David Barstow and Alejandra Xanic von Bertrab, The Bribery Aisle: How Wal-Mart Got Its Way in Mexico. The New York Times, 17 December 2012. (This is Part Two of a two-part series. Part One: Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle.) “Wal-Mart Abroad: A retail giant fueled growth with bribes. Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited…”
Excerpts from story:
Wal-Mart longed to build in Elda Pineda’s alfalfa field. It was an ideal location, just off this town’s bustling main entrance and barely a mile from its ancient pyramids, which draw tourists from around the world. With its usual precision, Wal-Mart calculated it would attract 250 customers an hour if only it could put a store in Mrs. Pineda’s field.
One major obstacle stood in Wal-Mart’s way.
After years of study, the town’s elected leaders had just approved a new zoning map. The leaders wanted to limit growth near the pyramids, and they considered the town’s main entrance too congested already. As a result, the 2003 zoning map prohibited commercial development on Mrs. Pineda’s field, seemingly dooming Wal-Mart’s hopes.
But 30 miles away in Mexico City, at the headquarters of Wal-Mart de Mexico, executives were not about to be thwarted by an unfavorable zoning decision. Instead, records and interviews show, they decided to undo the damage with one well-placed $52,000 bribe…
Wal-Mart de Mexico broke ground months later, provoking fierce opposition. Protesters decried the very idea of a Wal-Mart so close to a cultural treasure. They contended the town’s traditional public markets would be decimated, its traffic mess made worse. Months of hunger strikes and sit-ins consumed Mexico’s news media. Yet for all the scrutiny, the story of the altered map remained a secret. The store opened for Christmas 2004, affirming Wal-Mart’s emerging dominance in Mexico.
The secret held even after a former Wal-Mart de Mexico lawyer contacted Wal-Mart executives in Bentonville, Ark., and told them how Wal-Mart de Mexico routinely resorted to bribery, citing the altered map as but one example. His detailed account — he had been in charge of getting building permits throughout Mexico — raised alarms at the highest levels of Wal-Mart and prompted an internal investigation.
More in the Series Wal-Mart Abroad »
But as The New York Times revealed in April, Wal-Mart’s leaders shut down the investigation in 2006. They did so even though their investigators had found a wealth of evidence supporting the lawyer’s allegations. The decision meant authorities were not notified. It also meant basic questions about the nature, extent and impact of Wal-Mart de Mexico’s conduct were never asked, much less answered.
The Times has now picked up where Wal-Mart’s internal investigation was cut off, traveling to dozens of towns and cities in Mexico, gathering tens of thousands of documents related to Wal-Mart de Mexico permits, and interviewing scores of government officials and Wal-Mart employees, including 15 hours of interviews with the former lawyer, Sergio Cicero Zapata.
The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals…