Ohio Lawsuit Filed Over Chiquita Ties To Terror: Labor Union Says Shareholders Damaged

CINCINNATI (TDB) -- The 1.9-million member Service Employees International Union contends Chiquita Brands International Inc.'s board engaged in rogue activities when the Ohio-based multinational funded a right wing terrorist group in Colombia. Democratic Hamilton County Commissioner Todd Portune's private law firm represents the union, and Portune is signed on as a litigator in the case.

According to the union's civil lawsuit, Chiquita's top officials "instituted a corporate culture that encouraged unlawful and irresponsible activity." It names 11 current and former directors or executives as defendants, describes them as negligent in the management and administration of the affairs of the company, and seeks unspecified damages for breach of fiduciary duties.

Chiquita is based in Cincinnati. In March, the company agreed to a pay a $25 million fine after pleading guilty to federal charges that it made $1.7 million in payments to a violent paramilitary organization. The company said the money was to protect its employees and operations from extremists. The Justice Department brought the charges nine months ago, and said the payments took place from 1997 until early 2004.

SEIU said it owns shares in publicly traded Chiquita. It said the defendants had a duty to ensure that the company did not break any laws. The case is A 0711383 in Hamilton County's Court of Common Pleas.

Chiquita produces, distributes and market bananas and other produce in Europe and North America. It has about $4 billion in annual sales in some 70 countries. According to the lawsuit:

"The individual defendants, in light of their positions of control and authority as directors and/or officers of the Company, were able to and did, directly and indirectly exercise control over the criminal acts described herein. That conduct involves knowing, willful and repeated violations and obligations as officers and directors of Chiquita. Furthermore, Chiquita's Board effectively ratified the illegal conduct of Chiquita's officers, employees and . . . by failing to take any legal actions on behalf of the company against them . ."

Those named include:

Roderick Hills, who served on the board from 2002 until May 2007. He chaired the company's audit committee.

Fernando Aguirre, president and CEO since 2004.

Morten Arntzen, a director since 2002.

Steven P. Stanbrook, a director and audit committee member.

Robert W. Fisher, a director since 2002 and a one-time action COO.

Durk Jager, a board member since December 2002.

Jaime Serra, a director since 2003.

Clare Hasler, a board member since October 2005.

Jeffrey D. Benjamin, a director from March 2002 until his resignation in February 2007.

Cyrus F. Friedheim Jr., former CEO and chairman.

Robert Olson, who served as the company's general counsel.

Chicago Newspaper Exec: Caught Up In Chiquita Colombian Terrorist Scandal?

CINCINNATI (TDB) -- Former Chiquita Chairman Cyrus Freidheim Jr. headed the Cincinnati banana company during some of the period it appears to have had illegal dealings with Colombian terrorists -- financial payments that were supposed to protect the company's workers from violence. Freidheim is now the top executive at Sun-Times media group, the company that publishes the Chicago Sun-Times, a tabloid newspaper that is second in circulation behind the Chicago Tribune in that market.

The link between the newspaper exec and Chiquita has not been dwelled upon in media reports after federal prosecutors filed criminal charges against the Cincinnati banana producer last week. Reuters, the British news service, reported Freidheim's possible involvement in the Chiquita investigation.

"Sun Times Media said Freidheim has not been told he is a target of the probe. But he could face questions as a former officer and director of Chiquita."

On its surface, this looks really lousy. It means that a newspaper executive -- a journalist under broad legal definitions -- headed a corporation that admits it consorted with violent groups that the U.S. government officially classified as terrorist organizations. At worst, it means that newspapers are in the hands of bean counters who will do anything to make a buck. Forget the adages about afflicting the comfortable and comforting the afflicted. At best, it could be said it means that running a multi-national fruit company with a history of sleazy dealings in Latin America takes the same skills as running a major metropolitan American newspaper.

Some 40,000 Colombians have died during four decades of violence between rightists, leftists, their paramilitaries, guerrilla groups and the central government. The country has 3 million displaced persons, a total that the UN says is among the highest on the planet. Freidheim, most in the news business should hope, is a great guy who set Chiquita on the straight and narrow. Anything else, it would seem, is too terrible to contemplate.