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Walmart Mexico involved in massive bribery scandal


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#1 jnc

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Posted 23 April 2012 - 07:16 PM

NYTimes article about how Walmart's Mexican branch allegedly engaged in a massive $24 million (USD) bribery campaign to win approval of building permits throughout Mexico, ultimately allowing the corporation to become Mexico's largest private employer. The home office in Arkansas found out about it as early as 2005, but allegedly shut down its own investigation and and hushed it all up. Questions are being raised about how far up the management chain the criminality goes. This sort of activity is not only illegal in Mexico, but would violate the US Corrupt Foreign Practices Act.

http://www.nytimes.c...y-silenced.html

#2 Toltepeceno

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Posted 23 April 2012 - 08:32 PM

Nothing is done here without bribes. The whole sysatem needs to be fixed, it's not juse walmart.

#3 jnc

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Posted 24 April 2012 - 10:22 PM

Nothing is done here without bribes. The whole sysatem needs to be fixed, it's not juse walmart.


True there is a lot of bribery here, including expats who pay mordida to cops to let them off the hook. However, this is a matter of scale. Walmart is the largest private employer in Mexico, and they got that way by allegedly bribing a variety of officials at all levels throughout the country to the tune of $24 million dollars US to grease the way for permits which enabled them to build a huge number of stores here. Just as in the US, those stores have no doubt put many small, locally owned Mexican businesses out of business.

Not only that, but in doing so they appear to have violated a major US anti-corrpution statute put in place to stop just this sort of behavior by representatives of US corporations abroad. When the head office in Arkansas heard about the bribery from a Walmart executive who was obviously concerned, the company's first response was correct: they sent investigators to check it out. Their next impulse was unfortunately exactly wrong: they buried the report. Now they are starting to pay the inevitable political, legal, and economic price (and have seen a 5% drop in their stock value overnight). "Everybody does it" is the response that a teenager gives to his parents when they catch him drinking beer under age. It is not the appropriate response for one of the biggest, richest, and most powerful corporations on the planet when it is caught corrupting foreign government officials.

#4 jaykay

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Posted 03 May 2012 - 09:36 AM

I'm sure there are many people reading about the bribery by Wal-Mart, and thinking "Boy are they going to learn a lesson." True, but probably not the way you think. Any large company planning to make a major investment in Latin America is going to think, "Ah, that's how you do it." You know what? That IS the way you do it. There is zero chance of changing the way business gets done in countries other than the US. Different countries, different cultures, and different ways of getting things done. What was dumb about this is the way they left a paper trail. My personal take on mordida is that it is direct taxation, going to people who are very badly paid. 24 million for the kind of speed and results Wal-Mart got is a heck of a deal.

#5 jnc

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Posted 23 May 2012 - 09:55 PM

I'm sure there are many people reading about the bribery by Wal-Mart, and thinking "Boy are they going to learn a lesson." True, but probably not the way you think. Any large company planning to make a major investment in Latin America is going to think, "Ah, that's how you do it." You know what? That IS the way you do it. There is zero chance of changing the way business gets done in countries other than the US. Different countries, different cultures, and different ways of getting things done. What was dumb about this is the way they left a paper trail. My personal take on mordida is that it is direct taxation, going to people who are very badly paid. 24 million for the kind of speed and results Wal-Mart got is a heck of a deal.


So, "YAY for corruption, go for it WalMart!" Is that your message? I'm sure the small local businesses forced out when WalMart bribed its way into permit approvals will be glad to hear it (especially from a foreigner). Now if the small guys were just smart enough to bring millions of dollars to grease palms like WalMart did, maybe they could be big players too!

#6 RVGRINGO

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Posted 24 May 2012 - 08:43 AM

Perhaps we need a topic on the pallets of cash shipped 'offshore' and distributed to 'contractors' in many parts of the world without a paper trail or budget category. Let's not be naive.

#7 AlanMexicali

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Posted 24 May 2012 - 10:21 AM

Contrary to public opinion here about Walmart's bad reputation in the US and Canada for putting, and this is the clincher, small town businesses out of business I have heard nothing but praise for Walmart in Mexico from many.

First. They are not in small towns here.

Second. When they built in the cities I frequent they brought down prices for all the superstores due to competitive pricing. Before that those chains that were well established were into gouging. Also they hire many people and are open longer hours and forced the others to do the same, adding jobs to their workforce.

Third. People who work long hours never did spend the time going to the small stores because it took too long, The stores were constantly running out of things all the time or didn't stock them, usually and sometimes the stalest goods and only the smallest and most expensive sizes etc. [one roll of toilet paper]. So your critique of putting small stores out of business doesn't fly here. They are still here. If anything OXXO is doing what you described but I love OXXO but shop at small stores also, picking an item that other places do not have.

Fourth and most important. Comparing your experiences and news about Walmart back home only adds to your frustration of being an alien in an alien land. Why not just lighten up and let people shop where and when and buy what they want in peace and quite trying to convince others that your way of thinking has anything to do with what is happening here.

#8 HelperGuy

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Posted 24 May 2012 - 11:27 AM

The way WalMart deals with its staff, employees, and suppliers is undeniably vicious, cruel, and always skirting the edge of the law: they get away with whatever they can get away with, to make their profits. This is so well-documented it's not worth discussing.

They have, however, set the standard for the rest of the supply-chain world, and most everyone follows suit. There is no getting around it, unfortunately: it's the way of the future.

#9 Griffin

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Posted 24 May 2012 - 11:43 AM

The way WalMart deals with its staff, employees, and suppliers is undeniably vicious, cruel, and always skirting the edge of the law: they get away with whatever they can get away with, to make their profits. This is so well-documented it's not worth discussing.

They have, however, set the standard for the rest of the supply-chain world, and most everyone follows suit. There is no getting around it, unfortunately: it's the way of the future.


Wal-Mart here pays for IMSS for the employee and his family. It pays better than many other jobs that are available. I don't know of any stores that were run out of business when the Ajijic Wal-Mart opened and comparing Wal-Mart NOB to Wal-Mart Mexico doesn't work.
Three things in human life are important. The first is to be kind. The second is to be kind. And the third is to be kind. Henry James 

#10 HelperGuy

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Posted 24 May 2012 - 11:22 PM

If WalMart pays IMSS here, it will do so only when it has to, and only because of the law. I'd venture to guess there are many employees for whom they don't pay IMSS. Just like NOB where their hiring policies are atrocious: moving employees to fewer hours, making them only eligible for reduced benefits; hiring new employees on a part-time basis only, making them eligible for fewer benefits; cutting back on employee insurance; making the shifts impossible to string together enough hours for various benefits; paying rock-bottom wages; dealing with class-action suits on a regular basis NOB from female employees...

You can say WalMart pays for IMSS; I have no idea how you would know that, but let's just say it's true. You say they pay better than many other jobs (tell that to the bag-boys and girls, who don't get paid); let's say for argument's sake that's true too. But comparing WalMart NOB to here: why doesn't this work exactly? Because this is an impoverished country, or what? What possible reason can be acceptable for treating people as less than people?

And that's just the staff. What about the suppliers? I know personally of one east-coast Canadian boot company that was doing quite well, that went belly-up trying to fulfill an order for WalMart. They came in one day late, and the entire order was cancelled, forcing them to lay off their entire staff, close the factory (all their capital invested in the facility to fulfill the order), and shut down a much-needed business. Just one company out of thousands.




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