In an impressive investigation published by the NY Times on Saturday, April 21st, the Times uncovered evidence of a massive bribery scandal involving a former executive of Wal-Mart de Mexico. (1)

The report made public an email from the executive admitting to the Corporate leadership at Wal-Mart, that he had paid bribes for permits to build stores in “virtually every corner of the country.”

The former executive was the lawyer responsible for getting those construction permits in Mexico for new Wal-Marts, and reported in his emails all of the wrong-doing that took place. At first, according to the NY Times, Wal-Mart appeared to follow the correct protocol for any breach of the Foreign Corrupt Practices Act, dispatching investigators to Mexico City to confirm the bribery claims.

Investigators found the paper trail of payments totaling over $24 million, as well as evidence that executives at Wal-Mart de Mexico had been working to hide those bribes from Wal-Mart headquarters. The lead investigator – a former FBI special agent – reported to headquarters that there was “reasonable suspicion to believe that Mexican and USA laws have been violated.”

That is the point where the correct course of action ended on the part of Wal-Mart leadership, and instead a cover-up ensued.











Wal-Mart Tries to Cover Up Mexico Bribery Scandal

In correspondence obtained by the NY Times, a “prolonged struggle” was revealed at the upper echelon of Wal-Mart, where Wal-Mart executives avoided reporting the illegal activity to law enforcement officials, and instead began an effort to conduct a campaign of “damage control”.

That effort included Wal-Mart’s chief executive at the time, H. Lee Scott Jr, telling the investigators that they had been “overly aggressive.” It included the shipment of the investigator’s files to the general counsel office of Wal-Mart de Mexico, the same organizational structure responsible for authorizing the bribery activities in the first place.

It wasn’t until December of 2011, when Wal-Mart executives learned that the NY Times was actively investigating the case in Mexico, that executives finally decided to report the situation to the Justice Department, but telling the DoJ that the violations were limited to “discrete cases”.

Despite the effort of Wal-Mart executives to downplay the scandal, the NY Times investigation revealed just how widespread the bribery activity was, and how integral a part it played in Wal-Mart’s aggressive growth in Mexico. Wal-Mart is now Mexico’s biggest private employer, and 20% of Wal-Mart’s stores are located in Mexico.

Prior to publication, the Times actually shared its own findings with Wal-Mart leadership. Neither executive involved in the scandal were willing to offer comment. According to the NY Times, the evidence makes it clear that former executive Sergio Cicero Zapata had organized the delivery of envelopes filled with cash to city mayors, city council members, and even low-level urban bureaucrats responsible for issuing construction permits.

The NY Times conducted interviews “participants in Wal-Mart’s investigation”, and those sources confirmed that Cicero’s bribery allegations were all true. In his claims, Cicero contended that the person truly responsible for the bribery was none other than Eduardo Castro-Wright, who in 2001 left Honeywell to take the position as the Wal-Mart’s Chief Operating Officer in Mexico.