[ by Melanie Gretchen ] The Wal-Mart bribery scandal in Mexico - too soon to tell what direction it will take.  It may take off like a Roman Candle, ejecting intense, bright star-like flares, setting fire to those nearby, before quickly flaming out.  It may burn with the slow deliberateness and grow with long-term intensity, fueled by opponents of big business - Wal-Mart is the world's largest retailer -  or Congressional leaders and political operatives who seek to distract the American populace from the U.S. presidential election, Europe's ongoing financial struggles, and tomorrow's hot-button issues. Already, the CEO of Michaels Stores, John Menzer, has been connected to the Mexican bribery inquiry - even as the company prepares to go public.  Two U.S. lawmakers said they were launching separate investigations into activities, of allegations reported by the New York Times.  On Monday, when the story broke, Wal-Mart shares plunged, losing $10 billion of its market value. Wal-Mart's shares dropped due to concerns that a bribery investigation in Mexico could be very costly and hinder its plans to grow.  Indeed, the possibility that it may begin shrinking is already looming on the horizon:

• Two U.S. lawmakers said they were launching their own investigation into allegations in a New York Times article that Wal-Mart de Mexico had engaged in a multi-year campaign of bribery to build its business.  Elijah Cummings and Henry Waxman said they were launching an investigation into the matter and sent a letter to Wal-Mart Chief Executive Mike Duke requesting a meeting.

• In Mexico, the front-running presidential candidate, Enrique Pena Nieto, and lawmakers also called on local authorities to investigate.
• Shares of Wal-Mart de Mexico, which is 69%-owned by Wal-Mart and known as Walmex, fell 12% to 37.89 pesos ($2.88).  The drop wiped out a 12 percent year-to-date gain in the 2nd-most-weighted stock on Mexico's IPC index.

Violations. If the allegations are true, Wal-Mart may have violated the U.S. Foreign Corrupt Practices Act (FCPA), which forbids bribes to foreign government officials, and of Sarbanes-Oxley rules that require corporate gatekeepers to report material violations of securities laws. Long-Term Consequences. For its part, Walmex said on Monday that it does not believe the allegations will hurt its business.  For outsiders, the time for expansion on the international front may be nigh.  The Times report "raises significant questions about the actions of top company officials in the United States who reportedly tried to disregard substantial evidence of abuse," the lawmakers Cummings and Waxman said in a statement. "Entering additional countries is a cornerstone of Wal-Mart's growth strategy," Consumer Edge Research analyst Faye Landes wrote in a research note.  "We can foresee the authorities in some key countries, notably India, becoming dramatically less welcoming to Wal-Mart following the release of the allegations." BMO Capital Markets analyst Wayne Hood said in a research note that Wal-Mart's growth could be hurt both domestically and abroad by the bribery allegations.  "Articles like this will be used against the company by activists and competitors when it attempts to open stores in the U.S. and abroad," he wrote in a note on Monday. Lawsuit Potential. Going forward, Wal-Mart could be facing shareholder lawsuits accusing the company of securities fraud for having inflated its stock price by misleading investors about its FCPA compliance.  Cosmetics maker Avon Products Inc faces similar lawsuits over its activities in China. Opportunity. Alternately, others said the share drop could provide a buying opportunity, given that Wal-Mart shares had been trading near a 52-week high on optimism over the recovery in its U.S. business.  Citigroup analysts said in a note that, after discussions with Wal-Mart, it believed that the retailer would conduct a "thorough and transparent" review and said any pressure on the stock was "an enhanced buying opportunity." Options market activity has also suggested a bullish bias on Wal-Mart stock. The sun may be setting on the Wal-Mart empire. For further details, go to [Reuters, 4/23/12].