Mèxico: "Walmart Scandal in Mexico Points to U.S. Hypocrisy" (Newsweek/The Daily Beast, April 23, 2012)...by John M. Ackerman

Photo: Reuters via The Daily Beast

The real scandal is that the Walmart Mexico corruption exposé does not come as a surprise. Constant controversy has marked Walmart’s rapid expansion in Mexico over the last 15 years.

One of every five Wal-Mart stores is now south of the border and the company reported total sales of 29 billion USD in the country during 2011. Last year alone, it opened 365 new stores in Mexico.

But there are constant allegations that most profits are expatriated or hidden through sophisticated accounting schemes in order to avoid paying taxes to the Mexican government. This has been confirmed by studies conducted both by the Mexican Chamber of Deputies and the company’s own internal investigation. Wal-Mart also pays miserable wages, employs an army of unpaid “baggers” at its check-out lines and has been accused of widespread violation of labor laws.

The company establishes few backward linkages with Mexican manufacturers, since the vast majority of the products it sells originate in the United States. Its recent growth also puts at risk the Mexican tradition of street markets, which date back to the time of the Aztecs and the Mayans. The company has even been accused of interfering with archeological sites, for instance in Teotihuacan in central Mexico.

The fact that Wal-Mart has also paid more than $24 million dollars in bribes to Mexican officials, according to the Times’ account, is therefore more of the same. Wal-Mart has claimed that it is “deeply concerned” by the allegations and is “working aggressively to determine what happened”. But there is no reason to think that this is an isolated incident. Sunday´s exposé demonstrates that Wal-Mart has not taken any measures to stop the wrongdoing and that, seven years later, absolutely no one has been punished for the criminal acts. The corruption was probably even more widespread than we know and similar practices most likely continue today as Wal-Mart still expands at a death-defying pace in Mexico...

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