Monday, April 30, 2012

WNU #1127: Bribery Scandal Hits Wal-Mart in Mexico

Weekly News Update on the Americas
Issue #1127, April 29, 2012

1. Mexico: Wal-Mart Stocks Plunge After Bribery Exposé
2. Chile: Youth Wounded in Raid on Mapuche Village
3. Haiti: Armed Ex-Soldiers Disrupt Parliament Session
4. Links to alternative sources on: Latin America, Argentina, Brazil, Bolivia, Peru, Ecuador, Colombia, Venezuela, Nicaragua, Honduras, Guatemala, Mexico, Caribbean, Haiti, Immigration

ISSN#: 1084 922X. Weekly News Update on the Americas covers news from Latin America and the Caribbean, compiled and written from a progressive perspective. It has been published weekly by the Nicaragua Solidarity Network of Greater New York since 1990. It is archived at For a subscription, write to Follow us on Twitter at

*1. Mexico: Wal-Mart Stocks Plunge After Bribery Exposé
Wal-Mart de México’s stocks fell by a total of 15.46% on the Bolsa Mexicana de Valores (BMV, the Mexico City stock market) from Apr. 23 through Apr. 24 following a report in the New York Times that the company’s US-based owner, Wal-Mart Stores, Inc., had covered up a major bribery scandal in 2005. The Mexican branch of the giant retailer is the largest private employer in the country, with 2,138 outlets: 1,250 stores under the Aurrerá name, 214 Wal-Mart stores, 127 Sam’s Clubs, 88 Superamas, 94 Suburbias and 365 restaurants. (La Jornada (Mexico) 4/24/12, 4/25/12)

The Times reported on Apr. 22 that in 2005 Wal-Mart investigators found evidence that the Mexican subsidiary had fueled its explosive growth with more than $24 million in bribes to obtain building permits, circumvent environmental requirements and stifle community opposition. The bribery violated laws in both Mexico and the US, but Wal-Mart corporate headquarters in Bentonville, Arkansas, failed to report the illegal acts to the two governments. Instead, executives essentially shut the investigation down, according to the Times. The company finally notified the US Justice Department in December 2011, after it learned that the newspaper was working on the story. (NYT 4/22/12)

Wal-Mart began operating in Mexico in 1991, when it formed a connection with the Aurrerá chain (the name means “forward” in Basque). The administration of former president Carlos Salinas de Gortari (1988-1994) gave special privileges to the firm, according to Enrique Bonilla, director of the National Front Against Wal-Mart. Bonilla says the company only pays 1.6% in taxes on its sales and is allowed to use unpaid employees—packers and parking lot attendants who have to get by on their tips and receive no employee benefits. “This company’s very rapid growth [in Mexico] can’t be explained without support from the highest levels of government,” Bonilla claims. (LJ 4/28/12)

Government favor for Wal-Mart may not have ended. On Apr. 23 Attorney General Marisela Morales suggested that her office wasn’t in a hurry to bring charges in the corruption scandal. “It’s a case that we still don’t have,” she said, “but if in a given moment it’s in our jurisdiction, of course we’re going to act and ask for whatever is necessary.” (EFE 4/23/12 via Univision)

The new revelations brought sharp criticism of Wal-Mart both in Mexico and in the US. An editorial in the left-leaning Mexican daily La Jornada noted that the scandal comes on top of many complaints against the company: the very low prices it pays its suppliers; its record of driving out small businesses and reducing overall employment; and such labor practices as “low wages, banning of unions, protection contracts, exhausting workdays without overtime.” (LJ 4/24/12) Richard Trumka, president of the largest US labor federation, the AFL-CIO, charged that “the Walmart episode shows the utter futility of expecting large corporations, their boards and their law firms to police themselves” and “reveals the tragic folly of NAFTA [the North American Free Trade Agreement]… a race to the bottom in every respect--including rule of law.” Wal-Mart is the largest private employer in the US as well as in Mexico, and it opposes labor organizing just as strongly in the US as it does in Mexico. (Huffington Post 4/26/12)

The US media stressed that corruption is endemic in Mexico and in Latin America in general. In a follow-up article on the Wal-Mart scandal, the Times wrote that “bribery and other forms of corruption are taken in stride” in Mexico. (NYT 4/24/12) The US media avoided mentioning two earlier bribery scandals that involved another major US corporation, the computer giant IBM. In Argentina the multinational allegedly paid $21 million in bribes to win a $249 million contract with the state-owned bank Banco Nación in 1993; the Argentine judge in the case wasn’t able to get IBM employees extradited from the US to testify. A second scandal emerged in 1998 in Mexico City, where IBM had to pay a large settlement in a bribery case involving three IBM executives and a $27 million contract for a database system for the city. After the Mexico City scandal, IBM announced that it had “decided to sign no more direct contracts with the public sector in the region for systems engineering” [see Update #440].

*2. Chile: Youth Wounded in Raid on Mapuche Village
A 16-year-old Chilean youth was seriously wounded with metal pellets on Apr. 20 when agents from the carabineros militarized police raided the indigenous Mapuche community of Temucuicui in the southern region of Araucanía. The youth, Lautaro Naín, was rushed to the city of Victoria for emergency treatment.

According to Mijael Carbone, the community’s werken (spokesperson), about 100 uniformed police burst into the village and began firing at houses. The Chilean Foundation in Support of Children and Their Rights (Anide) denounced “the violence exercised by the police forces against the Mapuche communities, a violence which once again has a child as its victim.” The organization called for an end to police raids against Mapuche communities in Araucanía and for negotiations to end “the conflict created by the Chilean state by dispossessing the Mapuche communities of their ancestral land.” The Mapuche Territorial Alliance (ATM) demanded the immediate removal of local prosecutor Luis Chamorro from investigations in the area, charging that he had an anti-Mapuche attitude and constituted “an obvious public danger.” (Prensa Latina 4/22/12) [See Update #1124 for reporting on an earlier raid, led by Luis Chamorro, against a Mapuche village.]

In other news, both the government and student organizers seemed taken by surprise on Apr. 25 when thousands of students and their supporters marched in Santiago for educational reforms. In contrast to the massive mobilizations of the 2011 school year, student actions had been small since the current school year started in March [see Update #1122]. But even the police estimated the turnout in Santiago on Apr. 25 at 48,000, while organizers put the number at 70,000; there were also demonstrations in Valparaíso, Concepción, Temuco, La Serena and other cities.

Federation of University of Chile Students (FECH) president Gabriel Boric called the strong showing at the march “a very clear signal that the students aren’t going to back down from their conviction that education in Chile has be a right for all Chileans, and not by getting into debt.” Under pressure from the students’ popular demand for a return to a system of free public education, rightwing president Sebastián Piñera has proposed legislation raising corporate tax rates from 18.5% to 20% as part of a fiscal overhaul that will allow the government to provide student loans at 2%, replacing the current privately financed loans. However, student leaders consider these concessions inadequate. (Adital (Brazil) 4/26/12; La Jornada (Mexico) 4/26/12 from correspondent; Business Week 4/27/12)

*3. Haiti: Armed Ex-Soldiers Disrupt Parliament Session
The Chamber of Deputies of the Haitian Parliament abruptly ended its session on Apr. 17 when a group of armed men in uniforms entered the legislature’s grounds in two vans. The men claimed to be former soldiers from the Armed Forces of Haiti (FAd’H), which was officially disbanded in 1995 during the first administration of former president Jean-Bertrand Aristide (1991-1996, 2001-2004). Chamber president Levaillant Louis Jeune refused to meet with the men and suspended the session. “It’s a serious issue when a working parliament is besieged by armed bandits,” he said. Groups of former soldiers have been seen since the beginning of the year carrying out exercises in various parts of the country, sometimes using old military bases and training camps; apparently the government has done nothing to interfere [see Update #1117].

Before the interruption, the Chamber of Deputies was meeting to start the confirmation process for Laurent Lamothe, President Michel Martelly’s nominee for prime minister. Lamothe, currently the foreign minister, would replace Garry Conille, who submitted his resignation on Feb. 24, just four months after taking office [see Update #1119]. (AlterPresse (Haiti) 4/17/12, 4/18/12) Meanwhile, President Martelly left the country on Apr. 16 in his third visit to Florida for medical treatment since October. The president’s office said the first two trips were for a shoulder problem, but this time the doctors diagnosed a pulmonary embolism. “I’m doing better presently, and I’m in contact with the government team and the members of my cabinet so that everything will continue to function normally,” Martelly said in a communiqué. (AlterPresse 4/18/12)

*4. Links to alternative sources on: Latin America, Argentina, Brazil, Bolivia, Peru, Ecuador, Colombia, Venezuela, Nicaragua, Honduras, Guatemala, Mexico, Caribbean, Haiti, Immigration

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Impunity Revisited: Another Confrontation in Cherán

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