Customers shop for groceries at a Wal-Mart de Mexico SAB store in Mexico City, Mexico, on Thursday, Feb. 19, 2015.
Photograph by Susana Gonzalez — Bloomberg via Getty Images

The Department of Justice has largely finished its bribery probe into Wal-Mart's Mexican unit and has found a much smaller case than initially thought, the Wall Street Journal reports.

By Phil Wahba
October 18, 2015

Wal-Mart Stores WMT found itself embroiled in controversy three years ago after a New York Times exposé that claimed widespread corruption by the company’s Mexican unit, aimed at speeding up the discount retailer’s expansion in that market.

But the Wall Street Journal reported on Sunday night that the U.S. Department of Justice, conducting a probe into the matter under the auspices of the Foreign Corrupt Practices Act, has not found a major smoking gun. The investigation will likely to result in a much smaller case than the government initially expected, the newspaper reported, citing people familiar with the probe.

The New York Times‘ articles in 2012 claimed that top bosses at Wal-Mart’s Mexican division sought to hide a widespread bribery scheme from the company’s headquarters in Bentonville, Ark. The allegations went back to 2005, when a former Wal-Mart de Mexico executive allegedly e-mailed one of Wal-Mart’s senior lawyers, detailing how the world’s largest retailer had paid more than $24 million in bribes to secure construction permits throughout Mexico. About one-fifth of Walmart’s 11,500 stores are in Mexico.

A spokesman for Wal-Mart declined to comment, and a spokesperson for the DOJ did not immediately respond to a request for comment.

The sources cited by the Journal said that the three-year investigation isn’t over yet, but that most of the legwork is done, and that the case could end with only a fine and no criminal charges made against individual Walmart executives.

The probe, which was preceded by an internal Wal-Mart investigation that began a year earlier, has cost the retailer $650 million so far and led the chastened company to repeatedly say compliance with anti-corruption laws is a top priority. The FCPA is a U.S. law that seeks to punish American companies that use bribes in foreign countries.

The Journal reported that as part of the same DOJ probe into Wal-Mart, U.S. investigators found evidence of bribery by the company in India, specifically widespread but relatively small payments made to local officials there. Wal-Mart will probably face U.S. foreign-bribery charges under the FCPA for that, the Journal‘s sources said.

 

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