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Justice Dep't probes alleged Wal-Mart bribery in Mexico

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Justice Dep't probes alleged Wal-Mart bribery in Mexico

  • Mexican President Felipe Calderón (right) meets with Wal-Mart de Mexico representatives on Feb. 24, 2011, in Mexico City.
    Gobierno Federal (Mexico)/FlickrMexican President Felipe Calderón (right) meets with Wal-Mart de Mexico representatives on Feb. 24, 2011, in Mexico City.

The Justice Department has opened a probe into allegations that Wal-Mart engaged in massive bribery in Mexico, Bloomberg reported.

The company has been smarting since Saturday when The New York Times reported that an internal company inquiry had been swept under the carpet after it said the company’s Mexican subsidiary had paid $24 million in bribes on its way to becoming the Latin American country’s largest employer.

The Washington Post reported Tuesday that the probe had begun in December. That month, Wal-Mart had informed the Securities and Exchange Commission that it was conducting its own internal investigation after learning that The Times was reporting on the matter.

Penalties under the 1977 Foreign Corrupt Practices Act, which is designed to prevent U.S. investors from profiting from corrupt corporate activities abroad, are often fixed as a proportion of ill-gotten gains won through bribery. That could leave Wal-Mart de Mexico and its parent company Wal-Mart Stores Inc on the hook for potentially very large sums of money.

Bloomberg said it had learned of the federal probe from a person familiar with the matter who spoke on condition of anonymity as the person was not authorized to speak publicly on the matter.

It is standard practice for U.S. agencies neither to confirm nor to deny the existence of pending investigations. The SEC can also initiate parallel civil action over foreign bribery. Bloomberg said an SEC spokesman declined to discuss a possible probe.

Congressman Elijah Cummings of Baltimore, the top Democrat on the House Oversight Committee, announced he was opening his own investigation and asked company executives for a meeting, according to The Baltimore Sun.

The Wall Street Journal reported that Wal-Mart on Tuesday attempted to dampen the fires burning over the bribery allegations by announcing that it had created a new global compliance officer position to ensure the company does not violate the Foreign Corrupt Practices Act in its dealings around the world.

In a statement, the company Tuesday also detailed its efforts made in the past year to help itself comply with the law.

Company shares continued to drop Tuesday, and were down 2.38 percent by mid-afternoon at $58.1215. Shares in Wal-Mart de Mexico were likewise down nearly 3 percent at 36.88 pesos.

This article originally appeared on GlobalPost.

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