Wal-Mart bribery probe limps to an end

Dive Brief:

The U.S. Justice Department is wrapping up its four-year investigation into alleged corruption in Wal-Mart’s international dealings, sources told Bloomberg.
Interviews with former executives and others associated with Wal-Mart’s China operations have yielded little information, sources said, in part because of a lack of evidence and byzantine disclosure rules in China.
Bloomberg reports that prosecutors will probably cite Wal-Mart for a lack of a sufficient system to controls to detect and prevent violations of the Foreign Corrupt Practices Act, and that much of the fallout will include fines rather than any criminal penalties.

Dive Insight:

The China investigation is part of a wide-ranging investigation by U.S. officials into Wal-Mart’s dealings in Brazil, Mexico and India. In late 2011, Wal-Mart disclosed possible violations in Mexico, and the following April, the New York Times reported company officials in Mexico had paid $24 million in alleged bribes and then halted an internal probe.

The Wal-Mart bribery scandal is still ongoing and includes investigative press reports, government inquiries inside those countries as well as here, and criminal court proceedings have cost the retailer dearly: Wal-Mart has since spent more than $730 million in response to the charges, Bloomberg notes. Sources said that information unearthed in Mexico was too old for use as evidence, however, although officials may be able to build more compelling cases in Brazil and India.

In some areas of the world, bribing officials is an accepted practice to obtain building permits and licensing, and to close business deals. It’s not exactly copacetic from the perspective of the U.S. government, however.

Still, there are grey areas. In some countries, "gifts" are expected during business negotiations. The U.S. Department of Justice has a guide—including case studies—on how to comply with the Foreign Corrupt Practices Act of 1977, which outlaws the kind of activity that has Wal-Mart in so much hot water, while still keeping up with business gift customs.