Regulation

Walmart Bribery Probe Ends With A Whimper

After chasing a trail of alleged corruption around the globe for the past four years, U.S. Justice Department officials are reaching dead ends in several of their probes into Walmart’s business operations overseas.

According to a recent article by Bloomberg Business, officials have spent months interviewing executives and others associated with Walmart’s China operations only to find lack of evidence to support claims that Walmart dispensed bribes to government officials in the country. Investigators haven’t found widespread corruption or payments to government officials there, people close to the matter told Bloomberg, asking not to be named because the investigation is confidential.

The probe began back in Nov. 2011, when Walmart disclosed possible violations in Mexico to the Justice Department and Securities and Exchange Commission. In April 2012, The New York Times reported that Walmart officials had paid $24 million in alleged bribes in Mexico and then shut down an internal investigation into the matter. The investigation ultimately also expanded to include Walmart operations in Brazil, India and China.

Now, nearly four years later, it seems likely, according to Bloomberg Business, that prosecutors will have only enough evidence to bring a case against the company for insufficient controls to detect and prevent violations of the Foreign Corrupt Practices Act. The law bars payment to foreign officials to obtain or retain business and requires internal controls to be maintained by companies in order to prevent such corruption.

According to Bloomberg Business, in its most recent quarterly report, Walmart said it didn’t believe the eventual penalty would be material to the company’s operations; however, it did indicate that a loss from the matter was “probable.” Walmart has spent more than $730 million since 2012 responding to the allegations and revamping its compliance infrastructure. Most of the company’s leadership has changed since 2012, including the chief executive officer and heads of China and Brazil.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

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