Potential Cover-up Liability in Wal-Mart FCPA Case Could Dwarf Mexican Bribery Claims, Experts Say
Posted Apr 23, 2012 07:33 pm CDT
Allegations that bribery by the Wal-Mart Stores Inc.subsidiary in Mexico may have violated the Foreign Corrupt Practices Act look “quite ordinary,” a law professor says.
But a claimed cover-up by company officials is a different story, he and other experts tell the Guardian.
“The question now is who knew what and when,” law professor Mike Koehler of Butler University tells the newspaper. “This has been going on since 2005. What has the company been saying to the Securities and Exchange Commission, to investors?”
Among other issues, the company is accused of putting its Walmart de Mexico general counsel—who is accused of having authorized bribes—primarily in charge of the investigation.
The New York Times (reg. req.) first reported the news of the company’s claimed efforts to cover up the bribery probe and says then-CEO Lee Scott Jr. at one point rebuked those involved in the internal investigation for being “overly aggressive.”
The Times reported that Wal-Mart is alleged to have paid some $24 million to Mexican officials, handing over cash in envelopes to smooth the way to open new stores, the Wall Street Journal’s Corruption Currents blog recounts.
Calling the FCPA claims against Wal-Mart “as bad as it gets,” attorney Tom Fox of Houston said a potential fine against the company, following a several-year multinational investigation, could top the previous $559 million record—the amount with which Halliburton was hit in 2009 after a company official was found to have knowledge of an illegal payment to a foreign official, the Guardian reports.
Responding to the Times article, Wal-Mart said in a written statement that the company is “deeply concerned by these allegations and are working aggressively to determine what happened.” The statement also includes a link to a related video.
ABAJournal.com: “Handed Wal-Mart FCPA Case By NY Times, Feds May Be Tempted to Bring 1st SOX Certification Case”
Last updated at 5:40 p.m. to link to subsequent ABAJournal.com post.