Wal-Mart’s Mexican unit hit by bribery scandal

NEW YORK — Wal-Mart Stores confirmed that it is investigating its operations in Mexico for possible violations of the U.S. law that prohibits bribery overseas. The acknowledgement came in response to a lengthy article by The New York Times on Saturday that alleged the giant discounter first learned of allegations of "widespread bribery" by its workers in the country in 2005 and that top executives subsequently covered them up.

In a report by Reuters, legal and retail experts said that the allegations, if proven true, could badly impact Wal-Mart and its management for years, resulting in steep financial penalties paid to U.S. authorities and the departure of some key executives.

The Times story alleged that Wal-Mart had found evidence of more than $24 million in illicit payments to Mexican officials to help obtain permits for new stores to help speed up openings in that country. Top Wal-Mart officials in the United States learned of the bribery allegations, the Times reported, but the company never reported the matter to U.S. or Mexican authorities.

"If these allegations are true, it is not a reflection of who we are or what we stand for," Wal-Mart spokesman David Tovar said in a prepared statement. "We are deeply concerned about these allegations and are working aggressively to determine what happened."

According to the Times, current Wal-Mart CEO Mike Duke and former CEO Lee Scott, who still sits on the chain’s board, were among senior executives allegedly aware of the situation.

Wal-Mart said it has met voluntarily with the Justice Department and the Securities and Exchange Commission to discuss the case.

The expansion of Wal-Mart de Mexico, mainly in the last decade, left the world’s largest retailer with about 20% of its stores in Mexico.