Washington, D.C. Trump Cuts a Deal With Wal-Mart To Settle Mexican Bribery Case
For nearly 6 years, Wal-Mart has suffered through painful headline stories about it corrupt practices while seeking permit approvals for new store growth in Mexico, and other foreign countries. The Obama Administration was pressing Wal-Mart for a large fine for its actions—rumored to be as high as $1 billion--levied under the 1977 Foreign Corrupt Practices Act, which makes it a crime for a company to bribe officials to win business overseas.
The Trump Justice Department deal requires one Wal-Mart subsidiary, perhaps Walmex, to plead guilty to the charges, but the parent company, Wal-Mart Store U.S., would be charged with nothing. Wal-Mart would agree to a “non-prosecution agreement” involving an independent monitor to oversee Wal-Mart’s compliance with the settlement.
The Justice Department and the Securities and Exchange Commission investigated bribery allegations against Wal-Mart not only in Mexico, but in China and India as well. The legal fees that Wal-Mart ran up defending itself are nearly three times the proposed fine. Wal-Mart corporate filings indicate that the company spent roughly $837 million on legal fees. So fines and fees come to more than $1.1 billion.
Wal-Mart was accused of making dozens of small payments to government officials to grease the skids for its zoning and building permits. Wal-Mart has been in Mexico for roughly 26 years. But the dominance of its stores—Wal-Mart is the largest grocer in Mexico---allowed Walmex to make a $543 million net profit in one recent three month period. So small dollar brides result in major profits for the company.
Billionaire Donald Trump appears to have a cut a deal with one family of billionaires in America that far outshines the President’s wealth—the heirs of Sam Walton.
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