Walmart spent nearly $1 billion delaying justice in foreign bribery case for over 13 years

 Washington, D.C. – Today, the Making Change at Walmart campaign issued the following statement in response to news that Walmart will pay a $282 million fine to the Securities and Exchange Commission (SEC) and U.S. Department of Justice to settle its 13-year battle against Foreign Corrupt Practices Act (FCPA) allegations in Mexico.

“Walmart would not be the global goliath it is today if it didn’t bulldoze its way through Mexico 13 years ago. A slap-on-the wrist fine does not undo 13 years of damage that Walmart has done to our federal justice system nor does it justify Walmart spending approximately 1 billion dollars on defending criminal charges instead of investing that kind of capital into its workforce,” said Amy Ritter, communications director for Making Change at Walmart.

Justice will not be served as long as Walmart executives who were involved in the alleged widespread bribery, like CEO Doug McMillon, are still on Walmart’s board and payroll. Walmart continues to skirt the blame for what exactly occurred in Mexico. Which leads us to ask, how far could Walmart go to become #1?” said Ritter.

MCAW is asking for full disclosure on the settlement terms as well as the list of Walmart executives linked to the bribery case, some of whom still sit on Walmart’s executive board.

In addition to asking for full disclosure, MCAW raises the following points:

  • While Walmart has spent approximately $1 billion dollars on legal fees and other investigation-related costs, Walmart workers’ wages remain low and benefits, inadequate.
  • The $282 million fine is only 2% of what the Walton family received in dividends this year alone.
  • Current Walmart CEO Doug McMillon took part in several meetings and communications about the alleged bribery when he was president of Wal-Mart International, yet he remains in his CEO position.

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Background:

  • On April 21, 2012, The New York Times uncovered Walmart’s internal investigation of alleged widespread bribery between Mexican officials and Walmart de Mexico totaling $24 million in suspect payments and potential bribery dating back to 2005.
  • Roughly one in five of Walmart’s stores are in Mexico. Walmart de Mexico has 2,438 retail centers and employs 234,000 people, making it the country’s largest private employer, generating approximately $617 million in revenue and $36.7 million in profits in 2018.
  • The New York Times reported that in January 2006, Rob Walton, the largest individual Walmart shareholder and former chairman of Walmart’s board of directors, received an anonymous email saying Mexico’s top real estate executives were receiving kickbacks from construction companies.
  • In the three days after the Times story broke, Walmart’s market value slid $17 billion.
  • and New York Times reported that Eduardo Castro-Wright, CEO of Walmart Mexico from 2003-2005, was one of the main proponents behind the alleged payoffs. As of 2012, he had not been disciplined according to CNN, and he retired from Walmart in 2012, having made $41.3 million in the years leading up to his departure from the company.
  • The New York Times reported that in 2012, former Walmart CEO’s Lee Scott (2000-2009) and Mike Duke (2009-2014) were both aware of the alleged bribery. Scott at the time was more concerned with damage control from the allegations than with correcting the situation. In April 2014, nearly 10 years after the alleged bribery occurred, Scott retired from the board, earning $30 million during his final year as CEO.  Mike Duke retired from Walmart’s board in 2016, with a $140 million in deferred pay upon retiring from his duties at Walmart.

Making Change at Walmart (MCAW) is a project of the United Food & Commercial Workers International union that seeks to make Walmart a better employer and community partner.