Wal-Mart review includes India, South Africa

Lawyers hired by Wal-Mart Stores Inc. to evaluate its anticorruption policies have recommended adding India and South Africa to a review that includes Mexico, Brazil and China, said a letter to the company from congressional Democrats.

The letter, released Tuesday by ranking members of House committees investigating allegations that Wal-Mart bribed officials in Mexico, complained that the company hasn't allowed any of its employees to discuss the matter and hasn't provided requested documents.

On Wednesday, lawyers for the company are scheduled to discuss its Mexico investigation with the committees' staffs, according to the letter, signed by Reps. Elijah E. Cummings (D., Md.) ranking member of the House Committee on Oversight, and Henry Waxman (D., Calif.), ranking member of the Committee on Energy and Commerce.

Greenberg Traurig LLP and Akin Gump Strauss Hauer & Feld LLP, which represent Wal-Mart, referred requests for comment to the retailer.

Wal-Mart confirmed the meeting scheduled for Wednesday and said it continues to brief Congress about the review it began last year of compliance with the Foreign Corrupt Practices Act in every country where it operates.

"We are committed to a full and independent investigation," said David Tovar, a company spokesman. "A thorough investigation will take time; we're in the early stages, [and] it would be inappropriate to comment further on specific allegations or to come to conclusions before the investigation is complete."

Wal-Mart disclosed last December that it had begun an internal investigation into whether some employees violated the Foreign Corrupt Practices Act. The New York Times reported in April that company executives learned in 2005 of allegations of "widespread bribery" designed to smooth the company's rapid expansion in that country, but didn't report the allegations to government officials or conduct an adequate internal probe.

Wal-Mart previously said it was overhauling its compliance practices around the world and that it takes the bribery allegations "very seriously." The company has said it is cooperating with Justice Department and Securities and Exchange Commission probes into the matter.

The company is revising its anticorruption policies to include a procedure for escalating corruption complaints to senior management and the Wal-Mart board's audit committee, the letter said.

Separately, concerns about Wal-Mart's compliance practices were raised in South Africa in a report commissioned by an independent regulator, co-written by Nobel laureate Joseph Stiglitz and submitted last weekend.

South Africa last year approved Wal-Mart's $2.4 billion bid to buy a majority stake in retailer Massmart Holdings Ltd. but appointed a three-person panel to study the effects of the merged entity on local suppliers.

The report, by panel members Mr. Stiglitz and Genesis Analytics Ltd. economist James Hodge, recommends Wal-Mart and Massmart develop a fund that would spend as much as $239 million over the next five to 10 years to enhance local suppliers' capacity and job creation.

The report also raises concerns that Wal-Mart "has gained global market share not just through greater efficiencies…but also through its labor practices and corruption that would and should be unacceptable in South Africa." The allegations in Mexico, it continues, seem "to demonstrate deficiencies in Wal-Mart's internal structures."

A Massmart and Wal-Mart spokesman said the two companies' lawyers are reviewing the report and would respond in writing.

(Published by WSJ - June 12, 2012)