So this might not be the most important question in the world, but I’ve been wondering why the U.S. Government’s investigation into Walmart’s alleged violations of the Foreign Corrupt Practices Act (or, more accurately, FCPA violations committed by Wal-Mart’s Mexican subsidiary, Walmex) has yet to produce a final settlement.

A quick and somewhat simplified recap (for those among our readers who don’t obsessively follow every FCPA case in the pipeline): In April 2012, two New York Times reporters broke a blockbuster story about how Wal-Mex had been systematically paying bribes to scores of Mexican officials to get permits for new stores (often circumventing local environmental protection and historical preservation regulations in the process), and—perhaps even more damningly—about how Walmart’s senior leadership, upon learning of the bribery allegations from an internal whistleblower and preliminary internal investigation, had decided to cover up the problem and reject its own compliance department’s calls for a thorough investigation. (Walmart tried to get out in front of the story by including a disclosure of possible FCPA problems in its December 2011 FCPA filing, though that disclosure downplayed the seriousness of the issue.) The original New York Times story, along with a follow-up story published in April 2012, netted the two reporters a Pulitzer Prize. Those reports, along with Walmart’s December 2011 disclosure, prompted the Department of Justice Securities & Exchange Commission to begin investigating Walmart for FCPA violations.

That was back in April 2012. It’s now three and a half years later, and there’s still no resolution of the case; the investigation is still ongoing—something that has prompted grumbling in some quarters about both the length and cost of the investigation (see here and here). Why is this taking so long?

This is a question I’ve heard several people raise at various conferences and meetings. I don’t have any good answers, but I thought I’d throw out a few hypotheses:

The first, and perhaps simplest, possibility is that there’s in fact nothing special about the Walmart case, and that for better or worse, resolving these sorts of complex, high-stakes FCPA cases simply takes a long time. There’s certainly plenty of data to corroborate that hypothesis: The OECD’s 2014 Foreign Bribery Report found that the average resolution time for foreign bribery cases was over seven years; that statistic includes non-U.S. cases, but other analyses have concluded that recent large FCPA cases take about that long (unsurprising, since the lion’s share of foreign bribery cases considered in the OECD report are FCPA cases). If that’s right, then Walmart is hardly an outlier, and we may well be only about halfway into the investigation. (There’s a debate about whether it’s reasonable for these investigations to take so long, which I’m not going to get into here. The point is that those who think that Walmart is somehow unusual may simply not have a sense of what’s normal for these kinds of investigations.)

That hypothesis is perhaps the most straightforward, and I suspect it’s probably right. But it’s not much fun. So just for the sake of keeping things interesting, let me assume for the moment that Walmart is (or will end up) taking longer than the typical FCPA case. Why might that be? (And again, lots of people I talk to who are purportedly experts in this field do seem to think the case is dragging on.) Here are a few possibilities:

• First, the DOJ may want to drop the hammer on Walmart, and so it’s harder for the parties to settle the case. Virtually all FCPA investigations targeting corporations end in a settlement (usually a deferred prosecution agreement or non-prosecution agreement), one that the parties work out through negotiations. In most cases, the government has an incentive to wrap up the case reasonably expeditiously, which means it may sometimes be willing to make some concessions to the company, even though the company almost always wants to avoid indictment at (almost) all costs. But there’s a sense out there that the DOJ wants to make an example of Walmart, because Walmart’s (alleged) conduct was so egregious—and here I’m not so much referring to the extent of Walmex’s bribery scheme, but to Walmart HQ’s decision to squelch the internal investigation and cover things up. After all, the DOJ very much wants to encourage companies to self-disclose potential FCPA violations (at least when they’re serious), and also wants to encourage companies to take internal compliance seriously. The government has in the past used individual cases to try to send signals to companies that it’s in their interest to do these things. A leading example was the decision not to prosecute Morgan Stanley for one of its employees’ FCPA violations in China; in a rare public announcement of a declination decision, the DOJ emphasized that Morgan Stanley had an elaborate compliance program (which the employee had willfully circumvented), and that the company had promptly disclosed the misconduct to the government and cooperated with the investigation. It may well be that the DOJ wants Walmart to be the counterexample, so they can say (implicitly or explicitly) to the corporate world, “This is what happens when you play nice and cooperate (Morgan Stanley); and this is what happens when you don’t (Walmart).” If that’s right, that the DOJ will be much less willing to give Walmart any sort of break on the sanctions to be imposed, which will extend the length of the negotiating process.
• Second, and perhaps related to the above idea, the fact that the ongoing investigation is costing a huge amount each day in legal fees and associated expenses may not bother the DOJ so much in this case, relative to other cases, precisely because Walmart looks like it was such a bad-faith actor. A number of commentators have complained about the high cost of FCPA investigations, and have often cited to Walmart as a leading example of this. In responding to such criticisms, I quipped a while back that Walmart may not be the best case to use to arouse sympathy for these beleaguered targets of FCPA investigations (and indeed, I’m not terribly sympathetic). Perhaps some of the government folks working on the case feel the same way. To be clear, I doubt that anyone in the government would deliberately draw out the investigation as a means of punishing Walmart. But I could easily imagine that a Walmart representative urging the government to wrap things up quickly in light of the financial burden of the investigation would get a much less sympathetic hearing than would the representative of some other company that had tried to do the right thing, at least after discovering possible FCPA violations.
• Third, it’s at least possible that the government’s legal case in Walmart is not a strong as it appears from the outside. Perhaps there are statute of limitations issues, given that the bribery took place in 2005 and 2006 (and the FCPA has a 5-year statute of limitations)—though the government may be able to establish an ongoing conspiracy to violate the FCPA right up to 2011. Perhaps it might be difficult to attribute Wal-Mex’s unlawful conduct to Walmart (though I doubt it). Still, it might be the case that the government is having a harder time constructing such an airtight legal case that Walmart’s attorneys feel like they have to cave and accept whatever punishment the DOJ wants to impose. And if my first point above is right, then both factors could work in tandem: The DOJ wants to hammer Walmart to set an example, but Walmart’s attorneys are resisting due to possible legal or factual weaknesses in the government’s case.
• Fourth, it might be that the extent of the Walmart’s misconduct is much worse than we know. It’s possible (indeed, likely) that the DOJ is insisting that Walmart conduct an investigation not only into its Mexico operations, but its operations all over the world, including places like India, Brazil, and China. Who knows what those investigations will turn up, or have already turned up?

Of course, this is all rank speculation. As noted above, it’s not at all clear that the Walmart case is in fact taking unusually long, despite the fact that many people seem to think it is. And even if the case is proceeding slower than we’d expect, I really have no idea why that would be. But I’ve thrown out some guesses, and I’d be interested in what other people out there in ReaderLand think about this.