Walmart De Mexico Case Study

1. Summarize and discuss the core issue in the case. Do not repeat the entire case details but only pertinent information at the heart of the case. The core issue in this case is about how Wal-Mart de Mexico covered a vast bribery orchestrated by government officials, authorities, and executives from Mexico. Wal-mart de Mexico perfected the art of bribery by using fraudulent accounting and building stores so fast by getting zoning maps changed and making environmental objections disappear. Wal-mart de Mexico’s executives bribed government officials to aid in getting permits faster, since this is a process that typically takes months to complete. However, the company’s executives managed to get them materialized in days. Bribes were also

Every month, Wal-Mart de Mexico executives received a detailed schedule of the payments performed. These payments, however, were then “purified” in accounting records as simple legal fees. These were basically Mr. Cicero’s allegations. However, this was not the first indication of corruption in Wal-Mart de Mexico. In an investigation in 2003, it was found that Wal-Mart de Mexico had systematically increased sales by aiding favored high-volume customers avoid sales taxes. Wal-Mart de Mexico had failed to enforce their own anticorruption policies. As the investigation from Mr. Cicero’s allegations moved forward, there was corroborating evidence in Decemeber 2005 that there were hundreds of gestor payments, mystery codes, rewritten audits, evasive responses from Wal-Mart de Mexico executives, donations for permits, and evidence gestores were still being used. At last, Mr. Rodriguezmacedo wrapped up the case saying that there was no evidence or indications of the bribes. Instead, he attacked the integrity of his accuser, Mr. Cicero. They attacked it by saying his conduct was typical of someone who engaged in fraud.

Bribes are not legal fees. Potential bribes were not disclosed in the books as well. This violation not only involves the accountants of Wal-Mart de Mexico, but the CEO, CFO, and auditors that were supposed to make sure records are transparent, accurate, and reliable. Sarbanes Oxley also requires CEO’s and CFO’s to certify that the financial reports are correct. The United States Department of Justice encourages companies to conduct internal investigations and to disclose the relevant facts to the authorities. Any suspicion that the Foreign Corrupt Practices Act is being violated should be reported to the US DOJ, which it was not reported by Wal-Mart. According to The New York Times, Wal-Mart did approach the Justice Department, but after learning about the Times’