The allegation of bribery in Mexico by Walmart’s Mexican company will be in the news for quite some time.  It has all the making of a great mini-series:  who made payments to whom with whose knowledge for what purpose.  Each of these pieces of information will be significant.

My understanding of the U.S. Foreign Corrupt Practices Act (FCPA) is that anyone working for a US company (even a subsidiary in another country) may not make payments to a government official to gain business.  The New York Times story stated that “executives at Wal-Mart de Mexico authorized payments to Mexican government officials in exchange for expedited zoning and construction permits.”

Once exception according to the FCPA is that “facilitating payments” can be given to a local government official to speed up the process.”  My understanding is that facilitation payments are considered to be modest amounts of money.  Reports say that $24 million was paid in bribes.  So questions about who paid whom, for what purpose, and for what amount of money will have to be established.

There are at least 81 companies under investigation for bribery charges right now.  Most companies charged with bribery settle cases rather than have long court cases with lots of media coverage.  Given the drop in Walmart’s stock when these allegations were made public, a long drawn-out trial would be disastrous to their public image.

Since this is true for all companies, very few have gone to trial so there is little precedent interpreting the boundaries of what constitutes a facilitation payment, whether specific individuals such as the CEO can be held liable, or whether the US corporate headquarters can be held liable for the actions of an independent subsidiary in another country.

Watching this story unfold over the next few months will provide interesting reading even if no legal precedents are established.