Walmart Silences $27M Bribery Probe

Looks like Walmart stores blew past their competition in Mexico by doling out millions of dollars in bribes—and, when the scandal came to light, sweeping it deftly under the rug, the New York Times reports. Former Walmart de Mexico executive Sergio Cicero Zapata revealed the payoffs in 2005, triggering alarm bells at Walmart's headquarters in Bentonville, Ark. ($27 million in foreign bribes would, after all, violate US law). But records show that Walmart execs handed off the investigation to their Mexican general counsel—himself accused of authorizing bribes. In his hands, the probe slowly died.

Top executives at Walmart de Mexico had allegedly kept the bribery system hidden from Bentonville for years while payoffs continued to buy zoning approvals, lower environmental impact fees, and the support of local leaders. In particular, Cicero blames Walmart's highly ambitious former chief executive in Mexico, Eduardo Castro-Wright, for keeping the bribery system alive (even though Walmart promoted him to vice-chairman in 2008). As for Walmart, it posted a press release today saying it has met with US authorities and is "deeply concerned by these allegations." (More Walmart stories.)