In its recent 4Q FY2016 earnings call presentation  Wal-Mart disclosed $33 million in Foreign Corrupt Practices Act and compliance related expenses ($25 million for ongoing investigations and inquiries and $8 million for global compliance program and organizational enhancements).
Doing the math, Wal-Mart’s 4Q FCPA and compliance-related costs is approximately $520,000 per working day.
Over the past approximate four years, I have tracked Wal-Mart’s quarterly disclosed pre-enforcement action professional fees and expenses.
While some pundits have ridiculed me  for doing so, such figures are notable because, as has been noted in prior posts and in my article “Foreign Corrupt Practices Act Ripples ,” settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from corporate FCPA scrutiny.
Pre-enforcement action professional fees and expenses are typically the largest (in many cases to a degree of 3, 5, 10 or higher than settlement amounts) financial hit to a company under FCPA scrutiny.
While $520,000 per working day remains eye-popping, Wal-Mart’s recent figure suggests that the company’s pre-enforcement action professional fees and expenses have largely crested as the figures for the past nine quarters have been approximately $470,000, $470,000, $516,000, $563,000, $640,000, $662,000, $855,000, $1.1 million and $1.3 million per working day.
In the aggregate, Wal-Mart’s disclosed pre-enforcement professional fees and expenses are as follows.
FY 2013 = $157 million.
FY 2014 = $282 million.
FY 2015 = $173 million.
FY 2016 = $126 million.
In addition, Wal-Mart disclosed: “in fiscal year 2017, we expect our FCPA-related expenses to range between $100 and $120 million.”
Regardless of what may (or may not) have happened at Wal-Mart approximately 5-10 years ago, it is clear that Wal-Mart has recently become an industry-leader in FCPA compliance best practices.
The significant investment Wal-Mart has made in FCPA compliance should be relevant as a matter of law in the future if a non-executive employee or agent acts contrary to Wal-Mart’s policies and procedures and in violation of the FCPA. (See my article “Revisiting a Foreign Corrupt Practices Act Compliance Defense “).
Compliance defense detractors say that such a defense will promote “check-a-box compliance” and a “race to the bottom.”
There is nothing “check-a-box” about spending approximately $250 million over the past four years on FCPA compliance enhancements nor can one credibly argue that if other companies follow Wal-Mart’s enhancements and approach that this is a “race to the bottom.”
The key policy issue is this.
Wal-Mart has engaged in FCPA compliance enhancements in reaction to its high-profile FCPA scrutiny.
Perhaps if there was a compliance defense more companies would be incentivized to engage in compliance enhancements pro-actively.
A compliance defense is thus not a “race to the bottom” it is a “race to the top” (see here  for the prior post) and it is surprising how compliance defense detractors are unable or incapable of grasping this point.