Major Ethics Violations at Wal-Mart; It’s a Long Way From Bentonville to Mexico City

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This morning, April 21, 2012, The New York Times’ page 1 main headline made this allegation:  Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle.”  A secondary headline called out:  “An Internal Inquiry Was Shut Down, and the Authorities Were Not Notified.”

The article continued on from page 1 to pages 8, 9 and 10.  I strongly suggest that you read the entire article.  Do plan, however, on blocking out some time.  The article is stunning in its length and depth of coverage.  It is, however, truly jolting in its allegations of routine bribery at Wal-Mart’s Mexico division in the mid-2000’s.  This activity, according to the article, was ordered by those in top positions in Mexico City and kept secret by high level individuals in Bentonville.

The article reports that: “Neither American nor Mexican law enforcement officials were notified. None of Wal-Mart de Mexico’s leaders were disciplined. Indeed, its chief executive, Eduardo Castro-Wright, identified by the former executive as the driving force behind years of bribery, was promoted to vice chairman of Wal-Mart in 2008.” 

The article goes on to report:

 

 


In one meeting where the bribery case was discussed, H. Lee Scott Jr., then Wal-Mart’s chief executive, rebuked internal investigators for being overly aggressive. Days later, records show, Wal-Mart’s top lawyer arranged to ship the internal investigators’ files on the case to Mexico City. Primary responsibility for the investigation was then given to the general counsel of Wal-Mart de Mexico — a remarkable choice since the same general counsel was alleged to have authorized bribes.

Does any of of this matter?  Does this story deserve this kind of extensive coverage and investigative reporting?  Some don’t think so.   Tim Worstall, a Forbes contributor, responded with this headline “Wal-Mart and Corruption in Mexico: So What?”  He wrote:  "I realize that this will shock some but in my view the correct reaction to the stories of corruption involving Wal-Mart in Mexico is almost certainly “'So what?'”  This isn’t because we wouldn’t prefer there to be no corruption in such places, nor that we wouldn’t be entirely disgusted if such corruption became commonplace in our own societies and economies.  It is rather simply a necessary admission that other countries are indeed other countries and they do things differently there."

I don’t agree.  I’ll tell you why in my next posting.

 

 

 

 

 

 

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