The New York Times broke another story on December 17 on the corruption at Walmart de Mexico and the unwillingness of senior leaders at their Bentonville HQ to pursue the allegations.
Reporters David Barstow and Alejandra Xanic von Bertrab reviewed thousands of documents and interviewed dozens of witnesses to corroborate their allegations. Their findings allege that in one cited case (among 19 across Mexico) Walmart executives were not just paying off officials to expedite approvals that would have come anyway but were engaged in falsifying documents, circumventing laws, bribing officials throughout the country, and even excavating land with protected artifacts and treasures, all to get a store open before the holiday rush in 2004.
When senior executives at Walmart’s HQ were alerted to the facts, they shut down the investigation and covered it up. The NYT article says, “Walmart de Mexico was an aggressive and creative corruptor, offering large payoffs to get what the law otherwise prohibited.”
Walmart deserves its day in court and should be presumed innocent until proven otherwise. However, if the charges prove accurate, then high-level executives at Walmart should be fired and jailed if Mexican or American laws have been broken. Fines paid for by the shareholders are not enough. Knowingly, brazenly, arrogantly break the law, then go to jail and lose your job.
Walmart is reportedly now spending $100 million on investigative costs to root out corruption in the firm. But what are the costs in broken trust, brand and corporate reputation debasement, and customers who will now refuse to shop at Walmart? Where was the leadership to insist that such unethical behavior was absolutely not allowed?
We are sick and tired of unethical executives getting away with outrageous actions and skating free. The SEC and the Department of Justice must pursue these possible violations of the Foreign Corrupt Practices Act to the fullest.
Sam Walton would be shocked at what has happened to his firm. When Bob called on Walmart during his business career, he was struck by the servant-leadership quotes in the spartan lobby at Bentonville. Walmart de Mexico executives were certainly not servant leaders, nor were the leaders in Bentonville who permitted this perversion of business to happen.
Walmart leaders have failed. How sad.