Update on Investigation Into Alleged Bribery and Cover-Up at Walmart

Walmart’s earnings release for FY 2013, running from February 2012 to January 2013, revealed that the company spent $157 million last year on matters related to the investigation of the alleged bribery scheme and executive-level cover-up in the company’s Mexican division. Notably, the amount Walmart spent grew each quarter:








Source: Q4 2013 earnings release, Q3 2013 Form 10-Q, Q2 2013 Form 10-Q

These expenses are likely to just be the beginning: as Prof. Mike Koehler, an anti-corruption and FCPA law expert, wrote in White Collar Crime Report last fall, “The facts remain that such scrutiny will result in a gray cloud hanging over the company for several years. Typically, FCPA scrutiny lasts between two and four years from the point of first disclosure to any enforcement action. In some cases…this time period can range from six to eight years.”

Recall that New York Times reports and documents obtained by the House of Representatives’ Commit­tee on Oversight and Reform indicate that CEO Mike Duke, then the head of Walmart’s international division, was fully aware of the scandal as early as October 2005, and that executive chairman Rob Walton had substantial prior knowledge of the alleged illegal activity and was a member of the internal committee that approved the project most clearly linked to the bribery.

What do you think?