Bribery in Mexico?

Walmart Scandals: Bribery Allegations in Mexico and More (PHOTOS)

From alleged bribery in Mexico to toxic Miley Cyrus jewelry, uproars that engulfed the big-box giant.

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Walmart Mexico Bribery

Walmart acknowledged Sunday that it is investigating allegations that its Mexico subsidiary used bribes to get building permits quickly to achieve rapid growth and remain ahead of its competitors. The New York Times reported Saturday that the big-box giant began a probe into a former Walmart de Mexico employee’s accusations only after as much as $24 million had already changed hands, and that it tried to hush up the scandal. In a report obtained by The Times, the company’s lead investigator said, “There is reasonable suspicion to believe that Mexican and USA laws have been violated.”

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Toxic Miley Cyrus Jewelry

Within three hours of an Associated Press report in 2010 that Miley Cyrus–themed jewelry sold by Walmart contained the toxic metal cadmium, the company issued a statement saying bye-bye to the toxic Cyrus bling. Still, the store had continued to sell the products after earlier AP tests had revealed the same health threat. It was unclear how many of the necklaces and bracelets were sold before Walmart removed them, and the retail giant excused itself by saying it was impractical to test merchandise in all its stores for the toxin.

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Anti-Union Tactics Questioned

A Human Rights Watch report in 2007 showed that the retail giant had been restricting the ability of its workers to form labor unions. Along with threatening a loss of benefits to employees, Walmart fired pro-union employees, interrogated individuals about their union ties, and had managers eavesdrop on conversations. The company replied that it respected workers’ rights to join a union, but its actions showed something different. A few years before, when employees voted to unionize a Canada branch, the store was shut down.

Jacquelyn Martin / AP Photo

Sexual Discrimination Suit

Walmart had women up against the wall, claimed Betty Dukes and her million-something fellow plaintiffs when they filed a class-action suit against the company. Dukes was 54 in 2000, when she decided that she’d had enough of what she saw as the sexual bias inherent in Walmart’s management, blocking her from equal treatment and opportunities for promotion. Her case went to the Supreme Court, but was tossed out when the justices found the plaintiffs’ evidence unsatisfactory. The gender-discrimination suit was the largest-class action lawsuit in American history and was meant to represent all women who worked for the company after Dec. 26, 1998.

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Undercutting on Health Care

With nothing else to cut, some have alleged that Walmart has trimmed back on employee health coverage to fatten its bottom line. In 2005 a vice president sent a memo to the company’s board of directors, noting disapprovingly that “the least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart.” The next year Maryland lawmakers compelled the retail chain to provide better health care to its employees, arguing that there was no reason taxpayers should be shouldering the burden of the megasuccess’s health costs. Seventeen thousand Maryland residents were employed at Walmart or Walmart affiliates.

J. Pat Carter / AP Photo

Driving Out Smaller Companies

Walmart founder Sam Walton once said his ideal location for a store was “a little one-horse town which everybody else was ignoring.” Today, with thousands of stores across America and $258 billion in revenue annually, many towns have a version of Walton’s vision. Nearly one third of the U.S. population visits Walmart each week. But not everyone’s happy about it. The company has long been accused of driving local business into the ground, and new openings are often controversial. By erasing competition, the company is able to maintain its standing as the world’s largest retailer.

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Chinese Pork Misabeled ‘Organic’

Walmart found itself under fire in October 2011, when the some of the company’s stores in China were found to be selling regular pork using the label “organic.” Both the CEO of Walmart in China and the head of human resources resigned amid the scandal for “personal reasons.” Dozens of company employees were detained by police over the incident.

Matt Rourke / AP Photo

Violations of Labor Laws

In 2009 Walmart was forced to pay more than $78 million for violating Pennsylvania’s labor laws. The class-action suit involved 187,000 employees from Walmart and Sam’s Club who claimed the company had forced them to work through rest breaks and off the clock. One employee said she was forced to work eight to 12 unpaid hours per month and that the lawsuit was necessary “to show how we were treated working at Walmart—working off the clock and not getting paid.” The company has faced more than 70 similar lawsuits across the country.

Brain-Damaged Former Employee Sued

In 2000 Debbie Shank was involved in a traffic accident that left her severely brain-damaged and in a wheelchair. At the time, she was a Walmart employee, and the company’s benefits program covered about $470,000 for her medical bills. Two years after the accident, Shanks and her husband collected $1 million in a lawsuit against the trucking company involved in the crash. Only $417,000 remained after the couple paid their legal fees, and it was placed in a trust for Debbie’s medical care. However, the Shanks failed to notice a Walmart policy stating that the company can recoup medical costs if an employee collects damages in a lawsuit—and the company sued the couple to get its money back. “Wal-Mart’s plan is bound by very specific rules ... We wish it could be more flexible in Mrs. Shank’s case since her circumstances are clearly extraordinary, but this is done out of fairness to all associates who contribute to, and benefit from, the plan,” a spokesman said.

Catherine Gugelmann, AFP / Getty Images

Furniture From Siberian Tiger Habitats?

In 2007 the Environmental Investigation Agency said it had obtained evidence that furniture sold at Walmart was being constructed of illegally obtained wood logged in protected Siberian tiger habitats. As a result, Walmart said it would investigate its suppliers and joined the Global Forest & Trade Network. The company also made a pledge to get rid of all environmentally rotten wood by 2013.

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Hiring of Undocumented Workers

In 2005 Walmart was forced to pay $11 million to settle claims that the company’s cleaning contractor hired workers who were in the country illegally. The government’s investigation into the company lasted more than four years and resulted in the arrests of more than 245 undocumented workers. The government claimed to have wiretaps proving that Walmart executives knew about the hiring of illegal workers, but as part of the settlement, the company was not required to admit to wrongdoing. A spokesperson said, “We acknowledge we should have had better safeguards in place to make sure our (floor-cleaning) contractors hired only legal workers.”