“A woman’s heart is a deep ocean of secrets.” Rose Calvert, Titanic (1997)
A woman’s heart may be a deep ocean of secrets, but Big Government’s is deeper and Big Corporation’s is even deeper. In fact, Big Government’s ocean isn’t very deep or secretive, at all: it’s as clear as well water that the current administration intends to betray the U.S. Constitution and transform us into a socialist, if not communist, nation.
Why else would it have taken seven years – seven years! – for the U.S. government to uncover this “scandal” of Wal-Mart bribing local Mexican officials to come to the surface? How bright to you have to be to know that Mexico is riddled with corruption? China is no better, yet they’re our leading trading partner. Why, who knew that allowing the Chinese to violate patent laws and steal your company’s designs was the price for doing business there?
For that matter, why is this all coming up now? Are people getting bored with the salacious details of the Secret Service scandals? Do they need something to new to cover up the fact that Obama failed the initial eligibility test in New Jersey? That his own lawyers admitted that the long-form birth certificate that he produced in April 2011 on national television, and declared to the American people was the real deal, was a baked fake?
Wal-Mart is well-known for its pro-business, anti-union, conservative leanings. In 2010, Wal-Mart was the store with largest revenues in the world. That’s a lot of anti-union money that could help get Mitt Romney, the presumptive Republican candidate, get elected.
The news, if you hadn’t heard, is that Wal-Mart is now under investigation. In 2005, seven years ago, Wal-Mart’s Mexican affiliate allegedly paid local government officials $24 million to dominate the Mexican market. It’s not against Mexican law but it is against the U.S. Foreign Corrupt Practices Act and Wal-Mart is a U.S.-based corporation.
Wal-Mart’s Mexican unit has 2,100 stores and over 200,000 employees, making it Mexico’s biggest employer and Wal-Mart’s largest foreign subsidiary.
The New York Times broke the story on Sunday, April 22nd. In September 2005, a senior Wal-Mart lawyer received an alarming e-mail from a former executive at the company’s largest foreign subsidiary, Wal-Mart de Mexico. A Wal-Mart executive described how Wal-Mart de Mexican committed bribery to achieve dominance in the market. In its rush to build stores, the unnamed executive said, the company had paid bribes to obtain permits in virtually every corner of the country.
The former executive claimed he had been the lawyer charged with obtaining construction permits for Wal-Mart de Mexico. He gave names, dates, and how much the bribes cost. Wal-Mart sent its own investigators to Mexico City, according to the NY Times and within days, unearthed evidence of bribery. The Times reporter says the officials found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark.
In a confidential report to his superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent, summed up their initial findings this way: “There is reasonable suspicion to believe that Mexican and U.S. laws have been violated.”
The New York Times reported Sunday that a former Wal-Mart de Mexico employee had warned headquarters of the bribes but management shut down an investigation into whether the company had violated the U.S. Foreign Corrupt Practices Act.
“At the municipal level [in Mexico], anyone who wants to open a business, it’s difficult to get all the permits you want to get without paying off low-level officials,” he said. “It’s pretty hard to get anything done unless you spread money around…The quicker you want to do something, you’d better do it this way.”
David Tovar, Vice President, Corporate Communications of Wal-Mart, released the following statement on Sat., April 21, before the story was published, a statement that has been met with unease by those in the business world who believe it weakens Wal-Mart’s image:
“We take compliance with the U.S. Foreign Corrupt Practices Act (FCPA) very seriously and are committed to having a strong and effective global anti-corruption program in every country in which we operate.
“We will not tolerate noncompliance with FCPA anywhere or at any level of the company.
“Many of the alleged activities in The New York Times article are more than six years old. If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.
“In the fall of last year, the Company, through the Audit Committee of the Board of Directors, began an extensive investigation related to compliance with the FCPA. That investigation is being conducted by outside legal counsel and forensic accountants, who are experts in FCPA compliance, and they are reporting regularly to the Audit Committee.
“We have met voluntarily with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) to self-disclose the ongoing investigation on this matter. We also filed a 10-Q in December to inform our shareholders of the investigation. The Company’s outside advisors have and will continue to meet with the DOJ and SEC to report on the progress of the investigation.
“We are committed to getting to the bottom of this matter. The audit committee and the outside advisors have at their disposal all the resources they may need to pursue a comprehensive and thorough investigation.
“We have taken a number of actions in Mexico to establish stronger FCPA compliance. We have implemented enhanced FCPA compliance measures including:
•robust policies and procedures
•enhanced auditing procedures; and
•issue escalation and remediation protocols.
“In addition, we have established a dedicated FCPA compliance director in Mexico that reports directly to our Home Office in Bentonville.
“The investigation is ongoing and we don’t have a full explanation of what happened. It would be inappropriate for us to comment further on the specific allegations until we have finished the investigation.
“We are working hard to understand what occurred in Bentonville more than six years ago and are committed to conducting a complete investigation before forming conclusions. We don’t want to speculate or weave stories from incomplete inquiries and limited recollections, as others might do.
“Unfortunately, we realize that, at this point, there are some unanswered questions. We wish we could say more but we will not jeopardize the integrity of the investigation.
“We are confident we are conducting a comprehensive investigation and if violations of our policies occurred here, we will take appropriate action.
“Over the last several years, Walmart has focused diligently on FCPA compliance and implemented a series of changes to our FCPA compliance program to further strengthen them. This work is ongoing and continues today.
“As part of that effort, in the spring of 2011, we initiated a worldwide review of our anti-corruption program. We are taking a deep look at our policies and procedures in every country in which we operate. This includes developing and implementing recommendations for FCPA training, anti-corruption safeguards, and internal controls.
“Acting with integrity is the essence of our corporate culture. We have the same high standards of integrity for every associate – regardless of his or her position– and everyone is held accountable for those standards.
“In a large global enterprise such as Walmart, sometimes issues arise despite our best efforts and intentions. When they do, we take them seriously and act as quickly as possible to understand what happened. We take action and work to implement changes so the issue doesn’t happen again. That’s what we’re doing today.
“Walmart is committed to doing the right thing and we are working hard every day to become an even better company.”
In a large enterprise such as Wal-Mart, not only can issues arise, but those who caused the issues can be long-gone by the time any misdeeds are discovered. Seven years is a long time in the life of a company. Seven years ago, my former company’s regional office had been through at least three or four vice presidents already, to say nothing of our department managers. Now they’re all gone. Good luck with finding any of them; everyone is either scattered to the four corners of the country, making their way up some other corporate ladder, or hoping to climb onto one.
Most companies insist that employees sign a non-disclosure agreement. If you violate it, you can be sued and even imprisoned. This attorney enjoys whistle-blower status because he’s reporting an alleged wrong-doing, but he’s doing so long after the chief actors have probably vanished to some non-extradition country. The only thing this investigation will serve to do is give Wal-Mart, a politically-mortal enemy of Obama and his union backers a black eye in an election year.
Everyone assumes that officers, executives, managers and employees are all on the same page in a Corporation, and to the extent that they sign a non-disclosure agreement about the company’s activities, they are. But there are as many layers, as many intrigues, as many secrets, as many private wars, as many factions as anything you would find in the vast, bureaucratic hallways of Congress or the Pentagon. With all the politics going on, it’s no wonder Big Business gets along so well with Big Government.
Most very large corporations even have their own secret security forces (Occupy Wall Street has been trying to take out Bloomingdale’s [the store]). Generally, you don’t mess with the company. Certainly, lower-ranking employees don’t. Something nasty is going on within Wal-Mart; of that, you can be absolutely certain. Corporations can have moles just as governments do. They spy on one another, infiltrate one another’s corridors, steal away executives and employees, and make criminal decisions at the executive level, then make their getaway with a golden parachute long before the dirt surfaces, leaving the very highest levels of the company with no explanations for what happened.
Very often, the head doesn’t know what it’s left or right arms are doing, and certainly no one is going to bell the cat and tell them. In any case, the executives are too well-guarded by insiders who will never let a word of the truth get by – until it’s too late. In extreme cases, a rebellious but honest executive can even find himself pushing up daisies if he gets in the way of a billion-dollar deal. But more often, such an executive is simply set up. A drug deal. Maybe prostitution or a manipulated financial sheet.
All a corporation can do is call out its army of lawyers and public relations spinners and make the best of it.
So, the new Wal-Mart scandal will give the Secret Service agents a breather from their scandal and give the cheerleaders something different to print in their scandal sheets.