Walmart bribery crisis–what do you do when you’ve done wrong

The New York Times story revealing Walmart’s alleged bribery of government officials enabling the company to grow very rapidly in Mexico probably has a familiar ring to many in crisis management. The question is: how do you help a client who has done wrong, that is violated the law, ethics, or moral standards and values commonly held by the community or society?

Walmart’s problem here goes far beyond bribery. This is a classic of what of the coverup story. As juicy as the story about foreign bribery is, what makes it so much more interesting to the NYT, and presumably its readers, is the alleged coverup. These events happened in 2005. NYT has hundreds of emails involving top executives and company lawyers fretting over it. But the NYT reports:

In December, after learning of The Times’s reporting in Mexico, Wal-Mart informed the Justice Department that it had begun an internal investigation into possible violations of the Foreign Corrupt Practices Act…

In other words, according to the NYT the company knew about the violations, had intense discussions about what to do, but did not report to the Justice Department, nor come clean with the public or media about the dirty dealings until forced to by the NYT investigation.

The allegations are that company real estate officials bribed Mexican government officials to get approvals to place Walmart stores over Mexico. Walmart is huge in Mexico, employing over 200,000 people and is the country’s largest private employer.

The company’s response is measured, focused and on the one hand, strong. They noted (complained) that the story reports on events that happened over 6 years ago. They say they took independent action to investigate. They state their commitment to fully comply with FCPA. They provide some specific details on how they are insuring future compliance. And they commit to deal appropriately with anyone determined to have violated.

In others, they admitted to no wrong doing and stated commitments and actions. But, given what is at issue here, it is a very weak response. What about the implied cover-up? Why not an explanation for the delay? Why complain about the NYT dredging up old accusations when it is news because it has not been reported before, and why mention this in the context of an implied coverup?

It seems some rules about crisis communication have evolved quite clearly in the past few years. One main one is, if you’ve done wrong, fess up. Don’t obfuscate, duck and weave. If senior leaders knew about the very serious potential problems in Mexico way back in 2005, then I believe Mr. Tovar should have said “we would have met our own standard for honesty, integrity and legality if we had fully and independently investigated when these allegations first appeared and if warranted, turn them over to the government for investigation.”

When facing a client who has done wrong, I tell them that whatever they have done wrong to accept responsibility, show they are remorseful, and demonstrate that by taking action that rectifies the harm done. If they haven’t done wrong, then clearly explain why the accusers are wrong in their suggestions or allegations. If, as is often the case, there is a mix of wrong doing and over-wrought accusations, then the explanation of where the accusations are wrong must done with humility and contriteness given that at least some are accurate.

If the NYT article is wrong, if the accusations of bribery and worse, of cover-up are overwrought, Walmart has done little to convince they are being treated unfairly. If the accusations are valid (which we must consider that given the lack of rebuttal), then Walmart has to come much further in accepting responsibility and admitting they violated our trust.

 

3 thoughts on “Walmart bribery crisis–what do you do when you’ve done wrong”

  1. I know walmart is croocked and corrupt. I had a great work history and many excellent customer service notices where i worked at the Exton, Pa. walmart for 10-years, until we got a new store manager who was severely verbally abusive to many employees, myself and even a mentally handicapped female employee. Other employees were afraid they’d be fired if they report it and told me i would be too if i report it. I said this is America, not some degenerate county, we have rights and laws to protect us against this type of thing. They said walmart has all the politicians and legal system in their pocket and controls them with their laywers and money. I thought those beliefs and fears to be sad and shameful and i chose to do the right thing, stand up for a reasonable workplace for me and my fellow employees and report it. Then the abusive manager started making negative cooments about my reporting him and fired me. At that point i went to the NLRB and they filed a charge on walmart. I then dropped the charge in exchange for having my job reinstated, but upon returning to work i was subjected to much retaliation and fired twice more for lies made up by the same district manager who ignored my reports of the abuse. The first termination since my return i was able to prove was completely false and have overturned, but then when i went back to the NLRB to file another charge about the illegal retaliation i was being subjected to i was fired again the next day. This time the NLRB told me that walmart had got their laywer involved, they didn’t want to pursue it, and they recklessly wrote a bunch of slanderous, defamatory , delusive lies that walmart told them in a government file and dismissed my case.
    So now i have lost my secure job and stable life that i worked so hard for so many years to build up, all due to being the one to do the right thing, trust the system, and report the abuse, and all the sad, shameful beliefs and fears of the other walmart employees are confirmed and justified. What is going on? Walmart has succeded in destroying even our basic constitutional civil rights in the workplace. Is this the America that preaches democracy and human rights all over the world? I am truly ashamed of walmart and embarassed of my hypocritical country. Robert Snodgrass

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