Remember what Modi asked? Is SoniaG’s visit to the US linked with Walmart bribes?
This is an excerpt of a report from Surajkund:
Narendra Modi demanded an answer from Singh on whether FDI in retail had anything to do with Sonia Gandhi’s visit to the US as it was announced soon after her return from there. Referring to coal block allocations, Modi said it seemed like the Congress president had a role in all “scams” and that the prime minister was answerable for this to the country.
Read with this is the following report of Walmart conceding involvement with bribes in India.
Walmart Concedes Involvement with Bribes in India, Too
Mumbai Some things are meant to be it seems. Sitting in the Bengaluru airport before 6 AM in the morning waiting for a flight to Mumbai there was a rack of papers offered for free. Failing to find theTimes of India, I settled on Economic Times, another more business oriented daily I often read. There on page 3 finally was the news that I knew had to be coming: a virtual confession from Walmart that its partnership with Bharti in India is likely as knee deep in bribes as the revelations in Mexico have shown.
When I say that they have “conceded” that their joint venture with Bharti is also rife with corruption, of course I don’t mean that Walmart has come right out and plainly admitted that bribery is basic to their business model in India. The boys in Arkansas are much too slick for any standard confession! No, this is a spinning, misdirection play more often seen by the Miami Heat’s Dwyane Wade, than the smiley-face of Walmart.
First, they are pointing the fingers at their suppliers. They engaged KPMG for the second time here in India after the Mexico mess broke. The first was to educate their employees about anti-corrupt practices, including the concession that as an American-based multinational that Walmart’s operations here are covered by the US Foreign Corrupt Practices Act. Now, they are targeting their suppliers and having the consulting firm KPMG investigate the vendors and rate them as Red (dirty as the day is long), Amber (somewhere in the middle though unclear how you can only sometimes be bribing?), and Green (good to go). Supposedly the “red” group will no longer be able to supply Bharti Walmart, “amber” is a discretionary call for the company (I hope no bribery is allowed to affect the decision), and “green” is no problems, full steam ahead.
The Economic Times was a good venue in India to break this story. In a classic sentence, they painted with a very light brush the problem of corrupt business practices in India:
As companies in India, like in Mexico, are susceptible to pay bribes at various levels to get reams of licenses required to start and operate businesses, Walmart wants to make sure they do business with only those vendors who don’t indulge in such activities.
Reading this you would think that somehow Walmart was a simple bystander in the bribery business both in India and Mexico, as opposed to having paid over $20 million USD in bribes to get its way in Mexico, and an unknown amount in India. The Economic Times and reporter Rasul Bailay are being disingenuous here. When they say “companies in India…are susceptible to pay bribes…to get licenses…to start and operate businesses…” they have to know that this is likely what Bharti Walmart itself was doing and not simply suppliers. Furthermore, If the suppliers were paying bribes to advance their businesses, the bribes would be finding their way into the pockets of Bharti Walmart buyers and executives.
Spin it however you want. It’s clear that Walmart knows way more than it is saying, and is likely to be anything but transparent in how it releases (if at all) any results of KMPG’s supposed investigation. Indirectly they are conceding that their business model here is as thoroughly corrupt as it was in Mexico and are trying to infer that they “went native” and in a country where bribery was the norm, they just went along to get along.
If so, Walmart’s corrupt business model found fertile soil, but that doesn’t exonerate the company nor does it make them any less guilty of violating the FCPA, no matter how many millions they pay KMPG and others to clean up their mess in India while it is still somehow escaping the radar of the Western business press in the glare of the light shining on Mexico.
Walmart Bribery Review Focusing On Brazil, China, India, Mexico, South Africa
Reuters | Posted: 06/12/2012 12:03 pm Updated: 06/13/2012 12:26 am
WASHINGTON, June 12 (Reuters) – Lawyers for Wal-Mart Stores Inc reviewed the company’s anti-corruption policies and operations in Brazil and China in addition to Mexico, according to a letter from lawmakers investigating the company.
The lawyers also recommended, based on their initial review, that Wal-Mart evaluate operations in India and South Africa, the letter said.
The company has acknowledged it is conducting an investigation into bribery allegations involving its Mexican operations but has not provided details about the additional countries it is reviewing.
Wal-Mart expands foreign corruption probe
By Aaron Smith @CNNMoney June 14, 2012: 8:07 AM ET
NEW YORK (CNNMoney) — Wal-Mart is expanding an investigation of alleged corrupt business practices beyond Mexico to other nations, including China, according to two Democratic congressmen.
Rep. Henry Waxman of California and Rep. Elijah Cummings of Maryland, ranking members of two House committees, said the retailer’s outside counsel was retained to look into anti-corruption policies and operations in Brazil and China, as well as Mexico.
In a letter to Wal-Mart (WMT,Fortune 500) Chief Executive Michael Duke dated Tuesday, the congressmen also said the attorneys recommended that the probe be expanded to include operations in India and South Africa.
Wal-Mart spokesman David Tovar, in response to questions about the letter, said his company has expanded the review of its anti-corruption program that began in March 2011.
“They list five [countries,]” said Tovar. “We’re looking at every country in which we operate.”
The investigation stems from allegations that Eduardo Castro-Wright, the former CEO of Wal-Mart de Mexico and former head of Wal-Mart U.S., orchestrated $24 million worth of alleged bribes in Mexico to streamline construction projects, dating from 2005.
The letter blasted Duke for failing to hand over relevant documents and not allowing Wal-Mart employees to brief the committee. In particular, the congressmen want to hear from Maritza Munich, a former general counsel of Wal-Mart’s international division, who the committee called “a key figure in the investigation.”
“Although you stated during a recent shareholders meeting that Wal-Mart is ‘doing everything we can to get to the bottom of the matter,’ you have not provided us with the information we requested,” wrote the congressmen. “Wal-Mart’s actions to date significantly inhibit our ability to investigate these allegations.”
The congressmen accuse Wal-Mart of communicating through its lawyers, rather than its officials, in regard to “potential violations of the Foreign Corrupt Practices Act (FCPA).”
But Wal-Mart’s Tovar said his company has, in fact, been cooperating with Congress as it investigates the world’s largest retailer’s compliance with the international corruption law.
“We take compliance with the FCPA very seriously,” said Tovar. “We’re cooperating with the ongoing investigation and we’ll continue to assist the congressional investigation.”
First Published: June 13, 2012: 11:52 AM ET
FDI in retail: Why does PM Manmohan Singh ‘turn active’ only in US interest, says Narendra Modi
SURAJKUND: Gujarat chief minister Narendra Modi on Friday unleashed a scathing offensive on Prime Minister Manmohan Singh and Congress president Sonia Gandhi over corruption and FDI in multi-brand retail.
His diatribe came within hours of BJP patriarch LK Advani asking the party to look within and ensure an “unblemished” and “united” image to be a credible alternative to the UPA government, which he said was unlikely to last till 2014.
While Advani adopted the role of a mentor making the closing remarks at BJP’s national council meet, advising the party to set its house in order to cash in on the “public anger” against corruption, Modi took centrestage as the party’s show-stopper to take on UPA at a public rally winding up the conclave.
“The country wants to know why in eight years you have become Singham twice – once when there was the nuclear treaty with US, and the second time on the FDI issue… Why not become Singham for India,” Modi said alleging that in both instances it was done to benefit foreigners. He said that both times, the US was in election year and asked if there was a connection between the two.
Taking on the government on FDI in multi-brand retail, he said US President Barack Obama had tweeted that Americans should buy from small shopkeepers. “I wonder why our prime minister could not see the position President Obama took,” he said and demanded an answer from Singh on whether FDI in retail had anything to do with Sonia Gandhi’s visit to the US as it was announced soon after her return from there. Referring to coal block allocations, Modi said it seemed like the Congress president had a role in all “scams” and that the prime minister was answerable for this to the country.
Flaunting Gujarat’s progress in dairy farming, he said “even in the prime minister’s house, the milk comes from Gujarata¦ In Gujarat, even cattle are operated for cataract; such facilities are not there for human beings in some other states.”
Earlier, Advani had sent a clear message that at a time when BJP was taking on Congress on issues like corruption, it cannot afford to hesitate in addressing shortcomings within the party, amidst applause from members. “When we criticise Congress on corruption and there is even a whiff of corruption in our party, there is so much noise,” he said. His remarks come at a time when allegations have been made by an RTI activist against BJP President Nitin Gadkari that he did not want the irrigation scam in Maharashtra to be pursued. Gadkari has denied the charges and sent a legal notice to activist Anjali Damania seeking an apology from her.
Advani touched a raw nerve in the party when he said BJP leaders should not speak in multiple voices. “It has never happened that BJP leaders speak in different voices. We should speak in one voice,” he said.