Chiquita Fined $25M For Terror Ties

Banana Company Admits To Paying Right-Wing Group In Colombia To Protect Employees

(AP)  Cincinnati-based banana company Chiquita Brands International said Wednesday it has agreed to a $25 million fine after admitting it paid terrorists for protection in a volatile farming region of Colombia.

The settlement resolves a lengthy Justice Department investigation into the company's financial dealings with right-wing paramilitaries and leftist rebels the U.S. government deems terrorist groups.

In court documents filed Wednesday, federal prosecutors said the company and several unnamed high-ranking corporate officers paid about $1.7 million between 1997 and 2004 to the United Self-Defense Forces of Colombia, known as AUC for its Spanish initials.

The AUC has been responsible for some of the worst massacres in Colombia's civil conflict and for a sizable percentage of the country's cocaine exports. The U.S. government designated the right-wing militia a terrorist organization in September 2001.

Prosecutors said the company made the payments in exchange for protection for its workers. In addition to paying the AUC, prosecutors said, Chiquita made payments to the National Liberation Army, or ELN, and the leftist Revolutionary Armed Forces of Colombia, or FARC, as control of the company's banana-growing area shifted.

Leftist rebels and far-right paramilitaries have fought viciously over Colombia's banana-growing region, though the victims are most often noncombatants. Most companies in the area have extensive security operations to protect employees.

In Colombia, authorities reported Wednesday that nine geologists searching for gold were captured by the FARC. In addition, the army confirmed that four contractors hired by Colombian oil giant Ecopetrol were missing near Colombia's border with Venezuela.

Colombia has one of the highest kidnapping rates in the world. Arrangements between companies and either guerrillas or paramilitaries are not uncommon, but it is impossible to know how much money is paid each year.

"The information filed today is part of a plea agreement, which we view as a reasoned solution to the dilemma the company faced several years ago," Chiquita's chief executive, Fernando Aguirre, said in a statement. "The payments made by the company were always motivated by our good faith concern for the safety of our employees."

Chiquita sold its Colombian banana operations in June 2004.

Details of the settlement were not included in court documents, but Aguirre said Chiquita would pay $25 million in fines, which it set aside this year. The company reported the deal to the Securities and Exchange Commission. A plea hearing was scheduled for Monday.

The payments were approved by senior executives at Chiquita, prosecutors wrote in court documents. Prosecutors said Chiquita began paying the right-wing AUC after a meeting in 1997 and disguised the payments in company books.

"No later than in or about September 2000, defendant Chiquita's senior executives knew that the corporation was paying AUC and that the AUC was a violent paramilitary organization," prosecutors wrote in Wednesday's court filing.

Company attorneys made it clear the payments were improper, prosecutors said.

"Bottom line: CANNOT MAKE THE PAYMENT," the company's outside counsel advised in February 2003, according to an excerpt of a memo included in court documents.

In April 2003, company officials and lawyers approached the Justice Department and told prosecutors they had been making the payments. According to court documents, the payments continued for months.

The document filed by federal prosecutors is known as an information. Unlike an indictment, it is normally worked out through discussions with prosecutors and is followed by a guilty plea.

[torocaca]

United Brands (Chiquita) disgraced the U.S. flag it carried throughout Latin America. UB had a shiny, cheerful public face, in the person of its ubiquitous trademark, Chiquita Banana, a banana-shaped, miniskirted Latino cutie who sang and danced on radio and television.

However, in 1954 the CIA accepted and carried out a proposal from UB to overthrow the Guatemalan government, which was the only democratically elected government Guatemala had ever had. UB and the CIA replaced that government with over 30 years of bloodshed under a series of barbaric right-wing dictators.

The U.S. taxpayers funded these regimes under the recurring threat that if they do not, the Guatemalan people will fall prey to the evils of communism. Hmmmmm.... I seem to recall the same threat during the buildup to the Vietnam war.

United Brands/CIA "dirty deals" with the CIA are also documented in "Bitter Fruit: The Untold Story of the American Coup in Guatemala" by Stephen Schlesinger and Stephen Kinzer.

[torocaca]

No surprise here. This company, under its various names, has been involved in dirty deals in Central America for decades. "Chiquita Brands International Inc. was formerly known as "United Brands" and the "United Fruit Company."

From Wikipedia: "In 1975, a SEC invesitgation revealed that the company had bribed the Honduran President (dictator) Oswaldo Lspez Arellano and Italian officals. The scandal was named Bananagate."

And...

"In the 1980's, the company (then known as United Brands Company) was involved in a leading Competition Law case when they were found to abuse their dominant position in the banana and fruit supply markets by the European Commission."

And from "Endless Enemies..."

"...two United Brands freighters that lurked in Cuba's Bahia de Cochinos on 4/17/1961 weren't there for the usual load of bananas. ...their mission was so extraordinary that it remained a classified military secret until 1976 when a retired UB VP published his memoirs. Neither the government nor UB has challenged his account of how the UB ships became warships that day."

Bahia de Cochinos = Bay of Pigs. See next post...

[torocaca]

Chiquita...United Brands...Bay of Pigs...continued.

Taxpayers might wonder why the Bay of Pigs invasion relied on transport ships on loan from United Brands, a private, for-profit enterprise. But when you think about it, the arrangement was only fair. The whole CIA had been on loan to United Brands for years..." and so it goes on for 13 pages in "Endless Enemies: The Making of an Unfriendly World" by Jonathan Kwitney. You'll have to go to Amazon.com and buy a used copy of the book to read the rest of the story.

As an aside: The failed Bay of Pigs invasion, the fact that Castro "finally put it to the gringos," delivered to Castro a power he never could have bought--a legitimacy he could have won no other way. In Cuba to this day, Castro continues to breathe strength and life from the glory of that triumph. The fact that he has been dictator for 47 years, longer than any other dictator, is proof of that glory and triumph.

[krotec54]

diputSdiputS at 08:14 AM : Mar 15, 2007

That's a good ideal, Let's not buy bananas for a month from these countries. It may not hurt them, but they will notice that they could lose a lot of money if it continues.

[bwright923]

As unsavory as thoes groups are, the FARC for example are the only rule of law in some areas. National Geographic did an article on them a few years ago. Their means are not right, but they are the only ones setting up schools and health clinics in many parts of the area. If the corrupt governments down there would step up and do their jobs then companies wouldn't have to pay thugs for protection.

[mitdgreenb]

A few random thoughts.

1) I have a friend who was probably saved by these payoffs, although she had the pleasure of witnessing a murder while she was there. It was bad enough that she got the equivalent of "combat pay" to be there.

2) Payoffs like this are not a good thing -- it's a protection racket. These are not nice poeple.

3) Don't rush to judgement... unless you've been there. If you're faced with the ethical choice of risking your (or your employee's) life or paying clearly unsavory people, what would you do? The other options -- pulling your employees out or appealing to the police to enforce the rule of law -- are not available to you. What would you do?

4) Banana companies have a long history of interference in Latin American politics and of unethical practices. Look up "banana republic" some time. Alas, little has changed.

[fredegrar]

Time to change those 'don't do drugs because drug money supports terrorists' ads to 'don't do bananas'! I can't believe my 3 yr old banana loving child is a supporter of terorism!

[krotec54]

All American companies in Mexico, Central, and South America states will always be targets for these right-wing paramilitaries, leftist rebels and local police. Now, find a country that will welcome us and not request additional protection money for their citizens. We may need to grow our own in the states.

[cathaleen]

Bad break for banana lovers.

[nothappyatall]

"The payments were approved by senior executives at Chiquita and corporate books were kept to conceal the deals, prosecutors said."

Typical corporate mo-fo's and greed cooking the books to hide shady dealings, just like Bush and his regime