By  on November 17, 2017

Wal-Mart Stores Inc. is getting close to putting a lengthy government investigation of its foreign operations behind it, but the financial cost has been steep.The retail giant said in its generally glowing third-quarter financial results that it’s set aside $283 million, equal to about 1 cent per share, for a possible settlement with the Securities and Exchange Commission of its nearly seven-year investigation of possible bribes that company executives used to clear a path for Wal-Mart’s international expansion. Payments by certain persons or entities with business interests to foreign officials is a violation of the Foreign Corrupt Practices Act of 1977. “Discussions with government agencies in the FCPA matter have progressed to the point that we can now reasonably estimate a probable loss and have recorded an accrual as part of our third-quarter earnings results,” a Wal-Mart spokesman said. “We’re pleased talks have advanced and are continuing discussions with the government agencies as we work to reach a resolution.”  Settlements with the SEC often include no admission of guilt, but Wal-Mart isn’t exactly getting off without a hitch.Since 2013, the retailer has spent $870 million related to the government and its own inquires related to the alleged scheme, along with purported enhancements to its global compliance efforts. If the expected settlement comes to fruition, Wal-Mart’s total cost from the investigation would exceed $1.15 billion.Shares of the retailer fell Friday afternoon 2.5 percent to $97.12 after hitting an all-time high of $99.62 the day before.An investigation into FCPA matters was generically disclosed at the end of 2011 by Wal-Mart, but a lengthy article in The New York Times a few months later detailed allegations that some of the retailer’s executives had paid about $24 million in bribes in the early to mid-Aughts to Mexican officials in order to obtain and expedite permits to expand its operations in the country.The investigation subsequently expanded to include operations in Brazil, China and India.Former Wal-Mart president and chief executive officer Eduardo Castro-Wright was implicated in the scheme, along with former executive Sergio Cicero Zapata, who allegedly admitted to a “campaign of bribery” in order to aid the retailer’s market dominance in Mexico, and told the retailer as much.        Walmex, or Wal-Mart de Mexico, currently operates more than 2,400 locations in the country and is its largest private sector employer.The retailer said at the time that it went to the SEC “voluntarily,” but that was apparently years after it became aware of the alleged bribery scheme. The Times’ investigation focused on how Wal-Mart handled the purported 2005 admission that Zapata made to the company and alleged that an internal investigation was subsequently shut down without altering federal authorities.For More, See:Wal-Mart Dodges Shareholder Suit Over Bribery in MexicoWal-Mart Again Faces Allegations of Pay Discrimination in New Class Tapping Lord & Taylor for 'Premium' Fashion

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