In contrast to standards applied to charities, this corporation was allowed to enter into a plea deal and pay a fine after admitting it paid terrorists for protection in Columbia even though they knew the payments were illegal. The company paid two groups that were U.S.-designated terrorist organizations. In a plea agreement with the U.S. Department of Justice, Chiquita agreed to pay a $25 million fine and admitted that it paid the terrorists. The company was allowed to continue profitable production during the investigation. Six years later, the company sued the SEC to block release of documents related to payments the company made to terrorist groups, and in 2016, a federal judge cleared the way for families of villagers killed by these armed groups to sue Chiquita in a class action lawsuit.
In a plea agreement with the U.S. Department of Justice (DOJ), on Mar. 14, 2007 Chiquita Brands International agreed to pay a $25 million fine after admitting it paid terrorists for protection in a dangerous region of Colombia. The payments, made between 1997 and 2004, continued despite the company’s knowledge that they were illegal. The company was allowed to continue profitable production during the investigation. The U.S. government’s action is inconsistent with standards and procedure used against charities, which have had their assets seized and frozen while investigations are pending. Six U.S. charities have been shut down on the basis of much less evidence than the direct payments to which Chiquita admitted. The Chiquita fine is unlikely to affect its operations, as the company has annual revenues of approximately $4.5 billion.
The Cincinnati-based company paid approximately $1.7 million to the United Self-Defense Forces of Colombia (AUC) and also made payments to the leftist Revolutionary Armed Forces of Colombia (FARC), both U.S. designated terrorist organizations. The government’s designation of AUC as a terrorist organization made it illegal for anyone in the U.S. “to knowingly provide material support, including currency and monetary instruments” to such organizations. According to a Wall Street Journal report in 2003, outside attorneys for Chiquita notified the company that the payments violated U.S. anti-terrorism laws and should not continue. However, payments to the groups continued until Chiquita sold its subsidiary, Banadex, in June 2004.
The company reported the $25 million plea agreement to the Securities and Exchange Commission (SEC). The SEC filing stated, “In 2003, Chiquita voluntarily disclosed to the Department of Justice that its former banana-producing subsidiary had been forced to make payments to right- and left-wing paramilitary groups in Colombia to protect the lives of its employees. The company made this disclosure shortly after senior management became aware that these groups had been designated as foreign terrorist organizations under a U.S. statute that makes it a crime to make payments to such organizations.”
DOJ’s “slap on the wrist” approach exhibits clearly unequal enforcement of anti-terrorist financing laws. In contrast to the direct funding Chiquita paid AUC, no significant evidence of terror financing by U.S.-based charities has been found. Instead, questionable evidence was used to shut down the largest U.S.-based Muslim charities, including the Holy Land Foundation. Several U.S. charities have been shut down on the basis of much less evidence than the direct payments to which Chiquita admitted.
Chiquita Sues SEC
On April 4, 2013, Chiquita sued the SEC, seeking to block the release of documents related to payments the company made to terrorist groups, according to the complaint filed in U.S. District Court for the District of Colombia.
According to the National Security Archive, a project sponsored by George Washington University, the documents Chiquita is hoping to block may contain more information about the illegal transactions between Chiquita and the Colombian groups. In 2011, the National Security Archive released over 5,000 pages of declassified internal Chiquita documents from the 2007 investigation that showed the company and its partners had received tangible benefits from those payments. Among them, a 1994 legal memo says that the general manager of Chiquita operations in Turbó told company attorneys that “Guerrilla Groups” were “used to supply security personnel at the various farms.”
Class Action Lawsuit
In November 2016, a federal judge in Florida cleared the way for lawsuits against Chiquita Brands International to proceed in U.S. federal courts.
The ruling stems from a 2007 class-action lawsuit against Chiquita, filed by Earth Rights International on behalf of the families of thousands of villagers, labor leaders and community organizers murdered by the Autodefensas Unidas de Colombia (AUC), a right-wing Columbian paramilitary group.
Although the produce giant admitted to paying the AUC $1.7 million over a seven-year period and pleaded guilty to U.S. criminal charges that it supported terrorists, it insists it was blackmailed into paying or risking violence against its own operations and employees.
Faced with potentially billions of dollars in legal liability, Chiquita Brands International had asked a federal appeals court to block lawsuits filed against it in the U.S. The November 16 ruling allows the trial to move forward. The case is Doe v. Chiquita Brands International, No. 08-MD-80421.