Wal-Mart’s PR Nightmare Gets a Little More Expensive
Wal-Mart (NYSE:WMT) executives are feeling the heat from an investigation by the U.S. Department of Justice over possible violations of the Foreign Corrupt Policies Act. Reuters reports that Wal-Mart is paying for lawyers for as many as 30 executives targeted by the DoJ over suspicion of bribery and other misconduct in Mexico, Brazil, China, and India.
Bribery allegations first materialized in 2012, when The New York Times published reports that detailed the financial incentives given to Mexican officials by the company’s affiliate, Wal-Mart de Mexico. One of the largest was a $52,000 bribe paid to change a zoning map so that the retailer could open a store located near ancient pyramids in Teotihuacan.
Earlier that year, Wal-Mart announced that it was “probable” it would incur losses as a result of the bribery probe. The company began its own investigation into the matter in November 2011, and an annual proxy statement revealed that these efforts cost approximately $157 million in 2012.
Now, sources told Reuters that the U.S. government has been questioning senior Wal-Mart executives, and the company has confirmed that it is covering legal expenses.
The bribery investigation isn’t the only costly problem facing the retailer. Wal-Mart has come under fire by workers and labor groups across the country for is wage practices and alleged violations of the National Labor Relations Act.
In November, the National Labor Relations Board issued a statement saying that it had investigated allegations that Wal-Mart was violating the rights of its employees and “found merit in some of the charges and no merit in others.” The Office of the General Council has authorized some of the complaints related to alleged violations of the National Labor Relations Act.The NLRB is pursuing violations related to Wal-Mart threatening “employees with reprisal if they engaged in strikes and protests on November 22, 2012.”
Also in November, Ashton Kutcher issued a series of tweets aimed directly at Wal-Mart, calling the corporation out for what many believe to be unfair wages paid to many — if not most — of its employees. Kutcher referred specifically to a story in The Wire, which in turn referred to a story from the Cleveland Plain Dealer.
The latter story revealed that a Wal-Mart in Canton, Ohio, was holding a Thanksgiving food drive for its own employees. The food drive was quickly turned into a symbol for the struggle of Wal-Mart workers, many of whom argue that they do not earn enough money to live on.