Mexico starts investigation in Wal-Mart bribery case

Mexico said on Wednesday it would open an investigation into allegations that the Mexican unit of Wal-Mart Stores Inc bribed officials to expand its business in Mexico, piling pressure onto the embattled retail giant.

The Mexican federal comptroller's office said it has begun checking the federal paperwork and permits Wal-Mart de Mexico, known as Walmex , obtained to open and operate its stores in Mexico.

The comptroller's office added that it would ask U.S. authorities for information on the case, in order to carry out its investigation and that the federal government would take action if wrongdoing by public officials was detected.

Wal-Mart, which is also facing a probe from U.S. authorities, did not immediately comment on the investigation.

Mexican politicians had been calling for an investigation into Wal-Mart even though the economy ministry had initially said the allegations were not a federal matter.

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Guillermo Tamborrel, a senator for President Felipe Calderon's conservative ruling National Action Party (PAN), said the scandal had tarnished Mexico's reputation.

"We cannot let an international company come and corrupt our authorities," Tamborrel told Reuters.

On Saturday, The New York Times reported that a senior Wal-Mart lawyer received an email from a former executive at Walmex in September 2005 describing how the Mexican affiliate, known as Walmex, had paid bribes to obtain permits to build stores in Mexico. The newspaper said that senior Wal-Mart officials stymied an internal investigation into the alleged bribery.

The world's largest retailer is also facing a criminal probe by the Department of Justice over potential violations of the U.S. Foreign Corrupt Practices Act (FCPA), a U.S. law that forbids bribing foreign officials.

After the Times story broke, Wal-Mart said it had begun an investigation last fall into its compliance with the FCPA. It said it had disclosed the probe to the U.S. Department of Justice and U.S. Securities and Exchange Commission.

Wal-Mart Stores Inc said it put a former U.S. Attorney who has worked for the retailer for eight years in charge of overseeing its compliance with a U.S. bribery law, the company disclosed on Wednesday, as it deals with the fallout over alleged bribes in Mexico that recently came to light.

Wal-Mart also outlined the high-profile lawyers and accountants helping with its ongoing internal investigation into the matter, as well as its worldwide review of compliance.

Also on Wednesday, a shareholder sued Wal-Mart's board and several officers, seeking to recover damage to the company's reputation as well as costs of investigating the claims.

INTERNAL PROBE

The company is setting up an internal system for dealing with possible abuses of the FCPA.

Wal-Mart said Tom Gean, a former U.S. attorney for the Western District of Arkansas, was named global FCPA compliance officer earlier this year. Gean has worked for Wal-Mart since 2004 and was a U.S. attorney earlier that decade.

While Gean was named to the post before the story ran, the Times has said that Wal-Mart was aware of its reporting last year.

Law firm Jones Day is leading Wal-Mart's investigation and is reporting to the audit committee of the board, which is comprised of four independent directors. Deloitte is the investigative forensic accountant assisting Jones Day on the investigation launched in November 2011, Wal-Mart said.

Cahill Gordon & Reindel is serving as outside counsel to the audit committee, Wal-Mart said.

Meanwhile, Greenberg Traurig is the outside counsel for the worldwide compliance review Wal-Mart says it started in March 2011, and reports to Gean. KPMG is serving as compliance review accountant, assisting Greenberg Traurig.

(Reporting by Elinor Comlay in Mexico City, Jessica Wohl in Chicago, additional reporting by Aruna Viswanatha, David Ingram and Andrew Longstreth; Editing by Gerald E. McCormick and Matthew Lewis)

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