Wal-Mart allegedly involved in Mexican-bribery scandal, case under Department of Justice consideration – Part 2

There have been 150 cases handled by the Federal Bureau of Investigation, FBI, in the recent years. Many companies have taken the plea bargains and deferment of cases after agreements with the prosecutors. In the recent example, Siemens had to pay in the tune of $3 Billion of violation of FCPA.

In addition, DOJ promotes the corporate entities to self-report such crimes. In return, the courts offer leniency to the evicted and companies. However, the companies are still penalized in huge amounts; the example of Siemens also falls in this context.

However, the first problem in this scenario is that the corporate sector is unable to fathom the very point of self-disclosure, if they are still going to be fined in millions and billions of dollars.

In the case of Wal-Mart, the situation aggravates more. If DOJ pay no heed to the Mexican bribery case and/or investigates it with favouritism or leniency, then other corporate organizations will take themselves for a fool; paying billions and self-disclosing is for fools is what they are going to think.

Eduardo Castro-Wright, the man behind the bribery fiasco, is now vice-chairman of Wal-Mart and retires in July, 2012. This fact worsens the case if the Department of Justice does not take it seriously. Lee Scott Jr., Wal-Mart’s CEO in 2005, stated that the investigators were over aggressive. Moreover, current CEO of the company, Mike Duke, was also well informed of the situation.

In this case, the whole top management comes under the radar and the situation might turn into a huge scandal that might put a dent on Wal-Mart’s reputation.

The problem for both Wal-Mart and DOJ is that if the department does not come hard on them, the ramifications will be worse. For one, that is going to spur a anti-self-disclosure campaign in other companies, who have incurred both billions in fines and bad-reputation as well.

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Posted by Usman Khalid on Apr 23 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.