Wal-Mart - The Pulitzer Prizes · U(D54G1D)y+,!?!?!#!$ By JENNIFER STEINHAUER and CHARLIE SAVAGE WASHINGTON — Demon-strating rapidly shifting attitudes toward gun control in the

U(D54G1D)y+,!?!?!#!$

By JENNIFER STEINHAUERand CHARLIE SAVAGE

WASHINGTON — Demon-strating rapidly shifting attitudestoward gun control in the after-math of a massacre in a Connecti-cut school, many pro-gun Con-gressional Democrats — includ-ing Senator Harry Reid of Neva-da, the majority leader and alongstanding gun rights support-er — signaled an openness Mon-day to new restrictions on guns.

White House officials re-mained vague and noncommittalabout how President Obamawould translate into action hissoaring rhetoric Sunday in New-town, when he appeared to pres-age an effort to curb access toguns. But many Democrats, in-cluding several from conserva-tive states, said Congress shouldtake up the issue next year, andone Senate chairman promisedhearings.

Senator Joe Manchin III ofWest Virginia, an advocate of gunrights who drew attention in 2010by running a commercial thatshowed him firing a rifle into apiece of legislation serving as atarget, said “everything shouldbe on the table” as gun control isdebated in the coming weeks andmonths.

The receptiveness to new gunlaws from figures like Mr. Man-chin suggested the National RifleAssociation, long one of the mostpowerful lobbies in Washington,would face a strong test of its in-fluence in the coming months if itsought to fend off tougher re-strictions. Leaders of the organ-ization have declined interviewrequests since the shootings, thegroup’s Twitter account has gonesilent, and it has deactivated itsFacebook page.

As the criminal inquiry pro-ceeded, investigators studying acomputer taken from the house ofthe Connecticut gunman, AdamLanza, said it was so badly dam-aged that they were not opti-mistic that they would be able toget any information from it, a lawenforcement official said Mon-day. [Page A30.]

The Federal Bureau of Investi-gation, which has more expertisein computer forensics than Con-necticut’s state forensic laborato-ry, has been part of the effort torecover data from the computer,the official said.

A federal law enforcement offi-cial said the Bureau of Alcohol,Tobacco, Firearms and Explo-sives had determined that Mr.Lanza and his mother, NancyLanza, visited firing ranges to-gether and separately in recentyears, with one known occasionof their going together. It was notclear whether they had both firedweapons on that visit.

The White House offered no

Pro-Gun Democrats Signaling Openness to Limits; Town Starts the Mournful Task of Saying Goodbye

Attitudes Shift inCongress After

Shootings

Continued on Page A32

By DAVID BARSTOW and ALEJANDRA XANIC von BERTRAB

SAN JUAN TEOTIHUA-CÁN, Mexico — Wal-Martlonged to build in Elda Pine-da’s alfalfa field. It was anideal location, just off thistown’s bustling main entranceand barely a mile from its an-cient pyramids, which drawtourists from around theworld. With its usual preci-sion, Wal-Mart calculated itwould attract 250 customersan hour if only it could put astore in Mrs. Pineda’s field.

One major obstacle stood inWal-Mart’s way.

After years of study, thetown’s elected leaders hadjust approved a new zoningmap. The leaders wanted tolimit growth near the pyra-mids, and they considered thetown’s main entrance too con-gested already. As a result,the 2003 zoning map prohib-ited commercial developmenton Mrs. Pineda’s field, seem-ingly dooming Wal-Mart’shopes.

But 30 miles away in Mex-ico City, at the headquartersof Wal-Mart de Mexico, exec-utives were not about to be

thwarted by an unfavorablezoning decision. Instead,records and interviews show,they decided to undo the dam-age with one well-placed$52,000 bribe.

The plan was simple. Thezoning map would not becomelaw until it was published in agovernment newspaper. SoWal-Mart de Mexico arrangedto bribe an official to changethe map before it was sent tothe newspaper, records andinterviews show. Sureenough, when the map waspublished, the zoning for Mrs.Pineda’s field was redrawn toallow Wal-Mart’s store.

Problem solved. Wal-Mart de Mexico broke

ground months later, provok-ing fierce opposition. Protest-ers decried the very idea of aWal-Mart so close to a cultur-al treasure. They contendedthe town’s traditional publicmarkets would be decimated,its traffic mess made worse.Months of hunger strikes andsit-ins consumed Mexico’snews media. Yet for all thescrutiny, the story of the al-tered map remained a secret.The store opened for Christ-mas 2004, affirming Wal-Mart’s emerging dominancein Mexico.

The secret held even after aformer Wal-Mart de Mexicolawyer contacted Wal-Martexecutives in Bentonville,Ark., and told them how Wal-Mart de Mexico routinely re-sorted to bribery, citing the al-tered map as but one exam-ple. His detailed account — hehad been in charge of gettingbuilding permits throughoutMexico — raised alarms atthe highest levels of Wal-Martand prompted an internal in-vestigation.

But as The New York Timesrevealed in April, Wal-Mart’sleaders shut down the investi-gation in 2006. They did soeven though their investiga-tors had found a wealth of evi-dence supporting the lawyer’s

The Bribery AisleHow Wal-Mart Used Payoffs

To Get Its Way in Mexico

DANIEL AGUILAR/REUTERS

In Teotihuacán, EmmanuelD’Herrera helped lead pro-tests against Wal-Mart. Continued on Page B6

A POWERFUL ADVOCATE The Na-tional Rifle Association, silentsince the massacre, may face atest of its political power. PAGE A31

WHAT HAPPENED From school of-ficials, parents and police, a re-counting of the shooting. PAGE A31

THE HEALING PROCESS For youngsurvivors of gun trauma, the roadto recovery can be long. PAGE D1

By DAN BARRY

NEWTOWN, Conn. — NoahPozner loved tacos, so much sothat he talked of wanting to bethe manager of a taco factorywhen he grew up; that way, hewould be able to eat a taco when-ever he wanted. He had a way ofcharming his elders and loved hissiblings, including a twin sisterwho was in another classroomthat day.

Jack Pinto adored the New

York Giants and proudly wore ared Little League cap adornedwith a large N for the name of hishometown. He was a spinning topof a boy, bouncing from one activ-ity to the next, as if the day couldnever contain all the fun to behad.

The people of Newtown buriedthese two boys under an ashensky on Monday afternoon, in thefirst of the many funerals to fol-low last week’s massacre at theSandy Hook Elementary School.They were both 6 years old.

The realization that Jack andNoah were gone settled like theDecember chill upon the HonanFuneral Home in Newtown,where a Christian service washeld for Jack, and upon the Abra-ham L. Green and Sons FuneralHome in Fairfield, where a Jew-ish service was held for Noah.

An 8-year-old boy named No-lan Krieger, dressed in khakipants and a plaid dress shirt, cap-tured the intensifying sense ofloss as he left the service for hisfriend Jack. “I used to do every-thing with him,” Nolan said, rub-

bing his eyes. “We liked to wres-tle. We played Wii. We just playedall the time. I can’t believe I’mnever going to see him again.”

The how of their deaths is, bynow, internationally known. A 20-year-old man named Adam Lan-za shot and killed his mother onFriday morning. Then, armedwith an assault rifle and twohandguns, he shot his way intothe elementary school and killed20 first-grade children and sixschool officials, all women, beforekilling himself.

The why of their deaths,though, is still being pieced to-gether. The school remains acrime scene, and law enforce-ment officials said they expectedto spend weeks, if not months, in-vestigating angles and interview-ing witnesses — including chil-dren — to develop the complete,unsettling picture.

First, though, there was Mon-day, just after Hanukkah, a weekbefore Christmas Eve — andwhat was supposed to be the first

With the Why Elusive, Two Boys, Two Burials

ADREES LATIF/REUTERS

A hearse carrying the body of Jack Pinto, 6, approached Newtown Village Cemetery on Monday.

CHANG W. LEE/THE NEW YORK TIMES

Some waited nearly two hoursto pay their respects to Jack. Continued on Page A30

Mr. Inouye, 88, aWorld War II herowho went to Wash-ington at the birthof his state in 1959and dominatedpublic life in theHawaiian islands,broke racial barri-ers on Capitol Hill.

PAGE A33

OBITUARIES A33

Daniel K. Inouye of Hawaii, Long-Serving Senator, Dies The Pentagon said it would give Paki-

stan nearly $700 million toward the costof stationing 140,000 troops on the Af-ghan border. The absence of a reactionin Washington indicates a gradual thaw-ing of relations. PAGE A9

INTERNATIONAL A3-15

Reimbursement for Pakistan

Joe Nocera PAGE A35

EDITORIAL, OP-ED A34-35

In Vietnam, archaeologists say, a StoneAge community took care of a man whocould not take care of himself. PAGE D1

SCIENCE TIMES D1-8

Ancient Bones Tell a Story

“Zero Dark Thirty” depicts the long,twisted search for Osama bin Laden. Areview by Manohla Dargis. PAGE C1

ARTS C1-8

Weaving Truth and Drama

Shelby County, Tenn., has signed anagreement to overhaul its juvenile jus-tice system, a move that the Justice De-partment hailed as the first of its kind inthe nation. PAGE A16

A Pact on Juvenile Justice

RepresentativeTim Scott of SouthCarolina was cho-sen to succeed JimDeMint. He will bethe sole African-American in theSenate and onlythe fifth since theReconstructionera. PAGE A16

NATIONAL A16-21

G.O.P. Choice With Moment

New York and New Jersey homeownersare receiving an expedited array ofpost-storm federal assistance. PAGE A24

NEW YORK A20-26

Extra Storm Aid, Extra Quickly

Morgan Stanley was fined $5 million bya Massachusetts regulator and accusedof improperly influencing the offering ofa highly coveted stock. PAGE B1

BUSINESS DAY B1-13

Fine in Facebook Offering

By JONATHAN WEISMAN

WASHINGTON — PresidentObama delivered to SpeakerJohn A. Boehner a new offer onMonday to resolve the pendingfiscal crisis, a deal that wouldraise revenues by $1.2 trillionover the next decade but keep inplace the Bush-era tax rates forany household with earnings be-low $400,000.

The offer is close to a plan pro-posed by the speaker on Friday,and both sides expressed confi-dence that they were closing inon a major deficit-reduction planthat could be passed well beforeJanuary, when more than a half-trillion dollars in automatic taxincreases and spending cutswould kick in.

Senior Republican aides saidthe speaker was to meet withHouse Republicans on Tuesdaymorning to discuss the state ofnegotiations. But they cautioned

that obstacles remained. “Any movement away from the

unrealistic offers the presidenthas made previously is a step inthe right direction,” said BrendanBuck, a spokesman for Mr. Boeh-ner. “We hope to continue dis-cussions with the president so wecan reach an agreement that istruly balanced and begins tosolve our spending problem.”

The two sides are now dicker-ing over price, not philosophicaldifferences, and the numbers arevery close.

Mr. Boehner had offered thepresident a deficit frameworkthat would raise $1 trillion over 10years, with the details to be set-tled next year by Congress’s tax-writing committees and the Oba-ma administration. In response,Mr. Obama reduced his proposalto $1.2 trillion from $1.4 trillion on

Obama Offers Fiscal Plan CloseTo G.O.P.’s, but Hurdles Remain


VOL. CLXII . . No. 55,989 © 2012 The New York Times NEW YORK, TUESDAY, DECEMBER 18, 2012

Late EditionToday, windy with some rain thismorning, then clouds and sun. High56. Tonight, partly cloudy, low 38.Tomorrow, clouds and sun, high 49.Weather map appears on Page B12.

$2.50

Mark Sanchez threw four interceptionsand fumbled a snap on the last play asthe bumbling Jets lost to the TennesseeTitans, 14-10, ending their chances ofmaking the playoffs. PAGE B15

SPORTSTUESDAY B14-19

Jets’ Playoff Chances End

C M Y K Nxxx,2012-12-18,A,001,Bs-BK,E3

SAN JUAN TEOTIHUACÁN, Mexico

WAl-MArT longed to build in Elda Pineda’s alfalfa field. It was an ideal location, just off this town’s bustling

main entrance and barely a mile from its ancient pyramids, which draw tourists from around the world. With its usual precision, Wal-Mart calcu-lated it would attract 250 customers an hour if only it could put a store in Mrs. Pineda’s field.

One major obstacle stood in Wal-Mart’s way.

After years of study, the town’s elected leaders had just approved a new zoning map. The leaders wanted to limit growth near the pyramids, and they considered the town’s main entrance too congested already. As a result, the 2003 zoning map prohibited commercial development on Mrs. Pineda’s field, seemingly dooming Wal-Mart’s hopes.

But 30 miles away in Mexico City, at the headquarters of Wal-Mart de Mexico, executives were not about to be thwarted by an un-favorable zoning decision. Instead, records and interviews show, they decided to undo the damage with one well-placed $52,000 bribe.

The plan was simple. The zon-ing map would not become law until it was published in a govern-ment newspaper. So Wal-Mart de Mexico arranged to bribe an official to change the map before it was sent to the newspaper, re-cords and interviews show. Sure enough, when the map was pub-lished, the zoning for Mrs. Pine-

da’s field was redrawn to allow Wal-Mart’s store.

Problem solved.Wal-Mart de Mexico broke ground months

later, provoking fierce opposition. Protesters decried the very idea of a Wal-Mart so close to a cultural treasure. They contended the town’s traditional public markets would be decimated, its traffic mess made worse. Months of hunger strikes and sit-ins consumed Mexico’s news me-dia. Yet for all the scrutiny, the story of the al-tered map remained a secret. The store opened for Christmas 2004, affirming Wal-Mart’s emerging dominance in Mexico.

The secret held even after a former Wal-Mart de Mexico lawyer contacted Wal-Mart ex-

ecutives in Bentonville, Ark., and told them how Wal-Mart de Mex-ico routinely resorted to bribery, citing the altered map as but one example. His detailed account — he had been in charge of getting building permits throughout Mex-ico — raised alarms at the highest levels of Wal-Mart and prompted an internal investigation.

But as The New York Times revealed in April, Wal-Mart’s lead-ers shut down the investigation in 2006. They did so even though their investigators had found a wealth of evidence supporting the lawyer’s allegations. The decision meant authorities were not noti-fied. It also meant basic questions about the nature, extent and im-pact of Wal-Mart de Mexico’s con-duct were never asked, much less


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answered.The Times has now picked up where Wal-

Mart’s internal investigation was cut off, trav-eling to dozens of towns and cities in Mexico, gathering tens of thousands of documents re-lated to Wal-Mart de Mexico permits, and in-terviewing scores of government officials and Wal-Mart employees, including 15 hours of in-terviews with the former lawyer, Sergio Cicero Zapata.

The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent proce-dures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from

unsafe construction. It used bribes to outflank rivals.

Through confidential Wal-Mart documents, The Times identified 19 store sites across Mexi-co that were the target of Wal-Mart de Mexico’s bribes. The Times then matched information about specific bribes against permit records for each site. Clear patterns emerged. Over and over, for example, the dates of bribe payments coincided with dates when critical permits were issued. Again and again, the strictly forbidden became miraculously attainable.

Thanks to eight bribe payments totaling $341,000, for example, Wal-Mart built a Sam’s Club in one of Mexico City’s most densely populated neighborhoods, near the Basílica de Guadalupe, without a construction license, or an environmental permit, or an urban impact assessment, or even a traffic permit. Thanks to nine bribe payments totaling $765,000, Wal-Mart built a vast refrigerated distribution cen-ter in an environmentally fragile flood basin

B6 N BUSINESSTHE NEW YORK TIMES TUESDAY, DECEMBER 18, 2012

allegations. The decision meant authori-ties were not notified. It also meant bas-ic questions about the nature, extentand impact of Wal-Mart de Mexico’sconduct were never asked, much lessanswered.

The Times has now picked up whereWal-Mart’s internal investigation wascut off, traveling to dozens of towns andcities in Mexico, gathering tens of thou-sands of documents related to Wal-Martde Mexico permits, and interviewingscores of government officials and Wal-Mart employees, including 15 hours ofinterviews with the former lawyer, Ser-gio Cicero Zapata.

The Times’s examination reveals thatWal-Mart de Mexico was not the re-luctant victim of a corrupt culture thatinsisted on bribes as the cost of doingbusiness. Nor did it pay bribes merelyto speed up routine approvals. Rather,Wal-Mart de Mexico was an aggressiveand creative corrupter, offering largepayoffs to get what the law otherwiseprohibited. It used bribes to subvertdemocratic governance — public votes,open debates, transparent procedures.It used bribes to circumvent regulatorysafeguards that protect Mexican citi-zens from unsafe construction. It usedbribes to outflank rivals.

Through confidential Wal-Mart docu-ments, The Times identified 19 storesites across Mexico that were the targetof Wal-Mart de Mexico’s bribes. TheTimes then matched information aboutspecific bribes against permit recordsfor each site. Clear patterns emerged.Over and over, for example, the dates ofbribe payments coincided with dateswhen critical permits were issued.Again and again, the strictly forbiddenbecame miraculously attainable.

Thanks to eight bribe payments to-taling $341,000, for example, Wal-Martbuilt a Sam’s Club in one of MexicoCity’s most densely populated neigh-borhoods, near the Basílica de Guada-lupe, without a construction license, oran environmental permit, or an urbanimpact assessment, or even a trafficpermit. Thanks to nine bribe paymentstotaling $765,000, Wal-Mart built a vastrefrigerated distribution center in anenvironmentally fragile flood basinnorth of Mexico City, in an area whereelectricity was so scarce that manysmaller developers were turned away.

But there is no better example of Wal-Mart de Mexico’s methods than its con-quest of Mrs. Pineda’s alfalfa field. InTeotihuacán, The Times found that Wal-Mart de Mexico executives approved atleast four different bribe payments —more than $200,000 in all — to build justa medium-size supermarket. Withoutthose payoffs, records and interviewsshow, Wal-Mart almost surely would nothave been allowed to build in Mrs. Pine-da’s field.

The Teotihuacán case also raises newquestions about the way Wal-Mart’sleaders in the United States respondedto evidence of widespread corruption intheir largest foreign subsidiary.

Wal-Mart’s leadership was wellaware of the protests here in 2004. (Thecontroversy was covered by severalnews outlets in the United States, in-cluding The Times.) From the start, pro-test leaders insisted that corruptionsurely played a role in the store’s per-mits. Although woefully short on specif-ics, their complaints prompted multipleinvestigations by Mexican authorities.One of those investigations was still un-der way when Wal-Mart’s top execu-tives first learned of Mr. Cicero’s ac-count of bribes in Teotihuacán (pro-nounced Tay-o-tea-wah-KHAN).

But Wal-Mart’s leaders did not tellMexican authorities about his allega-tions, not even after their own investi-gators concluded there was “reasonablesuspicion” to believe laws had been vio-

lated, records and interviews show. Un-aware of this new evidence, Mexican in-vestigators said they could find nowrongdoing in Teotihuacán.

Wal-Mart has been under growingscrutiny since The Times disclosed itscorruption problems in Mexico, where itis the largest private employer, with221,000 people working in 2,275 stores,supermarkets and restaurants.

In the United States, the Justice De-partment and the Securities and Ex-change Commission are investigatingpossible violations of the Foreign Cor-rupt Practices Act, the federal law thatmakes it a crime for American corpora-tions or their subsidiaries to bribe for-eign officials. Mexican authorities andCongressional Democrats have also be-gun investigations, and Wal-Mart hasbeen hit by shareholder lawsuits fromseveral major pension funds.

Wal-Mart declined to discuss its con-duct in Teotihuacán while it is continu-ing its own investigation. The companyhas hired hundreds of lawyers, investi-gators and forensic accountants whoare examining all 27 of its foreign mar-

kets. It has already found potentially se-rious wrongdoing, including indicationsof bribery in China, Brazil and India.Several top executives in Mexico andIndia have been suspended or forced toresign in recent months.

Wal-Mart has also tightened over-sight of its internal investigations. It hascreated high-level positions to help rootout corruption. It is spending millionson anticorruption training and back-ground checks of the lawyers and lobby-ists who represent Wal-Mart before for-eign governments. The company hasspent more than $100 million on in-vestigative costs this year.

“We are committed to having astrong and effective global anticorrup-tion program everywhere we operateand taking appropriate action for anyinstance of noncompliance,” said DavidW. Tovar, a Wal-Mart spokesman.

In Mexico, a major focus of Wal-Mart’s investigation is none other thanthe boxy, brown supermarket in Mrs.Pineda’s alfalfa field.

Eight years later, it remains the mostcontroversial Wal-Mart in Mexico, a

powerful symbol of globalism’s impacton Mexican culture and commerce.

As it turns out, the store also took onsymbolic importance within Wal-Martde Mexico, Mr. Cicero said in an in-terview. Executives, he said, came tobelieve that by outmuscling protestersand building in the shadow of a reverednational treasure, they would send amessage to the entire country: If wecan build here, we can build anywhere.

City of the GodsIn ancient times, Teotihuacán was a

sprawling metropolis of perhaps 150,000people. The “city of the gods,” as the Az-tecs called it, rose up around a vast tem-ple complex and two great pyramids,the Sun and the Moon. The ancient cityis long gone, buried under farm fields,small pueblos and the detritus of by-gone civilizations. But the temple com-plex and pyramids remain, which iswhy Teotihuacán is so central to Mex-ico’s cultural patrimony.

Teotihuacán’s leaders naturally want-ed to protect this legacy as they beganwork on a new zoning plan in 2001. To

keep the town attractive as a touristdestination, they decided to limit devel-opment in the “archaeological zone,” abuffer of protected land that encirclesthe pyramids. At the same time, theywanted a plan that would lure moretourists into the town’s central square.

“People complained tourists didn’t gointo town,” said Víctor Ortiz, a partnerin the consulting firm the town hired todraw up its new zoning plan.

By early 2003, just as Mr. Ortiz’s firmwas finishing its work, Wal-Mart deMexico had settled on Teotihuacán as aripe target for expansion. Its popula-tion, nearly 50,000, was growing fast,and its commerce was dominated bysmall neighborhood shops and a tradi-tional public market in the centralsquare — exactly the type of competi-tion Wal-Mart de Mexico had van-quished in town after town.

Mr. Cicero, a trim, sharp-featuredman, recalled how Mrs. Pineda’s alfalfafield jumped out as Wal-Mart’s real es-tate executives scoured aerial photo-graphs of Teotihuacán. By putting oneof Wal-Mart’s Bodega Aurrera super-markets at the town’s main entrance,they could create a choke point thatwould effectively place the town off lim-its to competitors. There was also spaceto add other types of Wal-Mart stores —restaurants or department stores —down the road. “We would be slammingthe gate on the whole town,” he said.

But Wal-Mart officials got a cold re-ception when they began to inquireabout permits at Teotihuacán’s munici-pal offices. Saúl Martínez, an employeein the urban development office, re-called telling Wal-Mart’s representa-tives that a supermarket could not bebuilt in Mrs. Pineda’s field, because thefield was zoned for housing. Wal-Martwould need a zoning change. But a su-permarket, he told them, was sure togenerate strong opposition because ofthe traffic chaos it would create.

“Go look for something else,” he re-called telling Wal-Mart.

At first, Mr. Cicero’s team thought ithad found a perfectly legal solution tothe zoning problem. Only a narrow stripof land separated Mrs. Pineda’s fieldfrom Hidalgo Avenue, the main roadinto town. If Wal-Mart could build an en-trance across that strip, zoning ruleswould let it rely on Hidalgo Avenue’szoning, which allowed commercial de-velopment. But Wal-Mart could not geta right of way, despite months of trying.

By then, the municipality was rush-ing to complete its new zoning plan. Of-ficials were already holding publicmeetings to present the plan and solicitfeedback. A final vote was scheduled forAug. 6, 2003.

The Times obtained four differentcopies of the new zoning map as it ex-isted on the eve of the vote. All four, in-cluding two found in the town’s urbandevelopment office, confirm that hous-ing was the only kind of development al-lowed on Mrs. Pineda’s field. There isno record of Wal-Mart seeking a last-minute change, and nine officials close-ly involved in drafting the plan all saidin separate interviews that they werecertain Wal-Mart made no such request.

“I would remember,” said HumbertoPeña, then the mayor of Teotihuacán.“And if they would have asked that, myanswer would have been no.”

After two years of painstaking work,Mr. Peña and the municipal councilunanimously approved Teotihuacán’snew zoning plan on Aug. 6

The next day Mr. Peña sent the newmap to the state’s Office of Urban andRegional Planning, a bureaucratic out-

PHOTOGRAPHS BY JOSH HANER/THE NEW YORK TIMES

A STORE BUILT ON BRIBESWithout paying more than $200,000 in bribes, Wal-Mart almost certainly would not have been able to build its Bodega Aurrera supermarket in Teotihuacán.

How Wal-Mart Used Payoffs to Get Its Way in Mexico

THE COMPETITION MOVES INInside the Bodega Aurrera in Teotihuacán, top, shoppers can buy everything from tortillas to tires. Market

vendors, above, were among those most concerned about Wal-Mart’s plans to enter Teotihuacán.

From Page A1

Josh Haner and James C. McKinley Jr.contributed reporting.

Videos and a photo slide showtracing Wal-Mart’s entry into

Teotihuacán and residents’ reactions,and previous articles. nytimes.com/business

ONLINE: IN THE PYRAMIDS’ SHADOW

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north of Mexico City, in an area where electric-ity was so scarce that many smaller developers were turned away.

But there is no better example of Wal-Mart de Mexico’s methods than its conquest of Mrs. Pineda’s alfalfa field. In Teotihuacán, The Times found that Wal-Mart de Mexico executives ap-proved at least four different bribe payments — more than $200,000 in all — to build just a me-dium-size supermarket. Without those payoffs, records and interviews show, Wal-Mart almost surely would not have been allowed to build in Mrs. Pineda’s field.

The Teotihuacán case also raises new ques-tions about the way Wal-Mart’s leaders in the United States responded to evidence of wide-spread corruption in their largest foreign sub-sidiary.

Wal-Mart’s leadership was well aware of the protests here in 2004. (The controversy was covered by several news outlets in the United States, including The Times.) From the start, protest leaders insisted that corruption surely played a role in the store’s permits. Although woefully short on specifics, their complaints prompted multiple investigations by Mexican authorities. One of those investigations was still under way when Wal-Mart’s top executives first learned of Mr. Cicero’s account of bribes in Teo-tihuacán (pronounced Tay-o-tea-wah-KHAN).

But Wal-Mart’s leaders did not tell Mexi-can authorities about his allegations, not even after their own investigators concluded there was “reasonable suspicion” to believe laws had been violated, records and interviews show. Unaware of this new evidence, Mexican inves-tigators said they could find no wrongdoing in Teotihuacán.

Wal-Mart has been under growing scrutiny since The Times disclosed its corruption prob-lems in Mexico, where it is the largest private employer, with 221,000 people working in 2,275 stores, supermarkets and restaurants.

In the United States, the Justice Depart-ment and the Securities and Exchange Com-mission are investigating possible violations of the Foreign Corrupt Practices Act, the federal law that makes it a crime for American corpo-rations or their subsidiaries to bribe foreign of-ficials. Mexican authorities and Congressional Democrats have also begun investigations, and Wal-Mart has been hit by shareholder lawsuits

from several major pension funds.Wal-Mart declined to discuss its conduct in

Teotihuacán while it is continuing its own inves-tigation. The company has hired hundreds of lawyers, investigators and forensic accountants who are examining all 27 of its foreign markets. It has already found potentially serious wrong-doing, including indications of bribery in China, Brazil and India. Several top executives in Mex-ico and India have been suspended or forced to resign in recent months.

Wal-Mart has also tightened oversight of its internal investigations. It has created high-level positions to help root out corruption. It is spend-ing millions on anticorruption training and background checks of the lawyers and lobbyists who represent Wal-Mart before foreign govern-ments. The company has spent more than $100 million on investigative costs this year.

“We are committed to having a strong and effective global anticorruption program every-where we operate and taking appropriate action for any instance of noncompliance,” said David W. Tovar, a Wal-Mart spokesman.

In Mexico, a major focus of Wal-Mart’s in-vestigation is none other than the boxy, brown supermarket in Mrs. Pineda’s alfalfa field.

Eight years later, it remains the most con-troversial Wal-Mart in Mexico, a powerful sym-bol of globalism’s impact on Mexican culture and commerce.

As it turns out, the store also took on sym-bolic importance within Wal-Mart de Mexico, Mr. Cicero said in an interview. Executives, he said, came to believe that by outmuscling pro-testers and building in the shadow of a revered national treasure, they would send a message to the entire country: If we can build here, we can build anywhere.

City of the GodsIn ancient times, Teotihuacán was a sprawl-

ing metropolis of perhaps 150,000 people. The “city of the gods,” as the Aztecs called it, rose up around a vast temple complex and two great pyramids, the Sun and the Moon. The ancient city is long gone, buried under farm fields, small pueblos and the detritus of bygone civilizations. But the temple complex and pyramids remain, which is why Teotihuacán is so central to Mexi-co’s cultural patrimony.

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protect this legacy as they began work on a new zoning plan in 2001. To keep the town attractive as a tourist destination, they decided to limit development in the “archaeological zone,” a buffer of protected land that encircles the pyra-mids. At the same time, they wanted a plan that would lure more tourists into the town’s central square.

“People complained tourists didn’t go into town,” said Víctor Ortiz, a partner in the con-sulting firm the town hired to draw up its new zoning plan.

By early 2003, just as Mr. Ortiz’s firm was finishing its work, Wal-Mart de Mexico had set-tled on Teotihuacán as a ripe target for expan-sion. Its population, nearly 50,000, was growing fast, and its commerce was dominated by small neighborhood shops and a traditional public market in the central square — exactly the type of competition Wal-Mart de Mexico had van-quished in town after town.

Mr. Cicero, a trim, sharp-featured man, re-called how Mrs. Pineda’s alfalfa field jumped out as Wal-Mart’s real estate executives scoured aerial photographs of Teotihuacán. By putting one of Wal-Mart’s Bodega Aurrera supermar-kets at the town’s main entrance, they could create a choke point that would effectively place the town off limits to competitors. There was also space to add other types of Wal-Mart stores — restaurants or department stores — down the road. “We would be slamming the gate on the whole town,” he said.

But Wal-Mart officials got a cold reception when they began to inquire about permits at Teotihuacán’s municipal offices. Saúl Martínez, an employee in the urban development office, recalled telling Wal-Mart’s representatives that a supermarket could not be built in Mrs. Pine-da’s field, because the field was zoned for hous-ing. Wal-Mart would need a zoning change. But a supermarket, he told them, was sure to gen-erate strong opposition because of the traffic chaos it would create.

“Go look for something else,” he recalled telling Wal-Mart.

At first, Mr. Cicero’s team thought it had found a perfectly legal solution to the zoning problem. Only a narrow strip of land separated Mrs. Pineda’s field from Hidalgo Avenue, the main road into town. If Wal-Mart could build an entrance across that strip, zoning rules would

let it rely on Hidalgo Avenue’s zoning, which al-lowed commercial development. But Wal-Mart could not get a right of way, despite months of trying.

By then, the municipality was rushing to complete its new zoning plan. Officials were already holding public meetings to present the plan and solicit feedback. A final vote was scheduled for Aug. 6, 2003.

The Times obtained four different copies of the new zoning map as it existed on the eve of the vote. All four, including two found in the town’s urban development office, confirm that housing was the only kind of development al-lowed on Mrs. Pineda’s field. There is no record of Wal-Mart seeking a last-minute change, and nine officials closely involved in drafting the plan all said in separate interviews that they were certain Wal-Mart made no such request.

“I would remember,” said Humberto Peña, then the mayor of Teotihuacán. “And if they would have asked that, my answer would have been no.”

After two years of painstaking work, Mr. Peña and the municipal council unanimously approved Teotihuacán’s new zoning plan on Aug. 6

The next day Mr. Peña sent the new map to the state’s Office of Urban and regional Plan-ning, a bureaucratic outpost of roughly a dozen employees in Toluca, the State of Mexico’s capi-tal. The office’s main job was to verify that local zoning plans fit the state’s development goals. It also handled the critical final step — arrang-ing publication of completed plans in the state’s official newspaper, the Government’s Gazette.

An Altered MapIf the council’s vote seemingly dashed Wal-

Mart’s hopes for Teotihuacán, Wal-Mart de Mexico’s executives certainly acted as if they knew something the rest of the world did not.

On Aug. 12, records show, they asked Wal-Mart’s leadership in the United States to ap-prove their plan to spend about $8 million on a Bodega Aurrera in Mrs. Pineda’s field. The request was approved by Wal-Mart’s interna-tional real estate committee, made up of 20 or so top executives, including S. robson Walton, the company’s chairman.

The committee’s approval, records show, was contingent on obtaining “zoning for com-

N B7BUSINESSTHE NEW YORK TIMES TUESDAY, DECEMBER 18, 2012

Main roadinto town

Main entrance to pyramid complex

Temple ofQuetzalcóatl

0.1 milesTo Sun and Moon Pyramids

San JuanTeotihuacán

Wal-Martsite

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FOUR BRIBES, ONE WAL-MART

THE ORIGINAL MAP

THE ALTERED MAP

$114,000Facing certain opposition from local merchants and residents, Wal-Mart de Mexico executives agreed to pay $114,000 in bribes to guarantee the support of Teotihuacán’s mayor and his allies on the municipal council, records and interviews show.

$25,900Wal-Mart wanted to build by the main entrance into Teotihuacán, in a spot already choked with traffic. Wal-Mart de Mexico authorized a $25,900 bribe payment to gain the approval of local traffic authorities, records and interviews show.

$52,000The biggest hurdle was Teotihuacán’s zoning map. It clearly prohibited commercial development where Wal-Mart wanted to build. Wal-Mart de Mexico authorized a $52,000 bribe payment to have the map altered, records and interviews show.

Wal-Mart de Mexico faced a series of legal obstacles in its quest to build a supermarket in the protected archaeological zone around the pyramid complex in Teotihuacán. It overcame those obstacles by authorizing bribes, records and interviews show.

Teotihuacán’s leaders approved a new zoning

map on Aug. 6, 2003. That map prohibited

any commercial development on the plot where Wal-Mart

wanted to build its supermarket.

The new map would not become law until it

was published in a government

newspaper. Wal-Mart de Mexico bribed an

official to alter the map before it was sent

off for publication.

In the altered map, the land where

Wal-Mart wanted to build had its zoning

changed to E-T-M, a category that

permitted a supermarket.

The plot’s zoning designation, H500A, allowed only houses

to be built there.

Up to $81,000Wal-Mart could not build by the pyramids without a permit from the agency that protects Mexico’s cultural landmarks. Wal-Mart de Mexico offered a “donation” of up to $45,000 and a “personal gift” of up to $36,000 in exchange for the permit, records and interviews show.

THE NEW YORK TIMES

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Teotihuacán

Mexico City

STATE OFMEXICO

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post of roughly a dozen employees inToluca, the State of Mexico’s capital.The office’s main job was to verify thatlocal zoning plans fit the state’s devel-opment goals. It also handled the crit-ical final step — arranging publicationof completed plans in the state’s officialnewspaper, the Government’s Gazette.

An Altered MapIf the council’s vote seemingly

dashed Wal-Mart’s hopes for Teotihua-cán, Wal-Mart de Mexico’s executivescertainly acted as if they knew some-thing the rest of the world did not.

On Aug. 12, records show, they askedWal-Mart’s leadership in the UnitedStates to approve their plan to spendabout $8 million on a Bodega Aurrera inMrs. Pineda’s field. The request was ap-proved by Wal-Mart’s international realestate committee, made up of 20 or sotop executives, including S. RobsonWalton, the company’s chairman.

The committee’s approval, recordsshow, was contingent on obtaining “zon-ing for commercial use.”

By law, the state Office of Urban andRegional Planning could not make zon-ing changes on maps it reviewed. Ifthere were problems, it was supposed tosend the map back to the town for revi-sions. Teotihuacán’s plan, however, wasquickly approved and then sent to theGovernment’s Gazette on Aug. 20.

It typically took the Gazette a fewweeks to publish a new zoning plan.Only then did it become law. But evenbefore Teotihuacán’s map was pub-

lished, Wal-Mart de Mexico did twovery curious things: First, it began anexpensive soil mechanics study of Mrs.Pineda’s field, which it would laterlease. Second, it submitted an applica-tion to the Business Attention Commis-sion, a state agency that helps develop-ers get permits.

The application and the soil studywould have been a foolish waste of timeand money, assuming the soon-to-be-published map matched what the Teoti-huacán council approved on Aug. 6. Itmade perfect sense, though, for a com-pany that had reason to believe the mapwould be published with a single stra-tegically situated change.

The Times found evidence of thatchange on a computer disc stored in ashoe box inside the Office of Urban andRegional Planning. The disc, created bya senior official in the office, held a copyof Teotihuacán’s zoning map as it ex-isted on Aug. 20, the day it was sent tothe Government’s Gazette.

On the map, the zoning on Mrs. Pine-da’s field had been changed to allow acommercial center.

“One thing I am sure of — this was al-tered,” Alejandro Heredia, a partner inthe consulting firm that created Teoti-huacán’s zoning map, said when he wasshown that Aug. 20 map.

“It was surgical work,” he said, add-ing, “It would be quite a gift to someonewho wanted to do something here.”

It was a safe bet that a single smallchange would not be noticed by Teoti-huacán’s municipal council. Because ofterm limits, the entire council left office

after the Aug. 6 vote. A new mayor, Gui-llermo Rodríguez, was sworn in with anew council on Aug. 17. In interviews,Mr. Rodríguez and members of the newcouncil said they had no idea Wal-Marthad its eye on Mrs. Pineda’s field whenthey took office.

“They must have had to bribe some-body in order to make the illegal legal,”Mr. Rodríguez said when he was shownboth the Aug. 20 map and the map ap-proved on Aug. 6.

“Whatever happened here must beexplained,” Jesús Aguiluz, a formerhigh-ranking state official whose do-main included the Office of Urban andRegional Planning, said when he wasshown both maps. Only one person, hesaid, could explain what happened —Víctor Manuel Frieventh, then the di-rector of the urban planning office.

“He was in charge totally,” Mr. Agui-luz said.

In interviews with The Times, peoplewho worked in Mr. Frieventh’s office re-called a steady parade of favor-seekers— housing developers, wealthy land-owners, politically wired businessmen— all hoping Mr. Frieventh would usehis influence to shape zoning plans tofavor their interests. Wal-Mart de Mex-ico, they said, was part of the parade.

During a two-hour interview with TheTimes, Mr. Frieventh jovially describedhow his predecessors had taken bribesto shift zoning boundaries. But he in-sisted he never met with anyone fromWal-Mart, and said he had nothing to dowith the change to Teotihuacán’s map.

“It’s very strange,” he said, looking

intently at the altered map. The formal order to publish Teotihua-

cán’s new zoning plan was received bythe Government’s Gazette on Sept. 11,2003. The next day, internal Wal-Martde Mexico records show, Mr. Cicero au-thorized five bribe payments totaling$221,000. According to the internalrecords, the bribes were for obtainingzoning changes to build five supermar-kets. One of the payments, for $52,000,was for the Bodega Aurrera in Teotihua-cán, Mr. Cicero said in an interview.

Wal-Mart de Mexico officials did notthemselves pay bribes. Records and in-terviews show that payoffs were madeby outside lawyers, trusted fixers dis-patched by Mr. Cicero to deliver enve-lopes of cash without leaving any traceof their existence. Wal-Mart de Mex-ico’s written policies said these fixerscould be entrusted with up to $280,000to “expedite” a single permit. The bribepayments covered the payoffs them-selves, a commission for the fixer andtaxes. For some permits, it was left tothe fixers to figure out who needed to bebribed. In this case, Mr. Cicero said, Mr.Frieventh was the intended recipient.

Mr. Frieventh, the son of a shoe-storeowner, earned a government salary ofless than $30,000 in 2003. However mod-est his pay, he was in the midst ofamassing an impressive real estateportfolio. From 2001 to 2004, propertyrecords show, he bought up most of acity block in Toluca. The land costsalone were nearly 65 percent of his gov-ernment pay during those years.

Asked if he had ever accepted any-thing of value from a Wal-Mart repre-sentative, Mr. Freiventh shook his head,chuckled and extended a hand, palm up.“Bring him to me so he can pay me, no?Have him bring it to me.”

Even with the right zoning, Wal-Martstill needed at least a dozen differentpermits to begin construction. But toapply for them, Mr. Cicero’s team firsthad to get a zoning certificate, whichverified that a plot’s zoning was consis-tent with the proposed development.

Zoning certificates did not come fromMr. Frieventh’s office. They were issuedby the state Office of Urban Operations,and Wal-Mart’s request went to LidiaGómez, a career civil servant known asa stickler for rules. Ms. Gómez rejectedWal-Mart’s request. Wal-Mart triedagain a few months later, and again Ms.Gómez said no, saying that even withTeotihuacán’s new map, a Bodega Aur-rera would still run afoul of a rarely en-forced federal guideline. Wal-Mart wasdead in the water.

With help from Mr. Frieventh, Mr.Cicero’s team found a way around Ms.Gómez, and the law. Mr. Frieventh hadno legal authority to overrule Ms.Gómez. But at Wal-Mart’s request,records show, Mr. Frieventh wrote a let-ter on government letterhead on March9, 2004, that directly contradicted Ms.Gómez’s rulings. Citing the altered map,he wrote that Wal-Mart’s supermarketwas indeed compatible with the zoningfor Mrs. Pineda’s field.

Mr. Frieventh said he did not recallthe letter, or why he wrote it. But Wal-Mart de Mexico immediately put the let-ter to work. It began applying for otherpermits, each time submitting the letteras if it were a valid zoning certificate.

One of its first applications was to thestate agency that regulates roads.

There were obvious reasons for traf-fic regulators to balk at Wal-Mart’s per-mit request. Traffic, of course, was oneof Teotihuacán’s biggest headaches, anda supermarket at the main entrancewould only make matters worse. Butthere was a far bigger complication. Thetown had recently approved a long-termplan to ease congestion. The plan calledfor building a bypass road through Mrs.Pineda’s alfalfa field.

According to internal Wal-Martrecords, Mr. Cicero authorized a $25,900bribe for the permit, which was issuedin less than two weeks. The paperworkapproving it did not even mention thebypass road.

A Helpful MayorTeotihuacán’s municipal council had

just finished its regular meeting on June11, 2004, when the mayor, GuillermoRodríguez, made an unusual request.He asked the council members to stickaround and meet privately with somepeople from Wal-Mart. Instructionswere given to turn off the video cameraused to record public meetings. But thevideo operator disregarded the instruc-tions, and the camera continued to roll.

“They are going to explain what they

want to do here,” the mayor told his col-leagues.

To build in Mrs. Pineda’s field, Wal-Mart now needed a construction licensefrom Teotihuacán. Construction licenseswere issued by Hugo Hernández, thetown’s director of urban development.Yet Mr. Hernández had thus far de-clined to give Wal-Mart a license be-cause it still lacked several approvals —an environmental permit, for example.

But Wal-Mart de Mexico had found afriend in Mayor Rodríguez, who now, inprivate, explained to the council why itwas essential to act with speed and flex-ibility to help Wal-Mart build, regard-less of the inevitable opposition.

“They say that if we don’t solve thisquickly, they will leave,” he told thecouncil members. Wal-Mart, he re-vealed, had raised the possibility of adonation. “They asked me, ‘What areyou going to ask from us?’ I said, ‘Payyour taxes, reach an agreement, helpthe community.’”

Then he summoned Wal-Mart’s team,led by Jorge Resendiz, one of Mr. Cic-ero’s deputies.

Mr. Resendiz got to the point. In ex-change for bringing jobs and low pricesto Teotihuacán, Wal-Mart wanted some-thing extraordinary. It wanted the coun-cil members to let Wal-Mart start con-struction even though it did not have allthe required permits. And it wantedthem to do it then and there, in private,without public hearings. Wal-Mart wasin a rush to open for Christmas shop-ping. “Time is precious for us,” he said.“If we don’t start this unit in the comingdays, we will have a delay.”

Mr. Rodríguez assured Mr. Resendizthat the council would give its approvalthe next week.

The mayor’s aggressive activism wasout of character. In interviews, formeraides and colleagues described Mr.Rodríguez as “insecure,” “easily manip-ulated” and “passive.” He was frequent-ly absent during working hours. “Mypersistent thought was that I was disap-pointed by him,” said Mr. Peña, the for-mer mayor who had been Mr. Rodrí-guez’s political mentor.

But according to Mr. Cicero, therewas nothing accidental about Mr. Rodrí-guez’s enthusiasm. Wal-Mart de Mex-ico, he said, bribed Mr. Rodríguez to se-cure his support and that of his allies onthe town council. The decision to bribeMr. Rodríguez, he said, was blessed byWal-Mart de Mexico’s leaders.

“I didn’t receive any money fromWal-Mart — no money,” Mr. Rodríguezinsisted during two lengthy interviewswith The Times.

But he struggled to explain why hebegan to spend tens of thousands of dol-lars in June 2004, the same month heemerged as Wal-Mart’s champion.

The spending is described in financialdisclosure reports Mr. Rodríguez pre-pared himself under oath. The reports,obtained by The Times, show that hespent $30,300 to begin building a ranchon a hill overlooking the pyramids. Hespent $1,800 more on a used Dodge pick-up. He paid cash in both transactions.

As mayor, Mr. Rodríguez was paid$47,000 a year. His wife made $23,000more working for the municipality. Hisspending spree in June nearly equaledtheir entire pay for the first half of 2004.

Even more remarkable was whathappened six months later. Mr. Rodrí-guez swore in his disclosure reportsthat he had no savings as of Dec. 31,2004. Yet on Jan. 1, 2005, he and his wifespent $47,700 in cash on improvementsto their ranch, his reports show.

Before becoming mayor, Mr. Rodrí-guez had been the town comptroller, re-sponsible for making sure municipal of-ficials completed their financial disclo-sure reports correctly. Yet in the in-terviews, Mr. Rodríguez claimed overand over that the amounts he reportedwere “mistakes” or “approximate fig-ures” or “generalized.”

He tried to be precise, he explained.“I now see it wasn’t so.”

But he did not dispute the overallspending pattern. From June 2004 toJune 2005, he acknowledged, he spent“approximately” $114,000 building andfurnishing his ranch, all in cash.

Wal-Mart’s investigators would askMr. Cicero how much Wal-Mart de Mex-ico had paid to bribe the mayor. About$114,000, he said.

Teotihuacán’s council members metagain on June 18, 2004, a week after Mr.Rodríguez first introduced them to Wal-Mart. It was just after 7 a.m. and Mr. Re-sendiz took a seat up front. Item 7 on theagenda was Wal-Mart.

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mercial use.”By law, the state Office of Urban and re-

gional Planning could not make zoning changes on maps it reviewed. If there were problems, it was supposed to send the map back to the town for revisions. Teotihuacán’s plan, however, was quickly approved and then sent to the Govern-ment’s Gazette on Aug. 20.

It typically took the Gazette a few weeks to publish a new zoning plan. Only then did it be-come law. But even before Teotihuacán’s map was published, Wal-Mart de Mexico did two very curious things: First, it began an expen-sive soil mechanics study of Mrs. Pineda’s field, which it would later lease. Second, it submitted an application to the Business Attention Com-mission, a state agency that helps developers get permits.

The application and the soil study would have been a foolish waste of time and money, as-suming the soon-to-be-published map matched what the Teotihuacán council approved on Aug.

6. It made perfect sense, though, for a company that had reason to believe the map would be published with a single strategically situated change.

The Times found evidence of that change on a computer disc stored in a shoe box inside the Office of Urban and regional Planning. The disc, created by a senior official in the office, held a copy of Teotihuacán’s zoning map as it existed on Aug. 20, the day it was sent to the Government’s Gazette.

On the map, the zoning on Mrs. Pineda’s field had been changed to allow a commercial center.

“One thing I am sure of — this was altered,” Alejandro Heredia, a partner in the consulting firm that created Teotihuacán’s zoning map, said when he was shown that Aug. 20 map.

“It was surgical work,” he said, adding, “It would be quite a gift to someone who wanted to do something here.”

It was a safe bet that a single small change


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would not be noticed by Teotihuacán’s munici-pal council. Because of term limits, the entire council left office after the Aug. 6 vote. A new mayor, Guillermo rodríguez, was sworn in with a new council on Aug. 17. In interviews, Mr. ro-dríguez and members of the new council said they had no idea Wal-Mart had its eye on Mrs. Pineda’s field when they took office.

“They must have had to bribe somebody in order to make the illegal legal,” Mr. rodríguez said when he was shown both the Aug. 20 map and the map approved on Aug. 6.

“Whatever happened here must be ex-plained,” Jesús Aguiluz, a former high-ranking state official whose domain included the Office of Urban and regional Planning, said when he was shown both maps. Only one person, he said, could explain what happened — Víctor Manuel Frieventh, then the director of the urban plan-ning office.

“He was in charge totally,” Mr. Aguiluz said.In interviews with The Times, people who

worked in Mr. Frieventh’s office recalled a steady parade of favor-seekers — housing de-velopers, wealthy landowners, politically wired businessmen — all hoping Mr. Frieventh would use his influence to shape zoning plans to favor their interests. Wal-Mart de Mexico, they said, was part of the parade.

During a two-hour interview with The Times, Mr. Frieventh jovially described how his predecessors had taken bribes to shift zoning boundaries. But he insisted he never met with anyone from Wal-Mart, and said he had nothing to do with the change to Teotihuacán’s map.

“It’s very strange,” he said, looking intently at the altered map.

The formal order to publish Teotihuacán’s new zoning plan was received by the Govern-ment’s Gazette on Sept. 11, 2003. The next day, internal Wal-Mart de Mexico records show, Mr. Cicero authorized five bribe payments totaling $221,000. According to the internal records, the bribes were for obtaining zoning changes to build five supermarkets. One of the payments, for $52,000, was for the Bodega Aurrera in Teoti-huacán, Mr. Cicero said in an interview.

Wal-Mart de Mexico officials did not them-selves pay bribes. records and interviews show that payoffs were made by outside lawyers, trusted fixers dispatched by Mr. Cicero to deliv-er envelopes of cash without leaving any trace

of their existence. Wal-Mart de Mexico’s writ-ten policies said these fixers could be entrusted with up to $280,000 to “expedite” a single per-mit. The bribe payments covered the payoffs themselves, a commission for the fixer and tax-es. For some permits, it was left to the fixers to figure out who needed to be bribed. In this case, Mr. Cicero said, Mr. Frieventh was the intended recipient.

Mr. Frieventh, the son of a shoe-store own-er, earned a government salary of less than $30,000 in 2003. However modest his pay, he was in the midst of amassing an impressive real estate portfolio. From 2001 to 2004, property re-cords show, he bought up most of a city block in Toluca. The land costs alone were nearly 65 per-cent of his government pay during those years.

Asked if he had ever accepted anything of value from a Wal-Mart representative, Mr. Frieventh shook his head, chuckled and extend-ed a hand, palm up. “Bring him to me so he can pay me, no? Have him bring it to me.”

Even with the right zoning, Wal-Mart still needed at least a dozen different permits to be-gin construction. But to apply for them, Mr. Ci-cero’s team first had to get a zoning certificate, which verified that a plot’s zoning was consis-tent with the proposed development.

Zoning certificates did not come from Mr. Frieventh’s office. They were issued by the state Office of Urban Operations, and Wal-Mart’s re-quest went to lidia Gómez, a career civil servant known as a stickler for rules. Ms. Gómez reject-ed Wal-Mart’s request. Wal-Mart tried again a few months later, and again Ms. Gómez said no, saying that even with Teotihuacán’s new map, a Bodega Aurrera would still run afoul of a rarely enforced federal guideline. Wal-Mart was dead in the water.

With help from Mr. Frieventh, Mr. Cicero’s team found a way around Ms. Gómez, and the law. Mr. Frieventh had no legal authority to overrule Ms. Gómez. But at Wal-Mart’s request, records show, Mr. Frieventh wrote a letter on government letterhead on March 9, 2004, that directly contradicted Ms. Gómez’s rulings. Cit-ing the altered map, he wrote that Wal-Mart’s supermarket was indeed compatible with the zoning for Mrs. Pineda’s field.

Mr. Frieventh said he did not recall the let-ter, or why he wrote it. But Wal-Mart de Mexico immediately put the letter to work. It began ap-

plying for other permits, each time submitting the letter as if it were a valid zoning certificate.

One of its first applications was to the state agency that regulates roads.

There were obvious reasons for traffic reg-ulators to balk at Wal-Mart’s permit request. Traffic, of course, was one of Teotihuacán’s big-gest headaches, and a supermarket at the main entrance would only make matters worse. But there was a far bigger complication. The town had recently approved a long-term plan to ease congestion. The plan called for building a by-pass road through Mrs. Pineda’s alfalfa field.

According to internal Wal-Mart records, Mr. Cicero authorized a $25,900 bribe for the permit, which was issued in less than two weeks. The paperwork approving it did not even mention the bypass road.

A Helpful MayorTeotihuacán’s municipal council had just

finished its regular meeting on June 11, 2004, when the mayor, Guillermo rodríguez, made an unusual request. He asked the council members to stick around and meet privately with some people from Wal-Mart. Instructions were given to turn off the video camera used to record pub-lic meetings. But the video operator disregard-ed the instructions, and the camera continued to roll.

“They are going to explain what they want to do here,” the mayor told his colleagues.

To build in Mrs. Pineda’s field, Wal-Mart now needed a construction license from Teoti-huacán. Construction licenses were issued by Hugo Hernández, the town’s director of urban development. Yet Mr. Hernández had thus far declined to give Wal-Mart a license because it still lacked several approvals — an environmen-tal permit, for example.

But Wal-Mart de Mexico had found a friend in Mayor rodríguez, who now, in private, ex-plained to the council why it was essential to act with speed and flexibility to help Wal-Mart build, regardless of the inevitable opposition.

“They say that if we don’t solve this quickly, they will leave,” he told the council members. Wal-Mart, he revealed, had raised the possibili-ty of a donation. “They asked me, ‘What are you going to ask from us?’ I said, ‘Pay your taxes, reach an agreement, help the community.’ ”

Then he summoned Wal-Mart’s team, led

by Jorge resendiz, one of Mr. Cicero’s deputies.Mr. resendiz got to the point. In exchange

for bringing jobs and low prices to Teotihuacán, Wal-Mart wanted something extraordinary. It wanted the council members to let Wal-Mart start construction even though it did not have all the required permits. And it wanted them to do it then and there, in private, without public hearings. Wal-Mart was in a rush to open for Christmas shopping. “Time is precious for us,” he said. “If we don’t start this unit in the coming days, we will have a delay.”

Mr. rodríguez assured Mr. resendiz that the council would give its approval the next week.

The mayor’s aggressive activism was out of character. In interviews, former aides and col-leagues described Mr. rodríguez as “insecure,” “easily manipulated” and “passive.” He was fre-quently absent during working hours. “My per-sistent thought was that I was disappointed by him,” said Mr. Peña, the former mayor who had been Mr. rodríguez’s political mentor.

But according to Mr. Cicero, there was noth-ing accidental about Mr. rodríguez’s enthusi-asm. Wal-Mart de Mexico, he said, bribed Mr. rodríguez to secure his support and that of his allies on the town council. The decision to bribe Mr. rodríguez, he said, was blessed by Wal-Mart de Mexico’s leaders.

“I didn’t receive any money from Wal-Mart — no money,” Mr. rodríguez insisted during two lengthy interviews with The Times.

But he struggled to explain why he began to spend tens of thousands of dollars in June 2004, the same month he emerged as Wal-Mart’s champion.

The spending is described in financial dis-closure reports Mr. rodríguez prepared himself under oath. The reports, obtained by The Times, show that he spent $30,300 to begin building a ranch on a hill overlooking the pyramids. He spent $1,800 more on a used Dodge pickup. He paid cash in both transactions.

As mayor, Mr. rodríguez was paid $47,000 a year. His wife made $23,000 more working for the municipality. His spending spree in June nearly equaled their entire pay for the first half of 2004.

Even more remarkable was what happened six months later. Mr. rodríguez swore in his dis-closure reports that he had no savings as of Dec.

31, 2004. Yet on Jan. 1, 2005, he and his wife spent $47,700 in cash on improvements to their ranch, his reports show.

Before becoming mayor, Mr. rodríguez had been the town comptroller, respon-sible for making sure mu-nicipal officials completed their financial disclosure reports correctly. Yet in the interviews, Mr. rodríguez claimed over and over that the amounts he reported were “mistakes” or “approx-imate figures” or “general-ized.”

He tried to be precise, he explained. “I now see it wasn’t so.”

But he did not dispute the overall spending pattern. From June 2004 to June 2005, he acknowl-edged, he spent “approximately” $114,000 building and furnishing his ranch, all in cash.

Wal-Mart’s investigators would ask Mr. Ci-cero how much Wal-Mart de Mexico had paid to bribe the mayor. About $114,000, he said.

Teotihuacán’s council members met again on June 18, 2004, a week after Mr. rodríguez first introduced them to Wal-Mart. It was just after 7 a.m. and Mr. resendiz took a seat up front. Item 7 on the agenda was Wal-Mart.

It was the first and only public airing of Wal-Mart’s plans. The council members spent 15 minutes discussing one of the largest con-struction projects in the town’s modern his-tory.

Mr. rodríguez announced they were there to give a “favorable or unfavorable opinion” of Wal-Mart’s supermarket. When a council member pointed out that Wal-Mart had not even submitted a formal written request, the mayor waved away the problem. “That’s a de-tail we omitted,” he said.

Mr. Hernández, the town’s urban devel-opment director, noted that Wal-Mart still did not have several permits it needed before the town could issue a construction license. He urged the council to stick to the rules.

Mr. resendiz objected, saying Wal-Mart did not have time to spare.

The mayor pushed for a vote, suggesting that all they were doing was indicating general support while Wal-Mart rounded up its missing permits. He gave no indica-tion that the vote constituted a final approval.

In interviews, council members said they viewed Wal-Mart’s proposal through the prism of lingering re-sentments toward their pub-lic markets. residents had long complained about ven-dors inflating prices and rig-ging scales. They liked the way Wal-Mart challenged the old irritants of the Mexi-can shopping experience — stores that do not list pric-es; stores with no parking;

stores with musty display cases.The vote was unanimous for Wal-Mart.

Days later, construction began.

Getting By the GuardiansThe appearance of heavy excavation equip-

ment in Mrs. Pineda’s field quickly aroused sus-picion around town. The suspicions stemmed from Teotihuacán’s fraught relationship with the National Institute of Anthropology and His-tory, or INAH, the official guardian of Mexico’s cultural treasures.

Because of the pyramids, INAH (pro-nounced EE-nah) is a major presence in Teoti-huacán. Its approval is required to build any-thing inside the protected archaeological zone. Its officials patrol town looking for signs of ille-gal construction, and it is not hard to find stories about zealous inspectors stopping a homeowner from extending a kitchen a few feet.

It was also well known that INAH required excavations to be done with picks and shovels to minimize damage if digging uncovered an-cient ruins. So the sight of bulldozers and back-hoes stood out, especially when a sign went up announcing that a Bodega Aurrera was coming. Why, residents asked, should Wal-Mart get spe-cial treatment?

Among those who noticed was Sergio Gó-mez, an archaeologist and researcher for INAH.


It was the first and only public airingof Wal-Mart’s plans. The council mem-bers spent 15 minutes discussing one ofthe largest construction projects in thetown’s modern history.

Mr. Rodríguez announced they werethere to give a “favorable or unfavor-able opinion” of Wal-Mart’s supermar-ket. When a council member pointed outthat Wal-Mart had not even submitted aformal written request, the mayorwaved away the problem. “That’s a de-tail we omitted,” he said.

Mr. Hernández, the town’s urban de-velopment director, noted that Wal-Mart still did not have several permits itneeded before the town could issue aconstruction license. He urged the coun-cil to stick to the rules.

Mr. Resendiz objected, saying Wal-Mart did not have time to spare.

The mayor pushed for a vote, sug-gesting that all they were doing was in-dicating general support while Wal-Mart rounded up its missing permits.He gave no indication that the vote con-stituted a final approval.

In interviews, council members saidthey viewed Wal-Mart’s proposalthrough the prism of lingering resent-ments toward their public markets. Res-idents had long complained about ven-dors inflating prices and rigging scales.They liked the way Wal-Mart chal-lenged the old irritants of the Mexicanshopping experience — stores that donot list prices; stores with no parking;stores with musty display cases.

The vote was unanimous for Wal-Mart. Days later, construction began.

Getting By the GuardiansThe appearance of heavy excavation

equipment in Mrs. Pineda’s field quick-ly aroused suspicion around town. Thesuspicions stemmed from Teotihuacán’sfraught relationship with the NationalInstitute of Anthropology and History,or INAH, the official guardian of Mex-ico’s cultural treasures.

Because of the pyramids, INAH (pro-nounced EE-nah) is a major presence inTeotihuacán. Its approval is required tobuild anything inside the protected ar-chaeological zone. Its officials patroltown looking for signs of illegal con-struction, and it is not hard to findstories about zealous inspectors stop-ping a homeowner from extending akitchen a few feet.

It was also well known that INAH re-quired excavations to be done withpicks and shovels to minimize damage ifdigging uncovered ancient ruins. So thesight of bulldozers and backhoes stoodout, especially when a sign went up an-nouncing that a Bodega Aurrera wascoming. Why, residents asked, shouldWal-Mart get special treatment?

Among those who noticed was SergioGómez, an archaeologist and research-er for INAH. Mr. Gómez knew that be-fore the agency issued a permit, it firsthad to officially “liberate” the plot byverifying that construction would notdestroy valuable archaeological re-mains. That meant conducting a formalarchaeological survey, with grid linesand exploration holes.

For any developer, a survey wasrisky. If significant remains were dis-covered, it could kill the project, or atleast force lengthy delays. Yet Mr.Gómez had not seen any sign of a sur-vey, an odd thing since a survey like thisshould have occupied a team of INAHresearchers and laborers for a good sixmonths. This, too, was a red flag.

Mr. Gómez was concerned enough tofollow the trucks from the site one day.When they dumped their loads, he couldsee fragments of pottery and other evi-dence of ancient remains. “I didn’t needto scratch the ground to see it,” he saidin an interview.

Iván Hernández noticed, too. He wasone of five INAH archaeologists whodid surveys to liberate land for con-struction in the protected zone. Heknew every major project in town, butnothing of this one.

Residents were also calling INAH tocomplain. The calls went to Juan CarlosSabais, the agency’s top lawyer in Teoti-huacán. He would have been the one toreview the permit paperwork and pre-pare the official liberation letter for thisplot. “We didn’t have a clue,” he re-called. “People were saying this wasWal-Mart, and we didn’t know a thing.”

Mr. Sabais led a party of INAH offi-cials to the site to find out what was go-ing on. They passed through a smallcrowd of angry residents. It was July 16,and construction was already well un-der way. There were several large exca-vations, one as deep as 16 feet, recordsshow. Workers claimed they had anINAH permit, just not on site as the lawrequired. Mr. Sabais ordered them tostop construction.“The crowd startedclapping,” he said.

By the time Mr. Sabais returned to hisoffice, senior INAH officials were call-ing from Mexico City demanding toknow why he had halted construction.Only then, he said, did he discover thatWal-Mart had somehow managed to geta permit without a survey, or a libera-tion letter.

This bureaucratic miracle, Mr. Cicerowould explain to Wal-Mart investiga-tors and The Times, was made possibleby another payoff. As Mr. Cicero de-scribed it, senior INAH officials hadasked for an “official donation” of up to$45,000 and a “personal gift” of up to$36,000 in exchange for a permit.

Wal-Mart’s permit was signed by

Mirabel Miró, then the agency’s top offi-cial in the State of Mexico. According toMs. Miró, it was Wal-Mart de Mexicothat made an improper offer of money.Her chief architect, she said, told herthat Wal-Mart had approached him withan offer of a sizable “donation.” Hewanted to accept, she said.

“I told him, ‘I don’t want a dime, notas a donation, not as anything, becauseit may be interpreted as somethingelse,’” she said.

Sergio Raúl Arroyo, the director gen-eral of INAH, recalled in an interviewthat Ms. Miró had told him about Wal-Mart’s offer. He could not recall any oth-er instance of a company offering a do-nation while it was seeking a permit.“That would have been totally irregu-lar,” he said. “It was obvious we had tobe very careful with these people.”

“I told Miró to accept no donations,”he added. “Not even a pair of scissors.”

And yet in June 2004, three weeks af-ter Ms. Miró signed the permit, Mr. Re-

sendiz spoke about a payment to INAHduring his private meeting with Teoti-huacán’s council. “INAH itself is askingus for a considerable contribution,” Mr.Resendiz said.

“We are going to formalize the contri-bution next Monday,” he added. “But itis a fact.”

Mr. Resendiz, who has been placed onadministrative leave pending Wal-Mart’s investigation, declined to com-ment. Every INAH official interviewed,including Ms. Miró’s chief architect,Carlos Madrigal, denied acceptingmoney from Wal-Mart.

But Mr. Sabais, the agency’s top law-yer in Teotihuacán, knew nothing aboutofficial donations or personal gifts onthe day he stopped construction. All heknew was that he was being summonedto INAH’s headquarters in Mexico City.Over several tense meetings, he re-called, his bosses confronted their em-barrassing predicament: INAH hadhalted construction even though Wal-Mart had the required permit. Yet theagency had given Wal-Mart that permitwithout first conducting a survey andliberating the land.

Fearing a public relations debacle,

senior INAH officials concocted a trailof backdated documents to hide itsblunders, Mr. Sabais said. He pointed toan INAH report dated April 2, 2004, sev-en weeks before the agency issued itspermit. The report suggested Wal-Mart’s plot had been liberated after a1984 survey. “This document,” Mr.Sabais said, “was made later to justifywhat had not been done.”

INAH officials would later say in mul-tiple government inquiries that Wal-Mart’s plot had been liberated becauseof this 1984 survey.

The Times tracked down the 1984 sur-vey. It had nothing to do with the landwhere Wal-Mart was building. The sur-vey was done on a different plot severalhundred yards away. The archaeolo-gists who supervised and evaluated thesurvey were appalled to learn that ithad been used to justify INAH’s permitfor Wal-Mart. “This is a fraud,” AnaMaría Jarquín, one of the archaeolo-gists, said in an interview.

In interviews last week, top INAH of-ficials acknowledged for the first timethat Wal-Mart’s plot had neither beensurveyed nor liberated, either in 1984 orany other time, before construction be-gan. They also made one other startlingadmission. The agency has long main-tained no ancient remains were de-stroyed during construction. But Verón-ica Ortega, INAH’s top archaeologist inTeotihuacán, acknowledged it was in-deed possible ancient remains were de-stroyed during the excavation beforeMr. Sabais halted construction.

“I am not able to affirm categoricallythat no soil went out,” she said.

The work shutdown ordered by Mr.Sabais did not last long. Four days later,INAH allowed Wal-Mart to resume con-struction. The agency did take one pre-caution: it began an extensive survey,digging dozens of exploration wellsalongside Wal-Mart’s crews.

A Gathering ProtestBy now a loose protest movement

had begun to form. Its leaders all haddeep roots here. Lorenzo Trujillo ownedproduce stands in the public market.Emmanuel D’Herrera, a teacher andpoet, had celebrated his son’s birth bytucking the boy’s umbilical cord in acrack atop the Moon pyramid. EmmaOrtega was a spiritual healer who caredfor patients a stone’s throw from thepyramid. “You feel that it’s part of you,and you are part of it,” she said.

The protesters immediately suspect-ed something “dirty” had taken place,Ms. Ortega recalled. The first clue cameon Aug. 1, 2004, when she and other pro-test leaders met with Mayor Rodríguez.By now the supermarket’s walls werebeing erected. They asked the mayor toshow them the construction permit. Themayor, nervous and evasive, admittedWal-Mart did not actually have one.

“So we were like, ‘Why are they thereworking?’” Ms. Ortega said. Theyasked the mayor to halt work and holdhearings. The mayor said he wouldthink about it. Two days later, he issuedWal-Mart a construction license.

He signed it himself. In response, the protesters demand-

ed his resignation and filed the first ofseveral legal challenges. Then theyblockaded the construction site.

As word of the blockade spread, bellsrang from a chapel in Purificación, the

neighborhood where Wal-Mart wasbuilding. It was the alarm used to sum-mon neighbors in an emergency. Resi-dents marched toward the blockade.

“We thought they were there to sup-port us,” Ms. Ortega recalled. “No. Theywere there to attack us.” The crowd de-scended on the small band of protesters,pushing and yelling insults until theblockade was broken.

What Ms. Ortega did not know wasthat Wal-Mart had already bought thesupport of Purificación’s neighborhoodleaders. In interviews, several of thoseleaders recalled being invited to Mr.Rodríguez’s office to meet with the com-pany’s representatives. The Wal-Martpeople, the leaders said, offered moneyto expand their cemetery, pave a roadand build a handball court. They offeredpaint and computers for Purificación’sschool. They offered money to build anew office for the neighborhood leaders.

But the money came with strings: ifthere were any protests, they were ex-pected to be visibly and loudly support-ive of Wal-Mart.

Protest leaders began to get anony-mous phone calls urging them to backoff. In news conferences, the mayor dis-missed them as a tiny minority of gad-flies and self-interested local mer-chants. He insisted the town over-whelmingly favored Wal-Mart’s arrival,and as proof of his incorruptibility, heboasted of how he had rejected Wal-Mart de Mexico’s offer of a $55,000 do-nation to the municipal treasury.

But the tide turned as INAH’s archae-ologists began to find evidence thatWal-Mart was building on ancient ruinsafter all. They found the remains of awall dating to approximately 1300 andenough clay pottery to fill several sacks.Then they found an altar, a plaza andnine graves. Once again, constructionwas temporarily halted so their findingscould be cataloged, photographed andanalyzed. The discoveries instantlytransformed the skirmish over Mrs.Pineda’s field into national news.

Student groups, unions and peasantleaders soon joined the protests. Oppo-nents of other Wal-Marts in Mexico of-fered support. Influential politicians be-gan to express concern. Prominent art-ists and intellectuals signed an open let-ter asking Mexico’s president to stopthe project. Many were cultural tradi-tionalists, united by a fear that Wal-Mart was inexorably drawing Mexico’speople away from the intimacy of neigh-borhood life, toward a bland, imperson-al “gringo lifestyle” of frozen pizzas,video games and credit card debt.

The support emboldened the protest-ers. When the mayor held a news con-ference, they interrupted and openly ac-cused him of taking bribes. They block-aded INAH’s headquarters andmarched on Wal-Mart de Mexico’s cor-porate offices in Mexico City. “All wehave found are closed doors and anocean of corruption around the author-izations for this Wal-Mart,” Mr. D’Her-rera told reporters with typical flourish.

Their allegations of corruptionseeped into the news coverage in Mex-ico and the United States. In September2004, an article in The Times includedthis passage: “How Wal-Mart got per-mission to build a superstore on farm-land supposedly protected under Mex-ican law as an archaeological site hasvexed the merchants here, who freely

accuse the town, the state and the fed-eral Institute of Anthropology and His-tory of corruption.”

Open for BusinessBack in Bentonville, Wal-Mart’s in-

ternational real estate committee wasaware of the growing attention from thenews media, former members said in in-terviews. Some committee memberscringed at the ugly optics of Wal-Martliterally bulldozing Mexico’s culturalheritage. “I kept waiting for someone tosay, ‘Let’s just move sites,’” recalledone member, who, like others on thecommittee, asked not to be identifiedbecause of the continuing inquiry.

But top Wal-Mart de Mexico execu-tives assured the committee that the sit-uation was under control. They por-trayed the protesters as a fringe group— “like they were from Occupy WallStreet,” another person recalled.

Despite multiple news accounts ofpossible bribes, Wal-Mart’s leaders inthe United States took no steps to in-vestigate Wal-Mart de Mexico, recordsand interviews show.

Mr. Tovar, the Wal-Mart spokesman,said that while executives in the UnitedStates were aware of the furor in Teoti-huacán, they did not know about thecorruption allegations. “None of the as-sociates we have interviewed, includingpeople responsible for real estateprojects in Mexico during this time peri-od, recall any mention of bribery allega-tions related to this store,” he said.

In Mexico, government officials werelooking for a way to quell the contro-versy. Mr. Arroyo, INAH’s chief, urgedWal-Mart to build elsewhere. State offi-cials quietly searched for alternate sitesoutside the archaeological zone. Then,on Oct. 2, Mexico’s newspapers report-ed a major announcement: Arturo Mon-tiel, the state’s governor, was lookingfor another site “that is better for all.”

With its supermarket more than halfbuilt, Wal-Mart de Mexico was not ea-ger to accommodate the governor. Thecompany raced to complete construc-tion and mounted a public relations of-fensive. Executives argued that Wal-Mart de Mexico had scrupulously ful-filled every legal requirement: the zon-ing was correct, as confirmed by themap in the Government’s Gazette; nec-essary approvals had been duly ob-tained from INAH, traffic authoritiesand other agencies; the mayor himselfhad signed the construction license.

Not even a week after Mr. Montiel’sannouncement, his top deputy told re-porters there was, alas, no way to stopWal-Mart. “We would be violating thelaw,” he explained.

The supermarket opened on Nov. 4,2004. A year later, Mr. Cicero met withWal-Mart’s lawyers and told his storyfor the first time. His allegations wereshared with several of the same execu-tives who were on the international realestate committee, records show. If theprotesters’ vague allegations of corrup-tion had been easy to dismiss, now theywere coming from the person responsi-ble for obtaining Wal-Mart de Mexico’spermits in Teotihuacán.

More important, Mr. Cicero’s allega-tions emerged as a comptroller for theState of Mexico was wrapping up alengthy investigation into whether offi-cials had acted unlawfully in grantingpermits to Wal-Mart de Mexico.

But Wal-Mart did not share Mr. Cic-ero’s allegations with any authorities inMexico. “This is one of the areas we arereviewing as part of our ongoing in-vestigation,” Mr. Tovar said.

When the comptroller’s office subse-quently announced it had found nowrongdoing, it chided protesters forfailing to present any specific proof.

The comptroller had been the protest-ers’ last hope. Most moved on, resignedto the idea that their struggle had beenfor nothing. But not Mr. D’Herrera. Hecontinued to visit government archives,seeking access to Wal-Mart’s permitrecords. He kept appealing to public of-ficials for help. “I shall continue myhunger strike until Wal-Mart leaves oruntil I die,” he wrote in a letter to Vicen-te Fox, Mexico’s president at the time.

Despite the passage of time, Mr.D’Herrera never wavered in his convic-tion that Wal-Mart must have paidbribes. He was appalled by the store’simpact on Teotihuacán, and infuriatedthat so few seemed to care. It did not gounnoticed when protest leaders werespotted shopping contentedly in the Bo-dega Aurrera, where people can buy ev-erything from tortillas to tires, almostalways at a discount from local shops.

Friends and relatives urged Mr.D’Herrera to let it go, but he refused.“He became obsessed,” Ms. Ortega said.Mr. D’Herrera finally snapped. On May16, 2009, he entered the Bodega Aurreraand placed a crude homemade bomb ina shopping cart. According to prosecu-tors, the bomb consisted of a small juicecan containing gunpowder and nails.Mr. D’Herrera pushed the cart into thestore’s home section, looked around tomake sure the aisle was empty, andthen lit a fuse poking from the can. Hisintent, he later wrote, was to kill himselfand damage the store to draw public at-tention back to Wal-Mart. But all theblast did was knock him down and dam-age $68 worth of merchandise.

As he awaited trial from a prison cell,he continued his hopeless campaign. Hewrote more letters to politicians. Heasked his wife to publish his diatribesagainst Wal-Mart on an obscure poetryblog. Yet he clearly recognized the pre-cariousness of his circumstances. Hewas thin and severely diabetic. Histeeth were falling out. In early 2010, heasked a cellmate to deliver a letter to hiswife in case he died in prison. A fewmonths later, he had a brain hemor-rhage and slipped into a coma. Deathquickly followed. He was 62.

In his final letter to his wife, Mr.D’Herrera tried to explain why he hadbattled so long at such grievous cost.

“I am not leaving material patrimonyfor you and our son,” he wrote. “I’mleaving you a moral and political legacy,dying as I am for a cause, in defense ofthe Mexican culture.”

Wal-MartUsed PayoffsTo Get WayIn Mexico

From Preceding Page


FOR AND AGAINSTGuillermo Rodríguez, top, outside his ranch, was the mayor of Teotihuacán when Wal-Mart built its super-market there in 2004. Emma Ortega, above, a spiritual healer who cares for patients across the street from

the Pyramid of the Moon, shown in background, viewed Wal-Mart as a threat to Mexico’s cultural traditions.

A POPULAR STOREWal-Mart’s supermarket is easilythe busiest store in town, cateringmostly to working-class families.

Nxxx,2012-12-18,B,008,Bs-BW,E1


It was the first and only public airingof Wal-Mart’s plans. The council mem-bers spent 15 minutes discussing one ofthe largest construction projects in thetown’s modern history.

Mr. Rodríguez announced they werethere to give a “favorable or unfavor-able opinion” of Wal-Mart’s supermar-ket. When a council member pointed outthat Wal-Mart had not even submitted aformal written request, the mayorwaved away the problem. “That’s a de-tail we omitted,” he said.

Mr. Hernández, the town’s urban de-velopment director, noted that Wal-Mart still did not have several permits itneeded before the town could issue aconstruction license. He urged the coun-cil to stick to the rules.

Mr. Resendiz objected, saying Wal-Mart did not have time to spare.

The mayor pushed for a vote, sug-gesting that all they were doing was in-dicating general support while Wal-Mart rounded up its missing permits.He gave no indication that the vote con-stituted a final approval.

In interviews, council members saidthey viewed Wal-Mart’s proposalthrough the prism of lingering resent-ments toward their public markets. Res-idents had long complained about ven-dors inflating prices and rigging scales.They liked the way Wal-Mart chal-lenged the old irritants of the Mexicanshopping experience — stores that donot list prices; stores with no parking;stores with musty display cases.

The vote was unanimous for Wal-Mart. Days later, construction began.

Getting By the GuardiansThe appearance of heavy excavation

equipment in Mrs. Pineda’s field quick-ly aroused suspicion around town. Thesuspicions stemmed from Teotihuacán’sfraught relationship with the NationalInstitute of Anthropology and History,or INAH, the official guardian of Mex-ico’s cultural treasures.

Because of the pyramids, INAH (pro-nounced EE-nah) is a major presence inTeotihuacán. Its approval is required tobuild anything inside the protected ar-chaeological zone. Its officials patroltown looking for signs of illegal con-struction, and it is not hard to findstories about zealous inspectors stop-ping a homeowner from extending akitchen a few feet.

It was also well known that INAH re-quired excavations to be done withpicks and shovels to minimize damage ifdigging uncovered ancient ruins. So thesight of bulldozers and backhoes stoodout, especially when a sign went up an-nouncing that a Bodega Aurrera wascoming. Why, residents asked, shouldWal-Mart get special treatment?

Among those who noticed was SergioGómez, an archaeologist and research-er for INAH. Mr. Gómez knew that be-fore the agency issued a permit, it firsthad to officially “liberate” the plot byverifying that construction would notdestroy valuable archaeological re-mains. That meant conducting a formalarchaeological survey, with grid linesand exploration holes.

For any developer, a survey wasrisky. If significant remains were dis-covered, it could kill the project, or atleast force lengthy delays. Yet Mr.Gómez had not seen any sign of a sur-vey, an odd thing since a survey like thisshould have occupied a team of INAHresearchers and laborers for a good sixmonths. This, too, was a red flag.

Mr. Gómez was concerned enough tofollow the trucks from the site one day.When they dumped their loads, he couldsee fragments of pottery and other evi-dence of ancient remains. “I didn’t needto scratch the ground to see it,” he saidin an interview.

Iván Hernández noticed, too. He wasone of five INAH archaeologists whodid surveys to liberate land for con-struction in the protected zone. Heknew every major project in town, butnothing of this one.

Residents were also calling INAH tocomplain. The calls went to Juan CarlosSabais, the agency’s top lawyer in Teoti-huacán. He would have been the one toreview the permit paperwork and pre-pare the official liberation letter for thisplot. “We didn’t have a clue,” he re-called. “People were saying this wasWal-Mart, and we didn’t know a thing.”

Mr. Sabais led a party of INAH offi-cials to the site to find out what was go-ing on. They passed through a smallcrowd of angry residents. It was July 16,and construction was already well un-der way. There were several large exca-vations, one as deep as 16 feet, recordsshow. Workers claimed they had anINAH permit, just not on site as the lawrequired. Mr. Sabais ordered them tostop construction.“The crowd startedclapping,” he said.

By the time Mr. Sabais returned to hisoffice, senior INAH officials were call-ing from Mexico City demanding toknow why he had halted construction.Only then, he said, did he discover thatWal-Mart had somehow managed to geta permit without a survey, or a libera-tion letter.

This bureaucratic miracle, Mr. Cicerowould explain to Wal-Mart investiga-tors and The Times, was made possibleby another payoff. As Mr. Cicero de-scribed it, senior INAH officials hadasked for an “official donation” of up to$45,000 and a “personal gift” of up to$36,000 in exchange for a permit.

Wal-Mart’s permit was signed by

Mirabel Miró, then the agency’s top offi-cial in the State of Mexico. According toMs. Miró, it was Wal-Mart de Mexicothat made an improper offer of money.Her chief architect, she said, told herthat Wal-Mart had approached him withan offer of a sizable “donation.” Hewanted to accept, she said.

“I told him, ‘I don’t want a dime, notas a donation, not as anything, becauseit may be interpreted as somethingelse,’” she said.

Sergio Raúl Arroyo, the director gen-eral of INAH, recalled in an interviewthat Ms. Miró had told him about Wal-Mart’s offer. He could not recall any oth-er instance of a company offering a do-nation while it was seeking a permit.“That would have been totally irregu-lar,” he said. “It was obvious we had tobe very careful with these people.”

“I told Miró to accept no donations,”he added. “Not even a pair of scissors.”

And yet in June 2004, three weeks af-ter Ms. Miró signed the permit, Mr. Re-

sendiz spoke about a payment to INAHduring his private meeting with Teoti-huacán’s council. “INAH itself is askingus for a considerable contribution,” Mr.Resendiz said.

“We are going to formalize the contri-bution next Monday,” he added. “But itis a fact.”

Mr. Resendiz, who has been placed onadministrative leave pending Wal-Mart’s investigation, declined to com-ment. Every INAH official interviewed,including Ms. Miró’s chief architect,Carlos Madrigal, denied acceptingmoney from Wal-Mart.

But Mr. Sabais, the agency’s top law-yer in Teotihuacán, knew nothing aboutofficial donations or personal gifts onthe day he stopped construction. All heknew was that he was being summonedto INAH’s headquarters in Mexico City.Over several tense meetings, he re-called, his bosses confronted their em-barrassing predicament: INAH hadhalted construction even though Wal-Mart had the required permit. Yet theagency had given Wal-Mart that permitwithout first conducting a survey andliberating the land.

Fearing a public relations debacle,

senior INAH officials concocted a trailof backdated documents to hide itsblunders, Mr. Sabais said. He pointed toan INAH report dated April 2, 2004, sev-en weeks before the agency issued itspermit. The report suggested Wal-Mart’s plot had been liberated after a1984 survey. “This document,” Mr.Sabais said, “was made later to justifywhat had not been done.”

INAH officials would later say in mul-tiple government inquiries that Wal-Mart’s plot had been liberated becauseof this 1984 survey.

The Times tracked down the 1984 sur-vey. It had nothing to do with the landwhere Wal-Mart was building. The sur-vey was done on a different plot severalhundred yards away. The archaeolo-gists who supervised and evaluated thesurvey were appalled to learn that ithad been used to justify INAH’s permitfor Wal-Mart. “This is a fraud,” AnaMaría Jarquín, one of the archaeolo-gists, said in an interview.

In interviews last week, top INAH of-ficials acknowledged for the first timethat Wal-Mart’s plot had neither beensurveyed nor liberated, either in 1984 orany other time, before construction be-gan. They also made one other startlingadmission. The agency has long main-tained no ancient remains were de-stroyed during construction. But Verón-ica Ortega, INAH’s top archaeologist inTeotihuacán, acknowledged it was in-deed possible ancient remains were de-stroyed during the excavation beforeMr. Sabais halted construction.

“I am not able to affirm categoricallythat no soil went out,” she said.

The work shutdown ordered by Mr.Sabais did not last long. Four days later,INAH allowed Wal-Mart to resume con-struction. The agency did take one pre-caution: it began an extensive survey,digging dozens of exploration wellsalongside Wal-Mart’s crews.

A Gathering ProtestBy now a loose protest movement

had begun to form. Its leaders all haddeep roots here. Lorenzo Trujillo ownedproduce stands in the public market.Emmanuel D’Herrera, a teacher andpoet, had celebrated his son’s birth bytucking the boy’s umbilical cord in acrack atop the Moon pyramid. EmmaOrtega was a spiritual healer who caredfor patients a stone’s throw from thepyramid. “You feel that it’s part of you,and you are part of it,” she said.

The protesters immediately suspect-ed something “dirty” had taken place,Ms. Ortega recalled. The first clue cameon Aug. 1, 2004, when she and other pro-test leaders met with Mayor Rodríguez.By now the supermarket’s walls werebeing erected. They asked the mayor toshow them the construction permit. Themayor, nervous and evasive, admittedWal-Mart did not actually have one.

“So we were like, ‘Why are they thereworking?’” Ms. Ortega said. Theyasked the mayor to halt work and holdhearings. The mayor said he wouldthink about it. Two days later, he issuedWal-Mart a construction license.

He signed it himself. In response, the protesters demand-

ed his resignation and filed the first ofseveral legal challenges. Then theyblockaded the construction site.

As word of the blockade spread, bellsrang from a chapel in Purificación, the

neighborhood where Wal-Mart wasbuilding. It was the alarm used to sum-mon neighbors in an emergency. Resi-dents marched toward the blockade.

“We thought they were there to sup-port us,” Ms. Ortega recalled. “No. Theywere there to attack us.” The crowd de-scended on the small band of protesters,pushing and yelling insults until theblockade was broken.

What Ms. Ortega did not know wasthat Wal-Mart had already bought thesupport of Purificación’s neighborhoodleaders. In interviews, several of thoseleaders recalled being invited to Mr.Rodríguez’s office to meet with the com-pany’s representatives. The Wal-Martpeople, the leaders said, offered moneyto expand their cemetery, pave a roadand build a handball court. They offeredpaint and computers for Purificación’sschool. They offered money to build anew office for the neighborhood leaders.

But the money came with strings: ifthere were any protests, they were ex-pected to be visibly and loudly support-ive of Wal-Mart.

Protest leaders began to get anony-mous phone calls urging them to backoff. In news conferences, the mayor dis-missed them as a tiny minority of gad-flies and self-interested local mer-chants. He insisted the town over-whelmingly favored Wal-Mart’s arrival,and as proof of his incorruptibility, heboasted of how he had rejected Wal-Mart de Mexico’s offer of a $55,000 do-nation to the municipal treasury.

But the tide turned as INAH’s archae-ologists began to find evidence thatWal-Mart was building on ancient ruinsafter all. They found the remains of awall dating to approximately 1300 andenough clay pottery to fill several sacks.Then they found an altar, a plaza andnine graves. Once again, constructionwas temporarily halted so their findingscould be cataloged, photographed andanalyzed. The discoveries instantlytransformed the skirmish over Mrs.Pineda’s field into national news.

Student groups, unions and peasantleaders soon joined the protests. Oppo-nents of other Wal-Marts in Mexico of-fered support. Influential politicians be-gan to express concern. Prominent art-ists and intellectuals signed an open let-ter asking Mexico’s president to stopthe project. Many were cultural tradi-tionalists, united by a fear that Wal-Mart was inexorably drawing Mexico’speople away from the intimacy of neigh-borhood life, toward a bland, imperson-al “gringo lifestyle” of frozen pizzas,video games and credit card debt.

The support emboldened the protest-ers. When the mayor held a news con-ference, they interrupted and openly ac-cused him of taking bribes. They block-aded INAH’s headquarters andmarched on Wal-Mart de Mexico’s cor-porate offices in Mexico City. “All wehave found are closed doors and anocean of corruption around the author-izations for this Wal-Mart,” Mr. D’Her-rera told reporters with typical flourish.

Their allegations of corruptionseeped into the news coverage in Mex-ico and the United States. In September2004, an article in The Times includedthis passage: “How Wal-Mart got per-mission to build a superstore on farm-land supposedly protected under Mex-ican law as an archaeological site hasvexed the merchants here, who freely

accuse the town, the state and the fed-eral Institute of Anthropology and His-tory of corruption.”

Open for BusinessBack in Bentonville, Wal-Mart’s in-

ternational real estate committee wasaware of the growing attention from thenews media, former members said in in-terviews. Some committee memberscringed at the ugly optics of Wal-Martliterally bulldozing Mexico’s culturalheritage. “I kept waiting for someone tosay, ‘Let’s just move sites,’” recalledone member, who, like others on thecommittee, asked not to be identifiedbecause of the continuing inquiry.

But top Wal-Mart de Mexico execu-tives assured the committee that the sit-uation was under control. They por-trayed the protesters as a fringe group— “like they were from Occupy WallStreet,” another person recalled.

Despite multiple news accounts ofpossible bribes, Wal-Mart’s leaders inthe United States took no steps to in-vestigate Wal-Mart de Mexico, recordsand interviews show.

Mr. Tovar, the Wal-Mart spokesman,said that while executives in the UnitedStates were aware of the furor in Teoti-huacán, they did not know about thecorruption allegations. “None of the as-sociates we have interviewed, includingpeople responsible for real estateprojects in Mexico during this time peri-od, recall any mention of bribery allega-tions related to this store,” he said.

In Mexico, government officials werelooking for a way to quell the contro-versy. Mr. Arroyo, INAH’s chief, urgedWal-Mart to build elsewhere. State offi-cials quietly searched for alternate sitesoutside the archaeological zone. Then,on Oct. 2, Mexico’s newspapers report-ed a major announcement: Arturo Mon-tiel, the state’s governor, was lookingfor another site “that is better for all.”

With its supermarket more than halfbuilt, Wal-Mart de Mexico was not ea-ger to accommodate the governor. Thecompany raced to complete construc-tion and mounted a public relations of-fensive. Executives argued that Wal-Mart de Mexico had scrupulously ful-filled every legal requirement: the zon-ing was correct, as confirmed by themap in the Government’s Gazette; nec-essary approvals had been duly ob-tained from INAH, traffic authoritiesand other agencies; the mayor himselfhad signed the construction license.

Not even a week after Mr. Montiel’sannouncement, his top deputy told re-porters there was, alas, no way to stopWal-Mart. “We would be violating thelaw,” he explained.

The supermarket opened on Nov. 4,2004. A year later, Mr. Cicero met withWal-Mart’s lawyers and told his storyfor the first time. His allegations wereshared with several of the same execu-tives who were on the international realestate committee, records show. If theprotesters’ vague allegations of corrup-tion had been easy to dismiss, now theywere coming from the person responsi-ble for obtaining Wal-Mart de Mexico’spermits in Teotihuacán.

More important, Mr. Cicero’s allega-tions emerged as a comptroller for theState of Mexico was wrapping up alengthy investigation into whether offi-cials had acted unlawfully in grantingpermits to Wal-Mart de Mexico.

But Wal-Mart did not share Mr. Cic-ero’s allegations with any authorities inMexico. “This is one of the areas we arereviewing as part of our ongoing in-vestigation,” Mr. Tovar said.

When the comptroller’s office subse-quently announced it had found nowrongdoing, it chided protesters forfailing to present any specific proof.

The comptroller had been the protest-ers’ last hope. Most moved on, resignedto the idea that their struggle had beenfor nothing. But not Mr. D’Herrera. Hecontinued to visit government archives,seeking access to Wal-Mart’s permitrecords. He kept appealing to public of-ficials for help. “I shall continue myhunger strike until Wal-Mart leaves oruntil I die,” he wrote in a letter to Vicen-te Fox, Mexico’s president at the time.

Despite the passage of time, Mr.D’Herrera never wavered in his convic-tion that Wal-Mart must have paidbribes. He was appalled by the store’simpact on Teotihuacán, and infuriatedthat so few seemed to care. It did not gounnoticed when protest leaders werespotted shopping contentedly in the Bo-dega Aurrera, where people can buy ev-erything from tortillas to tires, almostalways at a discount from local shops.

Friends and relatives urged Mr.D’Herrera to let it go, but he refused.“He became obsessed,” Ms. Ortega said.Mr. D’Herrera finally snapped. On May16, 2009, he entered the Bodega Aurreraand placed a crude homemade bomb ina shopping cart. According to prosecu-tors, the bomb consisted of a small juicecan containing gunpowder and nails.Mr. D’Herrera pushed the cart into thestore’s home section, looked around tomake sure the aisle was empty, andthen lit a fuse poking from the can. Hisintent, he later wrote, was to kill himselfand damage the store to draw public at-tention back to Wal-Mart. But all theblast did was knock him down and dam-age $68 worth of merchandise.

As he awaited trial from a prison cell,he continued his hopeless campaign. Hewrote more letters to politicians. Heasked his wife to publish his diatribesagainst Wal-Mart on an obscure poetryblog. Yet he clearly recognized the pre-cariousness of his circumstances. Hewas thin and severely diabetic. Histeeth were falling out. In early 2010, heasked a cellmate to deliver a letter to hiswife in case he died in prison. A fewmonths later, he had a brain hemor-rhage and slipped into a coma. Deathquickly followed. He was 62.

In his final letter to his wife, Mr.D’Herrera tried to explain why he hadbattled so long at such grievous cost.

“I am not leaving material patrimonyfor you and our son,” he wrote. “I’mleaving you a moral and political legacy,dying as I am for a cause, in defense ofthe Mexican culture.”

Wal-MartUsed PayoffsTo Get WayIn Mexico

From Preceding Page


FOR AND AGAINSTGuillermo Rodríguez, top, outside his ranch, was the mayor of Teotihuacán when Wal-Mart built its super-market there in 2004. Emma Ortega, above, a spiritual healer who cares for patients across the street from

the Pyramid of the Moon, shown in background, viewed Wal-Mart as a threat to Mexico’s cultural traditions.

A POPULAR STOREWal-Mart’s supermarket is easilythe busiest store in town, cateringmostly to working-class families.

Nxxx,2012-12-18,B,008,Bs-BW,E1

Mr. Gómez knew that before the agency issued a permit, it first had to officially “liberate” the plot by verifying that construction would not destroy valuable archaeological remains. That meant conducting a formal archaeological sur-vey, with grid lines and exploration holes.

For any developer, a survey was risky. If significant remains were discovered, it could kill the project, or at least force lengthy delays. Yet Mr. Gómez had not seen any sign of a sur-vey, an odd thing since a survey like this should have occupied a team of INAH researchers and laborers for a good six months. This, too, was a red flag.

Mr. Gómez was concerned enough to fol-low trucks from the site one day. When they dumped their loads, he could see fragments of pottery and other evidence of ancient remains. “I didn’t need to scratch the ground to see it,” he said in an interview.

Iván Hernández noticed, too. He was one of five INAH archaeologists who did surveys to liberate land for construction in the protected zone. He knew every major project in town, but nothing of this one.

residents were also calling INAH to com-plain. The calls went to Juan Carlos Sabais, the agency’s top lawyer in Teotihuacán. He would have been the one to review the permit paper-work and prepare the official liberation letter for this plot. “We didn’t have a clue,” he recalled. “People were saying this was Wal-Mart, and we didn’t know a thing.”

Mr. Sabais led a party of INAH officials to the site to find out what was going on. They passed through a small crowd of angry resi-dents. It was July 16, and construction was al-ready well under way. There were several large excavations, one as deep as 16 feet, records show. Workers claimed they had an INAH per-mit, just not on site as the law required. Mr. Sa-bais ordered them to stop construction.“The crowd started clapping,” he said.

By the time Mr. Sabais returned to his of-fice, senior INAH officials were calling from Mexico City demanding to know why he had halted construction. Only then, he said, did he discover that Wal-Mart had somehow managed to get a permit without a survey, or a liberation letter.

This bureaucratic miracle, Mr. Cicero would explain to Wal-Mart investigators and The

Times, was made possible by another payoff. As Mr. Cicero described it, senior INAH offi-cials had asked for an “official donation” of up to $45,000 and a “personal gift” of up to $36,000 in exchange for a permit.

Wal-Mart’s permit was signed by Mirabel Miró, then the agency’s top official in the State of Mexico. According to Ms. Miró, it was Wal-Mart de Mexico that made an improper offer of money. Her chief architect, she said, told her that Wal-Mart had approached him with an of-fer of a sizable “donation.” He wanted to accept, she said.

“I told him, ‘I don’t want a dime, not as a donation, not as anything, because it may be in-terpreted as something else,’ ” she said.

Sergio raúl Arroyo, the director general of INAH, recalled in an interview that Ms. Miró had told him about Wal-Mart’s offer. He could not recall any other instance of a company of-fering a donation while it was seeking a permit. “That would have been totally irregular,” he said. “It was obvious we had to be very careful with these people.”

“I told Miró to accept no donations,” he add-ed. “Not even a pair of scissors.”

And yet in June 2004, three weeks after Ms. Miró signed the permit, Mr. resendiz spoke about a payment to INAH during his private meeting with Teotihuacán’s council. “INAH itself is asking us for a considerable contribu-tion,” Mr. resendiz said.

“We are going to formalize the contribution next Monday,” he added. “But it is a fact.”

Mr. resendiz, who has been placed on ad-ministrative leave pending Wal-Mart’s inves-tigation, declined to comment. Every INAH official interviewed, including Ms. Miró’s chief architect, Carlos Madrigal, denied accepting money from Wal-Mart.

But Mr. Sabais, the agency’s top lawyer in Teotihuacán, knew nothing about official dona-tions or personal gifts on the day he stopped construction. All he knew was that he was being summoned to INAH’s headquarters in Mexico City. Over several tense meetings, he recalled, his bosses confronted their embarrassing pre-dicament: INAH had halted construction even though Wal-Mart had the required permit. Yet the agency had given Wal-Mart that permit without first conducting a survey and liberating the land.

Fearing a public relations debacle, senior INAH officials concocted a trail of backdated documents to hide its blunders, Mr. Sabais said. He pointed to an INAH report dated April 2, 2004, seven weeks before the agency issued its permit. The report suggested Wal-Mart’s plot had been liberated after a 1984 survey. “This document,” Mr. Sabais said, “was made later to justify what had not been done.”

INAH officials would later tell multiple government inquiries that Wal-Mart’s plot had been liberated because of this 1984 survey.

The Times tracked down the 1984 survey. It had nothing to do with the land where Wal-Mart was building. The survey was done on a differ-ent plot several hundred yards away. The ar-chaeologists who supervised and evaluated the survey were appalled to learn that it had been used to justify INAH’s permit for Wal-Mart. “This is a fraud,” Ana María Jarquín, one of the archaeologists, said in an interview.

In interviews last week, top INAH officials acknowledged for the first time that Wal-Mart’s plot had neither been surveyed nor liberated, ei-ther in 1984 or any other time, before construc-tion began. They also made one other startling admission. The agency has long maintained no ancient remains were destroyed during con-struction. But Verónica Ortega, INAH’s top archaeologist in Teotihuacán, acknowledged it was indeed possible ancient remains were de-stroyed during the excavation before Mr. Sabais halted construction.

“I am not able to affirm categorically that no soil went out,” she said.

The work shutdown ordered by Mr. Sabais did not last long. Four days later, INAH allowed Wal-Mart to resume construction. The agency did take one precaution: it began an extensive survey, digging dozens of exploration wells alongside Wal-Mart’s crews.

A Gathering ProtestBy now a loose protest movement had be-

gun to form. Its leaders all had deep roots here. lorenzo Trujillo owned produce stands in the public market. Emmanuel D’Herrera, a teacher and poet, had celebrated his son’s birth by tuck-ing the boy’s umbilical cord in a crack atop the Moon pyramid. Emma Ortega was a spiritual healer who cared for patients a stone’s throw from the pyramid. “You feel that it’s part of you,

and you are part of it,” she said.The protesters immediately suspected

something “dirty” had taken place, Ms. Ortega recalled. The first clue came on Aug. 1, 2004, when she and other protest leaders met with Mayor rodríguez. By now the supermarket’s walls were being erected. They asked the mayor to show them the construction permit. The may-or, nervous and evasive, admitted Wal-Mart did not actually have one.

“So we were like, ‘Why are they there work-ing?’ ” Ms. Ortega said. They asked the mayor to halt work and hold hearings. The mayor said he would think about it. Two days later, he is-sued Wal-Mart a construction license.

He signed it himself.In response, the protesters demanded his

resignation and filed the first of several legal challenges. Then they blockaded the construc-tion site.

As word of the blockade spread, bells rang from a chapel in Purificación, the neighborhood where Wal-Mart was building. It was the alarm used to summon neighbors in an emergency. residents marched toward the blockade.

“We thought they were there to support us,” Ms. Ortega recalled. “No. They were there to attack us.” The crowd descended on the small band of protesters, pushing and yelling insults until the blockade was broken.

What Ms. Ortega did not know was that Wal-Mart had already bought the support of Purifi-cación’s neighborhood leaders. In interviews, several of those leaders recalled being invited to Mr. rodríguez’s office to meet with the com-pany’s representatives. The Wal-Mart people, the leaders said, offered money to expand their cemetery, pave a road and build a handball court. They offered paint and computers for Pu-rificación’s school. They offered money to build a new office for the neighborhood leaders.

But the money came with strings: if there were any protests, they were expected to be vis-ibly and loudly supportive of Wal-Mart.

Protest leaders began to get anonymous phone calls urging them to back off. In news conferences, the mayor dismissed them as a tiny minority of gadflies and self-interested lo-cal merchants. He insisted the town overwhelm-ingly favored Wal-Mart’s arrival, and as proof of his incorruptibility, he boasted of how he had rejected Wal-Mart de Mexico’s offer of a $55,000

donation to the municipal treasury.But the tide turned as INAH’s archaeolo-

gists began to find evidence that Wal-Mart was building on ancient ruins after all. They found the remains of a wall dating to approximately 1300 and enough clay pottery to fill several sacks. Then they found an altar, a plaza and nine graves. Once again, construction was temporar-ily halted so their findings could be cataloged, photographed and analyzed. The discoveries instantly transformed the skirmish over Mrs. Pineda’s field into national news.

Student groups, unions and peasant lead-ers soon joined the protests. Opponents of other Wal-Marts in Mexico offered support. Influ-ential politicians began to express concern. Prominent artists and intellectuals signed an open letter asking Mexico’s president to stop the project. Many were cultural traditionalists, united by a fear that Wal-Mart was inexorably drawing Mexico’s people away from the intima-cy of neighborhood life, toward a bland, imper-sonal “gringo lifestyle” of frozen pizzas, video games and credit card debt.

The support emboldened the protesters. When the mayor held a news conference, they interrupted and openly accused him of taking bribes. They blockaded INAH’s headquarters and marched on Wal-Mart de Mexico’s corpo-rate offices in Mexico City. “All we have found are closed doors and an ocean of corruption around the authorizations for this Wal-Mart,” Mr. D’Herrera told reporters with typical flourish.

Their allegations of corruption seeped into the news coverage in Mexico and the United States. In September 2004, an article in The Times included this passage: “How Wal-Mart got permission to build a superstore on farm-land supposedly protected under Mexican law as an archaeological site has vexed the mer-chants here, who freely accuse the town, the state and the federal Institute of Anthropology and History of corruption.”

Open for BusinessBack in Bentonville, Wal-Mart’s interna-

tional real estate committee was aware of the growing attention from the news media, former members said in interviews. Some committee members cringed at the ugly optics of Wal-Mart literally bulldozing Mexico’s cultural heritage. “I kept waiting for someone to say, ‘let’s just

move sites,’ ” recalled one member, who, like others on the committee, asked not to be identi-fied because of the continuing inquiry.

But top Wal-Mart de Mexico executives as-sured the committee that the situation was un-der control. They portrayed the protesters as a fringe group — “like they were from Occupy Wall Street,” another person recalled.

Despite multiple news accounts of possible bribes, Wal-Mart’s leaders in the United States took no steps to investigate Wal-Mart de Mexi-co, records and interviews show.

Mr. Tovar, the Wal-Mart spokesman, said that while executives in the United States were aware of the furor in Teotihuacán they did not know about the corruption allegations. “None of the associates we have interviewed, includ-ing people responsible for real estate projects in Mexico during this time period, recall any men-tion of bribery allegations related to this store,” he said.

In Mexico, government officials were look-ing for a way to quell the controversy. Mr. Ar-royo, INAH’s director general, urged Wal-Mart de Mexico to build elsewhere. The state’s urban development ministry quietly searched for al-ternate sites outside the archaeological zone. Then, on Oct. 2, Mexico’s newspapers reported a major announcement: Arturo Montiel, the state’s governor, was looking for another site “that is better for all.”

With its supermarket more than half built, Wal-Mart de Mexico was not eager to accom-modate the governor. The company raced to complete construction and mounted a public re-lations offensive. Executives argued that Wal-Mart de Mexico had scrupulously fulfilled ev-ery legal requirement: the zoning was correct, as confirmed by the map in the Government’s Gazette; necessary approvals had been duly ob-tained from INAH, traffic authorities and other agencies; the mayor himself had signed the construction license.

Not even a week after Mr. Montiel’s an-nouncement, his top deputy told reporters there was, alas, no way to stop Wal-Mart. “We would be violating the law since they can tell us they complied with all that is required,” he explained.

The supermarket opened on Nov. 4, 2004. A year later, Mr. Cicero met with Wal-Mart’s law-yers and told his story for the first time. His al-legations were shared with several of the same

executives who were on the international real estate committee, records show. If the protest-ers’ vague allegations of corruption had been easy to dismiss, now they were coming from the person responsible for obtaining Wal-Mart de Mexico’s permits in Teotihuacán.

More important, Mr. Cicero’s allegations emerged as a comptroller for the State of Mexi-co was wrapping up a lengthy investigation into whether officials had acted unlawfully in grant-ing permits to Wal-Mart de Mexico.

But Wal-Mart did not share Mr. Cicero’s al-legations with any authorities in Mexico. “This is one of the areas we are reviewing as part of our ongoing investigation,” Mr. Tovar said.

When the comptroller’s office subsequently announced it had found no wrongdoing, it chid-ed protesters for failing to present any specific proof.

The comptroller had been the protesters’ last hope. Most moved on, resigned to the idea that their struggle had been for nothing. But not Mr. D’Herrera. He continued to visit govern-ment archives, seeking access to Wal-Mart’s permit records. He kept appealing to public offi-cials for help. “I shall continue my hunger strike until Wal-Mart leaves or until I die,” he wrote in a letter to Vicente Fox, Mexico’s president at the time.

Despite the passage of time, Mr. D’Herrera never wavered in his conviction that Wal-Mart must have paid bribes. He was appalled by the store’s impact on Teotihuacán, and infuriated that so few seemed to care. It did not go unno-ticed when protest leaders were spotted shop-

ping contentedly in the Bodega Aurrera, where people can buy everything from tortillas to tires, almost always at a substantial discount from lo-cal shops.

Friends and relatives urged Mr. D’Herrera to let it go, but he refused. “He became ob-sessed,” Ms. Ortega said. Mr. D’Herrera finally snapped. On May 16, 2009, he entered the Bode-ga Aurrera and placed a crude homemade bomb in a shopping cart. According to prosecutors, the bomb consisted of a small juice can contain-ing gunpowder and nails. Mr. D’Herrera pushed the cart into the store’s home section, looked around to make sure the aisle was empty, and then lit a fuse poking from the can. His intent, he later wrote, was to kill himself and damage the store to draw public attention back to Wal-Mart. But all the blast did was knock him down and damage $68 worth of merchandise.

As he awaited trial from a prison cell, he continued his hopeless campaign. He wrote more letters to politicians. He asked his wife to publish his diatribes against Wal-Mart on an ob-scure poetry blog. Yet he clearly recognized the precariousness of his circumstances. He was thin and severely diabetic. His teeth were fall-ing out. In early 2010, he asked a cellmate to de-liver a letter to his wife in case he died in prison. A few months later, he had a brain hemorrhage and slipped into a coma. Death quickly followed. He was 62.

In his final letter to his wife, Mr. D’Herrera tried to explain why he had battled so long at such grievous cost.

“I am not leaving material patrimony for you and our son,” he wrote. “I’m leaving you a moral and political legacy, dying as I am for a cause, in defense of the Mexican culture.” n

Josh Haner and James C. McKinley Jr. contributed reporting.

Documents

Wal-Mart - The Pulitzer Prizes · U(D54G1D)y+,!?!?!#!$ By JENNIFER STEINHAUER and CHARLIE SAVAGE WASHINGTON — Demon-strating rapidly shifting attitudes toward gun control in the