New Details Emerge in Wal-Mart FCPA Case

This article was reprinted with permission from FCPA Professor

Last week the New York Times ran a front-page story (here) regarding Wal-Mart and its FCPA scrutiny.  The story did not receive nearly the attention of the April New York Times story (see here for the prior post), but the recent article includes new details relevant to Wal-Mart's potential FCPA scrutiny.

And no, I am not talking about the unsurprising fact that Wal-Mart's scrutiny has expanded beyond Mexico to also include China, India and Brazil.  (See here for the prior post discussing how this was likely to happen).

Rather, the new details suggest that Wal-Mart's internal review is less of a knee-jerk reaction upon learning of the New York Times April story, but more an instance of the company pro-actively seeking to understand its FCPA risk, notwithstanding whatever may have occurred within the company in 2005 and 2006 upon learning of potentially problematic payments in Mexico.

According to the recent Times article, Wal-Mart's internal review began in Spring 2011 when Jeffrey Gearhart (Wal-Mart's general counsel) learned of an FCPA enforcement action against Tyson Foods (like Wal-Mart, a company headquartered in Arkansas - see here for the prior post discussing the Tyson enforcement action).  According to the Times article, "the audit began in Mexico, China and Brazil, the countries Wal-Mart executives considered the most likely source of problems" and Wal-Mart hired KPMG and Greenberg Traurig to conduct the audit.  The Times article notes that "in July 2011″ the firms "had identified significant weaknesses in all three subsidiaries."

The Times article next rightly states as follows.  "The audit was uncovering the kinds of problems and oversights that plague many global corporations."

The Times article notes that Wal-Mart has spent $99 million on its FCPA review in the past nine months.

To learn more about Wal-Mart's potential FCPA scrutiny and what it says about this current era of FCPA enforcement, see my article "Foreign Corrupt Practices Act Enforcement As Seen Through Wal-Mart's Potential Exposure."

Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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