Bribery Case at Wal-Mart May Widen

May 18, 2012

The New York Times on May 17, 2012 released the following:


As Wal-Mart reported higher-than-expected first-quarter earnings on Thursday, it suggested in a regulatory filing that the scope of an internal investigation into bribery accusations had widened beyond the retailer’s subsidiary in Mexico.

The company reported that the audit committee of the Wal-Mart Stores board was examining possible violations of the Foreign Corrupt Practices Act and “other alleged crimes or misconduct in connection with foreign subsidiaries, including Wal-Mart de México.” It was the first public disclosure by the company that the internal inquiry could involve additional subsidiaries, though none was named.

The regulatory filing also confirmed that Wal-Mart is the subject of investigations by the Securities and Exchange Commission and the Justice Department. And while Wal-Mart said in December that it did not expect the bribery accusations and their fallout to hurt the company, it backed away from that assertion on Thursday.

“Although the company does not presently believe that these matters will have a material adverse effect on its business, given the inherent uncertainties in such situations, the company can provide no assurance that these matters will not be material to its business in the future,” the filing said.

A Wal-Mart spokesman, David Tovar, declined to comment further on the filing.

The disclosures on Thursday caught some analysts by surprise. Faye Landes, an analyst with Consumer Edge Research, wrote in a note to clients that the new information was “dramatic.”

“They can’t leave any stone unturned,” Ms. Landes said. “Now they have to make sure that everything is squeaky clean.”

The New York Times reported last month that Wal-Mart had found credible evidence that its Mexican subsidiary had paid bribes and that an internal inquiry into the matter had been suppressed at corporate headquarters in Arkansas.

Also on Thursday, two congressmen who are looking into Wal-Mart’s activities in Mexico said they had internal company documents that showed the company’s former general counsel had pushed for an investigation of some transactions in Mexico before she resigned in 2006.

Representatives Elijah E. Cummings and Henry A. Waxman reiterated a request that Wal-Mart brief them on the bribery accusations, and asked that Wal-Mart authorize the former general counsel to speak to them. Mr. Tovar said Wal-Mart had already scheduled an initial briefing with the congressmen’s staffs, and was working to schedule another session.

Egan-Jones Proxy Services, which advises institutional investors, recommended on Thursday that shareholders vote against re-electing Wal-Mart’s chief executive, Michael T. Duke, and a board member, H. Lee Scott Jr., in June because of accusations that they were involved in the bribery case.

In a call with investors, Mr. Duke said, “We are working aggressively to determine what happened, and we will take appropriate action if violations of the law or our policies occurred.” Asked in a call with reporters to give an update on the timeline of the investigation or expectations about June’s shareholder meeting, Mr. Tovar, the Wal-Mart spokesman, declined to comment.

Wal-Mart also warned in Thursday’s filing that its reputation could be affected by the bribery scandal, with inquiries from the media and law enforcement authorities affecting the “perception among certain audiences of its role as a corporate citizen.”

Possible outcomes include enforcement actions that could lead to fines or criminal convictions; judgments against the company from shareholder lawsuits; and costs from the government’s investigations, from its own investigation and from defending itself against the lawsuits, the filing said.

The company “cannot predict at this time the ultimate amount of all such costs.” Further, the inquiry could involve some senior executives, and that could “could impinge on the time they have available to devote to other matters relating to the business.”

David Strasser, an analyst for Janney Capital Markets, said in a note to clients that the market was getting comfortable with the impact of the bribery accusations. He said he believed the investigations would “be more about fines and perhaps personal repercussions, but the broader implications for the Wal-Mart franchise will remain somewhat modest.”

The new disclosures on Thursday came as Wal-Mart reported its quarterly results, which were higher than analysts had expected.

Profit rose 10 percent to $3.74 billion, or $1.09 a share, 5 cents per share more than analysts had expected. Revenue increased 8.6 percent to $112.3 billion.

In the United States, sales at stores open at least a year rose 2.6 percent versus the same quarter last year. That was the best quarterly same-store sales result in three years.

Charles M. Holley Jr., the chief financial officer, said in a call with reporters that while shoppers continued to be on tight budgets, they were responding to the wider array of merchandise and cheaper prices that Wal-Mart had been bringing in.

“We still see what we call the paycheck cycle,” he said, “where the customer has the cash and will spend money early when they get the paycheck, and as the paycheck runs out, it gets a little harder.”

Wal-Mart said its business in the United States was particularly strong in areas like hunting and fishing and in home and outdoor goods.

Apparel, which the company has long struggled with, posted its first positive comparable-store sales figure in six years. Mr. Holley said that the company’s focus on cheap prices had helped, and that women’s workout apparel, jeans and underwear were popular. “We sold a lot of underwear in the first quarter,” he said.

The company’s Sam’s Club warehouse unit posted a 5.3 percent increase in same-store sales, excluding fuel, helped by extra marketing efforts for its grocery business.

Internationally, sales grew 10.9 percent, adjusted for currency fluctuations.

Mr. Holley said that the Mexico investigation had so far not affected plans for store openings in Mexico and its overseas growth expectations.”


Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at or at one of the offices listed above.

Taking Aim at the Foreign Corrupt Practices Act

May 1, 2012

The New York Times on April 30, 2012 released the following:


The Foreign Corrupt Practices Act has been at the center of a tug of war between business interests and federal authorities.

The United States Chamber of Commerce has led efforts to change the law, in response to ramped up prosecutions by the Justice Department and the Securities and Exchange Commission in the last few years. While the proposed changes are described as a means to “improve” the law, they would also make it more difficult to pursue cases.

But the revelations in The New York Times that Wal-Mart Stores squelched an investigation into bribery at its Mexican subsidiary may impel prosecutors to be even more forceful in applying the law and put legislative efforts to change it on the back burner.

Business leaders have long contended that the law is overly broad and too aggressively enforced, while federal authorities view it as a powerful means to police the overseas conduct of American companies.

The Foreign Corrupt Practices Act was adopted in 1977 in the wake of revelations of bribery of foreign officials by more than 400 United States companies. This was a time when misconduct by the Central Intelligence Agency and the Watergate scandal were still fresh in the public consciousness, so efforts to clean up business and government were paramount.

The law contains two parts: it prohibits bribing a foreign official for the purpose of “obtaining or retaining business,” and it requires that public companies file proper financial statements and maintain a system of internal controls.

The books and records provision is enforced regularly, most recently in the conspiracy prosecution of a former managing director of Morgan Stanley for hiding deals with a Chinese official. The Justice Department and the S.E.C. share authority over enforcement, which means companies have to deal with two sets of investigators whenever a potential violation comes to light.

For the first 30 years or so after its enactment, the antibribery portion of law was used sporadically. Only a handful of cases were brought each year against companies, almost always ending in settlements involving a modest fine, and even fewer involved individuals.

Prosecutors have now made enforcement of the law a priority, and more industries have been caught up in investigations. The Justice Department has filed cases against pharmaceutical manufacturers, like Pfizer, for dealings with state-run health care programs, and is reported to be pursuing an investigation into the dealings of American movie studios in China.

The push for changes in the statute coincided with its expanded enforcement as companies now have to deal with the vagaries of the law once viewed as a mild nuisance at best.

At a hearing before a House subcommittee last year, a former attorney general, Michael B. Mukasey, represented the United States Chamber of Commerce in supporting changes to restrain use of the law because “more expansive interpretations of the statute may ultimately punish corporations whose connection to improper acts is attenuated or, in some cases, nonexistent.”

The revelations about Wal-Mart’s conduct, however, shows the law’s importance as an anticorruption tool for policing large businesses.

Tinkering with the law could send the wrong signal to other countries about the importance of curbing bribery. Support among Congressional leaders for revisions that would make it harder to prosecute companies may dissolve if they could easily be portrayed as being soft on bribery — something that would become fodder for an opponent in an election campaign.

The Justice Department’s increased enforcement of the Foreign Corrupt Practices Act has also included more charges against individuals rather than just companies. But that shift has also led to problems. In one of its most prominent cases, prosecutors dismissed charges against 22 defendants from the “Africa Sting” case in which the government used an undercover informant to entice suppliers into agreeing to pay bribes to receive contracts with an African government, all of which was fictitious.

The charges foundered over issues regarding the conduct of the informant that raised questions about whether individuals were unfairly enticed into the deals. Federal juries could not reach a verdict after two trials of a group of the defendants, and the Justice Department decided to forgo further prosecutions.

As James B. Stewart wrote in a New York Times column last week, there has been a noticeable absence of corporate employees charged with violations even when it appears that the company condoned foreign bribery.

But while companies have been much more amenable to settling investigations rather than challenging charges in court, prosecuting individuals faces a number of hurdles. Corrupt payments are often made by foreign intermediaries acting on behalf of the company, many of whom have no ties to the United States. It does little good to charge someone when there is not a realistic prospect that the person can be brought to the United States.

Pursuing a case against senior executives for turning a blind eye to questionable payments can be quite difficult. The notion that management “had to be aware of what was going on” may well be true in some instances, but that perception alone is not enough to prove any individual corruptly and willfully violated the Foreign Corrupt Practices Act, which is the required legal intent standard for a conviction.

Foreign bribery can takes years to come to the government’s attention, so the five-year statute of limitations can preclude prosecuting those involved in the payments. As I discussed in an earlier piece, the Wal-Mart payments to Mexican officials from 2003 to 2005 probably cannot be pursued against individuals at the company unless something more recent occurred.

Interestingly, in the Dodd-Frank Act, Congress extended the statute of limitations for securities fraud crimes to six years, apparently leaving out violations of the Foreign Corrupt Practices Act. Even that small increase in the time available to pursue a case can help prosecutors in putting together charges. Congress can alter the limitations period for any offense, and the Justice Department may point to Wal-Mart to ask Congress to extend the time frame in which foreign bribery charges can be filed.

The investigation of Wal-Mart has brought the Foreign Corrupt Practices Act to the attention of the public in a way not seen since the 1970s scandals that led to its adoption. Congress may find it politically impossible to adopt changes to the statute that would arguably make it more difficult to pursue cases as long as the allegations of foreign bribery by a leading American company remain in the headlines.”


Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at or at one of the offices listed above.

Bribes Without Jail Time

April 30, 2012

The New York Times on April 27, 2012 released the following:


As reported in a front-page article in The New York Times this week, the Wal-Mart Mexican bribery scheme has all the makings of a gripping criminal prosecution: millions of dollars in illegal payoffs to Mexican government officials and evidence of a cover-up scheme that went all the way to Wal-Mart headquarters in Bentonville, Ark.

And the Foreign Corrupt Practices Act, which outlaws the bribery of foreign officials by American executives, carries stiff penalties for those convicted: fines of up to $5 million and up to 20 years in prison.

So who’s likely to go to jail?

No one, if past precedent is any guide.

Exhibit A for any lawyer representing potential Wal-Mart defendants would probably be last year’s bribery case against the huge poultry, pork and beef producer Tyson Foods. Like Wal-Mart, Tyson employees bribed Mexican officials. When Tyson officials learned about the scheme, they covered it up. Even worse, they tried to keep the bribes going by changing the nature of the illegal payments. The scheme ultimately reached into Tyson’s executive suite in Springdale, Ark., with the company’s president of international operations and its chief administrative officer among those involved.

Last year, the Justice Department charged Tyson with conspiracy and with violating the Foreign Corrupt Practices Act. Tyson didn’t contest the facts, agreed to resolve the charges with a deferred prosecution and paid a $4 million criminal penalty. The company paid an additional $1.2 million and settled related regulatory complaints that it had maintained false books and records and lacked the controls to prevent payments to phantom employees and government officials.

It’s axiomatic that people, not corporations, commit crimes. So what happened to the Tyson executives involved? Not only did the Justice Department and the Securities and Exchange Commission take no action against them, but the executives involved weren’t even named.

As I reported in a column last year, the highest-ranking Tyson executive involved was Greg Lee, then its chief administrative officer. Tyson announced in April 2007, the same month it disclosed its conduct to the government, that Mr. Lee would retire early. There was no mention of any bribery investigation. John Tyson, the company’s chairman, praised his “dedicated service to the company over the last three decades,” and the company paid Mr. Lee nearly $1 million and awarded him a 10-year consulting contract worth an additional $3.6 million. Mr. Lee was entitled to be reimbursed for his country club dues, to the use of a car and to “personal use of the company-owned aircraft for up to 100 hours per year,” according to his employment agreement. (Mr. Lee didn’t respond to my messages seeking comment.)

Wal-Mart’s Mexican bribery scandal, and the question of what to do about it, reached company headquarters in September 2005, according to the account by David Barstow of The Times. This was little more than a year after Tyson executives covered up their scandal. Given the subsequent outcome of the Tyson case, is it any wonder that Wal-Mart executives’ first reaction would have been to sweep the matter under the rug? Only after Mr. Barstow started asking questions did the company turn itself in to the Justice Department, no doubt hoping for something like the resolution its Arkansas neighbor received.

Neither the Justice Department nor the S.E.C. would comment on the Tyson case, now closed, or the continuing Wal-Mart investigation.

Both agencies have stepped up their investigations and prosecutions of Foreign Corrupt Practices Act violations in recent years, and they now have units dedicated to foreign bribery cases. Last year, the S.E.C. brought cases against 14 companies and 12 people. Major companies caught up in recent bribery investigations include Johnson & Johnson, Halliburton and Siemens. Just this week, the former Morgan Stanley executive Garth Peterson pleaded guilty to violating the act while based in Shanghai. Morgan Stanley wasn’t charged, and it appears to have been a model corporate citizen. It fired Mr. Peterson and didn’t mince words. It turned over evidence to the government and disclosed the inquiry in an S.E.C. filing.

Despite this laudable effort, an outcome like that in the Tyson case — in which a company admits the facts and pays a fine but no individuals are charged — hardly seems isolated. According to research by Qi Chen, working with Prof. Andrew Spalding at the Chicago-Kent College of Law at the Illinois Institute of Technology, 37 of the 57 companies involved in bribery enforcement actions from 2005 to 2010 settled bribery accusations and had no related individuals charged.

One of the most vocal critics of the failure to charge individuals has been the former Republican-turned-Democratic Senator Arlen Specter, who held hearings on the issue in 2010 while chairman of the Senate Judiciary Committee. “Criminal fines are added to the costs of doing business,” Mr. Specter said then. “Going to jail is what works to deter crime.”

This week he told me: “I’ve been speaking out on this issue everywhere I can. The Justice Department takes the view that deferred prosecutions are sufficient to deter bribery. But it obviously hasn’t worked. Maybe the Wal-Mart case will finally impel them to take a different view.”

That is not to say that no one has gone to jail for violating the Foreign Corrupt Practices Act. Albert J. Stanley, former chairman and chief executive of KBR, the global contracting concern that was once a subsidiary of Halliburton, was sentenced in February to 30 months in prison for a scheme to bribe Nigerian authorities in return for contracts to build liquefied natural gas facilities. Frederic Bourke, co-founder of the handbag maker Dooney & Bourke, was sentenced to one year and a day for his involvement in a scheme to bribe officials in Azerbaijan in a failed effort to take over the state-owned oil company. Last year, eight former executives of the German technology giant Siemens were charged with bribing Argentine officials in what the Justice Department characterized as “a stunning level of deception and corruption.” But the defendants live abroad and may never be successfully prosecuted in the United States.

I couldn’t find a case of an executive at a major American-based, publicly traded company who was successfully prosecuted and sent to jail. A majority of individual prosecutions appear to involve people of relatively limited means who are in smaller or privately held companies or who are officials in foreign companies based outside the United States, where there is little likelihood of a conviction. A typical case seems more like that of Gerald and Patricia Green, two Hollywood producers who were convicted of bribing the head of the Bangkok film festival. The couple was sentenced to six months in prison followed by six months of home confinement in 2010. At the time, Mr. Green was 83 years old and suffered from emphysema.

“It does appear that executives from U.S. public companies are not being pursued with the same vigor as individuals at private companies or who work on their own,” said Richard L. Cassin, founder of the firm CassinLaw and author of “Bribery Abroad” and “Bribery Everywhere.” “There are still a lot of enforcement actions against corporations where there are no indictments against individuals. The percentage of criminal cases against individuals is still very tiny.”

He suggests this may be partly because corporate executives, especially those with prominent lawyers whose fees are paid by their employers, are less likely to settle. And the Justice Department has suffered some embarrassing setbacks in a few recent litigated cases against individual defendants.

Asked for comment, the department provided this statement: “Prosecuting individuals who violate the law is an important part of our F.C.P.A. enforcement efforts. Since 2009, the Justice Department has secured convictions against 36 individuals for F.C.P.A.-related offenses. In all cases, we thoroughly review the facts and the law to determine whether criminal charges against individuals can be brought.”

An S.E.C. spokeswoman said: “We’re committed to holding individuals accountable. Where we have the evidence to bring cases against individuals, we do so, and we view that as a high priority.”

According to both the Justice Department and the commission, an important aspect of assessing a company’s cooperation is how it disciplines any executives found to be involved in a bribery scheme. Wal-Mart issued a statement this week saying: “We will not tolerate noncompliance with F.C.P.A. anywhere or at any level of the company. We are confident we are conducting a comprehensive investigation, and if violations of our policies occurred, we will take appropriate action.”

I asked Wal-Mart who, if anyone, involved in the bribery allegations had been disciplined, but I didn’t get a response. Eduardo Castro-Wright, who was described in The Times’s article as the driving force in the bribery conspiracy, is the former head of the company’s Mexican operations and remains at Wal-Mart, where he became vice chairman in 2008. Wal-Mart announced last September that Mr. Castro-Wright would retire on July 1, and he has since emphasized that his decision to retire had nothing to do with any bribery allegations.

In a send-off that echoes Tyson’s praise for Mr. Lee, Wal-Mart’s chief executive, Mike Duke, said: “Eduardo has made many contributions at Wal-Mart, beginning in Mexico and continuing until today. He has been a strong advocate for our customers and in every assignment has brought passion and commitment to the job.”

Mr. Castro-Wright isn’t a member of Wal-Mart’s board, but this week he resigned from the board of the insurer MetLife. “I now must focus my energy in spending personal time with my family and in protecting my good name,” he said, and confidently predicted that “these outside distractions will be resolved favorably within the next several months.”

But Wal-Mart may not turn out to be another Tyson. Professor Spalding told me “a lot has happened” since 2010, which is when he compiled the statistics on individual prosecutions. “The Department of Justice is making a strong push to hold individuals liable,” he said.

“Despite some recent embarrassing losses, the department must be looking for some high-profile prosecutions. Wal-Mart is about as high profile as you can get. This case could turn out to be a poster child for individual liability.””


Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment


To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at or at one of the offices listed above.

Weighing the Legal Ramifications of the Wal-Mart Bribery Case

April 24, 2012

The New York Times on April 23, 2012 released the following:


The United States government puts a premium on corporate cooperation in foreign bribery cases, relying on companies to conduct thorough internal investigations and voluntarily disclose any wrongdoing.

Indications that Wal-Mart Stores may have taken steps to keep an internal investigation from digging deeper into $24 million in questionable payments — and later promoting an executive who may have been implicated in them — may affect how the government decides to proceed against the giant retailer.

Wal-Mart first disclosed in December that it had started “a voluntary internal review of its policies, procedures and internal controls pertaining to its global anticorruption compliance program.” That review was the result of reporting by The New York Times about bribery by Wal-Mart de México to secure permits and approvals to build new stores.

The company’s disclosures did not give any information about where the foreign bribery issues had arisen, only that the focus was on whether “permitting, licensing and inspections were in compliance with the U.S. Foreign Corrupt Practices Act.” Wal-Mart said it had informed the Justice Department and the Securities and Exchange Commission about the internal investigation, and the company issued a statement in response to the Times article that its outside advisers “have and will continue to meet with the D.O.J. and S.E.C. to report on the progress of the investigation.”

Companies caught up in investigations of foreign bribery often seek to exert a measure of control over the flow of information by meeting early and often with government investigators in an effort to establish credibility regarding the scope and integrity of the investigation, usually sharing the results as quickly as possible. If corporate counsel can demonstrate its reliability, then the Justice Department and the S.E.C. are more likely to accept the findings of the internal investigation without conducting an independent review.

Cooperation is also important because it is a significant factor for prosecutors in deciding how to resolve a case. The Justice Department has allowed companies to pay reduced fines and avoid a guilty plea to criminal charges by entering into deferred or nonprosecution agreements because they came forward voluntarily and readily provided information.

While Wal-Mart may be angling for the same type of resolution, it is questionable whether being prodded by The Times’s reporting to start an internal investigation shows that it took affirmative steps to address a problem. The company had dropped its earlier investigation, and likely would have let that sleeping dog lie if not for potential media scrutiny.

The Times article also raises two significant red flags for investigators that may cause them to take a more aggressive approach in the case. First, the Mexican bribery involved senior management at the subsidiary, not just low-level employees operating on their own. One factor cited in the Justice Department guidelines for deciding whether to charge a business organization is the “pervasiveness of wrongdoing within the corporation,” and the most important consideration “is the role and conduct of management.”

Second, Wal-Mart’s own investigators raised questions about $16 million in “contributions” and “donations” to local governments, but there was no further review of those payments. Simply ignoring these types of transfers is sure to raise questions for the government about whether the company can claim it had an effective compliance program back in 2005 when these issue first came to light, another important consideration in determining whether to file charges.

Wal-Mart also pointed out twice in its statement that the payments in Mexico took place more than six years ago. That may be an effort to explain why it may be unable to conduct a complete investigation. Whether the excuse will fly with the Justice Department and the S.E.C. remains to be seen.

The time lag may present a problem if the Justice Department wants to prosecute any individuals for bribery of Mexican officials. The statute of limitations for a violation of the Foreign Corrupt Practices Act is five years. The limitations period can be extended if the government was seeking evidence from a foreign country, but that does not appear to be the case because Wal-Mart only disclosed the issue in late 2011. So charges related to conduct before 2007 may be lost due to the passage of time.

One way the government can try to avoid the statute of limitations is to charge a conspiracy, which only requires that one act in furtherance of the criminal agreement take place within the last five years. If active steps by Wal-Mart executives to cover up payments to foreign officials occurred in 2007 or later, then prosecutors might be able to pursue that charge.

The statute of limitations will not work as much in Wal-Mart’s favor, however, because the company is required to annually file financial statements covering the previous five years. It is likely that questionable payments were not properly reflected on the company’s books and records. So even if no charges can be brought for any foreign bribery, at a minimum it could be charged with violating the accounting provisions of federal securities law for not properly disclosing the payments made by Wal-Mart de México.

Another potential avenue that prosecutors are likely to investigate is obstruction of justice under 18 U.S.C. § 1519, which was added by the Sarbanes-Oxley Act. If there is evidence that anyone at the company covered up or destroyed records “with the intent to impede, obstruct, or influence” a future investigation, that could be grounds for a criminal charge.

One factor working against Wal-Mart is that the Justice Department may be looking for a prominent case to demonstrate the need for vigorous enforcement of the Foreign Corrupt Practices Act as a response to recent criticisms of the law. The Chamber of Commerce, which hired a former attorney general, Michael B. Mukasey, to lobby for changes to the statute, has argued that aggressive application of the law has caused companies to shy away from overseas investments for fear of being scrutinized.

The Times article makes it clear that Wal-Mart appeared to be more concerned with protecting its fast-growing Mexican operation than with thoroughly investigating allegations that corruption helped fuel its success. Prosecutors can make an example of Wal-Mart to show that the Justice Department will not tolerate foreign bribery, even by a leading American company. That would bolster the argument that revising the statute would send the wrong message to the rest of the world.

The payments at issue are comparatively paltry, perhaps totaling less than $50 million, although that number could increase as the internal investigation moves forward. The ultimate cost to Wal-Mart for the legal and accounting fees for the investigation, along with any monetary penalties the Justice Department and the S.E.C. may seek, will probably far exceed the bribes.”

18 U.S.C. § 1519


Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment


To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at or at one of the offices listed above.