Walmart has agreed to pay $282 million to settle a seven-year bribery investigation by the U.S. government concerning certain payments that were made to foreign officials in places like Mexico and China.
The Securities and Exchange Commission said on Thursday that it had charged the world's largest retailer by sales with violating the Foreign Corrupt Practices Act (FCPA), which makes it unlawful for companies to bribe foreign officials.
In a news release, the SEC said that Walmart allowed third parties in Mexico, China, Brazil and India to make payments to foreign government officials without ensuring that they complied with the FCPA. “Walmart valued international growth and cost-cutting over compliance,” said Charles Cain, who heads the FCPA unit at the SEC. “The company could have avoided many of these problems, but instead Walmart repeatedly failed to take red flags seriously and delayed the implementation of appropriate internal accounting controls.”
Walmart has agreed to pay $144 million to settle the charges brought by the SEC and another $138 million to resolve parallel criminal charges brought by the U.S. Department of Justice.
Walmart said that the payments in question took place prior to 2011 and that it has cooperated with government, conducted an internal investigation and taken "extensive steps" to establish a compliance program that guards sufficiently against corruption. It estimated the total costs of these efforts at $900 million.
“We’re pleased to resolve this matter,” said Walmart CEO Doug McMillon in a statement. “Walmart is committed to doing business the right way, and that means acting ethically everywhere we operate."
Walmart said the settlement would not materially impact its financial results. In November 2017, the company disclosed that it had accrued approximately $283 million to resolve the matter with the DOJ and SEC.
The settlement is essentially pocket change for a company that pulled in sales of over $500 billion in 2018. It is also insufficient to land Walmart on a list of companies who have paid the ten biggest FCPA fines. Energy company Petrobras still takes the cake after a whopping $1.78 billion settlement last year.
The settlement follows a New York Times investigation, published in 2012, which found Walmart had made suspicious payments to government officials in Mexico to gain approval in zoning decisions, nab permits and more in its pursuit of new store openings. When executives at the company's headquarters learned what was going on, they reportedly shut down the internal investigation and refrained from reporting the activity to regulators.