Chiquita: Chertoff told us to hold off stoppage of payments to terrorist group

On Apr. 24, 2003, a board member of Chiquita International Brands disclosed to a top official at the Justice Department that the king of the banana trade was evidently breaking the nation's anti-terrorism laws. Roderick M. Hills, who had sought the meeting with former law firm colleague Michael Chertoff, explained that Chiquita was paying "protection money" to a Colombian paramilitary group on the US government's list of terrorist organizations. Hills, a former chairman of the U.S. Securities and Exchange Commission, said he knew that such payments were illegal, according to sources and court records, but said that he needed Chertoff's advice. Chiquita, Hills said, would have to pull out of the country if it could not continue to pay the violent right-wing group to secure its Colombian banana plantations. Chertoff, then assistant attorney general and now secretary of homeland security, affirmed that the payments were illegal but said to wait for more feedback, according to five sources familiar with the meeting. Justice officials have acknowledged in court papers that an official at the meeting said they understood Chiquita's situation was "complicated," and three of the sources identified that official as Chertoff. They said he promised to get back to the company after conferring with national security advisers and the State Department about the larger ramifications for US interests if the corporate giant pulled out overnight. Sources close to Chiquita say that Chertoff never did get back to the company or its lawyers. Neither did Larry D. Thompson, the deputy attorney general, whom Chiquita officials sought out after Chertoff left his job for a federal judgeship in June 2003. And Chiquita kept making payments for nearly another year. Chiquita's executives left the meeting convinced that the government had not clearly demanded that the payments stop. Federal prosecutors, however, are now weighing whether to charge Hills; Robert Olson, who was then Chiquita's general counsel; former Chiquita CEO Cyrus Friedheim; and other former company officials for approving the illegal payments, according to records and sources close to the probe. The company has already pleaded guilty to making $1.7 million in payments to the United Self-Defense Forces of Colombia (AUC), and it agreed to pay a $25 million fine. But last week, lawyers for the former Chiquita executives sent letters to the Justice Department, asserting that their clients did not intentionally break the law but believed they were waiting for an answer from the highest levels of the Bush administration.