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Checking In On Wal-Mart’s Pre-Enforcement Action Professional Fees And Compliance Enhancements


In yesterday’s 4Q FY2018 earnings call presentation WalMart disclosed $7 million in Foreign Corrupt Practices Act and compliance related expenses ($4 million for ongoing investigations and inquiries and $3 million for global compliance program and organizational enhancements).

The Q4 expenses of $7 million compare to the following recent quarterly expenses: Q3 FY2018 $5 million, Q2 FY2018 $12 million, Q1 FY2018 $16 million; Q4 FY2017 $17 million; Q3  FY2017 $29 million; Q2 FY 2017 $28 million, and Q1 FY2017 $25 million).

Doing the math, Wal-Mart’s 4Q FY2018 FCPA and compliance-related costs is approximately $113,000 per working day.

Over the past 5 years, I have tracked WalMart’s quarterly disclosed pre-enforcement action professional fees and expenses. While some pundits ridiculed me for doing so, it quickly caught on as the popular thing to do.

And with good reason because, as has been noted in prior posts and in the 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.

Over the past 18 quarters, Wal-Mart’s FCPA and compliance-related costs have been approximately $113,00, $80,000, $195,000, $260,000, $275,000, $465,000, $445,000, $396,000, $520,000, $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 FCPA and compliance-related costs are as follows.

FY 2013 = $157 million

FY 2014 = $282 million

FY 2015  = $173 million

FY 2016 = $126 million

FY 2017  = $99 million

FY 2018 = $40 million

TOTAL: $877 million

In terms of FY 2019, Walmart disclosed in its earnings release as follows: “In fiscal year 2019, we expect our third party FCPA and compliance-related expenses to be at or around the same level as in fiscal year 2018.”

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