The Wall Street Journal: Cummings and Waxman Allege Wal-Mart ‘May Have’ Evaded Taxes, Laundered Money

August 15, 2012
Articles and Columns
The Wall Street Journal: Cummings and Waxman Allege Wal-Mart ‘May Have’ Evaded Taxes, Laundered Money

Two House Democrats slammed Wal-Mart Stores Inc. in a letter to the chief executive, accusing the company of engaging in misconduct beyond the alleged bribery in Mexico and stonewalling an investigation.

The letter, written by Reps. Elijah Cummings (D., Md.) and Henry Waxman (D., Calif.), said internal documents, including internal audit reports, obtained by the lawmakers “from other sources” suggested Wal-Mart “may have had compliance issues relating not only to bribery, but also to ‘questionable financial behavior’ including tax evasion and money laundering in Mexico.”

Wal-Mart didn’t immediately respond to a request for comment. More coverage of the letter is available here and here.

UPDATE: “We want to provide members of Congress with whatever appropriate information we can to help them understand our efforts to address compliance issues.  We have already provided committee staff with two briefings, and we are exploring ways to make additional information available.  We are committed to doing whatever we can to appropriately address their requests, consistent with the ongoing federal investigation,” said Brooke Buchanan, a Wal-Mart spokeswoman, in an email.

The lawmakers slammed the company in the letter for failing to provide any documents they requested and denying them access to witnesses.

“Your actions are preventing us from assessing the thoroughness of your internal investigation and from identifying potential remedial actions,” the letter said.

The lawmakers said in June the company was stalling then as well. They  launched a probe earlier this year into allegations that Wal-Mart bribed its way to opening stores all over Mexico.

Wal-Mart made its first disclosure of a foreign-bribery probe on Dec. 8 of last year. A blockbuster New York Times story in April said it engaged in systematic bribery to fuel growth in Mexico and covered up an internal probe into the matter. The Times report said the Justice Department was informed of the matter only after Wal-Mart learned of the paper’s reporting.

The audit committee of Wal-Mart’s board is investigating alleged violations of the Foreign Corrupt Practices Act in connection with its foreign subsidiaries, including its Mexican unit, and whether prior allegations of such violations were appropriately handled, it said in mid-May in a securities filing.

The retailer and its executives are the subject of more than a dozen lawsuits related to the alleged bribery. The company has said it’s cooperating with investigations by the Securities and Exchange Commission and the Justice Department.  Wal-Mart has said its Mexican unit, Wal-Mart de México S.A.B. de C.V, or Walmex, is cooperating with Mexican authorities conducting probes.

Read the Wal-Mart Letter here.