- The Washington Times - Wednesday, March 14, 2007

Chiquita Brands International, a leading global marketer and distributor of bananas and other fresh and processed food products, has admitted accusations by federal authorities that they have done business with terrorist organizations.

The Cincinnati-based company and several unnamed corporate officials are accused in court documents of making protection payments to the right-wing United Self-Defense Forces of Colombia, the AUC. Chiquita also did business with the leftist Revolutionary Armed Forces of Colombia, or FARC, according to prosecutors. Both groups have been designated by the State Department as terrorist organizations.

The company, the vast majority of whose 26,000 employees worldwide live and work in South America where the firm grows its bananas, said a plea agreement involving a $25 million fine had been reached.

“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,” said a statement by Chiquita CEO Fernando Aguirre. “The payments made by the company were always motivated by our good faith concern for the safety of our employees.”

The payments were approved by senior executives at the company, according to federal prosecutors, who said Chiquita’s corporate books were kept in a manner to conceal the payments. They said the payments to the AUC began as early as 1997.

“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,” prosecutors said in the filing.

The accusations were outlined in a federal court filing called a “criminal information” which, unlike a grand jury indictment, is settled through negotiations and an agreement to enter a guilty plea. A plea hearing is scheduled for Monday.

Last month, Chiquita acknowledged the Justice Department was investigating the company’s payments to the two groups, saying it had voluntarily disclosed the transactions. It said the payments were made to protect its employees.

The company has set aside $25 million to resolve the issue, a decision that caused Chiquita to delay filing its 2006 annual report with the U.S. Securities and Exchange Commission. It said it was trying to amend its credit agreements to account for the $25 million recorded in its 2006 financial statements.

Chiquita officials have said the investigation involved a Medellin, Colombia-based subsidiary, C.I. Bananos de Exportacion S.A.(Banadex), that made the payments under pressure to ensure the safety of the company’s employees. Chiquita sold its Colombian subsidiary in 2004.

The company previously has said it did not know the payments were illegal in the United States when it made them. The company said it sought Justice Department guidance when it became aware the groups had been designated as foreign terrorist organizations, making it a crime to support such an organization.

Chiquita’s Latin American operation is located mainly in areas where there is a heavy concentration of AUC members. The FARC announced a “peace tax” in 2000 requiring payments from persons and companies with a net worth of more than $1 million.

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