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Wednesday, March 14, 2007

Federal Prosecutors Say Ohio-based Chiquita Banana Paid Terrorists In Colombia

CINCINNATI (TDB) -- Cincinnati-based Chiquita Banana faces federal criminal charges for paying off violent, rightwing groups the U.S. considers terrorists in Colombia. The criminal case is United States of America v. Chiquita Brands International Inc. (07-055, U.S. District Court for the District of Colombia) and was filed March 14 in Washington. The criminal charge accuses the banana company of engaging in transactions with a federally-designated global terrorist group.

Chiquita, a multinational with about 70,000 employees and operations in some 70 nations, said it has agreed to pay a $25 million fine. The company said it cooperated during the criminal probe.

The Justice Department said Chiquita gave a rightwing paramilitary about $1.7 million. The organization is known as the United Self-Defense Forces of Colombia in English, and AUC in Spanish, which stands for "Autodefensas Unidas de Colombia."

According to the criminal case filed by the U.S. government, the banana firm paid what might be described as protection money.

"For six over six years -- from in or about 1997 through February 4, 2004 -- defendant Chiquita, through Bandex, paid money to the AUC in the two regions of Colombia where he had banana-producing operations: Uraba and Santa Marta. Defendant Chiquita paid the AUC, directly or indirectly, nearly every month. From in or about 1997 through on or about February 4, 2004, defendant Chiquita made over 100 payments to the AUC totaling over $1.7 million"

The government said Chiquita has a history of paying terrorists, and slipped money to leftwing Colombian groups from 1989 through 1997 when they controlled territory near its banana-producing operations.

It said the rightwing payments were approved by high-ranking officials, directors and officers and that "AUC was a violent, paramiliary organization led by Carlos Castano. An in-house attorney for defendant Chiquita conducted an internal investigation into the payments and provided individual C with a memorandum detailing the investigation."

According to the criminal charge, senior executives knew that the corporation was paying the AUC even after it had been publicly named as a terrorist group. Still, the money continued to flow, but under new procedures to deliver cash "established by senior executives in Cincinnati."

News is breaking, but CNN had a report earlier this month about Chiquita notifying the financial markets something was amiss. It is HERE , and raises this question: Where were the newspapers and media companies in Ohio?

The company's statement in response to the federal criminal charge is as follows:

"CINCINNATI, March 14 /PRNewswire-FirstCall/ -- Chiquita Brands International, Inc. (NYSE: CQB) today issued the following statement fromFernando Aguirre, chairman and chief executive officer, in response to an agreement with the U.S. Department of Justice (DOJ) regarding the previously disclosed investigation of protection payments made by thecompany's former banana-producing subsidiary in Colombia.

"The information filed today is part of a plea agreement, which we view as a reasoned solution to the dilemma the company faced several years ago.

"In 2003, Chiquita voluntarily disclosed to the Department of Justice that its former banana-producing subsidiary had been forced to make payments to right- and left-wing paramilitary groups in Colombia to protect the lives of its employees. The company made this disclosure shortly 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.

"Since voluntarily disclosing this information, Chiquita has continued to cooperate with the DOJ's investigation.

"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 of this admittedly difficult situation. The agreement reached with the DOJ today is in the best interests of the company.

"The agreement is subject to approval and acceptance by the United States District Court for the District of Columbia. Under the terms of the agreement, the company will pay a fine of $25 million, payable in five annual installments. As previously disclosed, the company recorded a reserve in 2006 for the full amount of the fine in anticipation of reaching an agreement. The company does not anticipate that the fine will impact its ability to operate its business."

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