- The Washington Times - Wednesday, March 28, 2007

Chiquita Brands International, which can trace its roots back to 1870, was, until earlier this month, known to millions of Americans as the “Banana Company” with the blue and yellow logo depicting the cute cartoon character, “Miss Chiquita.”

Now, thanks to a well-publicized legal action by the U.S. government against the company, Chiquita has become a poster child for overzealous government investigators or — depending on your perspective — for American companies abroad dealing with groups that have ties to terrorist groups posing a danger to our country.

Chiquita’s problems started in the late 1990s, and possibly earlier, when a wholly-owned Colombian subsidiary of the company — “Banadex”— determined that, to protect its employees’ lives, it would make security payments to paramilitary organizations operating in the remote areas of Colombia in which the subsidiary’s banana plantations were located. The organizations to which Banadex was forced to make payments included a right-wing paramilitary organization operating in that troubled Andean country and at least one leftist counterpart.

Unfortunately for Chiquita, the entities to which Banadex made payments appear on a U.S. State Department list of terrorist organizations. The payments, while not large, totaled some $1.7 million over about seven years.

Chiquita sold Banadex in 2004. Notwithstanding such divestiture, and even though the company voluntarily disclosed the payments to the U.S. government in 2003, when it comes to the U.S. government, no good deed goes unpunished and the company has been hit with a $25 million fine for violating the federal law that prohibits transactions with groups designated by the U.S. government as “terrorist organizations.” The fine could be higher if, at sentencing scheduled for June 1, U.S. District Judge Royce Lamberth refuses to accept the $25 million figure agreed to by the company and the Justice Department.

The case highlights an increasingly serious problem facing U.S. companies operating abroad in areas where violence against foreigners, especially Americans, poses a very real danger for company employees. The threat of violence is especially acute in Colombia, where more than a quarter-million people have been killed in narco-fueled conflict since the mid-1960s. Since 1993, there have been 100 Americans taken hostage in Colombia, and at least 25 of them were killed. At least one of Chiquita’s employees was murdered by groups operating in Colombia.

Organizations like those to which the Chiquita subsidiary made payments operate in remote areas where indigenous military and police forces are usually are absent or ineffectual. And, there is virtually nothing the U.S. State Department or the U.S. Defense Department, operating through U.S. embassies and consulates can do to protect or even assist U.S. companies or personnel.

Thus, companies are left between a rock and a hard place: refuse to pay unofficial organizations to provide security, and thereby leave themselves open to having personnel murdered and facilities destroyed, or pay and be prosecuted by their own government. It is not a comfortable position to be in.

Of course, while companies can choose to exercise a third option — selling off and leaving the country — this harms U.S. shareholders and causes the company to suffer economic loss at home, even as it hurts overall American economic interests in the countries thus abandoned. Apparently, the U.S. government prefers this to companies taking steps to protect their employees.

The Chiquita case highlights broader questions as well. For example, the law to which the company pleaded guilty is so broad it could ensnare companies not making “security payments” at all. The statute makes it a crime to provide “material support,” which can be nothing more than a payment of some sort, to an entity that engages in kidnapping or some other action deemed an offense under U.S. law.

Thus, the mere fact a foreign organization kidnaps or threatens to kidnap an employee of a company means the company cannot even pay to obtain more information from the kidnappers without running afoul of federal law, if the organization has been designated a “foreign terrorist organization.” Interestingly, entities with which the U.S. government has had dealings, such as Hamas and former Palestinian leader Yasser Arafat’s patron organization, are on the terrorist list.

Not only do American companies find themselves thus on the horns, a dilemma when faced with circumstances posing life-threatening dangers to its personnel, but the Chiquita case makes clear they will find neither help nor sympathy in Washington.

Other laws place additional pressures on U.S. companies operating abroad, and raise questions about just how far the Justice Department’s prosecutorial power should reach into the foreign business dealings of companies.

For instance, the Foreign Corrupt Practices Act, passed in the late 1970s, often makes it difficult for companies to compete in countries and regions where the line between a bribe and a “multa” or processing fee needed to secure paperwork essential to the successful conclusion of a business deal, is blurred at best.

If our own government insists on ratcheting up the pressure against American companies that are simply trying to take practical and necessary steps to protect their facilities and employees, the damage to the morale of our multinational corporations will suffer as greatly as the damage to our balance of payments.

Bob Barr is a former Republican member of the U.S. House of Representatives from Georgia and a former U.S. attorney there.

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