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June 14, 2012

Lawmakers Spur Walmart To Expand Its Probe of Alleged Corruption Beyond Mexico: Discount Retailer Will Now Probe Into FCPA Practices in Brazil and China — And Congressmen Suggest Walmart's CEO Expand Probe Further

Two congressmen are keeping Walmart on its toes with regard to the corruption allegations levied against the retailer after bribery practices were uncovered in Mexico this spring — and their actions are spurring Walmart to expand an investigation of alleged corrupt business practices beyond Mexico to other nations, including China. Democrats Henry Waxman of California and Elijah Cummings of Maryland, ranking members of two House committees, said the retailer's outside counsel was retained to look into anti-corruption policies and operations in Brazil and China, as well as Mexico. In a letter to Walmart chief exec Michael Duke this week, the congressmen also said the attorneys recommended that the probe be expanded to include operations in India and South Africa. The letter blasted Duke for failing to hand over relevant documents and not allowing Walmart employees to brief the committee. In particular, the congressmen want to hear from Maritza Munich, a former general counsel of Walmart's international division, who the committee called "a key figure in the investigation," CNNMoney reports. "Although you stated during a recent shareholders meeting that Walmart is 'doing everything we can to get to the bottom of the matter,' you have not provided us with the information we requested," wrote the congressmen. "Walmart's actions to date significantly inhibit our ability to investigate these allegations." Walmart spokesman David Tovar, in response to questions about the letter, said his company has expanded the investigation. "We're initiating a worldwide review," Tovar said. "They list five [countries.] We're looking at every country in which we operate," he added, according to the CNNMoney report.

The congressmen accuse Walmart of communicating through its lawyers, rather than its officials, in regard to "potential violations of the Foreign Corrupt Practices Act (FCPA)." The investigation stems from allegations that Eduardo Castro-Wright, the former CEO of Walmart de Mexico and former head of Walmart U.S., orchestrated $24 million worth of alleged bribes in Mexico to streamline construction projects, dating from 2005, CNNMoney.com reports.

But Tovar said his company has, in fact, been cooperating with Congress as it investigates the world's largest retailer's compliance with the international corruption law. "We take compliance with the FCPA very seriously," said Tovar. "We're cooperating with the ongoing investigation and we'll continue to assist the congressional investigation," he added, reports CNNMoney writer Aaron Smith.

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