Walmart Pays $283 Million As Subsidiary Pleads Guilty To Corrupt Practices

Walmart Inc. has managed to reduce to $282.7 million, the $600 million penalty demanded by the U.S. Department of Justice (DOJ) to settle a lawsuit charging its Brazilian unit with violating U.S. bribery laws.

WMT Brasilia S.a.r.l., an indirect wholly-owned subsidiary of Walmart, pleaded guilty Thursday for causing a books and records violation of the Foreign Corrupt Practices Act (FCPA). The guilty plea was part of the plea deal with the DOJ, Walmart confirmed in a statement.

Walmart Inc., its parent firm, agreed to a non-prosecution agreement (NPA) with the DOJ over violations of the FCPA, according to documents filed at the U.S. District Court for the Eastern District of Virginia.

WMT Brasilia also admitted to making improper payments worth $527,000 to an intermediary, and said these payments were falsely recorded on the company’s financial records. Its employees recorded those payments as going to construction companies despite knowing the money was to be paid to a former Brazilian government official.

This official helped Walmart secure a construction permit. Walmart earned more than $3.6 million in profit from stores built by these construction companies, said court documents.

Along with the DOJ, the U.S. Securities and Exchange Commission (SEC) also investigated allegations Walmart also paid bribe money to government officials in Mexico, China and India.

The total amount of $282.7 million Walmart agreed to pay consists of the following: a $137.96 million penalty to the DOJ; $144.69 million in disgorgement of profits plus interest to the SEC; and a $4.3 million penalty, including forfeiture, against WMT Brasilia to be deducted from the amount owed by Walmart under the NPA.

As part of the NPA, DOJ will not prosecute Walmart if, for a period of three years, it meets its obligations set forth in the agreement. Walmart also consented to an administrative order with the SEC to resolve SEC findings related to violations of the FCPA’s books and records and internal controls provisions.

Walmart said this global resolution ends all FCPA-related investigations or inquiries by the DOJ and the SEC into Walmart and its subsidiaries.

“We’re pleased to resolve this matter,” said Walmart President and CEO Doug McMillon.

“Walmart is committed to doing business the right way, and that means acting ethically everywhere we operate. We’ve enhanced our policies, procedures and systems and invested tremendous resources globally into ethics and compliance, and now have a strong Global Anti-Corruption Compliance Program. We want to be the most trusted retailer, and a key to this is maintaining our culture of integrity.”

In November 2017, Walmart disclosed it had set aside $283 million for the DOJ and SEC resolution. Walmart said the penalty won’t materially impact its financial results.