The Best Small Farm

   Chapter 100 Eventful Autumn Patch

  Ms. Munich worked as a lawyer for Procter & Gamble in Latin America for 12 years before joining Walmart in 2003, and knows the challenges of fighting corruption in Latin American countries. Munich responded quickly to Cicero's tip, and a few days later hired Torres Landa, a prominent Harvard-educated lawyer in Mexico City, to hear Cicero's briefing. Torres Landa and Cicero met three times in October 2005.

During the hours-long questioning, Cicero recounted how Wal-Mart Mexico perfected its bribery methods, and how it made false accounts to hide everything. Many Walmart Mexico executives, including the manager of the affairs department. However, Cicero told Torres Landa that the person most responsible for the bribery was Walmart Mexico CEO Castro Wright, who was recruited from Honeywell in 2001 to become Walmart Mexico's chief operating officer. Official Ecuadorian.

While bribery had occurred sporadically before Castro Wright came to the Mexican subsidiary, Cicero believes that the bribery took place only after Castro Wright was promoted to CEO of the Mexican company in 2002. Rapidly prevailing in the company. To break records in opening new stores, Walmart Mexico leaders set aggressive expansion goals. Under such pressure, executives at Walmart Mexico will do anything to get permission to open a store.

  Cicero explained to Torres Landa the “trick” of Walmart Mexico to cover up bribery through “PR” called “gestores.” "PR" is a group specific to bureaucratic Mexico, and ordinary citizens pay "PR" to help them line up at the driver's license office; companies hire them as lobbyists to handle things as much as possible to minimize hassle, they Some of the actions are completely legal. But this "public relations" black box, lured officials at all levels with money, plays a major role in Mexico's vicious circle of public corruption.

  Cicero told attorney Torres Landa that it was his job to recruit these "PRs" and work closely with them to share methods for finding bribes. However, he also favors Walmart Mexico giving these "PR" payments, because each payment can mask about 6 percent of bribe spending. This operation is carried out in secret and under close supervision, and only a few executives of Walmart Mexico know about it. When these "PRs" submit tickets, they will simply and vaguely describe the services they provide.

   In fact, the ticket had code written on it, and the code stated the specific “violation” activity. Cicero explained to Torres Landa: "Some codes imply a bribery that can be quickly approved by the government; others represent bribery in order to obtain classified information or avoid fines." According to the lawyer's investigation , each month Walmart Mexico CEO Castro Wright and other Walmart Mexico executives receive detailed bills for all bribes paid, which Walmart Mexico then "bleachs" into its account records as legitimate daily expenses. ".

  Walmart typically hires outside law firms to conduct internal investigations into allegations of material wrongdoing. It did so earlier in 2005. Take, for example, the investigation into Thomas Cowling, then vice chairman of Walmart, who was accused of "inflating reimbursement bills and misusing Walmart gift cards."

   Originally, Walmart took the same approach to Cicero’s whistleblower complaint, handing the investigation to Willkie, a law firm with extensive experience in FCPA cases

   Farr & Gallagher. The law firm needs to track all expenses of people who have helped Walmart Mexico obtain store licenses over five years, and plans to scrutinize all payments to government officials and interview anyone who might have knowledge of the bribery. Among them were the board members of Walmart's Mexican subsidiary who were implicated.

   In short, WillkieFarr advocates the kind of independent, no-brainer investigation method that large companies usually use in the face of serious violations by executives. Walmart's leadership rejected that approach and instead decided that Walmart's lawyers would oversee the investigation in the name of internal investigators, a decision that gave Walmart executives direct control over the investigation.

   On November 12, 2005, a team led by new Walmart Special Investigator Ronald Hurt began an investigation into Walmart's Mexican subsidiary. The research team obtained a database of financial expenditures of Walmart's Mexican subsidiary and searched for expenditure records using the keyword "public relations" (gestoria).

   Through one day's efforts, they found 441 payment records. Each of those payments was a potential bribe, though the investigation team only went back to 2003.

However, the investigation also revealed that in March 2004, in response to the "public relations spending" that had raised red flags at the time, in March 2004, senior management had initiated an internal audit at Walmart Mexico, which confirmed that two major Walmart Mexico How 'PR' was spending millions in the name of 'reducing the cost of licensing to set up shop in Mexico'.

  While the audit did not provide insight into how the money was being worked to reduce the cost of getting a store license, it did show that spending grew at roughly the same rate as Walmart’s Mexican subsidiary. The audit also recommends informing Walmart headquarters of matters related to expenditures. However, the auditor general of Walmart's Mexican subsidiary, whom Cicero identified as an executive with knowledge of the bribery, deleted the key letter of advice.

   Meanwhile, the drafters of the audit were fired shortly after the audit was completed. At the same time, Hurt's investigative team has made new progress: corruption is much worse than Cicero's confession. After scrutinizing the payments database of Walmart's Mexican subsidiary, investigators noticed that, beginning in 2003, Walmart Mexico had "contributed" or "donated" nearly $16 million directly to various levels of government in Mexico.

Rodriguez Macedo is the top executive at Walmart’s Mexican subsidiary that Hurt’s team is preparing to investigate first. Before joining Walmart's Mexican subsidiary in January 2004, Rodriguez Macedo worked as a lawyer at Citibank in Mexico, where he quickly won the Walmart headquarters with his fluent and impeccable English of favor. Cicero believed that Rodriguez Macedo was a participant in the bribery. The investigation team wants Rodriguez Macedo to explain "why two outside lawyers were paid $8.5 million to ease resistance to opening the shop." When investigators asked him about his "public relations" spending records, he said he didn't have time to track them down, a rhetoric echoed by other executives. Rodriguez Macedo did not cooperate until investigators complained to higher authorities.

   However, the auditors told the investigative team that since Cicero had approved most of the payments, they began to suspect that Cicero had also benefited in some way, so they called on the investigative agency Kroll to investigate. Rodriguez Macedo also said that the "PR payment" is likely to be a "scam" that Cicero used to defraud Walmart's Mexican subsidiary, and that Cicero and those "PR" are likely already in the "PR payment" CUHK makes a fortune. Simply put, Rodriguez Macedo believes the bribery was due to the theft of funds.

However, even if Rodriguez Macedo's statement is true, it does not explain why the executives of Walmart's Mexican subsidiary authorized the issuance of "public relations" payments, and cannot explain why executives obtained store licenses through "donations" Nor does it explain why they have kept Walmart headquarters in the dark by redoing the audit report. Investigators also wondered why a well-trained lawyer who had "stealed" a small sum of money from Wal-Mart and got away with it, now deliberately involves himself in a series of bribery cases to attract Wal-Mart's full attention. If the executives of Walmart's Mexican subsidiary really believed they were victims, why didn't they take legal action against Cicero instead

   "Theft" reported to Wal-Mart headquarters?

   In fact, the barrage of inquiries from Ronald Hurt's investigative team sparked fierce resistance from Walmart Mexico executives. Available records and interviews indicate that a week after the investigation, the team was approached by Eduardo Solozano Morales, then CEO of Walmart's Mexican subsidiary. Solorzano angrily scolded the investigation team, saying that their work was not open and transparent, and they were deliberately making things difficult for people. But the head of the investigations division, Lewis, said the complaints were nothing more than an attempt by Walmart Mexico to divert investigators.

   Some executives believe that Mexico is a country where bribery and bribery are ingrained in its business culture, and that bribery simply doesn’t deserve the kind of reaction it does on American soil. "It's a Mexican thing, and it's better to use a Mexican solution," said one executive. That speaks to the minds of Walmart managers. During the dispute, Ms. Munich filed her resignation report. "Bribery of government officials is also a crime in Mexico," she said dismayed.

  Various recordings and interviews show that Hurt received no permission to question Castro Wright and was unable to examine files on his computer. The current head of the investigation, Rodriguez Macedo, takes a different view. His report concluded that there was no evidence or clear indication that Walmart Mexico paid bribes to Mexican government agencies to obtain operating licenses and store permits. Rodriguez Macedo's six-page report said nothing about bribery involving himself.

   A few weeks later, with little further investigation, he put the matter to rest. But he did not explain how the millions of dollars in "public relations" dollars worked to get the license to operate. He was also silent on the fact that Walmart Mexico obtained a license to open a store through donations. Instead, Rodriguez Macedo's report mostly attacked its accusers, arguing that Cicero should be punished.

  Rodriguez Macedo said he consulted Zamora-Pierce, a respected independent counsel. Zamora believes that Cicero's behavior is typical of fraud. Separately, Rodriguez Macedo said Walmart Mexico was able to get store licenses faster after Cicero left. However, because Rodriguez Macedo did not list the data in the report, the validity of the data obtained cannot be verified. Moreover, in the case against Cicero, Rodriguez Macedo's report was also fraudulent. He described Cicero's resignation as "fired"; he also said the findings of the investigative agency Kroll's investigation into Cicero showed that "Cicero's standard of living has improved substantially during the stage of funding for 'public relations'." Investigators said there was no such remark in Kroll's report.

In an email to his boss, Lewis wrote: "If anyone agrees with Cicero to defraud the company, assuming I'm one of those people, then the question is, how does he get away with $10 million? And why doesn't he get away with it? Any action?" Rodriguez Macedo added a paragraph at the end of his report as a reply to Lewis: "It was decided not to bring criminal charges against Cicero because of the lack of evidence." So Lewis Reply: "At the risk of being called an 'angry youth', I would also like to say that this report is no different from the previous 'insufficient' one."

   But for Walmart, that's enough. On May 10, 2006, executives at Walmart headquarters notified Rodriguez Macedo to "form the final version of the report and conclude the investigation."

   No one informed Cicero. He just knew that after months of bombardment with emails, phone calls and talks, Walmart's interest in him had faded. He couldn't get through on the phone, and no one responded to his emails.

   "I don't think anyone cares about it, so forget about it," Cicero said. －－－－－－－－－－－－－The VIP chapter can’t be changed well and can’t appear, and the public chapter will be released

   (end of this chapter)