Chiquita Brands International, a leading global distributor of bananas, pleaded guilty yesterday and agreed to pay a $25 million fine for paying protection money to a designated terrorist organization.
Assistant Attorney General Kenneth L. Wainstein, who heads the Justice Department’s national-security division, said the Cincinnati-based company pleaded as part of an agreement under which the firm also will serve five years probation.
The plea, entered before U.S. District Judge Royce C. Lamberth, also requires the company to cooperate in the Justice Department’s ongoing terrorism investigation. The first payment of $5 million is due at sentencing on June 1.
Mr. Wainstein said the plea agreement stemmed from payments that Chiquita made to the terrorist organization United Self-Defense Forces of Colombia, or AUC, which has been named by the U.S. government as a Specially Designated Global Terrorist — making it a federal crime for a U.S. corporation to provide money to the AUC.
In April 2003, Chiquita volunteered to the government that it had made payments to the AUC to protect its workers in Colombia.
“Like any criminal enterprise, a terrorist organization needs a funding stream to support its operations,” said Mr. Wainstein. “For several years, the AUC terrorist group found one in the payments they demanded from Chiquita Brands International.
“Thanks to Chiquita’s cooperation and this prosecution, that funding stream is now dry and corporations are on notice that they cannot make protection payments to terrorists,” he said.
Mr. Wainstein said that after the company’s disclosure, evidence was developed showing that for more than six years — from 1997 through Feb. 4, 2004 — Chiquita paid money to the AUC in two regions of Colombia where the company maintained banana-producing operations: Uraba and Santa Marta.
He said Chiquita made the payments through a wholly owned subsidiary, a Medellin, Colombia-based C.I. Bananos de Exportacion S.A., known as “Banadex,” which by 2003 was the company’s most profitable operation. He said Chiquita, through Banadex, paid the AUC nearly every month, ultimately making more than 100 payments amounting to more than $1.7 million.
Mr. Wainstein said Chiquita began paying the AUC after a 1997 meeting between the then-AUC leader, Carlos Castano, and a senior executive of Banadex, during which Castano “implied that failure to make the payments could result in physical harm to Banadex personnel and property.”
He said that no later than September 2000, Chiquita’s senior executives knew that the corporation was paying the AUC and that it was a violent, paramilitary organization led by Castano.
Chiquita’s payments were approved by senior executives of the corporation, he said. Chiquita recorded the money as “security payments” or payments for “security” or “security services,” although it never received any security services in exchange for the payments, he said. Chiquita sold its Colombian subsidiary in 2004.
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