Chiquita Pleads Guilty to Paying Terrorists

March 19, 2007 — -- Chiquita Brands International Inc., one of the world's largest banana producers, pleaded guilty this morning to a federal charge of paying terrorist groups to provide security for its Colombian operations. In the plea agreement, Chiquita agreed to pay a $25 million fine for knowingly making payments to guerrilla groups from 1997 to 2004.

During that seven-year period, Chiquita admitted paying a paramilitary group more than $1.7 million in "security payments" through its subsidiary Banadex. The plea agreement noted that Chiquita's senior executives knew about the payments even after the United States declared the group "a foreign terrorist organization," and Chiquita continued the payments even after its independent outside counsel advised in writing that the company "must stop payments."

The United States declared that two of the paramilitary groups were terrorist organizations: the United Self Defense Forces of Colombia, known by its Spanish acronym AUC, in 2004, and the Revolutionary Armed Forces of Colombia, or FARC, in 1997. Both have a long history of brutal guerrilla warfare and ties to the Colombia drug trade

Chiquita released a statement from Fernando Aguirre, chairman and chief executive officer, saying, "The payments made by the company were always motivated by our good faith concern for the safety of our employees. Nevertheless, we recognized — and acted upon — our legal obligation to inform the DOJ [Department of Justice] of this admittedly difficult situation."

U.S. Attorney Jeffrey Taylor said in a statement, "Funding a terrorist organization can never be treated as a cost of doing business. American businesses must take note that payments to terrorists are of a whole different category. They are crimes."

The plea agreement language includes the assertion that "Chiquita had previously paid money to other terrorist organizations operating in Colombia … from in or about 1989 through … 1997, when the FARC and the ELN [National Liberation Army] controlled areas where defendant Chiquita had is banana producing operations."

Chiquita then began paying the AUC, as the AUC began to drive the FARC out of some areas in northern Colombia during the country's civil war.

In 2003, Chiquita voluntarily disclosed the payments to the Department of Justice, saying the paramilitaries had forced it to make them to protect company employees.

The Justice Department acknowledged Chiquita's cooperation in the case, and Taylor added, "American businesses, as good corporate citizens, will find ways to conform their conduct to the requirements of the law and still remain competitive."

As part of the plea, the firm has agreed to cooperate in any ongoing investigation. At this time, no individuals from Chiquita will be charged.