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Walmart Fires VP in Tech for Taking Daily Kickbacks Starting from $30K
- JCM9 1y agoIt’s unclear from the article exactly what happened, but the general implication/allegation one takes away is that Walmart tech operations looks more like waste management contracting from the Sopranos.
- koakuma-chan 1y agoCan you elaborate? I am confused by the language used here. What is "kickback" and what is "waste management contracting from the Sopranos"
- westmeal 1y agoA kickback is money you take for a favor that isn't legal or allowed or for being in charge of a project, organization etc. Waste management contracting from the sopranos refers to a TV show about new jersey mobsters entitled the sopranos. In the show, they use a garbage disposal corporation to launder the money they make from their racketeering schemes. Whenever the boss is asked about what job he does, he just replies with 'waste management'.
- matteotom 1y agoKickback: usually refers to a company (or sales rep) giving a large "gift" to the individual at a company responsible for making a purchase decision (influencing that person to make a decision not in their company's best interest). The Sopranos was a HBO show about a mob family. Historically, waste management in some cities has been controlled by the mob.
- TehCorwiz 1y agoBroadly and imprecisely speaking, kickbacks are illicit payments by a vendor or contractor to a specific member of the customer company for maintaining the relationship regardless of value or worth. It’s a type of bribery. The Sopranos was a TV show about the Mafia. The Mafia is a criminal syndicate whose operations consist primarily of providing illegal drugs, prostitution, and charging companies in their territory for “protection” often from other groups, but also often from themselves. The show had the mafia use a waste management company’s services as a superficially legal reason to be paying these protection payments. At least that’s my interpretation.
- oersted 1y agoThe Mafia does actually provide real waste-management services, also in Italy at large scale as far as I know. They do engage in racketeering to ensure that they own all the contracts in a certain region, and compete for territory, but they do often actually go and collect the waste, it's not just a front. And I think they did in the Sopranos too, although it was not explicitly depicted as far as I remember, just off-hand references. The illegal part is in how they get rid of it. Often they take on high-value contracts for toxic waste products that are complex to handle in a compliant manner, and they just dump it wherever.
- lambda 1y agoA kickback is a bribe; specifically, a bribe to someone on one side of a larger financial transaction, for facilitating it. As in, vendors A, B, and C are competing for a ten million dollar contract with Walmart to provide some service, so vendor A pays someone at Walmart in a decision making role ten thousand dollars to ensure that they are selected. A small portion of the money that vendor A receives is "kicked back" to the person who facilitated that transaction. Obviously, this is quite corrupt; that person is supposed to be paid by Walmart to best represent their interests, not select the vendor based on who will best financially compensate them personally. The Sopranos part is a reference to a TV show about the Mafia, in which (presumably, I haven't seen it), bribery schemes like this are common.
- kortilla 1y agoIf you’re selecting a contractor or vendor, they give you either money or some special payment to do so. Mostly illegal. The biggest kickback exceptions are airline mileage programs and hotel points where employees become incentivized to pick higher cost routes or stays to earn points.
- deleted 1y ago[deleted]
- Forgeties79 1y agoFolks I think he gets it lol
- lotsofpulp 1y agoSeems pretty clearly explained here. >Technology executives with authority over contractor requisitions and interview processes can direct substantial volume toward "preferred" staffing shops. In exchange, these vendors provide kickbacks that, in Walmart's case, generated what sources estimate as millions in illicit payments over multiple years. For more info: https://en.wikipedia.org/wiki/Principal–agent_problem https://en.wikipedia.org/wiki/Principal–agent_problem
- DrNosferatu 1y agoUnfortunately, this is a lot more common than people think… :/
- duxup 1y agoI’ve seen a lot of outsourcing efforts that end up costing more money than previously.
- franktankbank 1y agoFor the company sure, but the decision-maker probably did well.
- duxup 1y ago> Layered vendor relationships—where prime contractors sublease work to secondary vendors, who in turn engage tertiary providers—have created opaque financial structures that obscure accountability while enabling systematic exploitation. It’s wild to me that big companies with all the resources would expose their IT systems in this way where they have no idea who is doing the work….
- reactordev 1y agoYou should see the financial industry…
- dkdcio 1y agobut they have bank-level encryption!
- dlcarrier 1y agoI once submitted a bug report to my bank, through 3rd party that they had hired to administer their bug bounty program. The 3rd perty determined that it was a pretty high severity issue, because the setting to require a password could be disabled without entering a password. The bank closed it as works as intended, because they had only meant for the password to be optional, out of convenience. I gues this is in line with their normal practices, as they were unable to issue me a debit card that only works with a PIN, and can only issue cards where the PIN is optional.
- hammock 1y agoOr manufacturing. Or mining/oil. (I know we are getting away from the sensitive data part of the comment though. But this is how you get children digging thru cobalt pits with their bare hands)
- koliber 1y agoIn my experience, even though there are layers of subcontractors, the individual ultimately doing the work is vetted thoroughly. Source: 1st hand experience being a provider of such services.
- coderatlarge 1y ago“When you have four or five layers between the client and the actual worker, each taking a cut, it becomes impossible to track where influence ends and legitimate business begins." wow i would think that for all the money paid to ERP vendors tracking five layers of contracts would not be a major issue. but i guess unless people in positions of authority subject themselves to some sort of financial audit then it’s almost impossible to detect corruption related payments.
- stuartjohnson12 1y ago"Only at this point did Brady realize that it was the CEO himself who was fiddling with the numbers. The entire dual reporting system that the CEO had personally initiated was in part an elaborate spy network to guard against discovery of the slush fund manipulation, and perhaps other finagling, rather than a system to ensure financial honesty." - Moral Mazes (1988), Robert Jackall
- weeznerps 1y agoI just read that book and I can't believe it's not more well-known in tech circles
- torben-friis 1y agoWhen I worked for a B2B startup years ago (VR sector, hype of the moment back then), it was common to have our bid/proposal rejected in favor of a larger company that would then hire us to make the full project for a fraction of the price. I wouldn’t be surprised to know there were agreements between this bigger company and the person in charge of selecting a contractor, it seems to be an extremely common practice.
- wat10000 1y agoThere’s also the “nobody ever got fired for choosing IBM” effect. If they hire a small vendor and the project fails, that might be a resume-generating event for the person responsible for that choice. But if you choose a big vendor and it fails you’re probably safe.
- burnstek 1y agoReminiscent of the Netflix drama when Mike Kail was accused & eventually convicted of similar. https://www.justice.gov/usao-ndca/pr/former-netflix-executive-sentenced-30-months-bribes-and-kickbacks-netflix-vendors https://www.justice.gov/usao-ndca/pr/former-netflix-executiv...
- ulf-77723 1y agoNot knowing how the game works: What is legal in the US regarding kickbacks? Is it ok to get someone tickets for a gameday? To get invited to a party or taking a holiday? Pure cash seems a little odd to me - this must have been found in some company booking accounts, I guess
- delfinom 1y agoDepends, it can come down to your corporate employment contracts and corporate policies. Also, if you work for a public company, you usually have a fiduciary duty to shareholders at a certain managerial level, so it falls into the illegal territory. If you own your own company, it's usually not a big deal to let people wine and dine you lol
- gruez 1y ago>per-say *per se https://en.wiktionary.org/wiki/per_se https://en.wiktionary.org/wiki/per_se
- realslimjd 1y agoIt is illegal if you're a government employee or working as a government contractor. What most people get in trouble for is laundering the money that they're taking in bribes.
- lotsofpulp 1y ago>Is it ok to get someone tickets for a gameday? Not if there is a record of the tickets being given as a personal favor in exchange for a business favor.
- Moto7451 1y agoMost employee handbooks will spell out what’s ok for most of the examples you gave. A lot of that will be ethics oriented but if you follow the rules you’re also behaving in a way the company isn’t going to find to be fraudulent and you’ll avoid those legal issues. Pure cash is a problem, but for employees in Sales there’s basically a schedule for when you give and when you expect exchanges of tickets/events/small gifts and rules for what can be accepted and it scales with the position. When I worked in the same office as sales the gifts that came in made Christmas a bonanza. Those really expensive luxury fruit baskets I personally won’t buy for myself were very common. Junior’s Cheesecake from prior to their mail order and grocery store business taking off was a huge deal. Sometimes we got socks and ties. A LOT of socks. They addressed it to the whole office so the 30 or so engineers got to partake with the 500 or so sales and support members. At one company the CEO took a client to the Super Bowl (they wanted to go also, win win). Totally fine. I’ve been the technical lead on some deals and have gotten some of the perks like very expensive dinners, some token gifts (on the scale of a very nice box of chocolates), branded merch, etc. At one place I worked a gift card or cash equivalent was ok if it was reimbursing something (like your parking or flight) but otherwise had to be less than $100. For most places I’ve worked the rules are essentially that if it’s “fun”, legal, and substantially less than your pay/commission it’s probably allowed; if it’s clearly a bribe it is not.
- noobermin 1y agoSo this definitely sounds salacious and could be believable, but is this a reputable source? It's supposedly an IT consultant's website, a strange place for a news article of this kind to appear...
- bediger4000 1y agoAt the very end of the post: Disclaimer: The identity of the news submitter has been verified by us. However, we have not received any confirmation or verification from Walmart regarding the information provided I take this to mean it's garbled at best, and just might be fictitious.
- adolph 1y agoIt'll be interesting to see if this is true or if it just validates people's priors. Disclaimer: The identity of the news submitter has been verified by us. However, we have not received any confirmation or verification from Walmart regarding the information provided. See also: * Unverified Walmart H-1B Scandal Rumors Claim VP Got Kickbacks, 1,200 Terminated, Spark Fears Among Indians: https://inews.zoombangla.com/unverified-walmart-h-1b-scandal-rumors-claim-vp-got-kickbacks-1200-terminated-spark-fears-among-indians/ https://inews.zoombangla.com/unverified-walmart-h-1b-scandal... * Walmart H-1B scandal rumors spark anxiety among Indian workers, company responds: https://www.financialexpress.com/world-news/us-news/walmart-h-1b-scandal-rumors-spark-anxiety-among-indian-workers/3956210/ https://www.financialexpress.com/world-news/us-news/walmart-... * Walmart visa scandal fears unfounded, company says firings not linked to H-1Bs: https://www.hindustantimes.com/world-news/us-news/walmart-h-1b-scandal-rumors-claim-vp-got-kickbacks-1200-terminated-spark-fears-among-indians-101755985714636.html https://www.hindustantimes.com/world-news/us-news/walmart-h-...
- vjvjvjvjghv 1y agoWhen I did contracting at Siemens in Germany, the son of the CTO ran a staffing firm. He took around 30-50% of what Siemens paid. We did a rough calculation and concluded that the guy must make millions for not doing much. It’s hard to understand why countries are contracting with staffing firms that take a high cut but they do.
- sillyfluke 1y agoI always find Germans as a collective weirdly naive about the top-level corruption that goes on in their country. Don't get me wrong, I don't claim that it exceeds the US in anyway but Americans don't have any illusions about the possible corruption the top brass can be engaging at any point in time. Germans seem to be way too ocd about following the rules at the individual level themselves and policing those around them at an individual level that they don't seem to have much energy left for contemplating top-level or systematic corruption. German pride seems to also discourage them from engaging in devil's advocating when it comes to auditing German darling companies. I'm guessing the VW, Deutsche bank, and Wirecard scandals have at least made a healthy little dent in that collective psyche.
- seivan 1y ago[dead]
- postalcoder 1y agoThis article was written entirely by AI likely using the Blind thread as the prompt: https://www.teamblind.com/post/massive-fraud-at-walmart-770kf4op https://www.teamblind.com/post/massive-fraud-at-walmart-770k... If this was a sourced article, it'd have the name of the exec.
- djohnston 1y agoWant to place a bet to quantify our confidences of whether this happened or not?
- postalcoder 1y agoIt could be real. Doesn't make the article less bad.
- djohnston 1y agoI understand - I'm asking where you weigh the probability of it having happened based on the available evidence.
- deleted 1y ago[deleted]
- hammock 1y agoSo what. Can we please keep this thread and have a discussion?
- wavemode 1y agoAlmost none of the facts alleged in the article are verified. This thread isn't going anywhere, you can feel free to discuss. But it doesn't belong on front page, flagging was the right move.
- VoidWhisperer 1y agoIt is hard to have a discussion about an article with no details or evidence.
- djohnston 1y agoSurprise surprise, eh?
- hammock 1y agoIt may already be obvious to the average HN reader, but this seems to be about offshore staff. “Contingent workforce infrastructure” is a term of art I haven’t heard yet, but in Google terms this is about red badges, likely offshore ones from staffing agencies. And frankly, as someone who requests these kind of teams, it makes me question every interaction I’ve had in the past with the people who build these that has “pushed back” on me asking that we keep the recruiting network open globally and not just from some executive’s preferred country/area. For example I have in mind one exec who told me “I promised (unnnamed person) we would build a team in (redacted city)” and it was a lot of work to sidestep that
- franktankbank 1y agoI bet you made a lot of enemies doing that sidestep.
- jongjong 1y agoThis is a brave move by Walmart. If all companies follow suit, I suspect this will affect almost every major tech company. This is not an isolated case, but the norm in the industry. I've seen this over and over; specific SaaS providers being given preferential treatment because somebody high up in the tech leadership of a major corporation is either receiving kickbacks or they've been promised a future highly paid job at the SaaS provider. That's why you see a lot of corporate folks get hired into leadership positions by smaller SaaS providers who received business from the corporation. The corporation almost always overpays and it's the same providers getting all the money from all the corporations because they have a similar strategy for all of them. It's been going on for a LOT longer than 2023.
- jtbayly 1y agoThis (same link I believe, not just same story) was on the front page a couple of days ago and quickly flagged dead. I’m surprised to see it again so quickly. I would have thought a flagged link wouldn’t be possible to submit again and get to the front page.
- tiffanyh 1y agoWhy is this framed as “Daily Payments”? Isn’t that kind of vs just saying something like “VP received $X amount of money from Y vendor to be selected”
- raincom 1y agoKickbacks in the IT subcontracting is per head per hour. 8 billable hours per day * 1000 contractors a day * 5 dollars per billable hour = 40,000 USD a day.
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- hopelite 1y agoThis is an odd story. The VP of global tech for WM is fired, but no name is given? I found who that person is in that role, but there is also an x account that claims it is all not true and he is not fired.
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- VoidWhisperer 1y agoIf this did happen, you would think this would be better substantiated by now. All the articles I'm finding on it are very clear at the top that it is an 'unverified' report - you'd think they'd be able to find atleast one of the 1200 engineers willing to talk to them. Perhaps I'm too cynical but I'm not sure I believe this until a credible news source names the exec or has it substantiated by an engineer.
- franktankbank 1y agoIt took UnitedHealth several months to go back on their original refutation that they were under DOJ investigation for Medicare fraud.
- jongjong 1y agoThe "Everyone in tech has been receiving kickbacks scandal" has been averted successfully. Phew... So many people involved, so much pressure. This thing got flagged so fast, I didn't even have time to unmoor my ill-gotten yacht.