Chiquita International, no stranger to corporate machinations, has managed to make news.
Anyone familiar with the history of 20th century Central and Latin American political intrigues, economics and land ownership the large fruit company is no stranger.
After pleading guilty to federal charges that it paid a group called the United Self-Defense Forces of Colombia, known as the AUC, more than $1.7 million from 1997 to February 2004 and two other groups -- dating back to 1989 -- also designated as Foreign Terrorist Organizations in 1997, Chiquita Brands International Inc. will pay a $25 million fine.
Purportedly Chiquita paid the groups to "protect" employees. The company disclosed the payments to the Justice Department in April 2003 and publicly acknowledged the investigation in May 2004 disclosing that it had set aside $25 million for a potential settlement late last year. In June 2004, it sold its Colombian operations, taking a loss of $9 million on the deal.
As Carl Tobias, a law professor at the University of Richmond School of Law, told the Cincinnati Enquirer's Cliff Peale, the charges make it clear that the government is trying to send a message to other multinationals that it will prosecute them for doing business with terrorists.
"That's what's so striking about this case," Tobias said. "I believe this is in order to deter other companies that would aid terrorists. I would think other companies would sit up and take notice. I mean, that's a lot of money."
None of Chiquita's executives was charged individually, Peale reported. "The payments in question came before chairman and chief executive officer Fernando Aguirre joined Chiquita in January 2004, and started when Cincinnati-based American Financial Group and Carl Lindner controlled the company. A Lindner spokeswoman could not be reached for comment.
"Defendant Chiquita's payments to the AUC were reviewed and approved by senior executives of the corporation, to include high-ranking officers, directors and employees," the charges say. "No later than in or about September 2000, defendant Chiquita's senior executives knew that the corporation was paying the AUC and that the AUC was a violent, paramilitary organization."
For nearly a century, Chiquita, formerly known as United Brands and before that the infamous United Fruit Company, utilized the US Marines and later the CIA to help it establish a host of "banana republics" in the region. Indeed the history of the company, which at one time was under the control of Cincinnati businessman Carl H. Lindner Jr., who served as Chiquita's chairman and chief executive officer, is notorious.
Not only has the company maintained its historically cruel tradition in its treatment of its foreign workers, including a number of strike-breaking activities, but efforts by ex-president Bill Clinton to express his gratitude for a generous Lindner campaign contribution in recent years precipitated an all-out trade war between the European Union (EU) and the US, acting on behalf of Chiquita, over banana imports abroad.
According to a March 31, 1997, report by Michael Weisskoff in Time magazine two years prior, "Lindner wanted US Trade Representative Mickey Kantor to help him pry open European markets, which rely on various tariffs and trade barriers effectively to shut out Lindner's bananas.
Though hundreds of companies ask Washington to investigate unfair trade practices, the US Trade Representative accepts only about 14 cases each year. Even fewer are taken to Geneva for resolution by the World Trade Organization. And only rarely do such cases make the cut when hardly any US jobs are at stake; Chiquita employs most of its 45,000 workers in Honduras and Guatemala. And yet Kantor took the case."
But, as Weiskoff adds, "You wouldn't know how grateful Lindner was by checking records at the Federal Election Commission; he gave the Democratic National Committee only $15,000 in the final 15 months of the campaign. Instead, DNC officials instructed Lindner to give directly to state-party coffers, which are subject to far less public scrutiny than federal-election accounts.
"On April 12, 1996, the day after Kantor asked the WTO to examine Chiquita's grievance, Lindner and his top executives began funneling more than $500,000 to about two dozen states from Florida to California, campaign officials told Time."
"He has a lot of connections and a lot of reputation," said Neal Fisher, administrator for North Dakota's wheat commission. "We think he's very well-placed and well-respected."
The company's "generosity" has been the subject of much mirth, as featured in a PBS Frontline documentary titled "So You Want to Buy A President," in January, 1996.
PBS Documentary Commentator Robert Krulwich:
"Some of you might have missed this on television this fall, but it was a prime time broadcast of a gala fund raiser from Ford's Theater, the place where Lincoln was shot, and in the front row is the President of the United States and up on the stage was the comedian Paula Poundstone and she was trying to figure out who gets to sit next to the President?"
Paula Poundstone: "What determines who gets which seat? Do you do the whole seating chart?" (Laughter) "Do you know who that is behind your head very well? Who is that?"
Gala Hostess Seated in the Audience Next to the President: "Carl Lindner"
Paula Poundstone: "Carl Lindner, I'm sorry I'm not familiar. Alright, what made you give him that seat?" (Laughter) "Alright now, tell us who it is."
Hostess: "A whole lot of money!" (Laughter)
Paula Poundstone: "A whole lot of money!" (Applause and laughter) "Carl, I'm sure it was much deeper than that, sir. It was money and love little buddy, don't you worry. (Laughter) What's Carl's role in the community? Carl, why do you have so much money?" (Laughter) "Is that rude to ask?" (Applause) "Sir, what do you do for a living, I know I should know, but since I don't know, would you tell me? Mr. President, do you know who Carl Lindner is?" (Laughter)
President Clinton: (Nods yes)
Paula Poundstone: "Would you mind telling me!"
President Clinton: "It's a secret!"
Paula Poundstone: "It's a secret!" (Laughter)
President Clinton: "He's in bananas, sort of like you are."
Paula Poundstone: "He's in bananas! Is that true, sir? He's what? He's the Chiquita Banana guy! Gee sir, without the fruit on your head, sir, I didn't recognize you." (Laughter and applause) "Is that true? Why does the President know the banana guy?"
Robert Krulwich: "Now, there is an interesting question: why does the President know the banana guy? ... "
In 2002 Lindner retired as a member of the company's board. In a letter to Chiquita's CEO, Cyrus Freidheim, Lindner said he wished to limit his commitments and devote his full time and energy to the affairs of American Financial Group Inc., an insurance company led by Lindner and his sons.
Chiquita, since emerging from Chapter 11 bankruptcy has been seeking to make a fresh start, changing its top management, issuing new stocks and securities and adopting a new accounting standard. Payments to the terrorist organization, however, continued, now in cash, according to the charges.
Given Chiquita's history the recent news that it paid off Columbian terrorist organizations for "protection" in a foreign country should come as no surprise.
A.V. Krebs publishes the online newsletter, The Agribusiness Examiner, email email@example.com. He is author of The Corporate Reapers: The Book of Agribusiness.
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