NEW YORK -- Wal-Mart Stores Inc. is creating a new global compliance officer position following reports that the world's largest retailer allegedly covered up results of an internal probe proving that its Mexican subsidiary bribed officials there.
The new global leader, who has not been named, will make sure the discounter is in compliance worldwide with the U.S. law that forbids U.S companies from engaging in bribery and other corrupt practices overseas.
The new executive will oversee five regional compliance directors. The company said it also is adding new protocols to ensure investigations into possible violations of the 1977 Foreign Corrupt Practices Act are managed "consistently and independently."
Wal-Mart said it has a dedicated compliance director in Mexico, who will report directly to the global compliance leader.
"We are taking a deep look at our policies and procedures in every country in which we operate," Wal-Mart spokesman Dave Tovar said in a statement. "This includes developing and implementing recommendations for FCPA training, anti-corruption safeguards and internal controls."
Those moves are the latest Wal-Mart has announced in response to a New York Times article last weekend outlining the Mexico allegations. The news has hammered Wal-Mart's stock price and prompted congressional investigations.
The New York Times reported that Wal-Mart failed to notify law enforcement after company investigators found evidence that its officials had authorized millions of dollars in bribes to Mexican officials in exchange for speedier building permits and other favors that helped the company expand it aggressively in Mexico.
In December, Wal-Mart said in a filing with the Securities and Exchange Commission that it had begun an investigation into an overseas operation related to its compliance with the foreign corrupt practices law. Over the weekend, the company revealed that it had met with officials from the SEC and the Justice Department to discuss the company's ongoing investigation. But the Times said Wal-Mart only met with the federal officials after being informed that the paper was looking into the allegations.
Wal-Mart said Tuesday that a subset of its audit committee that includes only independent members of the company's board of directors is overseeing the investigation. The subcommittee is being assisted by outside legal advisors and forensic accountants. The Audit Committee is being briefed on the matter on a regular basis, Tovar said.
Tovar also reiterated that, in March 2011, CEO Mike Duke directed the company to conduct a worldwide review to ensure it was in compliance with the FCPA in every country.
Two Democratic congressmen, Elijah Cummings of Maryland and Henry Waxman of California, said on Monday that they were launching an investigation and wrote to CEO Mike Duke asking for a meeting.
The Washington Post, citing anonymous sources, reported late Monday that the Justice Department has been conducting a criminal probe of the allegations since December.
If Wal-Mart is found to have violated the foreign corrupt practices law, it could face fines of hundreds of millions of dollars. Top Wal-Mart executives could lose their jobs or go to jail. And the retailer could suffer a public relations nightmare if a lengthy investigation ensues.
The New York Times report implicated several former and current executives as either being involved in the bribery practices or choosing not to report it to law enforcement. Among them was Eduardo Castro-Wright, who is now vice chairman of the company. At the time the alleged bribery occurred, he was overseeing the company's whole Mexico operation. The Times said he was the driving force behind the practices.
MetLife announced Tuesday that Castro-Wright, who had served on its board since 2008, had resigned, effective immediately, for "personal reasons." Castro-Wright will step down from the boards of Metropolitan Life Insurance Co. and holding company MetLife Inc.
Castro-Wright wrote Steven Kandarian, CEO and Chairman of MetLife, a letter about the situation that MetLife filed Tuesday with regulators.
"Over the past weekend, I notified you of recent events that will require my immediate and personal attention. As a result, I will be stepping down from the board," Castro-Wright wrote. "I now must focus my energy in spending personal time with my family and in protecting my good name and business reputation."
Shares of Wal-Mart fell $1.77, or 3 percent, on Tuesday to close at $57.77 after falling nearly 5 percent on Monday. They've traded between $48.31 and $62.63 the past year.
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AP Business Reporter Sarah Skidmore in Portland, Ore., contributed to this report.
Wal-Mart creates global compliance officer post
Wal-Mart creates global compliance officer post
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By ANNE D'INNOCENZIO 04/24/12 05:40 PM ET