WASHINGTON — U.S. lawmakers probing the Wal-Mart Stores Inc. Mexican bribery scandal said Thursday they have internal documents that appear to indicate president and chief executive officer Mike Duke and senior executives had knowledge of the bribery allegations involving a store in Teotihuacan, Mexico, as early as 2005, despite claims to the contrary by the retail giant that senior U.S. officials were unaware of the allegations.
Reps. Elijah Cummings (D., Md.) and Henry Waxman (D., Calif.) sent a letter to Duke and released alleged internal Wal-Mart e-mails on Thursday that they claim show the ceo was informed of the bribery allegations in Mexico in 2005.
In addition to the Congressional probe, Wal-Mart is also under investigation by the Securities and Exchange Commission and U.S. Department of Justice into whether it violated the Foreign Corrupt Practices Act. Neither the SEC nor DOJ would comment on the lawmakers’ letter or newly released documents.
Observers have said the bribery scandal has likely tarnished Wal-Mart’s reputation, could have a material effect on its financial performance and has forced the company to launch a global investigation into its business practices, focusing on Mexico, China, Brazil, South Africa and India.
The two lawmakers, who have been compiling evidence in a separate Congressional investigation, said the internal company e-mails released Thursday contradict Wal-Mart’s public statements about the bribery allegations in Mexico.
“Documents obtained by our staffs from a confidential source indicate that you and other senior Wal-Mart officials were personally informed about these bribery allegations on multiple occasions,” the lawmakers said in the letter. They said the documents and e-mails “call into question” Wal-Mart’s public statements that no associates, including those in charge of real estate projects in Mexico, recall bribery allegations related to the store.
“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,” they warned Duke.
The Wal-Mart e-mails released Thursday, some of which showed Duke listed as a recipient, provided details about bribery allegations made by Sergio Cicero Zapata, the former in-house counsel for Wal-Mart de Mexico who was in charge of obtaining building permits in the country, relating to permits for the Teotihuacan store.
While not directly addressing the specific claim by the lawmakers that Duke knew about the bribery allegations related to the Teotihuacan store in 2005, a Wal-Mart spokeswoman instead denied their contention that Wal-Mart’s public statements on the bribery allegations were “contradictory.”
“The letter from Congressmen Waxman and Cummings leaves the wrong impression that our public statements are contradicted by the information they released today,” she said. “The fact is, the chronology of events relied upon in their letter is inaccurate. The company statement referenced in their letter that appeared in the December 2012 New York Times story focused on events in 2004. The e-mails attached to the [lawmakers’] letter were sent almost a year later.”
She also said there is “no new information” provided in the letter to Duke.
“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. “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 in this matter. We are committed to having a strong and effective global anticorruption program everywhere we operate and taking appropriate action for any instance of noncompliance.”
Duke recently responded to the broader bribery allegations at a Council on Foreign Relations event in New York in December.
“We take those allegations very, very seriously and we have an investigation ongoing,” Duke said. “We’ll take the appropriate action based upon the conclusion of this investigation.…Doing the right thing, we’ve installed a number of additional steps in this particular area of [FCPA] compliance.…We’ve taken a look at just how we operate and put in place compliance operations, and we’ve established a new office of compliance.…And I think this focus will make us a better company regardless of the outcome of the investigation in Mexico.”
Jonathan Fee, a partner with Alston & Bird LLC who specializes in international trade law, said it is premature to draw conclusions from the new documents released by Waxman and Cummings.
“I’m not sure random e-mails that could be taken out of context necessarily rise to the level of proof of intentional violations of the [FCPA] act until the whole matter has been heard and resolved,” Fee said. “I don’t think it’s fair to the ceo to make those kinds of conclusions before an investigation has run its course.…These investigations literally involve millions of documents of communications. To pick up one or two of them, either to prove or disprove wrongdoing, is premature.”
The congressmen are requesting that Duke explain his knowledge of the Teotihuacan bribery allegations by Jan. 24 and to allow Maritza Munich, former general counsel of Wal-Mart International, to meet with Congressional investigators without placing limits on what she can say.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty