
Walmart Pleads Guilty After a Decade of Bribes - rrego
https://www.nytimes.com/2019/06/20/business/walmart-bribery-settlement.html
======
rayiner
I suspect people cynically demanding that CEOs be put in jail haven’t really
dug into the facts of this or other FCPA cases. Holding the CEO liable for
employee misdeeds is like holding teachers responsible for teenagers getting
into fights or having sex. It’s a strong moral position to take (holding
teachers accountable), but it’s wholly impractical and unfair.

In a company with a million employees, it’s guaranteed that hundreds if not
thousands are doing things that are illegal. That’s just statistics applied to
human nature. When the company is multi-national the problem is worse. Conduct
like bribery or tax evasion that is condemned in the US is socially accepted
in many other countries. When some store manager in Mexico bribes an
inspector, the CEO of Wal-Mart has absolutely no idea that it happened. You
can probably go several layers down before you find someone who knew.

The touchstone of criminal law is a guilty mind. When someone’s conduct is
mharmful, we hold them liable for monetary damages. But only where there is
personal moral culpability do we impose criminal sanctions. It’s the
difference between wrongful death and murder. Ordinary negligence, and
criminal negligence. This is an easy, bright line rule, and shouldn’t be
compromised for anything.

~~~
StillBored
From the article:

"But even as employees frequently raised alarm, the company’s top leaders did
little to prevent Walmart from being involved in bribery and corruption
schemes."

Which means the "top leaders" knew of the problem, and choose to ignore it. It
would be a different story if they put real effort into self policing and
there was evidence they pushed the guilty contractors/etc but again:

"The plea agreement, which was technically related to the company’s improper
record-keeping, ... Federal regulators said Walmart looked the other way as
subsidiaries on three continents paid millions of dollars to middlemen who
helped the company obtain permits and other government approvals from July
2000 to April 2011."

Which sounds more like a coverup to me.

As an individual citizen, if I intentionally failed to file my taxes properly,
report crimes I knew of, or even fire a housekeeper or other low level
employee I knew had been committing crimes that benefited me you can be sure I
would be getting more than the equivalent of a parking fine.

That is why people are demanding someone be held responsible. It seems those
that are reaping the rewards and knew of the crimes are simply being given a
free pass.

~~~
rayiner
So the part right before your quote says: “For more than a decade, Walmart
used middlemen to make dubious payments to governments around the globe in
order to open new locations, _United States prosecutors and securities
regulators said_ in a settlement agreement on Thursday.”

The parts you quote are the NYT reporting the prosecutor’s allegations as
fact. But the passage you quoted also explains everything you need to know
about why nobody went to jail.

“The plea agreement, which was technically based on the company’s improper
record keeping....”

Wait—so Wal-Mart did all these bad things (they must have, the NYT reported
them as fact), but the plea agreement is “technically” based on “improper
record keeping?”

If you actually read the facts section of the SEC submission linked from the
article, it’s a real snooze fest. There were issues here and there, people
were fired, several rounds of compliance programs were instituted, etc. But
little to substantiate the _prosecution narrative_ recounted as fact by the
NYT. There is a reason Wal-Mart spent a billion dollars investigating this
case but the government agreed to settle for less than $300 million—once
prosecutors dug in, there wasn’t much of a story there.

I’ll also add:

> As an individual citizen, if I intentionally failed to file my taxes
> properly, report crimes I knew of, or even fire a housekeeper or other low
> level employee I knew had been committing crimes that benefited me you can
> be sure I would be getting more than the equivalent of a parking fine

The IRS’s response to people who intentionally don’t file tax returns—unless
the conduct is really outrageous—almost always is to just tell them to file,
and pay the deficiency with interest. Except in special circumstances, such as
lawyers reporting on other lawyers, ordinary individuals don’t have an
obligation to report crimes they’re aware of. Finally, unless it can be argued
that you encouraged your housekeeper to commit crimes, or somehow facilitated
them, I don’t think there would be anything illegal about not firing him
either. Like, you probably can’t criminally prosecute someone for accepting
gifts from someone they know is a drug dealer and purchased the gifts with
ill-gotten money.

~~~
StillBored
But that is how this works, the Government has a hard time proving intent
without a smoking gun. The Walmart execs are smart enough not to incriminate
themselves with any emails/phone calls. So the government has a fairly strong
case, but Walmart gets to plea agreement which wipes one of the main pieces of
evidence (effectively the bookkeeping coverup) in exchange for paying the fine
and closing the case.

Both sides are happy, no one at walmart goes to jail, they pay some trivial
fine, and the prosecutors get a raise and a bullet point on their resume. The
public gets to see justice in action...

~~~
rayiner
If you don’t have good evidence of intent, you don’t have “a fairly strong
case.” Intent is the lynchpin of criminal law, especially when you’re trying
to hold someone liable who didn’t do the actual illegal act. You know what
gets you a gold star as a prosecutor? Putting people in prison. The guy who
put Raj Rajaratnam in prison is now a partner at one of the top law firms.

~~~
snlacks
You know there's a difference between what is most likely true and what's
provable in court, right? It's perfectly reasonable to see all the facts, many
of which aren't permitted to be considered by a jury, and then say, "wow,these
laws are messed up, they let the powerful people get away with crimes. We
should change that and hold them accountable."

Likewise, it's not logically consistent to say " well, yeah it looks really
bad but because a court can't prove it, I'm going to advocate they they are
morally innocent. " Moral and legal aren't the same thing.

~~~
oarsinsync
> Moral and legal aren't the same thing.

Correct, but you shouldn't go to jail for immoral behaviour.

> It's perfectly reasonable to see all the facts, many of which aren't
> permitted to be considered by a jury, and then say, "wow,these laws are
> messed up, they let the powerful people get away with crimes. We should
> change that and hold them accountable."

The IRS does this, and it's horrible, but the accountability comes in the form
of an increased tax obligation and not jail time.

Going to jail for doing something that was legal, but has become illegal after
the fact, isn't something that benefits anyone but the ruling class, and isn't
something that I would advocate for.

------
StillBored
So, now its the US governments chance to hold out its hand.

These are so trivial for a company like Walmart, and no-one is being
individually held responsible. So it just looks like an official bit of us gov
bribery, just like the fee's to avoid the security line at the airport. Cloak
it in a bit of legal mumble jumbo and the us government gets its payout too.

Frankly though too, these foreign anti-bribery laws seem so antiquated. Every
year I have to sit through training for them as part of the corporate hand
waving (we can't be responsible we trained our employees). Yet really it pales
in comparison to the damage actually being done, and in the cases where the
officials will actually take bribes just puts us based companies at a
disadvantage to other foreign companies willing to pay the bribes. Especially
in cases where the companies from other countries will waltz in with
"infrastructure improvements", "cheap loans" whatever...

~~~
drivingmenuts
What comprises the “mind” of a corporation? I would argue that the board and
senior officers make up that mind and it’s their failure to demand or instill
strong ethics allowed for these crimes to occur.

~~~
StillBored
In this case, yes that appears to be what happened. The low level employees
reportedly raised the issues.

From TFA:

"But even as employees frequently raised alarm, the company’s top leaders did
little to prevent Walmart from being involved in bribery and corruption
schemes."

Which is why no-one is going to jail, if it were just a low level employee you
can bet they would be charged/fired and jailed. But since it went high in the
mgmt chain, they likely can't just pin it on someone. The records likely got
looked at, discussed off the record, and then got ignored without anyone's
fingerprints on them.

------
salmo
I'm sorry, It's an unpopular opinion to hold, but the overseas bribery thing
is a ridiculous standard to hold. [These opinions are just mine, and while I
have them as opinions I would never act on them as a representative of my
company, not that I would ever have the chance, and I don't work for Walmart]

Over the course of human history, bribery has been the norm. I would dare to
say that today, by population, it is the norm. It has obvious dirtiness in the
US and Western Europe. And the US and Western Europe have tried to force this
view on other nations, which have created laws that they don't pursue or
prosecute.

But criminalizing actions performed in another country based on morality in
the US feels equally dirty. I don't mind the US handing evidence over to
another sovereign nation for them to deal with, but prosecuting a crime on
another countries soil over something that may not be seen as a crime in that
country just doesn't make sense.

I know, Walmart is "evil". It's southern US, and hits rural towns, takes
advantage of US laws at scale (which would have been taken advantage of in
small chunks that added up to the near total), etc.

But, Amazon which is worse on the Walmart issues (low wages, overworked
employees, stressed vendors, killing jobs) and then adds on to it traditional
"antitrust" problems of vertical integration, and somehow gets a pass in our
community because they're a tech company and "we" shop there. Can we get past
the rhetoric and move on to the actual arguments?

~~~
tigershark
So, just to understand, would you be against prosecuting pedophiles that go
abroad in a country where having underage sex is not a crime to rape children?
Over the course of human history it was perfectly normal to have sex with
underage people, so it seems a rather fitting comparison.

~~~
stickfigure
That becomes a way more interesting hypothetical if you strip away the
emotionally charged language.

Let's say a twenty-year-old Californian goes to Canada, meets a 16-year-old,
and they have sex. This is (according to wikipedia, don't rely on me for legal
advice!) illegal in California and legal in Canada.

Do you think someone should go to jail?

~~~
tigershark
I was clearly speaking about pedophiles. Do you know the difference between
pedophilia and ephebophilia?

------
mruts
I live in Africa and pay bribes on a weekly and sometimes daily basis. It’s
hard to do anything at all without bribes here, and I am certainly sympathetic
of it.

People who don’t have experience with 3rd world countriss often think it’s a
big deal bribing someone. But it’s not, it’s a simple fact of life. I don’t
really see anything wrong with a company doing it either.

In fact, I kind of like paying bribes. Unlike in the US, I don’t really have
to worry about doing anything illegal. I can have weed in the car, I can have
out of date permits, I can really just do anything I please. I have money, so
it’s all good.

Of course, it’s worse if you’re poor. But then again, in America being stopped
by the police when you’re poor is probably worse.

~~~
blub
Can't tell if joking or antisocial. Especially the line about "I can really
just do anything I please. I have money, so it's all good."

Obviously if everyone with money can do whatever they want, the trust in
institutions plummets and more and more people start cheating, so one ends up
with a society of cheaters who think it's normal to bribe.

~~~
onetimemanytime
Yea but not everyone has money, and those with money are saying that
corruption is in a lot of way better for them.

In some places, you can be drunk, or even kill someone and the cops will let
you go for $$. If they take you in, it's not too late, just the price
increases, the prosecutor and judge want their cut. A lot of mafia people have
sentences cut or charges thrown out.

------
Zarathustra_
I will preface this by saying I am not defending Wal-Mart. However, it is
somewhat a cost of doing business in many countries. I have spoken with close
friends from both Brazil, Mexico, and India, and it is very much part of how
business is done there. I have also heard from numerous acquaintances that
this is the case in China, including people who did business there. This does
perhaps not justify Wal-Mart's behavior, but it provides some context and
reminds us that companies (even those the size of Wal-Mart) have few options.
Besides, promising to bring jobs to a certain area leads to more tax revenue,
which in turn leads to fatter pockets for politicians. We delude ourselves to
pretend we are perfect.

However, America has the Foreign Corrupt Practices Act, which does mean this
could be more complicated. We recognize that someone else jumping off a bridge
does not justify our doing so. And though we still have problems at home, we
do try to police them. When a corruption scandal breaks, politicians usually
are forced out of office; compared to many other places, this is good.

~~~
hinkley
I worked at a place where the anti-bribery training covered corner cases where
US law not only allows for bribery but you can write it off as a business
expense. I was pretty shocked by this.

> Regarding payments to foreign officials, the act draws a distinction between
> bribery and facilitation or "grease payments", which may be permissible
> under the FCPA, but may still violate local laws. The primary distinction is
> that grease payments or facilitation payments are made to an official to
> expedite his performance of the routine duties he is already bound to
> perform.

~~~
Zarathustra_
Interesting, I wasn't aware of that. That seems somewhat like a reasonable
loop hole, though I can easily see how it could be abused. I appreciate the
information.

------
jedberg
Question: What does the United States gain by disallowing US companies to
bribe government officials outside the United States? From a purely logistical
standpoint, it seems like it would make more sense for those other countries
to police these activities, or for the US to give the information they have to
those governments to fine the companies as they see fit in their own
countries.

Why does the US fine US companies for illegal behavior outside the US? Is it
just moral reasons? Or is there a diplomatic reason for it? Or a treaty that
requires us to do so?

~~~
rayiner
Moral and economic reasons. Without making it illegal for US companies to do
it, there would be strong competitive pressures for companies to engage in
bribery abroad, and honest US companies couldn’t compete.

Stepping back and thinking about the bigger picture, the FCPA is an example of
a law that enforces economically beneficial morality. One of the things that
makes America a good place to live, and economically successful, is that it’s
not a bribe-based society. Bribery is a tax on economically productive
activity, and it’s good for the economy as a whole to stamp it out.

------
lasky
I try to be careful with what is defined as bribery.

It’s very easy to prance around on a high horse and cast out moral judgements
when you’ve never had to open offices internationally.

It sounds like no doubt some pockets were unapologetically made fat. It also
sounds like they didn’t do a very good job of hiding it. I wonder if that’s
because their then line of thinking was “paying to pay” is simply normalized
in business.

As I think about where the boundary is drawn for bribery, it’s interesting to
see “offering cars and computers to governments” is framed as bribery, while
somehow what local municipalities are demanding from giant tech co’s (ie Mt
View / Google) is not.

------
hatboat
You obviously can't jail a corporation as you would a person in this
situation. However, a person would absolutely be subject to asset forfeiture
and proceeds of crime law in such a situation - do the same here.

A paltry fine such as this is never going to prevent this behaviour. Determine
as part of the investigation any revenue the company made from engaging in the
behaviour and take it off them, in addition to the fine.

------
jammygit
Is 280M just a speeding ticket? I wonder if they are met ahead or behind
because of the policy.

~~~
nerdponx
It's just a speeding ticket. They are ahead.

~~~
ghufran_syed
It's 3.67% of that number - if you were a software engineer making $100,000 /
year in the US, it would be like paying a speeding ticket of $3670, which is
an order of magnitude greater than most speeding tickets in the US

~~~
throw_away
$7.659B is the quarterly number, so divide your fine by four -> $917, which
would still be quite an expensive speeding ticket, but within the max possible
fines in my state.

~~~
hanniabu
It kind of would be like getting a ticket when you account the total cost with
your insurance going up and that staying on your record for ~4 years.

------
frequentnapper
Just a fine of ~280 mil, no jail time for any responsible. If corporations are
people, why can't we jail walmart?

~~~
khazhou
Corporations aren't people. You're misrepresenting _Citizens United_

~~~
googlemike
How should one interpret it then?

~~~
eindiran
From the Wikipedia page: "Although the decision does not address "corporate
personhood," a long-established judicial and constitutional concept, much
attention has focused on that issue."[0]

"How should one interpret [the case] then?" Recognize that Citizen's United is
_not_ about corporate personhood, and actually read what the case was about.
The number of times I've heard people making snarky remarks about Citizen's
United without having read anything about the case is amazing.

In the US, corporate personhood is about:

(1) Corporations having equal protection under the law as persons (ie the 14th
amendment applies to corporations).

(2) Coporations having the same rights as persons to draft and enforce
contracts, making them "legal entities". This is related to (3).

(3) "Person" as a concept applies to associations of people rather than just
individuals; associations of individuals includes corporations. See here: [1]

None of these things were decided in Citizen's United and further, it had no
legal bearing on the case law surrounding these things.

Instead Citizen's United was about whether a particular law violated the 1st
Amendment. Specifically the law prohibited corporations from releasing media
60 days before an election if it could impact the results of that election by
reaching 50,000 or more people in the electorate. But the 1st Amendment makes
no distinction between e.g. newspaper companies and other corporations, so the
majority opinion was that this law and other laws that limit speech of
associations of people infringe on the 1st Amendment.

From the opinion: "If the First Amendment has any force, it prohibits Congress
from fining or jailing citizens, or associations of citizens, for simply
engaging in political speech."

[0]
[https://en.wikipedia.org/wiki/Citizens_United_v._FEC](https://en.wikipedia.org/wiki/Citizens_United_v._FEC)

[1]
[https://en.wikipedia.org/wiki/Legal_person](https://en.wikipedia.org/wiki/Legal_person)

~~~
geofft
That's all well and good, but 'frequentnapper did not actually say anything
about _Citizens United_ in the first place.

If corporations are people, we should jail them. If corporations aren't
people, why do they have legal rights independent of the individual, jailable
people who constitute them?

~~~
Gibbon1
Seriously corporations have the right to pay fines with other peoples money
instead of being jailed or executed. People of flesh and blood don't have
those rights.

Compare Walmart committing bribery to me attempting to bribe my way out of
speeding ticket.

~~~
will_brown
>Compare Walmart committing bribery to me attempting to bribe my way out of
speeding ticket.

But that is how the ticket industry works...you get the ticket, hire a lawyer,
the lawyer “negotiates” a deal to plead no contest in exchange for no points
and a lower $ penalty or at your option take traffic school ( a local private
company that no doubt “bribes” its way in to those chushy exclusive county
government contracts) and the court will dismiss your ticket like it never
happened.

~~~
Gibbon1
Read harder. You try to bribe a cop, you get arrested and you go to jail. If
you have a buttload of money you can avoid jail. If not, you serve time. Then
you are branded a criminal, forever.

Unlike Walmart which gets to stay a corporation in good standing. And it's
executives who suffer no personal harm.

~~~
will_brown
Read harder? Don’t resort to ad hominem attacks because you don’t know or
understand the law.

Walmart allegedly bribed foreign officials they didn’t try to bribe the “cops”
for bringing the bribery charges. Although you can’t distinguish the legal
difference, it doesn’t mean there isn’t one.

Executives do go to jail quite regularly for bribery and companies can and are
judicially dissolved also.

For example I was in Las Vegas during the Shot Show when the FBI rolled right
into the convention center and arrested executives/VPs of Smith and Wesson for
bribing an undercover FBI agent, posing as a African delegate, for a large
government contract.

Or how about the VW executives arrested (and convicted) for the emissions
scandal?

Or the drug company Executives and CEO recently charged with conspiracy to
distribute controlled substances and defraud the US?

------
Bostonian
In a corrupt country, paying bribes to get licenses and permits is often
necessary for the copmany and beneficial for the citizens. India was known for
having a "License Raj", which has done far more to keep India poor than any
foreign company.

~~~
cbush06
Thank you.

------
ajhurliman
Somehow I just don't see this as a scandal, bribery is common in those
countries and it would be out of place to _not_ bribe officials to get permits
if everyone else is.

------
neilv
Does the US government offer any support to US companies that are tempted to
engage in bribery overseas (other than attempting to level the playing field,
among US companies, by outlawing any of them doing it)?

That sounds potentially very delicate, for a variety of reasons, and
interesting.

------
cbush06
I don't see the problem. Overseas, in many third-world and developing
countries, bribery is how business gets done. If you don't participate, you
don't do business.

------
JoeAltmaier
Strange - WalMart used to be hell on bribes, years ago. The WalMart Engineer
that visited our site would put a quarter on the counter when taking coffee
from the free machine - because it could mean his job to appear to take any
freebies whatsoever from any vendor/supplier! How the mighty have fallen.

------
chacha2
Top 7 comments, with the exception of the 4th, all defending Walmart. The
levels of bootlicking on this site can be too much for me to read at times. If
Walmart was a tech company I would have only assumed this was their doing but
it's nice to know the community provides this service free of charge.

------
droithomme
I wonder if any of these payments were a fraction of a percent of the
donations made to political candidates in the US?

------
ebg13
> _Walmart was able to negotiate a lower fine after President Trump, who had
> previously criticized the Foreign Corrupt Practices Act, took office._

Can anyone explain a reason why someone who isn't a cad might not agree with
the FCPA (ie. for reasons that aren't "money good, ethics bad")? This isn't a
dig at Trump. I just don't understand the law well enough to know how angry I
should be.

~~~
Consultant32452
I will just play devil's advocate. Sometimes different cultures have very
different ideas about what is an ethical way of doing things. If you're
passing judgement on Walmart here, I think you're also passing judgement on
Brazilian culture. Of course, you're welcome to do so, and I might even agree
with you. But if you want to fine Walmart for doing things the "Brazilian way"
while operating in Brazil, then I think if you are going to be a principled
person you must also advocate for trade sanctions or other barriers to doing
business with Brazil since you think their way of doing things is naughty. I
hope you're prepared for a long battle though, because once you get done
fussing at the Brazilian people and their culture you've got a very, very long
list of other countries you need to be prepared to harass.

~~~
tdeck
That assumes corruption exists in these countries because people are OK with
it, but that doesn't square with everything I've read about corruption. It
exists because corrupt systems are difficult to dismantle.

By analogy, imagine someone from outside the US making the argument that it's
"just our culture" that makes it OK for a lobbyist to walk into a senator's
office with a $20,000 check in hand ready to discuss policy. That's a
situation almost nobody is happy with here - it's not a "cultural difference"
but a difference in how power structures have been built up over time through
a concerted effort by very small groups in a larger society.

~~~
Consultant32452
If the people in power are abusive in some way, then advocate sanctions or
something. Fining Walmart because a Brazilian Walmart employee living and
working in Brazil greased few palms to get building permits seems like a
fool's errand.

------
anbop
With no personal punishment for the execs, they’re probably gearing up for
Decade #2 as I write this.

------
jgalt212
Someone please pass a law making it impossible to charge corporations with
crimes. People commit crimes not limited liability ownership structures.

------
evolve2k
The fish rots from the head.

------
malloreon
If your company is too big to keep its own employees from committing crimes,
it's too big.

~~~
harryh
No company bigger than 100 people is capable of such a thing. Do you seriously
think that companies larger than 100 people should not exist?

~~~
umanwizard
I’d argue that no company bigger than 1 person is capable of such a thing.

~~~
harryh
I kind of agree, but I was being generous with 100.

------
nefitty
I tried reading this in incognito and on outline and neither worked. Oh well.

~~~
jonmc12
fyi, Chrome 76 in beta with undetectable incognito mode.
[https://twitter.com/paul_irish/status/1138471166115368960](https://twitter.com/paul_irish/status/1138471166115368960)

~~~
winkeltripel
shiny, thanks!

------
fallingfrog
“Culture is the foundation of everything we do at Walmart. We define culture
as our values in action..

Service to the customer

Respect for the individual

Strive for excellence

Act with integrity”

-Wal Mart’s horseshit values statement, the same as the value statement of every other corporation. Why does every company bother doing this again?

~~~
pmiller2
Pretty much every corporation only has one value: make money for execs and
shareholders. Everything and everyone else is secondary.

~~~
hanniabu
Everything else is a facade

