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If Details of Wal-Mart Bribery Scandal Prove True, U.S. Government Should Vigorously Prosecute Both the Company and Individuals

Oct. 11, 2016

Don’t Let Corporations Off the Hook, Public Citizen Urges U.S. Department of Justice and SEC

WASHINGTON, D.C. – The U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) must vigorously prosecute both Wal-Mart and its employees for international bribery abuses, if reported allegations prove true, Public Citizen said in a letter to leaders at both agencies today.

A long-running probe examining alleged payoffs and kickbacks to Mexican officials in return for store approvals is now winding down according to news reports, with both federal agencies reportedly seeking hundreds of millions of dollars in fines.

Since 2011, the DOJ and SEC have conducted a wide-ranging investigation into potential criminal misconduct at Wal-Mart and Walmex, which may have violated the Foreign Corrupt Practices Act (FCPA) in Mexico and China, Brazil and India.

“With reason, the American people have grown deeply cynical about corporate criminal enforcement,” Public Citizen President, Robert Weissman wrote. “They believe there is a two-tiered standard of justice, with corporations and the powerful escaping criminal accountability for their wrongdoing. This perception is corrosive to our justice system and democracy. The government has an opportunity to show that it will fully hold corporations accountable for breaking the law.”

A settlement with Wal-Mart should be measured against these criteria:

  • Does the settlement disclose what the government found? In contrast to recent civil settlements with large banks, the settlement should provide a detailed description of the facts of Wal-Mart’s wrongdoing, as determined by government investigators.
  • Does Wal-Mart admit to its wrongdoing?
  • Is the penalty sufficient to achieve deterrence? Merely making Wal-Mart pay a fine equivalent to its wrongful gains is unlikely to deter future wrongdoing. Other companies may decide that it is worth taking a chance at violating the law.
  • Is Wal-Mart required to enter a guilty plea? The DOJ has made frequent use of deferred and non-prosecution agreements over the past decade, including recently in its settlement with Och-Ziff in an FCPA case. These deals amount to a free chance to violate the law without facing criminal penalty, and are bad policy for corporate wrongdoers.
  • Will individuals face criminal prosecution?

“This is an important moment for law enforcement and corporate accountability,” said Weissman. “The allegations of wrongdoing in this case are serious and connected to allegations of considerable harm in Mexico, and potentially in other nations, with victims entitled to accountability from the criminal justice system. But also at stake are far-reaching standards of corporate accountability for criminal wrongdoing and the American people’s trust in basic norms of equal justice.”

Read the letter.