6 Burning Questions on the Wal-Mart Corruption Scandal
http://www.alternet.org/economy/155159/6_burning_questions_on_the_wal-mart_corruption_scandal_/
I've worked for many years as a compliance consultant, and no one I know in corporate America was surprised by the recent New York Times allegations that Wal-Mart de Mexico spent over twenty million dollars to bribe Mexican officials to fast track their store openings. Unfortunately, doing in business in Mexico, China, India, Brazil, Russia, Africa and a number of other places means that government officials are going to ask for bribes. Some - but not all - companies pay them as a cost of doing business. If the allegations against Wal-Mart prove to be true, the case is a wake-up call to companies and investors that there are more important things than profits and growth. A company's ethical reputation is priceless.
When I served as a compliance officer for a multinational company a few years ago, I trained a Chinese businessman on the US bribery laws. He asked why the United States focused so much on the small bribes that get things done while allowing American legislators to accept big checks from corporate donors who wanted favorable legislation and tax treatment. I admit that I had no good answer other than the fact that lobbying is not illegal in the US, but bribery is.
As a law professor who uses Wal-Mart as a case study on corporate responsibility, what surprised me was the reported coverup at the highest levels of the organization once executives at Wal-Marts headquarters learned of the alleged bribery from one of their own managers in Mexico in 2005. Ironically, on the last day of class last week, I assigned one group of students to propose five priorities out of 50 choices for Wal-Marts board to consider. They presciently chose beefing up global regulatory compliance and ensuring that the company had a social media and crisis management plan in place in the event of a corporate scandal.
Not surprisingly, the corporate social responsibility report that the company released this month using a globally accepted set of metrics failed to provide any information at all in the section related to bribery, including the information that wouldnt necessarily put the company in legal jeopardy such as what percentage of employees have been trained in anticorruption or how many business units had been audited for potential bribery.