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Is Walmart’s Growth Bribe-fueled?

by Miki Saxon

Usually, when people talk about “too big to fail” they are referring to financial institutions and insurance companies.

But what happens when a company is too big to reign in? When it does what it wants and wields so much political clout that investigations seem to evaporate?

Walmart is such a company.

But maybe this time they will have to answer for their actions.

Because, fortunately, it is The New York Times that has been doing the investigating, not a government entity or by Wal-Mart—the internal investigation was shut down by company executives when the evidence wasn’t in their favor—and has been ongoing for years.

It seems that much of Walmart’s global growth in Mexico and other countries has been fueled by bribes.

Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.

In a statement a Walmart spokesman said, “We are committed to having a strong and effective global anticorruption program everywhere we operate and taking appropriate action for any instance of noncompliance.”

But actions speak louder than words and Walmart’s actions are a case study of leadership failure in the home office—all the way to the top.

But Wal-Mart’s leaders did not tell Mexican authorities about his allegations, not even after their own investigators concluded there was “reasonable suspicion” to believe laws had been violated, records and interviews show.

It seems similar tactics were used in India and China, too.

The Foreign Corrupt Practices Act is a federal law that makes it a crime for American corporations or their subsidiaries to bribe foreign officials and the Justice Department and SEC Have started their own investigations.

As the investigations unfold it will be interesting to see if a corporation can, indeed, be so big that it’s above the law.

On a related topic.

One more thought for those who believe that newspapers are no longer relevant.

I seriously doubt that any Internet media company, let alone a blogger, could or would have mounted this investigation and stuck with it—nor can this story be told in 140 character spurts.

No matter what happens we owe a debt to The New York Times.

Flickr image credit: The New York Times and Walmart

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