Wal-Mart Critics Pounce on Bribery Scandal
(NEW YORK) -- Wal-Mart's critics say they are not surprised by charges that the giant retailer paid bribes in Mexico to get its way. Some hope the Mexico scandal, which could wind up costing Wal-Mart billions in fines, will cause investigators to re-examine situations in the U.S. where payments or donations by Wal-Mart or its confederates preceded the company's getting permission to expand.
The New York Times reported that Wal-Mart's internal documents show that the company's Mexican subsidiary paid at least $24 million in bribes to Mexican officials to get permits needed for the company's rapid expansion there. The Times also claims Wal-Mart squelched its own internal investigation of the bribes.
Wal-Mart is the biggest private employer in Mexico. In size, its operations there are second only to its operations in the U.S. One out of every five Wal-Mart stores worldwide is in Mexico.
The company's stock has fallen nearly 5 percent since the scandal broke. The Department of Justice has reportedly launched a probe into the allegations.
What Bernard Sosnick, a stock analyst at Gilford Securities, calls the company's "new imbroglio" only confirms what many labor leaders and long-time critics say they have suspected all along: that Wal-Mart's rapacity knows no ethical restraint. Wal-Mart's many critics are lining up to pile on to the company's woes.
"Am I surprised? Of course not," says Al Norman, author of The Case Against Wal-Mart and of the forthcoming Occupy Wal-Mart. He has been dubbed "the guru of the anti-Wal-Mart movement."
"The only thing that surprises me," he says, "is that here you get to see their fingerprints. Usually, when money changes hands, you can't find the moment when it happened."
The company, he contends, has a long history of paying money to remove obstacles to its expansion. He has compiled examples of what he deems as Wal-Mart-related briberies on his website, Sprawl-Busters.com. The claims include situations where citizens testifying at public hearings have accepted cash in exchange for making pro-Wal-Mart statements. In other cases, he claims, groups protesting Wal-Mart expansion have ceased to protest after accepting donations from the company or its partners.
Joseph Hansen, international president of the United Food and Commercial Workers International Union (UFCW), says only two things surprise him about the Mexican revelations: First, the scope of the alleged bribery. Second, "I thought they were smarter than that."
Hansen says that when he first learned of the allegations, "They raised question in my mind about stores approved in the U.S., where zoning laws changed quickly and permits were issued quickly. I think we'll now see people go back and ask questions about that."
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