The
Congressional investigations into Wal-Mart’s bribery of Mexican officials to
get building permits for construction of new stores in that country have
widened to include issues surrounding participation by Wal-Mart executives in
trade association lobbying efforts to gut the Foreign Corrupt Practices Act.
California congressman Henry A. Waxman of the Energy and Commerce Committee and
Maryland Congressman Elijah E. Cummings of the Oversight and Government Reform
Committee have each written letters to the U.S. Chamber of Commerce and the
Retail Leaders Industry Association, inquiring about the participation of
Wal-Mart executives in the business organizations’ lobbying efforts to weaken
enforcement provisions of the law against U.S. businesses bribing foreign
government officials.
Last December
the Department of Justice launched an investigation into Wal-Mart payment of
$24 million in bribes to obtain store building permits for new stores as the
retailer expanses across Mexico. Apparently Wal-Mart corporate officers,
including its top ethics officer Thomas D. Hyde, were advised as early as 2005
of the bribery in Mexico. The company launched an internal investigation into
the Mexican corruption, then shut it down without reporting findings to U.S.
government agencies, as the Foreign Corrupt Practices Act requires. Throughout
the company’s internal bribery investigation, Hyde, who left Wal-Mart in 2010,
also sat on the Board of Directors of the U. S. chamber of Commerce Institute
of Legal Reform, where he was privy to the business group’s lobbying efforts to
limit corporate liability under the Foreign Corrupt Practices Act for actions
of foreign subsidiaries, and limit the definition of “foreign official” to whom
payment of bribes would be forbidden.
The
inquiring Congressmen also want to know about the lobbying involvement of
Wal-Mart President and CEO Bill Simon, who sits on the Board of Directors of
the Retail Industry Leaders Association. Wal-Mart’s carefully worded statement
from Vice President for Corporate Communications David Tovar simply says, “Wal-Mart
never lobbied on FCPA,” clearly leaving open the likelihood that the company’s
efforts to gut the law were conducted through the two trade associations where
Wal-Mart had senior executives in leadership positions, all while Mexican
Wal-Mart businesses were busily bribing Mexican building department officials
in flagrant violation of the FCPA.
Justice
Department enforcement actions under FCPA have increased dramatically in the
recent past. In 2004 DOJ brought just 2 cases, but by 2008 there were 20, and
48 in 2010, including a record $800 million fine against Siemens. The number of
prosecutors dedicated to working on FCPA cases rose from just 2 in 2002 to 15
now, with the addition of dedicated FCPA units at FBI and SEC. It’s no wonder
Wal-Mart has been feeling the heat.
