large room to have a meeting of people who believe that top management at Walmart did not know anything about the systemic and systemic bribery that was greasing the wheels down in Mexico. They may not have known details, but they figured that it was the cost of doing business, that this how things work south of the border. (Which, as we've pointed out here before, is ironic considering the extent to which Walmart goes to make sure its buyers won't be influenced by anything even remotely like a bribe.)