Walmart Settles FCPA Case For $282 Million

Criminal allegations that Walmart Inc. paid an intermediary in Brazil for help obtaining construction permits were settled June 20th with guilty pleas by the corporation’s Brazilian subsidiary and a payment of a $138 million. There were additional allegations that the company had weak anti-corruption internal controls in Brazil, China and India. The SEC settled those actions through an internal administrative order and didn’t go to court. Walmart paid $144.7 million in disgorgement and prejudgment interest. According to the SEC, from 2000 through 2011, Walmart’s subsidiaries in Brazil, China, India, and Mexico “operated without a system of sufficient anti-corruption related internal accounting controls,” and failed to sufficiently investigate or mitigate known corruption risks and allegations. As a result, Walmart subsidiaries paid third-party intermediaries without reasonable assurances that some of the transactions were consistent with their stated purpose or consistent with the prohibition against making improper payments to government officials. The company first disclosed the FCPA investigation in December 2011. In Mexico, a 2005 internal investigation found that $4 million was paid to an intermediary whom the company’s lawyer said was corrupt. In March 2006, another lawyer for the Mexican subsidiary concluded without evidence that the corruption allegations were unsubstantiated.