Lawmakers: Wal-Mart probe explores money laundering

by The City Wire staff ([email protected]) 98 views 

Wal-Mart Stores Inc. is coming under increasing pressure from U.S. lawmakers who say the company’s internal corruption investigation is widening beyond Mexico and may include new allegations of tax evasion and money laundering.

U.S. Reps. Elijah Cummings, D-Md., and Henry Waxman, D-Calif., said in a letter to Wal-Mart CEO Michael Duke that Wal-Mart de Mexico SAB, Latin America’s largest retailer, may have engaged in money laundering and tax evasion in Mexico. The letter also said the investigation is looking at five nations besides Mexico “where risk was greatest.”

The two legislators wrote a letter in June to Wal-Mart, accusing the retailer of not providing documents and access to witnesses that they had previously requested. In a second letter, dated yesterday (aug. 14), they said they were giving the Bentonville-based company a final opportunity to respond to requests for information.

“To date, you have not produced a single document we have requested,” they said in the letter.

Wal-Mart is accused of violating the U.S. Foreign Corrupt Practices Act by systematically bribing Mexican officials to open stores more quickly in the country. The bribes allegedly took place as recently as 2005. The scheme was first brought to light in April by the New York Times.

Lorenzo Lopez, a Wal-Mart spokesman, declined to comment.

The lawmakers asked for documents detailing any internal findings related to the corruption probe and explaining how Wal-Mart is changing its protocols for handling such issues.

“In addition, we have obtained internal company documents, including internal audit reports, from other sources suggesting that Wal-Mart may have had compliance issues relating not only to bribery, but also to ‘questionable financial behavior’ including tax evasion and money laundering in Mexico,” the lawmakers wrote in the letter.

Cummings is a ranking member of the House Oversight and Government Reform Committee, and Waxman is a ranking member of the House Energy and Commerce Committee.

Wal-Mart rose 0.6% to $74.45 today at the New York close. The shares have gained 25% this year.