Chiquita fined for paying terrorists

Banana company Chiquita Brands International admitted in federal court on Mar. 19 that for years it paid Colombian terrorists to protect its most profitable banana-growing operation. Federal prosecutors say Chiquita and several unnamed high-ranking corporate officers paid about $1.7 million from 1997 to 2004 to the United Self-Defense Forces of Colombia, a right-wing paramilitary organization known as the AUC. The AUC has been responsible for some of the worst massacres in Colombia's civil conflict and for much of the country's cocaine exports. The Cincinnati-based company pleaded guilty to one count of engaging in transactions with a specially designated global terrorist group. The plea was part of a settlement agreement with the government in which Chiquita will be fined $25 million. In return, the Department of Justice has agreed not to bring any more charges against the company. The US Secretary of State designated the AUC as a terrorist organization on Sept. 10, 2001. The AUC's activities include assassinating suspected guerrilla supporters, engaging guerrilla combat units and kidnapping and murdering civilians. The government's designation of AUC as a terrorist organization made it illegal for anyone in the United States "to knowingly provide material support, including currency and monetary instruments" to such organizations. Prosecutors said Chiquita made the payments to AUC in exchange for protection of its banana operations, and paid similar protection money to the leftist Revolutionary Armed Forces of Colombia, known as FARC. Court documents listed 10 unidentified Chiquita employees who participated in the illegal deals and helped conceal them on company books. The settlement was quickly denounced as too lenient by human rights groups, which have long said that Chiquita's bananas are "stained with blood," accusing the company of paying paramilitary groups not only to protect its operations, but also to target union leaders and agitators perceived as going against the company's commercial interests. They also pointed to President Bush's policy that anyone financing a terrorist organisation should be prosecuted as vigorously as the terrorists. Rather than handing down indictments through a federal grand jury, the Justice Department chose to file a "document of criminal information" against Chiquita–a less aggressive form of prosecution that usually leads to a settlement rather than a criminal trial. Local human rights groups in Colombia have accused the company in the past of using the ports it controls to smuggle weapons into the country for the AUC, often described as a death squad. Colombia may ask the United States to extradite Chiquita officials. "Extradition works both ways," said President Álvaro Uribe, who has sent hundreds of cocaine smuggling suspects to the United States since 2002 when he first took office. Colombian prosecutors will determine if an extradition request should be made against company executives believed to be responsible. Uribe is curently enduring a scandal in which eight of his congressional allies and his former intelligence chief have been jailed for financing or otherwise supporting AUC paramilitaries. Jaime Bernal Cuellar, a former Colombian attorney general, joined opposition lawmakers in calling for the extradition to Colombia of all those involved. "A criminal investigation of the people who financed these illegal groups should begin immediately," he said. Colombia's chief federal prosecutor's office said it would ask the US Justice Department for information on Chiquita's role concerning a report that a ship owned by Chiquita subsidiary Banadex was allegedly used to unload 3,000 rifles and more than 2.5 million bullets in November 2001 for use by the AUC. The shipment was revealed in a 2003 report by the Organization of American States. Chiquita spokesman Michael Mitchell acknowledged the OAS report, and said Banadex changed its policies as a result. Colombia's chief prosecutor's office isn't so sure. For one thing, it noted that the four people already convicted in the arms smuggling scheme included Banadex's legal represenative, Giovanny Hurtado Torres. Some Colombian politicians also questioned the US government's role in the scandal. According to US court documents, Chiquita told the Justice Department in April 2003 that it was funding the paramilitaries, and then kept paying them for another 10 months with the department's knowledge. "My question is: How much more does the US government know about payments to the paramilitaries?" asked Sen. Jorge Robledo, a leading opposition lawmaker. In Antioquia state, Chiquita's business boomed as the groups took over banana-growing lands and were blamed for the killings of human rights workers and trade unionists. The US complaint noted that "by 2003, Banadex was defendant Chiquita's most profitable banana-producing operation." With annual revenue of approximately $4.5 billion, Chiquita said the fine would not affect its global operations. It is a leading international marketer and distributor of fruits and salads, and is one of the world's top sellers of bananas. Chiquita has had a history of controversial dealings in South America that date back decades. Its precursor, the United Fruit Co., worked with the CIA to overthrow a democratically elected government in Guatemala, which it feared was a threat to its banana-growing enterprise there, in 1954. In 1975, a US investigation revealed that the company had bribed the president of Honduras in a scandal that came to be known as Bananagate. And in 1998, the Cincinnati Enquirer published an 18-page special section on Chiquita that alleged a host of questionable business practices and improprieties, including bribing foreign officials. Chiquita portrayed the articles as unfair and inaccurate and forced the Enquirer to run an apology and retraction and pay a settlement said to be more than $10 million. But critics of the company have noted that it never fully refuted many of the published allegations. In 1997, Chiquita began paying the AUC after a meeting between the general manager of its subsidiary and the AUC's leader at the time, Carlos Castaño. It continued paying until at least 2004, long after the United States had designated the group a terrorist organization, according to court documents. The payments, usually disguised through an elaborate series of financial tricks, "were reviewed and approved by senior executives of the corporation, to include high-ranking officers, directors and employees," the court filing said. By September 2000, senior executives at Chiquita knew that the corporation was paying the AUC and that it was a violent paramilitary organization, prosecutors said. In April 2002, the company seated a new board of directors after coming out of bankruptcy and began paying the AUC "according to new procedures established by senior executives." In early 2003, outside counsel hired by Chiquita was demanding that the company sever its financial relationship with the AUC. "Must stop payments," said a Feb. 21, 2003, communication cited in the court filing. The payments continued, however, and they were soon reported to the full board of directors, which agreed to disclose the payments to the Justice Department. One board member objected to the payments and urged the company to take immediate corrective action, including withdrawing from Colombia. But some other company leaders wanted the payments to continue, even if they were illegal and likely to draw Justice Department scrutiny. Two high-ranking company officials told their outside counsel to "just let them sue us, come after us," the filing says. In late April 2003, Chiquita officials met with Justice Department lawyers, who acknowledged that the issue of continued payments was complicated but said they were illegal and could not continue. Within two weeks, though, Chiquita officials gave instructions to "continue making payments," the criminal filing said.