Chiquita Brands International, the company that grows bananas and distributes what is probably the most well known banana label in the United States; a company that has grown through clever marketing, a long history and advertising, was accused and fined $25 million for paying protection money to a known terrorist group in Columbia.
The filing was made Wednesday the 14th of March, 2007 against the company and a number of the companies higher officials. They were reported to have given 1.7 million dollars to the militant AUC group, known in English as the United Self-Defense Forces of Columbia, in the years 1997 to 2004. The payments were made and then disguised in the company’s books.
Chiquita itself approached The Department of Justice in 2003 and admitted they had found certain higher officials of the company had been involved in the payoffs to the extremist group.
The group AUC was officially designated a terrorist group, by the United States government, in September of 2001. They are responsible for much of the cocaine exportation and the extreme violence in Columbian internal conflicts.
The payments were made to protect the workers in what is a very volatile farm and banana growing area of Columbia, where most companies have been forced to have their own security to keep their employees safe. This area of Columbia has one of the worst records for political kidnappings in the world and it has long been fought over by the two extreme groups of far-right paramilitaries and the leftist guerilla rebels.
Arrangements between these two extreme groups and other companies to protect their businesses and employees, are believed to be in play, but the amounts and specifics of each deal, and what companies are involved, are not known.
The filings are part of a plea bargain made by Chiquita as part of a solution to the accusation raised few years ago., but the Chief Executive Officer of Chiquita, Fernando Aguirre said, “The payments made by the company were always motivated by our good faith concern for the safety of our employees.”
The company was not indicted but instead information was filed against the company by federal prosecutors. The normal way to proceed through an information filing, is to have discussions with the prosecutors and then the filing is followed by a plea of guilt.
Their subsidiary, Banadex which contributed about 9 percent of the larger company’s banana supply was the Columbian branch of the company. The Chiquita company sold it’s Columbian banana business in 2004.
Chiquita began it’s long history in 1870, when Captain Lorenzo Dow Baker bought 160 bunches of bananas in Jamaica and imported them to Jersey City 11 days later, selling them at a profit. In recent years they have expanded into the sale of other fruits and fruit products and acquired Fresh Express, which is currently the number one seller of packaged salads in the United States.
Stocks dropped nearly five percent this week after the news of the illegal payments were disclosed.