Walmart to pay $282 million to settle charges

Walmart, the country’s largest retailer, on Thursday agreed to pay $282 million to settle federal criminal and civil charges that it ignored evidence of internal corruption for years that helped fuel its massive overseas expansion.

The company acknowledged wrongdoing as part of the settlements with the Justice Department and Securities and Exchange Commission. The settlements end a seven-year investigation to the company’s compliance with the Foreign Corrupt Practices Act, which prohibits U.S. companies from bribing foreign officials to help their businesses.

For more than a decade, between 2000 and 2011, Walmart executives were aware of problems with its anti- corruption programs at its foreign subsidiaries, including in Mexico, Brazil and China, but failed to act, according to court documents. The internal failures allowed the company to open its overseas stores more quickly than it would have otherwise and make additional profit, federal officials said.

The company reported $120.8 billion in international sales last year, nearly 25 times what it did a decade ago.

“Walmart valued international growth and costcutting over compliance,” Charles Cain, chief of the SEC’s Foreign Corrupt Practices Act division, said in a statement.

In 2005, a former Walmart attorney reported that he had overseen a scheme in Mexico in which a third-party made improper payments to government officials to obtain permits and licenses. The third party submitted invoices that specified that the payments were for “avoiding requirements” and “influence,” the Justice Department said in a statement.

Walmart Brazil indirectly hired a third-party, who was internally known as the “sorceress” or “genie,” though company officials knew of several “red flags” that prevented them from hiring her directly, according to DOJ. In 2009, that third-party made improper payments to government inspectors related to construction of Walmart stores there.

“In numerous instances, senior Walmart employees knew of failures of its anticorruption-related internal controls involving foreign subsidiaries, and yet Walmart failed for years to implement sufficient controls comporting with U.S. criminal laws,” said Assistant Attorney General Brian Benczkowski.