U.S. authorities have asked Wal-Mart Stores Inc. to pay $300 million to settle a five-year investigation into foreign bribery, according to a person familiar with the talks, a penalty far less than what the Obama administration had sought.
Continue Reading Below
The settlement offer comes after Wal-Mart spent nearly $840 million on its internal investigation of the bribery allegations and upgraded compliance operations, according to financial filings.
Wal-Mart hasn't yet agreed to the offer, this person said, but negotiations are in the final stages. Spokesmen for Wal-Mart and the Justice Department declined to comment. Bloomberg News earlier reported Wal-Mart was close to resolving the probe for $300 million.
As the Obama administration prepared to leave office late last year, the Justice Department and the Securities and Exchange Commission attempted to reach a settlement with the world's largest retailer of as much as $1 billion.
Those talks stalled over several issues beyond the amount Wal-Mart would pay, including the retailer's ability to accept food stamps in its 5,300 U.S. Wal-Mart and Sam's Club stores. A company can lose its right to government contracts after pleading guilty to a federal crime.
Wal-Mart is one of the country's largest recipients of food-stamp spending, taking in about 18% of the money disbursed through the Supplemental Nutrition Assistance Program. It is unclear how the government's current offer would resolve this issue.
Continue Reading Below
The Justice Department launched its investigation as a series of New York Times articles described alleged bribes Wal-Mart paid in Mexico to obtain permits to build stores there, potential violations of the Foreign Corrupt Practices Act. That spurred a wide-reaching investigation of Wal-Mart employee behavior across the globe, including in Brazil, China and India.
Wal-Mart now employs about 2,300 workers in ethics and compliance operations, according to a company report.
At $300 million, the proposed settlement wouldn't be among the largest such penalties. The top 10 largest FCPA settlements are $365 million or larger, according to cases compiled the FCPA Blog, a trade publication.
In December, Brazilian construction giant Odebrecht SA signed the largest anticorruption settlement and agreed to pay between $2.6 billion and $4.5 billion to authorities in Brazil, the U.S. and Switzerland.