America’s worst corporate citizen strikes again! Today, the New York Times features a stunning investigative account of how, throughout the ’00s, Walmart became a huge player in the Mexican economy. They opened stores and gained influence the old-fashioned way: they bribed anyone and everyone who stood in their way.
It’s quite a story. According to Times reporters David Barstow and Alejandra Xanic von Bertrab, Walmart was quite bold and inventive in its corruption and villainy:
Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.
Through confidential Wal-Mart documents, The Times identified 19 store sites across Mexico that were the target of Wal-Mart de Mexico’s bribes. The Times then matched information about specific bribes against permit records for each site. Clear patterns emerged. Over and over, for example, the dates of bribe payments coincided with dates when critical permits were issued. Again and again, the strictly forbidden became miraculously attainable.
I strongly urge you to read the entire article. It’s a truly ugly story, but fascinating. On top of its other sins, Walmart managed to defile such national treasures as the pyramids at Teotihuacán and the BasÃlica de Guadalupe, where the Virgin is said to have appeared, by constructing its eyesore stores close by. During a wonderful trip I made to Mexico several years ago (seriously — if you’ve never been, you must go! it’s an amazing place, and dirt cheap to boot), I stayed at a B&B in the neighborhood of the BasÃlica, and noted the ginormous local Walmart with dismay.
By 2006, Walmart’s upper level management in Bentonville had gotten wind of the bribery schemes, but they quickly shut down an internal investigation. The Times reports that the company is current facing investigations by the U.S. Justice Department, the S.E.C., and Congress for violations of the Foreign Corrupt Practices Act, and by Mexican authorities for violating Mexican law. It would be highly salutary if any of those investigations led to Walmart being brought up on charges, but I’m not holding my breath. Walmart appears to be the proverbial 800 pound gorilla in the room, and sadly, our elected officials generally let it do pretty much whatever it wants.
Kudos to the Times, though, for some great journalism.
