Chiquita pays price for funding terrorists
plead guilty to doing business with a terrorist group, resulting in
the company forking out a $25m fine.
The plea agreement with the US Department of Justice follows a three-year government investigation into payments made by the company in Colombia to certain groups designated under US law as foreign terrorist organizations. The investigation included an examination of the conduct of a number of Chiquita's employees and directors, and their role in the payments. The company said in a filing on Wednesday with the Securities Exchange Commission that it would cooperate with the government's continued investigation into the matter. Chiquita claimed the payments, which were made by its former banana-producing subsidiary in Colombia, were "protection payments". According to Chiquita's chairman and chief executive officer Fernando Aguirre, the company had been "forced" to make payments to right- and left-wing paramilitary groups in Colombia to "protect the lives of its employees". The firm, which voluntarily disclosed these payments to the Justice Department in April 2003, sold its Colombian subsidiary in 2004. A document detailing the payments, which were reportedly approved by senior company executives, was filed by the Justice Department in federal court in Washington. The payouts totaled more than $1.7m, according to the court document. The US Department of Justice refused to respond to FoodNavigator-USA.com on the issue, saying it never comments on investigations. According to Chiquita, the plea agreement reached yesterday was a "reasoned solution" to an "admittedly very difficult situation". Under the terms of the settlement, Chiquita will pay a fine of $25m, payable in five equal annual installments, with interest. The firm said it had recorded a reserve for the full $25m fine amount in anticipation of reaching a settlement. Chiquita, which is one of the world's largest banana producers, said it does not expect the fine will impact its ability to operate its business. The agreement remains subject to approval and acceptance by the United States District Court for the District of Colombia.