Scandal Threatens Wal-Mart's Urban Push

A bribery scandal recently uncovered by The New York Times is undoing years of hard work the retailer has engaged in to "polish its reputation and give elected officials, community groups and shoppers a reason to say yes to their stores."

For those already hesitant to accede to Wal-Mart's aggressive push to open outlets in big cities, a bribery scandal involving the retailer's Mexican subsidiary is providing critics "a new reason to say no," report Stephanie Clifford and Steven Greenhouse. After news broke last week that the "company had paid bribes to obtain permits in virtually every corner of the country [Mexico]", plans to open stores in New York, Los Angeles, Boston, and San Diego are receiving renewed scrutiny.

"In the United States, Wal-Mart has largely exhausted places in suburban and rural areas to build new stores, and is focusing on many of the nation's biggest cities. That means a lot of red tape for approvals. In the last few years, Wal-Mart has smoothed the way with donations to politicians and local nonprofit organizations, and arguments that it helps economic growth and provides healthy groceries."

"This pressure on politicians, in particular, to respond to the suggestion Wal-Mart is buying them off could spread to other cities, said Professor [Dorian] Warren of Columbia."

"'There definitely is a pattern of giving campaign contributions to politicians who support what they want,'" he said of Wal-Mart. But because the Mexican accusations include bribing local officials, 'when you take that to the context of New York or Los Angeles, it's going to make it harder for politicians to accept campaign contributions from Wal-Mart.'"

Full Story: Wal-Mart’s U.S. Expansion Plans Complicated by Bribery Scandal


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