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Chiquita fined for Colombia payments

THE NATION

A plea deal allows the banana company to pay a $25-million penalty for buying 'protection' from a paramilitary group.

September 18, 2007|Jordy Yager | Times Staff Writer

WASHINGTON — A federal judge on Monday accepted a plea deal that includes a $25-million fine from Chiquita Brands International Inc. over "protection" payments it made to a Colombian paramilitary group designated a terrorist organization by the U.S.

In the agreement, the Cincinnati-based banana company admitted paying the United Self-Defense Forces of Colombia $1.7 million from 1997 to 2004.

The group, which is known by its Spanish-language initials AUC, threatened to harm the employees of Chiquita's Colombian subsidiary if it was not paid, said Michael Mitchell, a company spokesman. "The threats were very real," he said. "There were employees who had been killed." Chiquita sold the subsidiary in 2004.

The plea agreement approved by U.S. District Judge Royce C. Lamberth includes a five-year probation period, during which the company will be watched and must continue to cooperate with the Justice Department.

The fine is "the largest criminal penalty ever imposed under the global terrorism sanctions regulations," said Justice Department spokesman Dean Boyd. It follows the department's decision last week not to prosecute any of the company's management and instead settle for corporate criminal liability.

The company, which has annual revenue of about $4.5 billion worldwide, had proposed the $25-million fine in March. Chiquita officials said Monday they were pleased that Lamberth had accepted the plea deal.

"We believe this is the right decision and one that reflects the good-faith efforts of the company to address a very difficult situation involving the lives and safety of our employees," Fernando Aguirre, Chiquita's chairman and chief executive, said in a statement.

Chiquita began making protection payments in the 1990s to the left-wing Revolutionary Armed Forces of Colombia, better known by the Spanish-language acronym FARC. But when the AUC took over areas of the country where the company had large banana plantations, Chiquita switched as well -- making more than 100 payments to the right-wing paramilitary organization between 1997 and 2004. Both groups are on the State Department's list of terrorist organizations. Both have been accused of human rights violations in their battle for political control. They have been responsible for terrorist attacks, drug trafficking and kidnappings of corporate officials.

Under a number of U.S. laws, it is illegal for an individual or a company to do business with any organization on the State Department list. The AUC was placed on the list in September 2001 and the FARC in 1997.

In February 2003, lawyers from Chiquita's outside counsel advised officials to cease payments. Two months later, the board of directors was informed of the payments. In late April, the company notified Justice Department authorities of the payments and were told to stop. However, from April 24, 2003, to Feb. 4, 2004, Chiquita paid the AUC more than $300,000, according to court documents.

"Chiquita had been forced to make extortion payments to both right-wing and left-wing groups in Colombia, and it made these extortion payments only to protect the well-being and lives of its employees," James Thompson, Chiquita's general counsel, said Monday after the plea agreement was approved.

Carlos Holguin, Colombia's justice and interior minister, felt differently, according to a Colombian radio report last week. The plea agreement "is not worthy of U.S. justice, because it gives the idea that impunity can be bought for a few million dollars," he told Bogota's Radio Caracol on Wednesday.

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jordy.yager@latimes.com

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