NY Times Expose How Wal-Mart Paid Bribes to get what the law otherwise prohibited

NY Times Expose How Wal-Mart Paid Bribes to get what the law otherwise prohibited

New York Times reported that Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited

SAN JUAN TEOTIHUACÁN, Mexico

Location - Elda Pineda’s alfalfa field

The above location is barely a mile from its ancient pyramids, which draw tourists from around the world.

Best location to do business which Wal-Mart also understood.

Thus, they decided to open a Walmart store in Mrs. Elda Pineda’s alfalfa field

What was the problem?

Local elected politicians of the town approved a new zoning system, which prohibited
Commercial development on Mrs. Pineda’s field, seemingly dooming Wal-Mart’s hopes.

But Walmart executives overcome that problem by with one well-placed $52,000 bribe.

The zoning map would not become law until it was published in a government newspaper.

So Wal-Mart de Mexico arranged to bribe an official to change the map before it was sent to the newspaper, records, and interviews show.

Sure enough, when the map was published, the zoning for Mrs. Pineda’s field was redrawn to allow Wal-Mart’s store.

The Times found that Wal-Mart de Mexico executives approved at least four different bribe payments — more than $200,000 in all — to build just a medium-size supermarket.

On Aug. 12, records show, Walmart Mexico asked Wal-Mart’s leadership in the United States to approve their plan to spend about $8 million on a Bodega Aurrera in Mrs. Pineda’s field. The request was approved by Wal-Mart’s international real estate committee, made up of 20 or so top executives, including S. Robson Walton, the company’s chairman.

The committee’s approval, records show, was contingent on obtaining “zoning for commercial use.”

The Times found evidence of that change on a computer disc stored in a shoe box inside the Office of Urban and Regional Planning. The disc, created by a senior official in the office, held a copy of Teotihuacán’s zoning map as it existed on Aug. 20, the day it was sent to the Government’s Gazette.

The formal order to publish Teotihuacán’s new zoning plan was received by the Government’s Gazette on Sept. 11, 2003.

The next day, internal Wal-Mart de Mexico records show, Mr. Cicero authorized five bribe payments totaling $221,000. According to the internal records, the bribes were for obtaining zoning changes to build five supermarkets. One of the payments, for $52,000, was for the Bodega Aurrera in Teotihuacán, Mr. Cicero said in an interview.


Local People did everything from hunger striking to everything which they can but
The store opened for Christmas 2004

Later Walmart lawyer who knew about the change of zoning map and bribe informed to his superiors Wal-Mart executives in Bentonville, Ark., and told them how Wal-Mart de Mexico routinely resorted to bribery, citing the altered map as but one example

After this Walmart started its own internal investigation.

Their investigators had found a wealth of evidence supporting the lawyer’s allegations.

But in Year 2006 Walmart shutdown that investigation.
After this NY, times started its own investigations.

And NY times found that and reported that Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited.

It used bribes to subvert democratic governance — public votes, open debates, transparent procedures.

It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.

The Times identified 19 store sites across Mexico that were the target of Wal-Mart de Mexico’s bribes.

The Times then matched information about specific bribes against permit records for each site.

Clear patterns emerged. Over and over, for example, the dates of bribe payments coincided with dates when critical permits were issued.

eight bribe payments totaling $341,000, =  Wal-Mart built a Sam’s Club in one of Mexico City’s most densely populated neighborhoods, near the Basílica de Guadalupe, without a construction license, or an environmental permit, or an urban impact assessment, or even a traffic permit.

nine bribe payments totaling $765,000, = Wal-Mart built a vast refrigerated distribution center in an environmentally fragile flood basin north of Mexico City, in an area where electricity was so scarce that many smaller developers were turned away.

This Year Walmart has spent more than $100 million on investigative costs

Suggested Reading – 

The Bribery Aisle: How Wal-Mart Got Its Way in Mexico

Reality views by sm –

Wednesday, December 19, 2012

Tags – Walmart Mexico Corruption Bribes