Wal-Mart silenced Mexico bribe inquiry: NY Times

(Reuters) - U.S. retail giant Wal-Mart Stores Inc squelched its own internal investigation of allegations made by a former executive of its subsidiary in Mexico that the Mexican division had orchestrated a campaign of bribery to grab market dominance, the New York Times reported on Saturday.

The paper said in September 2005 a senior Wal-Mart lawyer received an e-mail from a former executive at the company's largest foreign unit, Wal-Mart de Mexico, describing how the subsidiary had paid bribes to obtain permits to build stores in the country.

Wal-Mart sent investigators to Mexico City and found evidence of widespread bribery, but Wal-Mart's leaders then shut down the investigation and notified neither American nor Mexican law enforcement officials, the Times reported.

"We take compliance with the U.S. Foreign Corrupt Practices Act (FCPA) very seriously and are committed to having a strong and effective global anti-corruption program in every country in which we operate," Wal-Mart said in a statement.

The Times reported that the former executive gave names, dates and bribe amounts, adding that he knew so much because for years he had been the lawyer in charge of obtaining construction permits for Wal-Mart de Mexico, or Walmex as the company is known locally.

The Times said the company found a paper trail of hundreds of suspect payments totaling more than $24 million.

Wal-Mart also found documents showing that Wal-Mart de Mexico's top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart's headquarters in Bentonville, Arkansas, the newspaper reported.

The Times said that the company's lead investigator said there was reasonable suspicion to believe Mexican and U.S. laws had been violated and had recommended an expanded investigation, but that instead Wal-Mart's leaders shut it down.

None of Wal-Mart de Mexico's leaders were disciplined, the report said.

Eduardo Castro-Wright, whom the former executive identified as the driving force behind years of bribery, was promoted to vice chairman of Wal-Mart in 2008, the paper said.

Wal-Mart declined to make him available for an interview.

"Many of the alleged activities in The New York Times article are more than six years old," the company said in a statement.

"We are deeply concerned by these allegations and are working aggressively to determine what happened."

(Nivedita Bhattacharjee in Chicago and Will Dunham)