Wal-Mart’s U.S. Expansion Plans Complicated by Bribery Scandal

[M II A II R II K]

Wal-Mart’s U.S. Expansion Plans Complicated by Bribery Scandal


April 29, 2012

By STEPHANIE CLIFFORD and STEVEN GREENHOUSE

Read More: http://www.nytimes.com/2012/04/30/bu...imes&seid=auto

In Los Angeles, a Wal-Mart building permit is getting a once-over. In New York, the City Council is investigating a possible land deal with the retailer’s developer in Brooklyn. A state senator in California is pushing for a formal audit of a proposed Wal-Mart in San Diego. And in Boston and its suburbs, residents are pressuring politicians to disclose whether they have received contributions from the company. All of it in the past week.

Wal-Mart has worked hard in recent years to polish its reputation and give elected officials, community groups and shoppers a reason to say yes to their stores, especially as it pushes aggressively into big — and historically hostile — cities. Now, the revelation of a bribery scandal involving the retailer’s Mexican subsidiary is giving critics a new reason to say no. “Overnight, the environment has shifted in terms of Wal-Mart’s strategy in big cities, in winning over local politicians,” said Dorian T. Warren, a political science professor at Columbia who is writing a book about Wal-Mart’s efforts to expand into Chicago and Los Angeles.

The New York Times disclosed last week that Wal-Mart had found credible evidence that its Mexican subsidiary — the retailer’s biggest foreign operation, which opened 431 stores last year — had paid bribes and that an internal inquiry into the matter had been suppressed at corporate headquarters in Arkansas. The Mexican government has begun investigations into the retailer’s dealings with local officials. Felipe Calderón, the Mexican president, said last week that he was “indignant” about the company’s behavior, and some elected officials across the United States joined the chorus of outrage. In other countries where Wal-Mart operates, including China and India, the reaction was slower, but analysts said they expected the company to face significant new obstacles.

Wal-Mart last week took several steps intended to demonstrate it was serious about getting to the bottom of the bribery scandal — and preventing anything like it happening again — but the damage from the revelations could be problematic, analysts said. “It gives more power to critics, and that might prove to be the biggest negative of all,” said David Strasser, an analyst with Janney Montgomery Scott.

In the United States, Wal-Mart has largely exhausted places in suburban and rural areas to build new stores, and is focusing on many of the nation’s biggest cities. That means a lot of red tape for approvals. In the last few years, Wal-Mart has smoothed the way with donations to politicians and local nonprofit organizations, and arguments that it helps economic growth and provides healthy groceries. Steven Restivo, a Wal-Mart spokesman, said the bribery investigation would not affect those expansion plans. “We remain committed to opening stores all across the U.S., including large cities,” he said.

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[CyberEric]

Good, another reason to rally against Walmart.

[1Boston]

Hopefully walmart can't recover from this and has a slow and quiet death so no one remembers it.

[M II A II R II K]

It could also hamper their attempts to get into India, which wouldn't make too many there too sad as a result.

[llamaorama]

It could also hamper their attempts to get into India, which wouldn't make too many there too sad as a result.

That's an interesting discussion on it's own.

As big box retailers are allowed by governments in the developing world, it will both ruin the livelihood of millions of merchants and shopkeepers, but also improve the real spending power of poorer people who can buy more food(or whatever) for cheaper.

This may be more or less painful depending on if those countries are growing economically and the availability of manufacturing jobs, etc.

Maybe it's also why the world seems to be mostly divided into two kinds of societies: ones with free economies and some controversial but omnipresent redistributive welfare programs, and ones with regulated economies but people are on their own. Think about it, it's hard to find either a perfect meritocratic utopia like in Atlas Shrugged, and conversely China or the Soviet Union was/n't exactly protecting the poor and helpless in reality even if they claimed they were. If you have freedom of opportunity there's freedom to fail, so a safety net makes sense. If your place in society is set and someone else decides you've got all you need, there's no sympathy.

[photoLith]

Originally Posted by 1Boston

Hopefully walmart can't recover from this and has a slow and quiet death so no one remembers it.

So what? If Walmart dies, then some other giant box store will replace it. The cycle cant be broken now.

[mhays]

With their corruption, peasant wages, commitment to sliming their way past every quality, environmental standard, land use standard, etc., these guys are worse than what will likely replace them. And the replacement should be regulated too.

I'm not a costco shopper either, but on a documentary this week it said they average $20/hour, which must be double walmart. They don't push the world into the gutter even while they're not saints on land use or overconsumption.

[vid]

CostCo probably has far fewer employees per store.

[UpNorthMI]

All fine and good points, but the people of Mexico could give two shits less about the bribery. Like most third world countries, the only way to get anything accomplished is to pay off somebody. Here we just pay off politicians and call it a super pac. There it is a just part of the way things get done, by everyone for just about any reason.

[JDRCRASH]

Why can't Wal-Mart just make a long steady transition to urban-style stores?

[Centropolis]

rockets fall on rocket falls

[M II A II R II K]

http://6degreesofwalmart.com/

Following allegations of foreign bribery in Mexico, news quickly surfaced that Wal-Mart had participated in an extensive lobbying campaign to amend the Foreign Corrupt Practices Act (FCPA), which prohibits U.S. companies from offering fees or gifts to foreign officials to advance corporate interests.






Wal-Mart has a long history of failing to protect workers' rights and opposing their right to collectively bargain. Since 2009, Wal-Mart has been involved in more than 3,000 federal court lawsuits. Hundreds of these lawsuits are from workers claiming racial, sexual, religious or other bias in pay, promotions and other treatment.[8] Wal-Mart's participation in national business associations mirror these efforts to curtail workers rights and limit their ability to collectively bargain.






Arizona's Support Our Law Enforcement and Safe Neighborhoods Act (SB 1070) has attracted national attention as one of the broadest and strictest anti-illegal immigration measures in the U.S. The controversial law has produced a flurry of legal challenges over its constitutionality and compliance with civil rights laws.






Large corporations use tax subsidies and loopholes in federal and state tax codes to avoid paying their fair share. Wal-Mart is no exception, utilizing its army of tax lawyers Wal-Mart has found loopholes to insure it pays the lowest possible taxes.[8] Furthermore, through its involvement in business and special interest lobbying groups, Wal-Mart has sought to maintain these tax loopholes against outside pressure to level the playing field.

[Rizzo]

Originally Posted by JDRCRASH

Why can't Wal-Mart just make a long steady transition to urban-style stores?

Seems like they're trying. I'll give them credit on these in Chicago





Source: Me