If you’ve ever wondered how Walmart came to be such a massive international commerce juggernaut, the answer may be simpler than we thought: bribery.
The New York Times reported Sunday that Walmart may have paid more than $24 million in bribes to Mexican officials to expand its presence in the country. But the story doesn’t end there. Top Walmart executives may have known about the illegal activity and chosen to prevent a company investigation.
Bribing foreign officials is illegal thanks to the Foreign Corrupt Practices Act, a 1977 law designed to prevent American businesses from committing bribery and other illegal acts worldwide. So it appears as though one of America’s largest businesses may be heading to court to answer for criminal charges. It would be nice to see corrupt big business finally held accountable. Unfortunately for justice and average citizens everywhere, the law doesn’t have teeth.
In the 35 years the law has existed, the U.S. Justice Department has brought companies to court twice — and lost both times. Most companies settle out of court. Criminal allegations can be expensive, after all. But the law also contains a loophole, a bit of wording that makes it especially difficult to prosecute companies that try to bribe their way to success. The law prohibits corporations from committing bribery, but allows them to make “facilitating payments” to officials. These are payments to local officials that facilitate things such as, say, getting a building permit more quickly.
In other words: bribes.
It’s likely that, even if the government does investigate, Walmart will settle out of court. It certainly has the money. Of course, some lawmakers may hesitate to push for an investigation at all. Walmart gave $1,323,193 in campaign contributions, the American equivalent of the “facilitating payment,” in the 2010 midterm elections. It was about an even split between parties: 51 percent to Republicans, 48 percent to Democrats.
But Walmart may not get away unscathed. Its stock has already dropped 5 percent since the story was published. The stock market isn’t that concerned with the company’s ethics. Getting caught bribing foreign officials is just bad for business.
America isn’t very good at holding major corporations accountable when they do something illegal. We’re not likely to push too hard for Walmart’s prosecution. Like Goldman Sachs, Walmart may be too big to fail. And even if some Walmart executives lose their jobs, they can always find work at other companies, or as Washington lobbyists: The revolving door between business, government and the lobbying industry guarantees that. And they’ve already proven they know how to get things done in government.
What’s more likely is that Walmart’s dropping stock prices will mean cutbacks and layoffs for ordinary workers. This is just one more piece of evidence that we as a nation need to start holding big business accountable with the same scrutiny as Washington. Americans need to demand that the “facilitating payments” loophole be closed, and pressure lawmakers to start pushing for more accountability in the corporate world. We wouldn’t let our government get away with bribery, why should Walmart?
Max Bartlett can be reached at [email protected]