Sometimes the cover up is worse than the crime itself.
This week’s revelations of Wal-Mart’s alleged attempts to hide widespread bribery of Mexican officials is consistent with the company’s “culture of concealment.”
Media reports link top company managers, including current CEO Mike Duke, and former CEO Lee Scott, with the bribery scandal, and suggest that the company’s top brass were not only intimate with all the lurid details of the Mexi-Gate activities, but they also arranged to kill the evidence by keeping the bad news inside corporate file cabinets.
But Wal-Mart has bitten into an ethical jalapeno too hot for its public relations team to swallow.
Wal-Mart is charged with conducting an internal investigation of its own alleged bribery of local land use officials in Mexico — and then burying the evidence. This is what happens when a corporation is contemptuous of the laws individuals have to follow.
Any CEO who learns of possible corporate wrong doing — and then asks the perpetrators to report on themselves — is as complicit as the lower level employees who passed out the cash. This could only happen in a company that measures wrong-doing by its impact on its financial condition.
Scandal at the top is nothing new to Wal-Mart. In 2005, the upper management at Wal-Mart cut its losses when Tom Coughlin, the former Vice Chairman of Wal-Mart’s board of directors, and CEO Lee Scott’s right hand, man, was charged with embezzling money from the retailer.
Coughlin initially claimed that he used the embezzled funds to pay bribes to union officials not to organize at Wal-Mart locations, and to identify pro-union Wal-Mart workers.
But six months before the Coughlin story broke, he was eased out of the company’s inner circle and into retirement. Lee Scott said at the time, “Tom Coughlin has achieved one of the most successful business careers that anyone could imagine, and he is a great example of what a person can accomplish in the retail field today.” Indeed.
But Coughlin later said in a press statement, “It is obvious that the activity that I was involved in had gone on for a number of years and was in fact acknowledged by members of management even though they did not know the specific details.”
In a recent Security and Exchange Commission report, Wal-Mart admits it “began conducting a voluntary internal review… into whether certain matters, including permitting, licensing and inspections, were in compliance with the U.S. Foreign Corrupt Practices Act.” The company told stockholders “We do not believe that these matters will have a material adverse effect on our business, financial condition, results of operations or cash flows.
That’s how they define morality at Wal-Mart Will it hurt cash flow?
Wal-Mart is the poster child for today’s “1% corporation,” where enormous wealth swells at the top, while more than two million workers in the 99% struggle to pay their bills on Wal-Mart wages, and turn to Medicaid for their health care.
On top of Wal-Mart’s reputation for ruthless behavior towards its vendors and its workers, add its widespread unethical practices in its building growth program.
A company without a conscience is a dangerous player.
Readers are urged to call Walmart’s Global Ethics Office
1-800-WM-ETHIC with the following message
“Oh, I didn’t know that Wal-Mart HAD a global ethics office! Can I be connected to Wal-Mart’s Mexican Ethics Office? If you don’t have an Ethics office in Mexico, just connect me with corporate headquarters in Bentonville.”
Sometimes the cover up can be worse than the crime itself.
