Wal-Mart Stores Inc. (WMT:US) Chief Executive Officer Mike Duke knew about allegations of bribery in the retailer’s operations in Mexico in 2005, two U.S. Congressmen said.
Democratic Representatives Henry Waxman of California and Elijah Cummings of Maryland said today in a statement that documents obtained by their staffs show that Duke and senior Wal-Mart officials were informed about allegations of corruption regarding a store in Teotihuacan.
Wal-Mart, the world’s largest retailer, is investigating allegations that executives in Mexico paid more than $24 million in bribes to speed the retailer’s expansion there. The company also is the subject of a U.S. Justice Department criminal investigation, a person familiar with the probe has said.
The congressmen’s letter contains no new information, Brooke Buchanan, a Wal-Mart spokeswoman, said in an e-mailed statement.
“This information has been part of the company’s ongoing investigation of potential violations of the U.S. Foreign Corrupt Practices Act for more than a year and has been the subject of two New York Times articles,” she said.
Wal-Mart fell 0.3 percent to $68.36 at the close in New York. The shares (WMT:US) gained 14 percent last year, compared with a 7.5 percent gain for the Standard & Poor’s 500 Consumer Staples Index.
The e-mails contradict the company’s earlier statements that senior executives had no knowledge of the bribery allegations involving the Teotihuacan store, Cummings and Waxman said in a statement.
“It would be a serious matter if the CEO of one of our nation’s largest companies failed to address allegations of a bribery scheme,” Cummings and Waxman wrote in a letter to Duke dated today.
Maritza Munich, then general counsel of Wal-Mart International, e-mailed Duke and other senior Wal-Mart officials in November 2005 about specific bribes paid for permits and accelerated openings for stores in Teotihuacan and other locations, according to the correspondence released by the congressmen.
Wal-Mart hasn’t disputed the authenticity of the documents.
Buchanan said in the statement that the letter from the congressmen “leaves the wrong impression that our public statements are contradicted by the information they released today.” She said earlier statements denying knowledge of the accusations “focused on events in 2004” and not the e-mails in question.
“We are committed to having a strong and effective global anti-corruption program everywhere we operate and taking appropriate action for any instance of non-compliance,” Buchanan, the Wal-Mart spokeswoman, said in the statement.
The congressmen also said in their letter that the e-mails “cast a new and unfavorable light on Wal-Mart’s continued unwillingness to provide our investigators with access to Ms. Munich, who appears to be a key witness who would know about your knowledge of the Teotihuacan bribes.”
Wal-Mart attorneys told the members in June that they were “working through a protocol” that would allow Munich to speak to government investigators, according to the letter. They have received no additional information since then, the letter says.
“This ongoing delay frustrates our investigation,” Cummings and Waxman wrote.
The company is “exploring ways to make additional information available,” Buchanan said.
“We have provided extensive documentation to the Department of Justice and the Securities and Exchange Commission, including the documents released today, as part of our ongoing cooperation with the appropriate law enforcement agencies on this matter,” Buchanan said. “We want to provide Members of Congress with whatever appropriate information we can to help them and we have already provided committee staff with multiple briefings.”
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