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Bananas of Mass Destruction

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from: Bonnie Goldstein

Posted Monday, March 19, 2007, at 4:35 PM ET

Take a good look at what's written under "VIOLATION" in the document below, because it's not every day you see a hundred-year-old American corporation charged with "engaging in transactions with a specifically designated global terrorist." According to the One Count indictment, highlighted on the following 12 pages, (for the complete indictment click here), in 1997 the people who run Chiquita Brands International were pushed up against the wall by Colombian thugs. The company's Colombia-based shipping operation, Banadex, was shaken down for payoffs by Autodefensas Unidas de Colombia (AUC), "a violent paramilitary organization." Carlos Castaño, who ran AUC, gave Banadex's general manager "an unspoken but clear message that failure to make payments could result in physical harm to Banadex personnel and property." For years after that, Chiquita sent periodic checks to AUC middlemen for "security services."

Chiquita and Banadex executives were long accustomed to paying bribes in Colombia. Previously (page 4) they had paid off ELN and FARC, both "violent, left-wing, terrorist organizations." Chiquita got in its current fix in 2001 when the U.S. State Department designated AUC a foreign terrorist organization. At that moment, the produce company's protection payments violated U.S. laws against participating in financial transactions with terrorists. When Chiquita realized it was paying the AUC illegally, the company switched to making the payments in cash (page 6).

In early 2003, an Organization of American States report stated that Banadex had helped divert thousands of AK-47s and millions of rounds of ammunition from Nicaraguan government stocks to the AUC. Possibly in response to this separate difficulty, Chiquita's new recently seated board sought advice from "outside counsel" (former Deputy Attorney General Eric Holder is listed with the federal court as the company's counsel on this matter) about the AUC shakedowns. The attorney, presumably Holder, strongly cautioned that Chiquita "must stop payments" (pages 11 and 12). Shortly thereafter, the Chiquita brass met with U.S. Department officials to admit that they "had been making payments to the AUC for years" but that they'd paid the graft "under the threat of violence." The DOJ officials were apparently sympathetic, and the Chiquita representatives reported back to auditors that "there would be no liability for past conduct." As for future bribes to the terrorists, they reached no conclusion.

After another year of regular cash payoffs to the AUC, Chiquita ceased the payments, confessed to its stockholders, sold Banadex to the Colombians, and started collecting awards for public citizenship (click here and here). On March 14 of this year, Chiquita announced a $25 million settlement with the Justice department. The figure approximated the price Chiquita got for Banadex. A guilty charge for such activity typically carries a prison sentence (the American Talib John Walker Lindh was jailed for violating the same law), but in this case no executives will likely be sent to the slammer. The plea agreement does not protect the company's executives from extradition charges brought by the Colombian government in Bogotá.

It's all quite a comedown from the glory days when Chiquita (under its former name, United Fruit Company; later it was called United Brands) did the bullying as the very embodiment of Yanqui imperialism in Central America. "Look on my works, ye mighty, and despair!"

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hot document
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from: Bonnie Goldstein

Posted Monday, March 19, 2007, at 4:35 PM ET
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Bonnie Goldstein is a former special investigator to the U.S. Senate and investigative producer for ABC News.
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