News and Analysis: April 23 - 29

1 - NEWS FROM THE OTHER CAMPAIGN
2 - WALMART SCANDAL REVERBERATES
3 - U.S. WEAPONS FLOOD MEXICO
4 - UNDOCUMENTED IMMIGRATION DECLINES

On April 24, the Junta of Good Government in the Zapatista caracol La Garrucha published an open letter criticizing attacks on the Zapatista community Nueva Paraiso by neighboring communities affiliated with local politicians.  The attacks began last October and include land invasions, armed attacks, destruction of forests and cropland, and stealing crops.  Damages are estimated at nearly US$40,000, a small fortune for a campesino community struggling for existence.  The Junta accuses local, state and federal authorities of organizing the attacks.  These kinds of attacks against autonomous communities have been increasing in recent years.

2 - WALMART SCANDAL REVERBERATES
WalMart and its allies in the business press and ruling class did their best this week to rescue the transnational corporation from an embarrassing, illegal, and potentially costly scandal.  Mexico’s ruling party first tried to ignore the US$24 million bribery scandal that made WalMart the country’s largest private employer.  On Monday, President Felipe Calderon claimed that if the accusations are true, it would be a local matter since bribes for construction permits would have been paid to municipal and state officials. 

But by Thursday, under pressure from opposition parties and the politics of pending national elections, the Comptroller and the federal Attorney General both announced federal investigations.  Not to be outdone, Mexico City Mayor Marcelo Ebrard threatened a “store by store” investigation in the capitol.  The country’s political class quickly jumped on board a well, passing Mexico’s first anti-corruption law that would level fines of US$800 to US$160,000 against foreign companies engaging in corruption related to public works contracts.  WalMart opened over 2,000 stores in two decades using bribery to obtain building permits or buy off political opposition.  Fines in the range contemplated by the new law would hardly dent the bottom line of the transnational corporation.

The business media dutifully published WalMart’s self-serving press releases.  The president for corporate communications, David Tovar, tried to make nice with regulators and the public: “We are taking a deep look at our policies and procedures in every country in which we operate.”  Then he quickly followed with “blame the messenger” logic : “We believe it’s also important to keep a few things in context.  The allegations in the New York Times story about the decisions made in Bentonville are more than six years old.”  Analysts quickly noted that WalMart would not be in its current hot water had company executives at the highest levels not participated for more than six years in a massive cover up of illegal bribes to Mexican officials at all levels of government, violating both Mexican and US laws.  WalMart opened over 2,000 stores in two decades using bribery to obtain building permits or buy off political opposition.  Several analysts noted that bribery on a grand scale would be necessary to move complex commercial building permits and environmental approvals at a pace consistent with this level of new construction.  As WalMart opened a store a day last year, one wonders if the corruption continued right up until late 2011 when the New York Times informed the company of its investigation, and the company finally began its own internal inquiry.

WalMart’s crimes extend well beyond bribery.  Parking lot attendants and baggers aren’t even paid a salary by the company, depending rather on tips from customers.  Last year the company paid US$1.6 billion on sales of over US$30 billion for a tax rate of about 5%.

Former and current executives began looking for cover.  Former WalMart de Mexico senior executive and current WalMart board member Eduardo Castro-Wright, one of the central figures in the scandal, resigned this week from the board of MetLife, claiming, “I must now focus my energy in spending personal time with my family and in protecting my good name and business reputation.”  He may be expecting jail time under a growing SEC investigation into violations of the Foreign Corrupt Practices Act.

Until the full scope of the scandal became apparent, the business press shrugged its collective shoulders.  Tim Worstall of Forbes penned an editorial early in the week entitled “So what?” that captured the spirit of many business leaders.   He justified his attitude with an anything-goes logic: “other countries are indeed other countries and they do things differently there.”  This classic neocolonial view allows WalMart to do what it must to dominate Mexico’s retail market, repatriating profits to Bentonville, Arkansas, and the company’s stockholders, while leaving small and medium-sized retailers unemployed in Mexico.  But as the scope of the scandal became more apparent, even conservative publications like the Chicago Tribune began to wonder “to what extent can we trust our governments to remain free of the corrupting influence of rich corporations…  If the charges against Wal-Mart prove accurate, the punishment must fit the crime.”

3 - U.S. WEAPONS FLOOD MEXICO
Nearly 70,000 guns recovered in Mexico since 2007 came from the US, according to a recent report from the Bureau of Alcohol, Tobacco, Firearms and Explosives.  The US-made weapons represent 68% of all guns confiscated in Mexico during the period in question.  Late last year, the Obama administration initiated a requirement that gun dealers in border states report customers who purchase multiple high-powered rifles within a consecutive five-day period.  Gun dealers and the National Rifle Association are challenging the law in federal court.  

4 - UNDOCUMENTED IMMIGRATION DECLINES
The number of undocumented Mexicans living in the US dropped significantly for the first time since the Great Depression, according to analysis of census data by the Pew Hispanic Center.  Mexicans account for about 60% of undocumented workers living in the US and currently number 6.1 million, a decline from 7 million in 2007.  While experts attribute much of the drop to a sagging US economy and demographic changes in Mexico, many immigrants cite the increasing influence of violent organized crime factions who make it nearly impossible to cross the border without paying up to $3,500 for Mexicans, and perhaps five times as much for Central Americans.

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