Wal-Mart’s stock price plunged this morning after allegations that the largest retailer in the U.S. bribed Mexican officials and thereby violated the Foreign Corrupt Practices Act. Wal-Mart is also accused of hushing up the vast bribery campaign carried out by their top CEOs.
The Depart of Justice is investigating Wal-Mart for possible violations of a federal law. To put this in perspective, in 2008, Siemens AG paid a $450 million fine for violating the FCPA (Foreign Corrupt Practices Act).
Apparently, money can buy more than elections – money can also buy “growth”. Read the following from the New York Times to remind yourself why we have things like oversight and laws and why corporations, if they are people, are psychopaths:
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. In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country.
The former executive gave names, dates and bribe amounts. He knew so much, he explained, because for years he had been the lawyer in charge of obtaining construction permits for Wal-Mart de Mexico.
Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They 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 also 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 USA laws have been violated.”
Wal-Mart rewarded the fellow in charge of the Mexican bribery campaign with a promotion to vice chairman of Wal-Mart. Yes, you read that correctly; the person in charge of the bribery campaign got promoted.
Let us take a moment to examine what qualifies for bribery under the FCPA, before a conservative Wal-Mart shill comes along to justify violating federal law as “no big deal.” Bribery can result in prison time, and can also result in both criminal and civil charges. Greasing the wheels is not always bribery. In fact, the FCPA permits incentives paid to foreign officials to help expedite the completion of paperwork and to ensure the receipt of licenses or permits. So bribery has to be more serious than just greasing the wheels. Here are a few examples of bribery that violates the FCPA:
• Anytime a company, or its representatives, pays a government official with the expectation the payment will result in a contract, bribery is present.
• If payments are made expressly to obtain some government’s approval to do business in their country.
• Payments made to a government that will result in the government’s prohibiting a company’s competitor from doing business in its country.
Some other actions that are less apparent violations of the corrupt practices act, but offenses nonetheless.
• Payments made to seek preferential tax treatment in the foreign country.
• Payments made to reduce or eliminate foreign customs duties.
• Payments made in an attempt to secure a more favorable tariff rate.
It wasn’t just the bribery, it was the cover up:
Wal-Mart had sent investigators to Mexico City, where the newspaper report said they quickly discovered evidence that included a paper trail of hundreds of suspect payments totaling more than $24 million.
But according to the Times, top Wal-Mart executives kept quiet about the campaign and were more focused on damage control than on exposing the corruption. Then-CEO H. Lee Scott Jr. reportedly rebuked internal investigators at one meeting for being overly aggressive. Shortly thereafter, the newspaper said, the investigation was turned over to the general counsel for Wal-Mart de Mexico, who himself was alleged to have authorized bribes. He swiftly exonerated his fellow executives.
Wow, that’s some super free market growth going on! See how Wal-Mart regulated itself? Doesn’t that give you the warm fuzzies?
Now that they’ve bribed their way into Mexico and killed off the mom and pop stores and become the second largest employer in Mexico, we can rest assured that they won’t be going to jail. At worst, they will pay a fine and go back to their vulture “capitalism”. If this is capitalism, then yes, it sucks, but of course, this is not capitalism this is corruption, which is what we get when we practice corporatism.
Wal-Mart funds some pretty egregious policies when they aren’t busy keeping workers below the hours needed to be eligible for health insurance or walking a fine line with the law yet again by telling their employees how to vote . Let us not forget that, “federal election rules permit companies to advocate for specific political candidates to its executives, stockholders and salaried managers, but not to hourly employees.”
Wal-Mart suggests that their employees should vote Republican because of evil unions. Wal-Mart likes to put the scare on about how unions will ruin everything including killing jobs. Wal-Mart tries to kill unions because they don’t want to be on the hook for healthcare for their employees, and they certainly don’t want an empowered workforce. That would be bad for their bottom line, even if it were good for the people, and their bottom line is their only concern — unlike, say, people.
According to Mitt Romney, Wal-Mart is a person, and as such has every right to free speech in the form of millions of dollars spent impacting elections via PACs (Citizens United). But they don’t have the right to violate the law. The Foreign Corrupt Practices Act is a federal law that makes it illegal for an American corporation to bribe a foreign government official with money or gifts in hopes of landing or maintaining important business contacts. “Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons. The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions.”
If Wal-Mart is a person as Republicans allege, then Wal-Mart should be in jail.
But they shouldn’t be there alone. There are at least 78 companies under investigation for violating the FCPA. Three years ago, the DoJ vowed to come down hard on international graft. News Corporation (Fox News), Johnson and Johnson, Tyson Foods Inc., and plenty more are either being investigated or have been charged with violating the FCPA.
The US Chamber of Commerce calls the DoJ’s crackdown, “a culture of over-zealousness.” They are working to keep the DoJ from going after those poor people/corporations who are supposed to self-regulate when they are left unregulated and without oversight. How self-regulation is supposed to happen when these companies cover up their own investigations and thus the stock price only reflects the growth and not the graft is beyond me, but conservatives believe. By the way, this is exactly why we need oversight; their investors are getting hammered for a risk they knew nothing about, because Wal-Mart covered it up.
You and I would be in jail if we had violated federal law and then tried to cover it up. But then, we’re real people and Wal-Mart isn’t. As the largest retailer in the US, Wal-Mart serves as a great example of how mega corporations function as “people” and concurrently kills the “one bad apple” refuge of the corporatist shills.