Walmart disclosed this week in an earnings call that its investigation and compliance costs resulting from potential violations of the Foreign Corrupt Practices Act were approximately $30 million in the third quarter of fiscal year 2016, now bringing its total costs to $705 million.
As Compliance Week previously reported, the FCPA investigation resulted from allegations that executives at Walmart’s Mexico unit bribed Mexican officials to smooth the way to open stores in prime locations. The scandal came to light in a Pulitzer Prize-winning report by the New York Times in 2012.
The cost of the investigation continues to pile up fast. In fiscal year 2015, which ended Jan. 31, Walmart said it shelled out $173 million for compliance enhancements and investigation costs. Most of that—$121 million—was spent on legal costs associated with the investigation and additional inquiries. The remaining $52 million was spent on Wal-Mart’s global compliance and organizational enhancements.
Additionally, Walmart said expenses incurred for the FCPA inquiries and investigations, as well as our global compliance program and related organizational enhancements, were $282 million and $157 million for fiscal year 2014 and 2013, respectively.
Most recently, the company disclosed in a Nov. 17 earnings call that it spent $30 million for the third quarter of fiscal year 2016, comprised of $22 million for ongoing inquiries and investigations, and $8 million for our global compliance program and organizational enhancements.
These costs are in addition to the $30 million it said it spent in the second quarter, and $33 million it spent in the first quarter. Of the $63 million in total FCPA-related expenses in fiscal year 2016, most of the expenses ($48 million) went toward the ongoing inquiries and investigations, while $15 million went toward the company’s global compliance program and organizational enhancements, Walmart said.