US Warns On Corporate Terror Payments After Chiquita Fine

Taken from Yahoo News, Mar 19, 2007
By Associated Free Press

US authorities warned companies Monday they can never deal with terrorists after fruit giant Chiquita agreed to a hefty fine for paying protection money to Colombian paramilitaries.

Chiquita Brands International admitted to the US government in 2003 that it had been paying the money for years to the United Self-Defense Forces of Colombia (AUC), a right-wing paramilitary group on the US list of terrorists.



Under a settlement confirmed by the US Department of Justice Monday, the Cincinnati-based company agreed to pay a fine of 25 million dollars and to bolster its internal compliance and ethics program.

Chiquita pleaded guilty before Judge Royce Lamberth of the US District Court in Washington to one count of engaging in transactions with a designated global terrorist group. Judicial officials paid credit to Chiquita's cooperation in their investigation but stressed the gravity of the offense.

"Funding a terrorist organization can never be treated as a cost of doing business," US Attorney Jeffrey Taylor said in a statement.

"American businesses must take note that payments to terrorists are of a whole different category. They are crimes," he said.

Chiquita, through its wholly owned Colombian subsidiary C.I. Bananos de Exportaction S.A. (Banadex), paid the AUC in exchange for protection in the banana-producing areas of Uraba and Santa Marta, Colombia. In the past, the company had also made payments to leftist rebels of the Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN), both also listed as terror groups, US prosecutors said.

Chiquita, which sold Banadex in 2004, said it had voluntarily disclosed that its subsidiary "had been forced to make payments to right- and left-wing paramilitary groups in Colombia to protect the lives of its employees."

"The payments made by the company were always motivated by our good-faith concern for the safety of our employees," Chiquita chief executive Fernando Aguirre said in a statement last week.

"Nevertheless, we recognized - and acted upon - our legal obligation to inform the DoJ of this admittedly difficult situation."

According to the US investigation, Chiquita made over 100 payments to the AUC amounting to more than 1.7 million dollars, masked in its corporate records as contributions for "security."