Wal-Mart and Foreign Corruption — Where is the Corporate Responsibility; Where is the Federal Prosecution?

Wal-Mart is the latest multinational corporation now facing allegations of  illegal payments to foreign government officials.

 This case involves questionable corporate payments under both U.S. and Mexican law by Wal-Mart to help expand its stores in Mexico.

 “Wal-Mart Covered Up Bribery, Report Says.Washington Post (April 22, 2012);  “Vast Mexico Bribery Case Hushed Up by Wal-Mart.New York Times (April 22, 2012); “Wal-Mart Corruption in Mexico.” (CNBC video April 23, 2012).

Justice Department prosecutions under the Foreign Corrupt Practices Act(FCPA) have grown greatly under both the Bush the Obama administrations, justifiably so. The U.S. Chamber of Commerce has been aggressive in trying to change the foreign corruption law.

Many others have argued that nothing should be done to make the U.S. less than a leader, as it is now, in the ethical conduct of international business. In fact, they argue that the law should be broadened. “Bribing Foreign Officials.Washington Post (2.27.12).

So the question is will there be a federal investigation and prosecution of these latest allegations of bribery and corruption by a U.S. multinational abroad? And what about U.S. firms in China and elsewhere?

For a good review of FCPA cases (2007-2011), countries and companies involved see my recent collection of charts and excerpts for the USDOJ document (“Lay Person Guide“). Malawer, “Corrupt Practices Prosecutions.” (April 2012). These  documents indicate the absolute aggressive prosecutions by the USDOJ, the extensive extraterritorial application of FCPA, the huge fines and countries involved.

At the bottom of all this is the broader question of the responsibility of corporations in both the U.S. and the global system. It’s really about values and who we are.

 The fact is that most people and governments around the world understand the insidious and dysfunctional nature of bribery at all levels and its terrible impact on economics development.

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (School of Public Policy).
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