Last week, Walmart made several disclosures that touched upon its Foreign Corrupt Practices Act scrutiny and compliance enhancements. The materials were released in advance of Walmart’s May 30th annual meeting.
This post highlights FCPA and related information in Walmart’s Annual Report, Proxy Statement, and Global Ethics and Compliance Report.
In its Annual Report Walmart stated as follows regarding its FCPA scrutiny which was voluntarily disclosed to the DOJ/SEC in November 2011:
“The Company has been cooperating with the agencies and discussions have been ongoing regarding the resolution of these matters. These discussions have progressed to a point that the Company can now reasonably estimate a probable loss and has recorded an aggregate accrual of $283 million with respect to these matters (the “Accrual”). As the discussions are continuing, there can be no assurance as to the timing or the terms of the final resolution of these matters.”
In pertinent part, the Proxy Statement states:
“Since 2011, the Audit Committee has been conducting an internal investigation into, among other things, alleged violations of the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other alleged crimes or misconduct in connection with certain foreign subsidiaries, and whether prior allegations of these violations and/or misconduct were appropriately handled by Walmart. The Audit Committee and Walmart have engaged outside counsel from a number of law firms and other advisors who are assisting in the ongoing investigation of these matters. This investigation continues to result in a significant increase in the workload of the Audit Committee members, and during fiscal 2018, the Audit Committee members received frequent updates regarding the investigation via conference calls and other means of communication with outside counsel and other advisors. In light of this continuing significant additional time commitment, during fiscal 2018, the Audit Committee Chair received an additional fee of $90,000, and the other members of the Audit Committee received an additional fee of $45,000.”
In pertinent part, the Global Ethics and Compliance Report states:
“Reducing Corruption Risk We have also been working to strengthen our anti-corruption program for several years. Corruption hurts the most vulnerable people and communities because it undermines the type of honest, transparent government that is necessary for sustainable growth. We’re continuing to invest in people, processes, and systems to prevent and detect corruption risks, and we are encouraging our business partners to join in the global anti-corruption effort. In the last year we’ve made strategic choices about the companies with which we do business. We train, monitor and audit the third parties we rely upon to interact with government officials and agencies around the world. We also want to select only the most reliable partners for this work. Over the last year we significantly reduced the number of third parties that we use for these services, so we have fewer, stronger business relationships.”
See here for the recent post highlighting the approximate $880 million Walmart has spent on pre-enforcement action professional fees and compliance enhancements since its FCPA scrutiny arose.
See here for the previous guest post by Jay Jorgensen (Walmart Executive V.P. and Global Chief Ethics and Compliance Officer) on Walmart’s enhanced compliance and ethics program.