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Wal-Mart probes possible bribes in Mexico

By the CNN Wire Staff
updated 12:49 PM EDT, Sun April 22, 2012
An anti-World Bank rally is held in front of a Walmart in Cancun, Mexico, in 2010.
An anti-World Bank rally is held in front of a Walmart in Cancun, Mexico, in 2010.
STORY HIGHLIGHTS
  • The retail giant says bribery allegations are "not a reflection of who we are or what we stand for"
  • A report says Wal-Mart's Mexico subsidiary used bribery to speed up store construction
  • An internal review found suspect payments totaling more than $24 million, the report says
  • Wal-Mart says it began an investigation over compliance with the Foreign Corrupt Practices Act last year

Mexico City (CNN) -- Wal-Mart is investigating its operations in Mexico to determine whether there were violations of the U.S. law that prohibits giving bribes to international officials, the company said in a statement.

The retail giant's announcement comes after a New York Times report detailing what the newspaper said was widespread bribery used by Wal-Mart's Mexican subsidiary to speed up store construction.

Wal-Mart Stores Inc. executives in Bentonville, Arkansas, recommended shutting down an internal review of the alleged bribery even after the lead investigator recommended expanding the investigation, according to the newspaper, which cites former Wal-Mart employees, participants in the company's investigation and copies of internal review documents.

A paper trail found suspect payments in Mexico totaled more than $24 million, the newspaper said, citing an internal Wal-Mart review.

CNN has not independently confirmed the details in the New York Times report.

"Many of the alleged activities in The New York Times article are more than six years old," Wal-Mart spokesman David Tovar said in a statement Saturday. "If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened."

In a Securities and Exchange Commission filing late last year, Wal-Mart disclosed a probe into whether its workers violated the U.S. Foreign Corrupt Practices Act, which prohibits giving bribes to international officials. The retailer said the possible bribes pertained to such matters as obtaining permits and licenses, as well as to inspections. At the time, Tovar said the investigation was "focused on discrete incidents in specific cases."

"We take compliance with the U.S. Foreign Corrupt Practices Act (FCPA) very seriously and are committed to having a strong and effective global anti-corruption program in every country in which we operate," Tovar said Saturday. "We will not tolerate noncompliance with FCPA anywhere or at any level of the company."

Tovar said the company began an extensive review related to compliance with the law last year, and has met with the U.S. Department of Justice and the Securities and Exchange Commission to disclose the investigation.

Alisa Finelli, a Justice Department spokeswoman, declined to comment. A spokesman for the Securities and Exchange Commission could not be immediately reached for comment.

The New York Times report cites a former executive, Sergio Cicero Zapata, who resigned from Wal-Mart de Mexico in 2004. Cicero told the newspaper he had helped organize payoffs to local officials -- including dispatching intermediaries to deliver envelopes full of cash. The aim of the bribes, he said, was to guarantee zoning approvals, reductions in environmental impact fees and support from neighborhood leaders, according to the newspaper.

After resigning, Cicero alerted a senior Wal-Mart lawyer about the deals in 2005, prompting an internal investigation, the New York Times said.

Wal-Mart de Mexico y Centroamerica, the company's subsidiary in Mexico, said in a statement that it is "fully committed to complying with the laws of the countries where it operates, including any state or municipal regulations pertaining to the application for licenses and permits."

"The allegations in the recent New York Times article, if true, do not accurately reflect Wal-Mart de Mexico y Centroamerica's culture," the statement continued.

Mexico was the first country in Wal-Mart's international division. Wal-Mart has 2,099 retail units in the country, including 213 supercenters, according to a company fact sheet.

CNNMoney's Julia Talanova contributed to this report.

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