A Walmart in Puerto Vallarta, Mexico. (Image: Coolcaesar, CC BY-SA 3.0)
Mexico, North America, Today in Latin America

Report: Corruption Probe into Walmart’s Mexican Operations Unlikely to Result in Prosecutions

October 20, 2015 By Staff

Top Story — A three-year investigation led by the U.S. Justice Department has found little evidence of corruption in the business practices of Walmart executives in Mexico, a Wall Street Journal report revealed Monday. Nearly 20 percent of Walmart’s 11,500 stores are located in Mexico.

Using unnamed sources with knowledge of the case, the report detailed the findings of the multi-departmental investigation into a potential violation of the Foreign Corrupt Practices Act. The sources have claimed that, with the five-year statute of limitations on corruption charges looming, the case in Mexico could be resolved with a small fine and no criminal charges. The Justice Department investigation allegedly failed to differ significantly from Walmart’s internal investigation.

The findings challenge a 2012 series of Pulitzer Prize winning New York Times reports into the company’s practices in Mexico, which found that Walmart de México executives reportedly attempted to hide $24 million in suspect payments. Those bribes were allegedly made to government officials and other middlemen to acquire permits, circumvent democratic oversight and best competition in facilitating the construction of new stores in the country.

The 2012 investigation caused Walmart stock prices to fall nearly 5 percent immediately following its release, costing a reported $10 billion. In response, Walmart fired their legal counsel in Mexico and spent nearly $650 million on the internal investigation and compliance upgrades.

The recent federal investigation did, however, reportedly find evidence that Walmart paid widespread but small-scale bribery in India, and that charges are expected in that case.

Headlines from the Western Hemisphere

North America

  • U.S. investigators ordered some 700 businesses in the Miami area to report large sales of goods like cell phones earlier this year, a new enforcement tactic aimed at thwarting drug traffickers who buy products in dollars and ship them southward to be sold in Mexican pesos in order to launder their proceeds.
  • Mexico’s lower house of congress has approved tax cuts for sugary drinks, which critics of the proposal say will exacerbate Mexico’s obesity rate, which is already one of the highest in the world.
  • The body of a man was found hung from a bridge on Monday in Mexico City, where such displays of public violence, often signs of territorial disputes between drug cartels, are rare.

Caribbean

  • An outburst of violence Monday ahead of Haiti’s presidential election resulted in the killing of two pregnant women and at least 13 other people in the Cité Soleil slum of Port-au-Prince.
  • Monday marked the 55th anniversary of the U.S. trade embargo against Cuba, which remains in place despite renewed diplomatic ties between the two.

Central America

  • Two U.S. Congresswomen co-wrote an editorial for Vice condemning El Salvador’s prohibitive abortion laws, which they called for Secretary of State John Kerry to condemn ahead of a speech at the Inter-American Court of Human Rights by one of 17 Salvadoran women imprisoned after suffering birth complications.
  • Over 100 protesters in San José, Costa Rica, marched against public sexual harassment on Sunday, following the stabbing of a man who posted a popular video of himself shaming another man for harassing a woman on the street.

Andes

  • Peruvian ex-President Alan García will run in April elections for a third non-consecutive term, although he is currently polling third behind Keiko Fujimori, the daughter of imprisoned former President Alberto Fujimori, in first place.
  • Bolivia will double its external debt to $13 billion, its vice president announced Monday, through a deal with China to receive $7 billion of credit toward infrastructure projects.

Southern Cone

  • In Chile, a former Pinochet-era intelligence officer and two German members of the Colonia Dignidad cult were given extra prison time on Monday for orchestrating the 1975 kidnappings of 50 people who were taken to the cult’s enclave in the isolated Maule region, where the victims were tortured and sexually abused.
  • The black market value of Argentina’s peso reportedly hit a new low on Monday based on fears that Daniel Scioli, favored in the upcoming presidential election on Oct. 25, will devalue the currency, analysts and illicit traders told Reuters.
  • Many public-sector workers in Brazil retire early or pass benefits on to family members, resulting in a massive pension crisis that is rapidly draining public finances, according to The New York Times.
  • Rescue workers have reported at least seven injuries but no deaths from an explosion that damaged dozens of buildings in Rio de Janeiro’s São Cristovão neighborhood, an incident authorities have blamed on a gas leak.

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