U.S. Asks Wal-Mart to Pay $300 Million to Settle Bribery Probe
May 09 2017 - 6:16PM
Dow Jones News
By Aruna Viswanatha and Sarah Nassauer
U.S. authorities have asked Wal-Mart Stores Inc. to pay $300
million to settle a five-year investigation into foreign bribery,
according to a person familiar with the talks, a penalty far less
than what the Obama administration had sought.
The settlement offer comes after Wal-Mart spent nearly $840
million on its internal investigation of the bribery allegations
and upgraded compliance operations, according to financial
filings.
Wal-Mart hasn't yet agreed to the offer, this person said, but
negotiations are in the final stages. Spokesmen for Wal-Mart and
the Justice Department declined to comment. Bloomberg News earlier
reported Wal-Mart was close to resolving the probe for $300
million.
As the Obama administration prepared to leave office late last
year, the Justice Department and the Securities and Exchange
Commission attempted to reach a settlement with the world's largest
retailer of as much as $1 billion.
Those talks stalled over several issues beyond the amount
Wal-Mart would pay, including the retailer's ability to accept food
stamps in its 5,300 U.S. Wal-Mart and Sam's Club stores. A company
can lose its right to government contracts after pleading guilty to
a federal crime.
Wal-Mart is one of the country's largest recipients of
food-stamp spending, taking in about 18% of the money disbursed
through the Supplemental Nutrition Assistance Program. It is
unclear how the government's current offer would resolve this
issue.
The Justice Department launched its investigation as a series of
New York Times articles described alleged bribes Wal-Mart paid in
Mexico to obtain permits to build stores there, potential
violations of the Foreign Corrupt Practices Act. That spurred a
wide-reaching investigation of Wal-Mart employee behavior across
the globe, including in Brazil, China and India.
Wal-Mart now employs about 2,300 workers in ethics and
compliance operations, according to a company report.
At $300 million, the proposed settlement wouldn't be among the
largest such penalties. The top 10 largest FCPA settlements are
$365 million or larger, according to cases compiled the FCPA Blog,
a trade publication.
In December, Brazilian construction giant Odebrecht SA signed
the largest anticorruption settlement and agreed to pay between
$2.6 billion and $4.5 billion to authorities in Brazil, the U.S.
and Switzerland.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com and Sarah
Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
May 09, 2017 18:01 ET (22:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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