How Chiquita Banana Funded Terrorism

By Jerry Garner

Chiquita Brands International has reached an agreement with the US Department of Justice to pay a fine of $25 Million, according to a press statement issued by the company on Wednesday. The company is receiving the fine after paying millions of dollars to two terror groups based in the South American country of Columbia.

The company has also agreed to assist the Justice Department with any “continuing investigation into the matter”, according to a statement filed with the Securities and Exchange Commission (SEC). As a company that is traded publicly under the symbol CQB, Chiquita is required to disclose all legal actions to the SEC.

According to one Justice Department spokesman, the agreement to cooperate with ongoing investigations is significant. Particularly since the Department is still investigating whether or not Chiquita’s corporate officers, both present and past, knowingly engaged in the act to fund terrorism.

From 1997 to 2004, the company made payments of $1.7 Million to the United Self Defense Forces of Columbia, known as AUC for the initials of the group’s Spanish name. The AUC is a right-wing paramilitary group that has been responsible for some of the most horrific massacres in Columbia’s history. The group also has a sizable stake in the Columbian drug trade.

According to federal prosecutors, senior officials of Chiquita made similar payments to Revolutionary Armed Forces of Columbia. Known as FARC, this is a leftist guerilla group has been in a war with AUC for years, battling over turf in Columbia.

The United States Government officially designated both AUC and FARC as terrorist groups in September 2001. Authorities have stated that the Chiquita case is the most prominent, perhaps even the only, case since 2001, in which a US company has been linked to financial support for foreign terrorists. On several occasions, President Bush has stated that anyone providing financial support to a terrorist group will be prosecuted just as severely as the terror operatives themselves.

The plea agreement to pay a fine in the amount of $25 Million has been described as "a reasoned solution to the dilemma the company faced several years ago” by Chiquita’s Chairman and CEO, Fernando Aguirre.

The official position of the company is that the payments, which were made by Chiquita’s Columbian subsidiary, were a necessary part of doing business in a volatile region. The payments, according to the company, were made as protection, so that the militant groups would not target Chiquita facilities or employees.

"The payments made by the company were always motivated by our good-faith concern for the safety of our employees," Aguirre said.

While this may appear innocent enough at first glance, it should also be considered that the company has an extensive history of controversial activities in Latin America. In 1954, Chiquita’s predecessor, the United Fruit Company, allegedly worked with the CIA to overthrow the government in Guatemala. It is said that the company feared that the anti-capitalist regime was a threat to their banana growing enterprise.

In 1975 the company became involved in a scandal that the press dubbed Bananagate, after a Department of Justice investigation revealed that the company had bribed the President of Honduras. Later, in 1998, the Cincinnati Enquirer ran an 18-page featured story that accused the company of a number of questionable business practices. Chiquita won a $10 Million legal judgement from the newspaper following the expose’.

In April 2002, Chiquita appointed a new Board of Directors as the company emerged from bankruptcy. According to court documents, the new Board learned that the company had been paying an undisclosed amount of money to FARC since the early 1990s, and also began payments to AUC in 1997, after Chiquita officials met with the militant group’s leader, Carlos Casta-o.

In 2003, outside attorneys for Chiquita notified that company that the payments were in violation of US law and should not continue. The news provoked mixed reactions from the Board. One member wanted to pull out of Columbia entirely, while others wanted to continue business as usual. It should be noted that the company did eventually sell the Columbian subsidiary in 2004, but payments to the terror groups continued up until that time.

In April 2003, just one year after the appointment of the new Board of Directors, members of the Board met with Justice Department lawyers to disclose information about the payments. The Department of Justice acknowledged that it was a complicated issue, but the ultimate ruling was that the payments are illegal and must stop immediately.

That could have been the end of the matter. But in less than two weeks, the criminal filing states, the Board of Directors at Chiquita issued an order for the payments to the terrorists to continue. Because of such acts, the Justice Department briefly considered filing a more serious charge of providing Material Support for terror, but ultimately opted to charge the company with a lesser count.

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