Chiquita pleads guilty in terror probe
WASHINGTON (AP) — Banana company Chiquita Brands International admitted in federal court Monday that, for years, it paid Colombian terrorists to protect its most profitable banana-growing operation.
The company pleaded guilty to one count of doing business with a terrorist organization. The plea is part of a deal with prosecutors that calls for a $25 million fine and does not identity the several senior executives who approved the illegal protection payments.
The agreement ends 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.
Prosecutors say the Cincinnati-based company agreed to pay 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 AUC a terrorist group in September 2001
Chiquita has said it was forced to make the payments and was acting only to ensure the safety of its workers.
But federal prosecutors noted in court Monday that from 2001 to 2004, when Chiquita made $825,000 in illegal payments, the Colombian banana operation earned $49.4 million and was the company’s most profitable unit.
“Funding a terrorist organization can never be treated as a cost of doing business,” U.S. Attorney Jeffrey Taylor said.
Chiquita sold Banadex, its Colombian subsidiary, in June 2004 for around $43.5 million.
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.
Court documents listed 10 unidentified company employees who participated in the illegal deals and helped conceal them on company books. Prosecutors would not identity them or say whether they remain with Chiquita.
They assured U.S. District Judge Royce C. Lamberth, however, that two executives who approved the plea deal – CEO Fernando Aguirre and Senior Vice President James Thompson – were not among those in court documents.
The company is set to be sentenced June 1. By law, it faces up to nearly $100 million in fines if Lambreth does not accept the $25 million deal with prosecutors.
Chiquita stock has risen sharply since the deal was announced last week but company shares were trading down 1 cent at $13.51 in late morning trading on the New York Stock Exchange.