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Harry Cassin
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Thomas Fox
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Eric Carlson
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Why does Walmart want this retiring executive to keep quiet about FCPA matters?

In a November 29 press release that was also part of an SEC filing, Walmart Inc. announced the impending retirement of CFO Brett Biggs. The release said Mr. Biggs, 53, who joined Walmart 22 years ago and became CFO in late 2015, will leave in January 2023.

There’s no indication anywhere that Mr. Biggs’s departure is in any way unfriendly on his part or Walmart’s.

Included in the aforesaid SEC filing is a copy of Mr. Biggs’s retirement agreement. It’s relatively short and includes some typical provisions: Compensation terms until his departure, a two-year non-compete clause, a non-disparagement provision, his release of certain claims, and his undertaking (if called upon) to cooperate with Walmart to defend against litigation.

There’s also a confidentiality clause. It prohibits Mr. Biggs from using or disclosing Walmart’s confidential information at any time before or after his retirement. There are the usual exceptions for any disclosure “required by [an] applicable legal proceeding,” also for information that enters the public domain through no fault of Mr. Biggs, and information Walmart authorizes him to disclose.

I notice references to the FCPA, especially when the context is unusual. So this part of the much longer confidentiality clause stuck out:

“Confidential Information” means information pertaining to the business of Walmart, and includes, without limitation, information regarding . . . Foreign Corrupt Practices Act investigatory and compliance information and strategies . . ..

Here’s the question: Why would Walmart (or any company) want to limit disclosure of FCPA-related information?

Before diving in, a disclaimer: I have no inside or special knowledge about Walmart or CFO Biggs and his work there. I’m neither assuming nor implying anything untoward whatsoever. I’m merely trying to put myself in Walmart’s shoes as a way to understand why it called out the FCPA in an otherwise boilerplate confidentiality clause.

And here’s what I’ve come up with.

First, Walmart doesn’t want to violate its non-prosecution agreement with the DOJ.

In June 2019, Walmart paid the DOJ and SEC $282 million to resolve FCPA offenses. Walmart had weak anti-corruption internal controls in Brazil, China, India, and Mexico, and it paid an intermediary in Brazil for help obtaining construction permits.

The DOJ resolution included a three-year non-prosecution agreement. Walmart promised in the NPA that neither it nor anyone authorized to speak for it would “make any public statement, in litigation or otherwise, contradicting [Walmart’s] acceptance of responsibility . . . or the facts described in the attached Statement of Facts.”

If Walmart breaches that promise, the DOJ in its “sole discretion” can declare the NPA void and prosecute the company for any crime for which there’s evidence. There’s a similar clause in Walmart Brazil’s plea agreement.

No wonder Walmart doesn’t want a former top executive talking publicly about FCPA matters. One wrong word and the sword of Caesar could fall on the company yet again, and a lot harder this time.

Second, Walmart spent about eight years and $900 million conducting a vast global internal FCPA investigation.

The DOJ’s 20-page fact statement attached to the NPA likely reveals a minuscule fraction of the information found in millions of documents uncovered during the internal investigation. Some of those documents likely reveal identities and personal information about witnesses inside and outside Walmart. There might be numerous allegations that Walmart’s lawyers investigated but found to be untrue or unsupported. There could be volumes of valuable proprietary information about Walmart’s business systems, properties, product selections, developers, manufacturers, suppliers, and so on.

In other words, the files which those in the C-suite presumably had access to are probably stuffed with information that could hurt many innocent people and potentially destroy part of Walmart’s enterprise value.

Third, Walmart has an interest in preventing the “marketing” of compliance advice using its brand and methods.

Any former top executive from a world-famous company that was recently a defendant in a high-profile FCPA resolution could launch a rich consulting practice. Think of an insider’s list called “Walmart’s Lessons Learned.”

The DOJ said in the NPA that Walmart took significant remedial measures. Walmart’s measures, according to the NPA, included:

  • enhancing its anti-corruption compliance program and internal accounting controls
  • enhanced monthly and quarterly anti-corruption monitoring
  • enhancing annual anti-corruption risk assessments
  • enhancing on-site global anti-corruption audits
  • enhancing anti-corruption related internal accounting controls on the selection and use of third parties,
  • and more.

Should Walmart feel proprietary about its “enhanced” FCPA compliance strategies? Of course it should. Those strategies now influence how the company and its people interact with the outside world — with foreign officials everywhere, with suppliers, partners, planners, manufacturers, logistics firms, and others.

If Walmart believes its compliance strategies are unique and valuable to its overall business and therefore worth protecting, that’s great. All companies should feel the same way.

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