Wal-Mart Bribery

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Wal-Mart Bribery

Introduction

The United States Congress formulated the Foreign Corrupt Practices Act “FCPA”, was made a law by the then President Carter at the end of 1977. The principle aim of the congress was to prevent the companies and corporations operating within the United States from making bribe payments to governments in the foreign countries, officials, political parties and politicians in order to gain access to business opportunities internationally. In order to achieve this objective, the congress made it a crime for the citizens of United States, certain foreign individuals and companies, and domestic companies. It has become prohibited to propose any valuable thing, to officials belonging to foreign countries to obtain any business opportunity in return. The FCPA made these anti-bribery measures as the central legislation of FCPA but also took other initiatives for the promotion of anti-bribery. It made legislations to ensure the organizations maintain transparency in their business operations and develop financial records and books which reflect accurate payments. FCPA stressed on developing and maintaining internal controls of accounting. In this way the FCPA developed a method of detection of bribery payments and then made the legislations to ensure that violators are punished.

Discussion

New York Times published a report accusing Wal-Mart of quashing an internal investigation in 2006 against its employees of making bribes to official in Mexican government for increasing their market presence. Wal-Mart supposedly paid Mexican authorities' huge sum in bribes to obtain permission for opening stores at numerous part of the country (Barstow, 2012).

Figure 1: Wal-Mart de Mexico, (retrieved from www.nytimes.com)

New York Times reported that a former employee reached Wal-Mart's lawyer informing of the wide spread bribery and gave details of the amounts of money and people who have been paid. On receiving this information, the organization initiated a inquiry into the matter and sent their own investigators for evaluating the claim. The investigators found that as much as $24 million had been paid by Wal-Mart de Mexico to officials in Mexican government. It also discovered that not only the senior management knew about the payments, they made efforts to conceal those headquarters. Wal-Mart's investigators acknowledged that there was a possibility that numerous Mexican and United States laws had been violated. It was reported that Wal-Mart pulled the plug on the investigation. Due to the recent activism of FCPA, it has caught the attention of the authorities and they have put Wal-Mart under investigation.

We will now explore the details of the act and its implication on Wal-Mart case.

Details of FPCA Bribery Act

There are two main themes making up the FCPA. One of the themes states that the no person or entity should propose or make payment of any valuable thing to the office bearers of international governments or particular foreign companies which can pursue the official to misuse his official discretion to provide favor or benefit to a business company of any person or entity (provision of anti-bribery). The second central theme state that if any such transaction has taken place, no ...