GLOBAL ECONOMY

Bribery Scandal In Mexico Causes Seismic Changes At Wal-Mart

In this Nov. 18, 2011 photo, a man pays at the cash register at a Wal-Mart Superstore in Mexico City. (AP Photo)

In this Nov. 18, 2011 photo, a man pays at the cash register at a Wal-Mart Superstore in Mexico City. (AP Photo)  (AP2011)

Seismic changes have quietly occurred at the top of Wal-Mart's management over the last few years in response to accusations of widespread bribery at Wal-Mart stores in Mexico, The New York Times has learned.

According to the Times, at least eight executives in Mexico, India and Betonville, Ark, have left the company since late 2011, when the newspaper launched its investigation into potential corruption violations by the company. The sales giant has also revamped its global compliance program and added more compliance staff.

Wal-Mart is under federal investigation into whether they violated the Foreign Corrupt Practices Act which makes it illegal for American companies to bribe foreign officials. In this case, the company is accused of illegally bribing Mexican officials to speed up building permits and curry political favors. In a bid to build stores quickly, and win market dominance in Mexico, Wal-Mart de Mexico allegedly orchestrated their widespread bribery campaign that allowed superstores to be built on archeologically sensitive land and in areas widely opposed by residents. 

In September of 2005, a former Wal-Mart executive detailed the bribery accusations and the company ended up launching an internal investigation, which confirmed the executive's account, according to the Times, finding evidence of $24 million in bribery payments.

A federal investigation is reportedly ongoing but the Department of Justice has not confirmed nor denied its existence.

Still, more than two years since the bribery allegations, top brass at the company have either left or are in the process of leaving. The former chief administrative officer for Wal-Mart in the United States, the general counsel at Wal-Mart's Mexican division left the company, José Luis Rodríguezmacedo Rivera, and Walmart's former chief executive is retiring this month.

The changes come as the world's largest retailer faces new challenges at a time when low prices and one-stop shopping can be a few clicks away on a tablet computer or mobile phone. Wal-Mart Stores Inc. built its reputation on everyday low prices and convenient supercenters that allow customers to do all their shopping in one place.

But revenue at established Wal-Mart stores in the U.S., which account for 60 percent of the company's total sales, has declined for five consecutive quarters. Meanwhile, the number of customers has fallen six quarters in a row.

The Associated Press contributed to this report.

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