What happens when "Business as Usual" clashes with the vocabulary of the "War on Terror"? We got a glimpse of one case this March when the Cincinnati-based Chiquita Brands International, Inc., paid a $25 million settlement to the United States Justice Department for paying off right-wing paramilitary groups in Colombia, groups which Washington classifies as "terrorist organizations."
Chiquita is one biggest and most powerful food marketing and distributing companies in the world, and one of the world’s largest banana producers. The company shows annual revenues of approximately $4.5 billion and about 25,000 employees operating in more than 70 countries.[1] The banana market, worth about $5 billion a year in 2001, is the most important global fruit export. The majority of the 14 million tons of bananas exported every year come from Latin America.[2]
The charges state that from 1997 to 2004 several unnamed, high-ranking corporate officers from Chiquita and its Colombian Banadex subsidiary made monthly payments, totaling $1.7 million, to the United Self-Defense Forces of Colombia (AUC).[3] Even though Chiquita’s outside lawyers insisted that payments stop in 2001, Banadex continued write checks to the AUC, though Chiquita executives later decided that cash was a better idea.[4]
The AUC, often described as a "death squad," was incorporated as one of 28 "Foreign Terrorist Organizations" on the U.S. Department of State website in September, 2001.[5] Not without reason; even Forbes Magazine describes the AUC as "responsible for some of the worst massacres in Colombia’s civil conflict and for a sizable percentage of the country’s cocaine exports." With approximately 15,000 to 20,000 armed troops, the AUC uses "kidnapping, torture, disappearance, rape, murder, beatings, extortion and drug trafficking" among its standard techniques.[6] One of many massacres committed by the AUC took place in 2001, while the AUC was receiving funds from Chiquita. In the early morning on January 17, 80 AUC paramilitaries entered the rural town of Chengue and killed 24 men by smashing "their skulls with stones and a sledgehammer." Only one 19-year-old paramilitary member has been punished, though he named police and navy officials who organized the mass murder.[7]
Apparently, the company also funded two other Colombian groups on the US lists include the National Liberation Army, or ELN, and the leftist Revolutionary Armed Forces of Colombia, or FARC, both of Colombia’s main leftist rebel groups, which Chiquita also paid off as these groups took control of the banana-growing area.[8] This area has inspired deadly battles between left and right-wing paramilitary groups. Most of the victims of these wars are local residents, human rights workers and trade unionists.[9]
Chiquita’s involvement with the paramilitaries developed at a time when the right-wing groups were growing quickly and deepening their ties with politicians, security forces and businesses across Colombia. In the state of Antioquia, Chiquita’s business boomed as the groups took over banana-growing lands and were blamed for the killings of human rights workers and trade unionists. As the U.S. complaint noted, "by 2003, Banadex was defendant Chiquita’s most profitable banana-producing operation."[10] Chiquita sold its wholly owned subsidiary Banadex to the local company Banacol in June, 2004 for between $43.5 and $52 million.[11]
From United Fruit to Chiquita: An Inglorious Past
Chiquita’s history in Colombia is more than a century old. Its roots grow out of the United Fruit Company, notorious in Latin America as a U.S. Army backed opponent to agrarian reform and agricultural workers’ unions. Though later known as United Brands in 1970, and then Chiquita in 1989, business in Latin America has continued in similar veins. In 1928, several thousand workers of Colombia’s banana plantations began a strike demanding written contracts, eight-hour days, six-day weeks and the elimination of food coupons. According to the United Fruit Historical Society, the strike turned into "the largest labor movement ever witnessed in the country."[12] The strike continued in 1929, and received national attention and support from opposition political parties.
When the army fired on strikers during a demonstration in the city of Cienaga, killing a disputed number of workers (between 47 and 2,000), it created waves that contributed to the downfall of the Conservative Party and features in the masterworks of two famous Colombian authors.[13] The Santa Marta Massacre, as it came to be known, appears in Álvaro Cepeda Samudio’s novel "La Casa Grande" (1962), and Gabriel García Márquez’s epic novel "One Hundred Years of Solitude" (1966). Nobel-awarded Chilean writer Pablo Neruda also recognized the influence of the United Fruit Company with a chapter of the same name in his epic work "Canto General" about the history of Latin America.
Through out the 20th century, the company was infamous for using a combination of its financial clout, congressional influence and violent refusal to negotiate with striking workers to establish and maintain a colony of "banana republics" in Latin America. Often the CIA and the US Marines provided the company’s muscle, as in the case of the overthrow of the populist Guatemalan president Jacobo Arbenz in 1953.[14] Currently, Chiquita employs most of its 45,000 workers in Honduras and Guatemala.
United Fruit/United Brands/Chiquita has owned banana exporting companies in Honduras since 1899, and the U.S. Army has come to call frequently since then, first in 1903, then 1907, then 1912, 1919 and 1924. Chiquita workers have gone on strike more than 40 times during the 89 years the company has operated in Honduras. In 1930, workers held strikes against the company. In 1932 Juan Pablo Wainwright, the leader of the 1930 banana workers’ strike in Honduras, was assassinated in Guatemala. It wasn’t until 1949 that the Honduran Congress passed labor regulations for children and women and establishes an eight-hour working day. In 1954, however, massive strikes for wage increases paralyzes all banana operations and peak with 25,000 striking workers (around 15% of all the country’s labor force). United Fruit fired 10,000 workers. [15] More recently, in 1992, workers went on strike to demand housing, health care and schools for their families, increase salaries by ten percent.[16]
It wasn’t until March of 1974, that the governments of Honduras, Costa Rica, and Panama signed the Panama Agreement, imposing banana export taxes of $1 per 40-pound box. Later the same year, the governments of Costa Rica, Colombia, Honduras, Guatemala, and Panama formed the Union de Paises Exportadores de Banano (UPEB) -Organization of Banana Export Countries- to defend the interests of the member countries, raise and maintain high prices, and adopt common policies. United Brands threatened unsuccessfully to pull out.[17]
In 1975, "Bananagate" struck. A federal grand jury accused United Brands of bribing Honduran President Osvaldo Lopez Arellano with $1.25 million, with the promise of another $1.25 million later, in exchange for a reduction in the export taxes Honduras committed under the light of UPEB rules. Lopez Arellano was removed from power, but later investigations revealed repeated bribes carried out by the company. [18]
Silencing Reporters
Over twenty years later, business proved to be similar. In May of 1998, The Cincinnati Enquirer published a series of articles that exposed Chiquita’s still-questionable business practices. The articles, written by Mike Gallagher and Cameron McWhirter, reported cases in which the company used tactics including "bribery, abusive corporate control in Honduras and Colombia, the use of harmful pesticides, and repressive actions against workers" to bolster profits.[19] Bribery proved to be the least of it.
The investigation found Chiquita to be the secret owner of "dozens of supposedly independent banana companies." The writers found cases of worker and union suppression on Chiquita-controlled farms, though the "employee pamphlet" assures worker that they have the right to unionize.[20] In one case the company used the Honduran military to "evict residents of a farm village; the soldiers forced the farmers out at gunpoint, and the village was bulldozed."[21] When Chiquita does face competition, they prove to be similarly ruthless. A federal lawsuit filed by a competitor’s employee filed charged that Chiquita-hired thugs attempted to abduct him in Honduras.[22]
The investigation also found that Chiquita was aerially spraying workers, despite its pact with the Rainforest Alliance since November of 2000, which forbids aerial spraying.[23] Furthermore, in defiance of the "Better Banana" pact to abide by pesticide safety standards, Chiquita subsidiaries have used pesticides in Central America that are banned in the U.S., Canada, and the European Union, such as Bitertanol sold as Baycor, Chlorpyrifos, sold as Lorsban, Carbofuran, sold as Furadan and five other dangerous pesticides and fungicides.[24] In Costa Rica, a coroner’s report attributed a worker’s death to toxic chemicals released into farms by the company. Despite probably well funded articles and a book green-washing Chiquita’s transformation in 2004, it’s questionable if Chiquita has really changed its practices.[25]
Chiquita didn’t take the criticism kindly, however, and when their shareholders sued the company, Chiquita sued the newspaper, claiming that reporter Mike Gallagher obtained voice-mail tapes illegally . "The Cincinnati Enquirer published an apology across the top of its front page and said it had agreed to pay Chiquita Brands International Inc. more than $10 million to avoid being sued for a series of articles that exposed the fruit company’s criminal practices." [26] In court The Enquirer was forced to fire Gallagher. The facts found in the investigations were never challenged, however.[27] Several years later, on January 23, 2001, news leaked that Gannett Co. Inc., The Enquirer’s owner, paid Chiquita $14 million in an out-of-court settlement.[28]
Bananas, Cocaine and AK-47s
While the company claims that it was strong-armed into making the recent payments to paramilitaries in Colombia in order to protect its employees, human rights groups accuse the company of paying the paramilitaries not only to ‘protect’ workers, "but also to target union leaders and agitators perceived as going against the company’s commercial interests," and to force communities off farming land.[29]
In fact, beyond simply paying the AUC, local human rights groups say that in the past the company has used its company-controlled ports to smuggle weapons into the country for the AUC.[30] Nor would this be the first time that Chiquita’s ships have been used to transport something other than bananas. The Enquirer’s expose also found that in 1997, authorities seized more than a ton of cocaine from 7 Chiquita ships, though the shipment was attributed to lax Colombian security than the company.[31] A 2003 report by the Organization of American States states that a Banadex ship could also have been used illicitly in November 2001 to ship 3,000 rifles and 2.5 million bullets to the paramilitary groups. In late march, the chief prosecutor’s office in Colombia said that it would ask the U.S. Justice Department for more information about the case.[32]
Michael Mitchell, Chiquita spokesman acknowledged the OAS report, however, "there is no information that would lead us to believe that Banadex did anything improper," he said. However, Colombia’s chief prosecutor’s office has noted that Banadex’s legal representative, Giovanny Hurtado Torres, was one of four people already convicted in the arms smuggling scheme. Politicians are also wondering about the role of the U.S. Government. Leading opposition lawmaker Senator Jorge Robledo queried publicly, "My question is: How much more does the U.S. government know about payments to the paramilitaries?”[33]
Drug Traffickers to the U.S., CEOs to Colombia?
In light of the smuggling scandal, CNN reports that Gloria Cuartas, a former mayor in the banana producing area, is calling for a boycott of Chiquita products. Colombians like Cuartas know the implications of the U.S. funding for the AUC. After the information was filed, Colombian officials announced that they would seek the extradition of senior executives of the company. Extradition is a well known term in Colombia, where hundreds of suspected drug-traffickers have been extradited to the United States as part of the US War on Drugs. Even President Álvaro Uribe, possibly the Bush administration’s closest South American ally, gathered up a semblance of righteous indignation to comment that extradition "should be from here to there and from there to here."[34] However, since Uribe’s own links to the drug cartels are only overshadowed by his links to the paramilitaries, it is unlikely that he will be seeking any real action in the case.[35]
Former Colombian attorney general Jaime Bernal Cuellar, along with opposition law makers, called for an immediate "criminal investigation of the people who financed these illegal groups."[36] Extradition supporters point to Federal Prosecutors statements that the Chiquita Company itself did business with the AUC, that senior executives in the company’s Cincinnati headquarters approved the payments and kept corporate books to hide the deals. The Justice Department reported that Chiquita’s payments to the paramilitaries "were reviewed and approved by senior executives of the corporation, to include high-ranking officers, directors and employees,” but did not mention names.[37] In the court filing prosecutors wrote that "No later than in or about September 2000, defendant Chiquita’s senior executives knew that the corporation was paying AUC and that the AUC was a violent paramilitary organization."[38] Though this could be a sign of greater scrutiny of the company in Colombia, the U.S. is not known for sending its own ‘traffickers’ to other countries to do jail time.
A Slap on the Wrist
While headlines about the fine insinuated that Chiquita had been caught in the act, the company is dangerously nonchalant about the case. In fact, besides pleading guilty and paying the fine, counts which it has offered no objection to, the company faces no other sanctions.[39] This has most to do with the way that the Justice Department chose to file the case, through a "document of criminal information," as opposed to handing down indictments through a federal grand jury. While grand jury indictments can lead to a criminal trial, a "document of criminal information" usually leads to a settlement, as in this case.[40]
The company had no qualms it declaring that it will now pay a fine of $25 million, payable in five annual installments. Actually, it’s even possible that Chiquita suggested its own fine, as "the company recorded a reserve in 2006 for the full amount of the fine in anticipation of reaching an agreement."[41] This possibility is expanded by the fact that Chiquita carried out the payments for a time with the full knowledge of the Justice Department to which it will now pay its fine. "According to U.S. court documents, Chiquita told the Justice Department in April 2003 that it was funding the paramilitaries, and then kept paying them for another 10 months with the department’s knowledge." [42]
Chiquita itself shows no signs of shame or concern. Chairman and CEO Fernando Aguirre described the "information" as "a reasoned solution to the dilemma." In fact, the company says it voluntarily disclosed the information to the Department of Justice in 2003, but only "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."[43] In other words, "The War on Terror" clashed with its old mentor, "Imperialism as Usual". What of President Bush’s policy that anyone financing a terrorist organization should be prosecuted as vigorously as the terrorists?
The fine gives no reason to suppose that Chiquita’s overall policies will change. As journalist Sean Donahue notes, "death-squads’ victims won’t get any money from the multinational, and none of the company’s executives are facing jail time. Nor has the U.S. Justice Department shown any interest in investigating companies like Coca Cola or Drummond Coal that have even clearer links to paramilitary violence in Colombia than Chiquita."[44] Ultimately neither the U.S. State Department nor the company show any continued concern for the true victims of this kind of business: Latin Americans.
April Howard is a Journalist and History Teacher in Vermont and abroad. You can contact her at April.M.Howard(at)gmail.com
Notes:
[1]Kirdahy, Matthew. "U.S. Goes Bananas On Chiquita." Forbes. (March 18, 2007).
[2] Michael Jessen, "Going Bananas." AlterNet (February 6, 2001).
[3] United States of America V. Chiquita Brans International Inc.
[4] Goodman, Amy. "Chiquita’s Slipping Appeal" King Features Syndicate (March 21, 2007) http://alternet.org/story/49588/
[5]Kirdahy, Matthew. "U.S. Goes Bananas On Chiquita."
[6] Goodman, Amy. "Chiquita’s Slipping Appeal."
[7]Goodman, Amy. "Chiquita’s Slipping Appeal."
[8]Kirdahy, Matthew. "U.S. Goes Bananas On Chiquita."
[9] "Banana firm fined for paying off Colombian paramilitaries." Guardian Unlimited. (Thursday March 15, 2007).
[10] Muse, Toby, "Colombians Want Banana Execs Extradited." Associated Press (March 17, 2007). and "Banana firm fined"
[11] "Chronology" United Fruit Historical Society, and Muse, Toby, "Colombians Want Banana Execs Extradited."
[12] "Chronology" United Fruit Historical Society.
[13] Herrera Soto, Roberto and Rafael Romero Castañeda. La zona bananera del Magdalena. Colombia: Imprenta Patriótica del Instituto Caro y Cuervo (1979), p. 79.
[14] "Chronology" United Fruit Historical Society."
[15] "Chronology" United Fruit Historical Society."
[16] Krebs, Al, "Compounding Infamy: Chiquita, Its Workers and Colombia’s Death Squads." Counter Punch (March 16, 2007). ()
[16] "Chronology" United Fruit Historical Society."
[17] "Chronology" United Fruit Historical Society."
[18] "Chronology" United Fruit Historical Society."
[19] "Chiquita SECRETS Revealed" Series is available online at
[20] "Nuestros Valores Fundamentales y Código de Conducto" [Our Fundamental Values and Code of Conduct] Chiquita Brands Inc (2001).
[21] "The Chiquita Banana Story," Democracy Now! (July 7, 1998).
[22] "The Chiquita Banana Story."
[23] Michael Jessen, "Going Bananas." Also see "Banana Workers Sprayed in the Fields: Chiquita SECRETS Revealed," By Mike Gallagher and Cameron McWhirter. Cincinnati Enquirer (May, 3, 1998)
[24]"Unregistered Toxins Used Despite Claims: Chiquita SECRETS Revealed," By Mike Gallagher and Cameron McWhirter. Cincinnati Enquirer (May, 3, 1998).Also see "’Better Banana’ Program Under Attack: Chiquita SECRETS Revealed," By Mike Gallagher and Cameron McWhirter. Cincinnati Enquirer (May, 3, 1998).
[25]Alsever, Jennifer, "Chiquita cleans up its act."Fortune Magazine (November 17 2006). Book: Taylor, J. Gary and Scharlin, Patricia J. Smart Alliance: How a Global Corporation and Environmental Activists Transformed a Tarnished Brand. Yale University Press (April 10, 2004).
[26] "The Chiquita Banana Story." Democracy Now!
[27] "Chronology" United Fruit Historical Society."
[28] Michael Jessen, "Going Bananas."
[29] Gumbel, Andrew, "Chiquita banana company is fined $25m for paying off Colombian paramilitary groups." The Independent (March, 16 2007). Also see Donahue, Sean "With a $25 Million Fine, Chiquita Washes its Hands in Death Squad Case," The Narcosphere (Mar 17, 2007).
[30] Gumbel, Andrew, "Chiquita banana company."
[31] "The Chiquita Banana Story." Democracy Now!
[32] Romero, Simon, "Colombia May Extradite Chiquita Officials." The New York Times (March 19, 2007).
[33] Muse, Toby, "Colombians Want Banana Execs Extradited."
[34] Romero, Simon, "Colombia May Extradite Chiquita Officials."
[35] Feiling, Tom, "Alvaro Uribe Velez" New Internationalist (Oct, 2004).
[36] Muse, Toby, "Colombians Want Banana Execs Extradited."
[37] Muse, Toby, "Colombians Want Banana Execs Extradited."
[38] "Chiquita Banana Charged With Funding Terrorists," KTLA (March 14, 2007).
[39] Gumbel, Andrew, "Chiquita banana company is fined $25m."
[40] Gumbel, Andrew, "Chiquita banana company is fined $25m."
[41] "Chiquita Statement on Agreement with U.S. Department of Justice," Food Ingredients First (Mar 19,2007).
[42] Muse, Toby, "Colombians Want Banana Execs Extradited."
[43] "Chiquita to plead guilty to ties with terrorists," CNNMoney.com (March 14, 2007).
[44] Donahue, Sean "With a $25 Million Fine, Chiquita Washes its Hands in Death Squad Case." For more information, see http://www.killercoke.org/ and http://www.nomorevictims.org/drummondwatch/.