U.S. lawmakers launch investigation into Wal-Mart bribery scandal
New York — Two U.S. lawmakers are launching an investigation into allegations of bribery at Wal-Mart Stores’ Mexican affiliate. Representative Elijah Cummings, the top Democrat on the House Oversight and Government Reform Committee, and Representative Henry Waxman, the top Democrat on the House Energy and Commerce Committee, sent a letter to Michael Duke, Wal-Mart CEO, requesting an in-person meeting with company officials.
The lawmakers also said they are contacting former Wal-Mart executives who may have documents or information relevant to a congressional investigation.
In other developments, Wal-Mart de Mexico, or Walmex, battling bribery accusations, said in a statement on Monday it does not believe the allegations will hurt its business.
These developments follow Wal-Mart’s confirmation that it is investigating its operations in Mexico for possible violations of the U.S. law that prohibits bribery overseas. The acknowledgement came in response to a lengthy article by The New York Times on Saturday that alleged the giant discounter first learned of allegations of "widespread bribery" by its workers in the country in 2005 and that top executives subsequently covered them up.
In a report by Reuters, legal and retail experts said that the allegations, if proven true, could badly impact Wal-Mart and its management for years, resulting in steep financial penalties paid to U.S. authorities and the departure of some key executives.
The Times story alleged that Wal-Mart had found evidence of more than $24 million in illicit payments to Mexican officials to help obtain permits for new stores to help speed up openings in that country. Top Wal-Mart officials in the United States learned of the bribery allegations, the Times reported, but the company never reported the matter to U.S. or Mexican authorities.
"If these allegations are true, it is not a reflection of who we are or what we stand for," Wal-Mart spokesman David Tovar said in a prepared statement. "We are deeply concerned about these allegations and are working aggressively to determine what happened."
According to the Times, current Wal-Mart CEO Mike Duke and former CEO Lee Scott, who still sits on the chain’s board, were among senior executives allegedly aware of the situation.
Wal-Mart said it has met voluntarily with the Justice Department and the Securities and Exchange Commission to discuss the case.
The expansion of Wal-Mart de Mexico, mainly in the last decade, left the world’s largest retailer with about 20% of its stores in Mexico.
Best Buy appoints CEO search committee
Minneapolis — Best Buy Co. has announced the members of its CEO search committee. The company said the committee will oversee a global search process to identify internal and external candidates, including current interim CEO Mike Mikan.
As part of Best Buy’s commitment to transparency, the company said the board will also publicly announce the selected search firm and will post the position on the company website. The final search firm selection will be announced in the next few weeks.
Kathy J. Higgins Victor, who also serves as chairwoman of the nominating, corporate governance and public policy committee and a member of the compensation and human resources committee, will chair the search committee.
Report: Consumer confidence rises to match four-year high
New York — A report released Thursday by Bloomberg showed that household confidence improved last week to match the highest level in four years.
The Bloomberg Consumer Comfort Index was minus 31.4 in the period ended April 15, compared with minus 32.8 over the previous seven days. The reading equaled that from two weeks earlier as the best since March 2008.
Despite the strong showing, the monthly expectations measure fell from a one-year high, showing ongoing concerns that too many Americans are still unemployed.
“The uneven nature of the recovery will likely continue to restrain the type of improvement in consumer sentiment that one would traditionally observe at this point in the expansionary cycle,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York.
Jobless applications fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed Thursday in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000.
The positive news comes on the heels of this week’s announcements that retail sales rose a better-than-expected 0.8% in March. The gain was almost three times as large as projected by the median forecast of economists surveyed by Bloomberg and followed a 1% advance in February.