On Saturday, The New York Times published an extraordinary article that has set the anti-corruption world on fire. According to the Times, Walmart de Mexico engaged in a massive bribery campaign to win market share in Mexico, and "paid bribes to obtain permits in virtually every corner of the country." 

Perhaps even more troubling, the company's legal department received reports of the corruption, and allegedly conducted an investigation that found hundreds of suspect payments totaling more than $24 million, and also evidence that Walmart de Mexico's top executives knew of, and concealed, the payments from Walmart executives in the U.S. The person leading the investigation recommended that Walmart expand the investigation but, according to the Times, Walmart's leaders instead chose to shut it down and did not alert the authorities in either the U.S. or Mexico. Not only were Walmart de Mexico's executives not disciplined, its CEO who was said to be "the driving force" behind the bribery was actually promoted to vice chairman of Walmart in 2008. 

Reaction to the article has been swift, and you should expect this story to be huge in the months to come. Already, leading FCPA commentators have weighed in on various interesting angles of the matter:

On his Corruption, Crime and Compliance blog, Michael Volkov of law firm LeClair Ryan writes that the Times' report demonstrates two significant failures in a compliance program: (1) the danger to compliance when senior management and the board are not committed to compliance; and (2) how important it is for senior management to appoint and support an independent investigation. 

The FCPA Professor, Mike Koehler, writes that the most remarkable aspect of the Times investigation is "the conduct (or lack thereof) of Walmart and its top executives upon learning of problematic conduct in its Mexican subsidiary." Koehler says that most companies of Walmart's size and stature "tend to disclose conduct that could implicate the FCPA, particularly given the SEC's position that all payments in violation of the FCPA are qualitatively material, even if not quantitatively material." Walmart did not, nor did it implement effective remedial measures such as disciplining or terminating culpable employees. In short, Koehler says, "Walmart's conduct will not be viewed favorably by the enforcement agencies."

Tom Fox says on his FCPA Compliance and Ethics blog that his first reaction to the alleged bribery scheme at Walmart was that it will be the death knell for any efforts to amend the Foreign Corrupt Practices Act." Fox states that "whether you believe such efforts constitute badly needed reform because the Department of Justice (DOJ) has gone too far in enforcement; that any amendments would water down the FCPA and simply make bribery easier; or perhaps some minor clarification of certain terms and definitions is needed; I think you can kiss all of that good-bye."

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