Eduardo Castro-Wright, who headed Wal-Mart's Mexico operations in the mid-2000s,...

Eduardo Castro-Wright, who headed Wal-Mart's Mexico operations in the mid-2000s, is under scrutiny in the company's bribery scandal (June 6, 2008). Credit: AP

As a lightning rod for criticism, Wal-Mart Stores Inc. is the kind of company that should go out of its way to avoid trouble.

Or so one would think. Instead, according to The New York Times, the global retailing giant suppressed an internal investigation into allegations of bribery by the company in Mexico.

The newspaper reported that Wal-Mart's own 2005 investigation unearthed more than $24 million in questionable payments made by the company to facilitate opening new stores in Mexico, where today one in five Wal-Mart outlets is located.

The money allegedly went for zoning approvals, various permits and to buy off opposition. But when senior management learned of these allegations, the Times' article contends, they squelched the inquiry. Among those reportedly kept informed on the probe: Michael Duke, now Wal-Mart's chief executive.

It doesn't matter whether you think Wal-Mart is the driving force behind a race to the bottom on wages and benefits, or a force for good in the lives of lower income Americans and the Third World workers who make so many of its products. Federal law prohibits bribery by American companies overseas. And there is simply no justification for corporate lawbreaking, assuming any occurred in this case, just as there is no justification for failing to investigate and root out wrongdoing.

Wal-Mart has been in hot water before, but these are potentially criminal matters. In December, with the Times on the case, the company told the U.S. Department of Justice it had launched a new investigation. The department should do likewise. And Wal-Mart should appoint an experienced outsider of impeccable integrity to get to the bottom of this mess. Did the company violate the Foreign Corrupt Practices Act by paying bribes to facilitate new stores south of the border? Was it doing the same elsewhere? If wrongdoing did occur, who in senior management knew about it?

The allegations raise disturbing questions about a business patronized by millions of customers. Whatever one's view of Wal-Mart, surely the company and its critics can agree that its executives have to follow the law.