Ethics Complaint filed April 22, 2013 with Walmart’s Global Ethics Office
Gerardo (Gerry) Paladan, Walmart Associate and OUR Walmart member, Federal Way, Washington
It’s been one year since the April 22, 2012 edition of The New York Times made public the alleged wide-scale use
of bribery in Mexico. The story revealed that from 2003 to 2005, over $24 million in bribes were handed out to
advance the company’s plans in Mexico. But in the year that's passed since this information was uncovered,
Walmart is showing no evidence of acting more responsibly or ethically in their business practices in Mexico or
around the globe. CEO Mike Duke and Board Chair Rob Walton, who ignored or covered up concerns, have even
been financially rewarded with promotions, increased compensation and stock awards despite their inaction in
addressing ethics violations.
Today, we join concerned communities around the world in calling on Walmart to end its unethical business
practices and recommit to its Statement of Ethics, which explicitly prohibits the giving of bribes. The company
has known about these issues since 2005, but to date no one has been held accountable. We are calling for
Walmart’s Board of Directors to remove CEO Mike Duke and Chair Rob Walton for their failure in leadership in
preventing the alleged bribery, trying to cover it up and taking no meaningful action to rectify internal problems
that led to this egregious abuse of power.
Since April 2012, more details on Walmart’s unethical practices in Mexico have come to light. A second New
York Times article published on December 18, 2012 indicated that top executives in Walmart de Mexico were
not only aware but authorized the practice of using bribes to get stores built. In addition, leaders of the
company are alleged to have used their power to advance personal interests and quash investigations into
alleged corruption, in direct contradiction of the company’s own Statement of Ethics.
The April Times story outlined that in 2005 a whistleblower alerted the company to this practice, eventually
prompting top executives in Bentonville to became involved in the decision on how to respond to the
allegations. But rather than notifying shareholders or the U.S. government of possible violations of the Foreign
Corrupt Practices Act (FCPA) or undertaking a full investigation, leaders in Bentonville decided that the best
course of action was to close down the investigation.
Mexico isn’t the only country where Walmart’s behavior has raised suspicions. Possible FCPA violations have
been identified in Brazil, India and China, and the company is now saying that it will lose money as a result.
As a Walmart Associate I’m familiar with the company’s ethics guidelines, particularly the section on nonretaliation – which outlines how Associates who raise concerns will be protected from retaliation. But when I
suffered an injury due to broken equipment and raised concerns about safety in my store, my manager told me
that I was paid to work – not mouth off and complain. Unfortunately, my experience isn’t unique. In many
instances when my fellow Associates have raised concerns, company management has retaliated against us for
speaking out. It is particularly frustrating that when Associates raise legitimate concerns, the reaction is swift
and unjust, while justice has been all but absent in the case of the Mexican bribery scandal.
At the 2012 shareholder meeting Rob Walton said, “We will not tolerate violations of the FCPA, or ethical
wrongdoing of any kind. If violations of the law or company policies occurred, appropriate action will be taken.
This is our commitment as a Board – and my personal commitment – to each of you, our associates and
shareholders. We will do the right thing the right way. You have my word on that.”
http://news.walmart.com/events/walmart-shareholders-meeting-2012-webcast
If Walmart is serious about fulfilling that promise, then it’s time for a change of course. It’s time to hold those
involved in the Mexico bribery and cover-up accountable for their violations of the law and the company’s own
Statement of Ethics. And it’s time to put an end to the unethical practices that put shareholders, local
communities, and the company’s future at risk.