Mexico Affair Hangs Over Walmart Meeting


Walmart Chairman Rob Walton didn’t mention the company’s Mexico bribery scandal specifically at the company’s annual shareholders meeting in Fayetteville, Ark., today, but the whole mess hung over the gathering like a pallid mist.

And Walton left little to the imagination when he vowed that the $112-billion world’s largest retailers would recommit to “integrity” as one of five “enduring values” that would continue to propel the retailer beyond its upcoming 50th anniversary in July.

“If you work for Walmart, there is no gray area between right and wrong,” Walton said in his remarks, a clear reference to the New York Times investigation that allegedly uncovered that the company’s Mexican operation had orchestrated bribes of $24 million to help it grow quickly and that some company executives had covered it up.[more]

“It’s either the right thing to do or it shouldn’t be done at all,” Walton continued. “We will not accept anything less than integrity.” And he said that Walmart is “working to continuallky strengthen our compliance efforts around the world” and “doing everything we can to get to the bottom of this matter.”

“This matter” of Mexico is not only the focus of an internal Walmart probe but also investigations by the U.S. government and Mexican government agencies. And some major shareholders, such as the California government-pension system, haven’t waited around for the results of these investigations: They planned to vote against certain Walmart board members at the meeting today.

At this point, opposition to Walmart over the Mexico mess won’t accomplish much with corporate governance because the Walton family owns about half the company shares. But it will add yet another broad avenue of complaint against Walmart and its current management, joining strains of criticism over the decades about how Walmart treats its employees, small-business competitors and even the environment. Walmart management, including under current CEO Michael Duke, has addressed each one of these critiques in various ways.

But more important to them in the immediate sense, Walton and his colleagues could report that Walmart’s business in the U.S. and in other international markets is firming up. First-quarter earnings rose 10 percent from a year ago, reflecting better U.S.-store comparisons, international profit growth and continued sales momentum at Sam’s Club. is an increasingly important part of the mix as well. And the company said it soon wil launch a monthly mail-subscription service called “Goodies” that will allow customers to sample new foods not found in Walmart stores. It’ll launch in the next month or so, focusing on packaged foods initially but with the possibility of expanding into other product categories. The monthly subscription price has yet to be determined.

This week, clearing the decks of looming matters before the shareholders’ meeting, Walmart also announced that it is pulling its support from the American Legislative Exchange Council (ALEC), a conservative group that has been targeted by Common Cause and other liberal organizations because ALEC has helped its state-legislator members introduce bills regarding voter registration and Stand Your Ground legislation. Walmart said it regretted that the group hadn’t stuck with its original focus on fiscal matters, although ALEC did recently veer back toward that emphasis after other corporate members including Kraft and Coca-Cola pulled out.

Meanwhile, Walton tried to get Walmart shareholders and employees to focus on those “enduring values” of the company, which, he said, also include opportunity, family and community, purpose and responsibility.

“If we stay true to the foundation that Sam Walton built, we’ll continue to be a better company, a stronger company and a prouder company,” the founder’s eldest son concluded. “And over the next 50 years, there will be no limit to the good we can do in the world.”