Para-Business Gone Bananas: Chiquita Brands in ColombiaBy: COHA Research Associate William Moore
In March 2007 in a U.S. District Court, Chiquita Brands International pled guilty to one count of “Engaging in Transactions with a Specially-Designated Global Terrorist.”[i] The banana giant confessed to paying the United Self-Defense Forces of Colombia (AUC), the nation’s notoriously violent network of right-wing paramilitary groups, USD 1.7 million in over one hundred payments between 1997 and 2004.[ii] Yet the case was resolved by a cash settlement, thus failing to publicly expose both sides of their quid pro quo relationship. A 2011 declassification of Chiquita documents, confessions by former paramilitaries, and ongoing lawsuits lay bare the U.S. corporation’s ruthless profiteering and invite cautious hope of justice for the victims.
The Rise of Paramilitaries
The AUC paramilitaries have their roots in Colombia’s internal armed conflict. The violence began in 1948 in Bogotá as a bloody civil war between Liberals and Conservatives. The partisan warfare ended with the National Front, a political pact that snubbed dissident factions of Liberals, Communists, self-defense communities, and independent peasant organizations.[iii] By the 1960s and 1970s, the conflict had morphed into a guerrilla insurgency against the state, which sought to rectify a history of inequality and social exclusion. This phase of integration on the part of internal leftist forces gave rise to the Revolutionary Armed Forces of Colombia (FARC), which continues to call for greater land access, rural development, political participation, and an end to the extrajudicial murder of its supporters.[iv]
Colombia’s thriving drug exports of the 1980s profoundly altered the class-based conflict, generating the multipolar civil war that continues today.[v] Narco-traffickers laundered their newfound wealth through the purchase of plantations in the traditional cattle and agricultural regions, which further exacerbated the land struggle and displacement of peasants.[vi] The emerging class of drug lords established death squads to protect their financial interests, often targeting guerrilla forces in the field. In tandem, the Colombian military organized paramilitary groups to combat leftist insurgents and safeguard the landed elite. However, the right-wing paramilitaries largely deviated from state control as they solidified essential links to cocaine kingpins, large landowners, industrialists, and bankers.[vii]
By the mid-1990s, paramilitary chiefs had secured their autonomy through the production and trafficking of cocaine, and combined their private armies to form the United Self-Defense Forces of Colombia (AUC).[viii] The umbrella group ruthlessly attacked any civilians suspected of harboring guerrilla sympathies. They quartered victims with chainsaws, cut off their tongues and testicles, and poured battery acid down their throats.[ix] Hardline AUC commander Carlos Castaño defended the sanguine strategy as “draining the water to catch the fish.”[x]
In 1989, former Colombian President Virgilio Barco outlawed all paramilitary activity and forbade provision of material and financial support to the right-wing forces. Yet despite their rampant criminality, the paramilitaries had become a key ally of the state’s counterinsurgency efforts. The government tacitly permitted the groups to remain intact and five years later passed Decree 356, which in essence created front companies for paramilitary operations. The law allowed private sector security groups known as Convivir to “provide their own security…in areas of high risk or in the public interest.”[xi] The paramilitaries promptly populated and took control of the Convivir, which were funded and armed by the Colombian military.[xii]
Stranger in a Strange Land
Chiquita’s banana operations in Colombia pre-date the most recent surge of violence, beginning with its infamous predecessor, United Fruit Company, over a century ago. In the 1960s, the corporation established a stronghold in Urabá of the Antioquia Department, where regional elite prepared plantations for production in exchange for expanded credit and loans. These investors acquired the land for United Fruit through the massive expulsion of peasant farmers, and their Association of the Banana Growers (Augura) dominated the region’s politics.[xiii] Augura, particularly its president, would become an outspoken supporter of paramilitary groups.[xiv]
Driven out in the early 1980s by Colombia’s ongoing civil war, Chiquita returned to Urabá by the end of the decade to face a particularly violent mutation of the internal armed conflict. Labor struggles had attracted leftist guerrilla groups, who then competed for territory and the loyalty of union members. During Colombia’s temporary ceasefire with the FARC in 1984, right-wing paramilitaries began to fill the resulting power vacuum by killing off demobilized guerrillas and infiltrating the banana unions.[xv] Such violence eventually left the FARC committed to purely militant tactics. The leftist guerrillas in Urabá kidnapped and extorted banana-growers, transportation companies, and shopkeepers in order to finance their war against the Colombian state.[xvi]
Meet Pedro Bonito
In the face of unmitigated violence, Chiquita was desperate to regain control of its banana production and workers. Enter Raúl Hasbún, the well-read and diplomatic heir to large banana farms in Urabá who looks more comfortable in a business suit than camouflage fatigues. In 1994 he masterminded a system that would have banana-producing companies pay paramilitaries for the pacification of plantations and suppression of union activity.[xvii] For the next decade Hasbún moonlighted as both a businessman and paramilitary chief under his nom de guerre “Pedro Bonito.” As commander of Urabá’s Southern “Banana Bloc” Front, he personally murdered and ordered the death of hundreds.[xviii]
In 1997, Hasbún met with paramilitary leaders and a high-level Chiquita official, believed to be Charles Keiser, then manager of Chiquita’s Colombian subsidiary Banadex. Chiquita agreed to pay the right-wing network, through Convivir paramilitary fronts, a three-cent tax for every crate of bananas exported, in exchange for the bloody pacification of the banana-growing regions. During the seven years Chiquita funded the AUC, the paramilitaries murdered over four thousand individuals in Urabá, the vast majority civilians, and displaced an additional sixty thousand.[xix]
Yet Chiquita has consistently misrepresented its relationship with Hasbún and AUC paramilitaries. Long after the payments took place, Fernando Aguirre, Chiquita’s President and CEO since January 2004, lied through his teeth: “It was a dilemma about literally having a gun pointed to your head, where you have someone who says, ‘Either you pay me, or I’m going to kill you, or I’m going to kill your employees.’”[xx] Chiquita has claimed that the payments were extortionate in nature and “motivated by [their] good faith concern for the safety of [their] employees,” even though its own banana workers were often the victims.[xxi] When the AUC rapidly wrested control of the banana plantations from leftist guerrillas, they often targeted peasant communities, leftist politicians, and labor leaders.
Bananas, Guns, and Cocaine
Even worse, the corporation appears to have helped smuggle AUC weapons into the Colombian war zone. In 2001, Chiquita facilitated the diversion of three thousand Nicaraguan AK-47 assault rifles and five million rounds of ammunition from Panama to Antioquia, where Banadex controlled the port of Turbo.[xxii] The crates remained at Chiquita’s private facilities for several days before their transfer to fourteen AUC vehicles.[xxiii] While paperwork claimed that the Panamanian ship carried plastic and rubber balls, the Banadex employees used heavy-lifting machinery unnecessary to move the declared cargo.[xxiv] Two years later, the Organization of American States (OAS) found Banadex guilty of the illegal arms deal and probable bribery of port authorities, but somehow failed to mention Chiquita’s ownership of the subsidiary.[xxv]
Chiquita may have facilitated the transfer of at least four other arms shipments to the AUC. Hasbún himself has confessed to the entry of 4,200 assault rifles through Chiquita’s port of Turbo.[xxvi] In another instance, José Leonardo López Valencia, an electrical mechanic at Turbo, witnessed uniformed AUC paramilitaries offloading from a Chiquita ship crates believed to contain smuggled firearms.[xxvii] In 2001, a Securities and Exchange Commission (SEC) report revealed that Chiquita agreed to pay a USD 100,000 fine without admission of guilt for a 1995 bribery case in which Banadex employees paid Turbo port officials USD 30,000 to overlook two previous citations for failure to comply with Colombian customs regulations.[xxviii]
Chiquita’s assistance to the AUC extended even beyond illicit arms shipments, to tacit participation in the drug trafficking. The produce behemoth allegedly gave the right-wing umbrella group “uncontrolled access to its port facilities and ships” and Colombian prosecutors accuse the AUC of using Chiquita vessels bound for Europe to smuggle narcotics, particularly cocaine.[xxix] Éver Veloza García, former commander of the paramilitary Turbo Front in Northern Urabá, explained how paramilitaries evaded the control points of security agencies by tying narcotic shipments to the hulls of banana vessels at high sea.[xxx] Indeed, authorities have seized over one and a half tons of cocaine, valued at USD 33 million, from Chiquita ships.[xxxi]
“A Slap on the Corporate Wrist”[xxxii]
In September 2001, the U.S. State Department designated the AUC as a Foreign Terrorist Organization (FTO), making Chiquita’s material support of the right-wing paramilitaries a federal crime. Despite widespread reporting of the announcement by Colombian and U.S. media, including The Cincinnati Enquirer, the Cincinnati-based corporation claims that it was unaware of the terrorist listing for another eighteen months. By 2003, outside counsel had convinced Chiquita’s Board of Directors to disclose its AUC funding to the U.S. Department of Justice (DOJ). Yet company executives purportedly left a meeting with DOJ officials on April 24 with the conclusion that they could expect “no liability for past conduct.”[xxxiii] Two subsequent board meetings that year attended by Cyrus Friedheim, Chiquita’s former CEO, concluded that the company should “continue making payments.”[xxxiv] The DOJ’s failure to intervene in a timely fashion permitted Chiquita to make thirty more AUC payments totaling USD 300,000 until January 2004.[xxxv]
Statements surrounding United States v. Chiquita Brands International erroneously supported the corporation’s claim that Chiquita’s AUC funding was shelled out under extreme duress. Eric Holder, former lead counsel for Chiquita and current U.S. Attorney General, advocated leniency for its executives “who made a really painful decision.”[xxxvi] Yet as Chiquita’s own outside counsel had told the company, “You voluntarily put yourself in this position. Duress defense can wear out thin through repetition.”[xxxvii] Chiquita officials in collusion with the AUC ultimately walked away largely unscathed: confidentiality intact, no jail time, and a plea bargain fine of USD 25 million.[xxxviii]
The Chiquita Papers
In April 2011, the National Security Archive (NSA), located at George Washington University, published over 5,500 pages of Chiquita’s internal documents obtained from the DOJ under the Freedom of Information Act. The staggering content details the multinational corporation’s illicit payments and raises major questions about the DOJ’s failure to fully prosecute Chiquita in 2007. In fact, the evidence directly contradicts the plea bargain’s conclusion that Convivir militias “never provided defendant Chiquita or Banadex with any actual security services… in exchange for the payments”[xxxix] and exposes numerous attempts to conceal the true nature of their relationship. For example, a March 2000 internal memo written by Chiquita Senior Counsel Robert Thomas, states that paramilitaries in the banana-growing region of Santa Marta created a front company called “Inversiones Manglar” that claimed to “produce, harvest, and export fruit and cattle” but in reality relayed “info on guerrilla movements” and “disguised the real purpose of providing security.”[xl]
The declassified documents demonstrate consistent attempts to hide the AUC funding recorded as “security payments” in corporate books and records. A Chiquita PowerPoint presentation from as late as 2003 weighs different methods of accounting tricks, from the concealment of disbursements in General Managers’ expense accounts, to their cover-up as additional salary payments, to simply bringing the payments into Colombia as cold hard cash.[xli]
Obscured Collusion with the Armed Left
The Chiquita Papers also unexpectedly reveal that prior to funding the AUC, the corporation colluded with leftist guerrillas. In a series of confidential memos from Medellín between 1992 and 1995, Chiquita analyzed intra-guerrilla violence between the FARC, the National Liberation Army (ELN), the Socialist Renewal Current (CRS), the Popular Liberation Army (EPL), and the nascent Esperanza party, the EPL’s right-leaning political counterpart. In the face of these numerous warring factions, Chiquita appears to have simply paid them all, while also funneling money to the Colombian military through Augura.[xlii] The memos detail the payment of hundreds of thousands of dollars by the corporation’s subsidiaries to the “Guerrilla and Political Groups” in Urabá and Santa Marta, often by year, month, and even specific dates.[xliii] Thus the corporation contradictorily paid off the Esperanza party while simultaneously funding the FARC’s armed takeovers of buses in which they demanded that the passengers refuse to vote for Esperanza.
Perhaps the most surprising revelation among Chiquita’s declassified documents is the guerrilla groups’ provision of armed security for the banana giant, their ideological nemesis. One “Highly Confidential” legal memo draft from January 1994 concerns funds characterized by Chiquita accountants as “guerrilla extortion payments” yet recorded as “citizen security.”[xliv] The document includes a remark by a Banadex General Manager in Turbo that “Guerrilla Groups are used to supply security personnel at the various farms.”[xlv] Michael Evans, director of the NSA Colombia project, points out that lawyers tried to mask a give-and-take relationship by replacing the word “transactions” with “payments” throughout the document when describing the relationship between Chiquita and various guerrilla groups.[xlvi]
A Suspect General
Chiquita’s documents also outline a personal relationship with a Colombian military general currently under trial for murder and collaboration with right-wing paramilitaries. Among Chiquita’s declassified papers is a handwritten document from 1999 that discusses a “General in the zone for several years” who was “suspended from the Army” following accusations of being “with [a] death squad.” Although the general’s name was expunged from the document, it is almost certainly discussing General Rito Alejo del Río, commander of the Seventeenth Brigade in Urabá in 1995, but forced into retirement for colluding with paramilitary forces. A 1998 declassified cable from the U.S. Embassy in Bogotá by then Ambassador Curtis Kamman includes allegations that del Río was one of the “two most corrupt army officials in Colombia” and that he told his subordinates to “cooperate with paramilitaries.”[xlvii] Meanwhile, Chiquita’s document states that this general “helped us personally” with “security” and “information that prevented kidnappings.”[xlviii]
Justice Escapes on All Sides
In the months following Chiquita’s plea bargain, the U.S. Congress began investigations into further wrongdoings. In June 2007, former Representative Bill Delahunt of Massachusetts spearheaded a House joint hearing on “Protection and Money: U.S. Companies, Their Employees, and Violence in Colombia,”[xlix] as he claimed that Chiquita’s collusion with the AUC was just “the tip of the iceberg.”[l] Yet Delahunt unexpectedly shut down the inconclusive investigation. Allegations link its termination to Joaquín Pérez, a Miami-based advocate dubbed the “Devil’s Lawyer” for his representation of top paramilitary thugs.
Prospects for justice in Colombia also fell flat. Following Chiquita’s 2007 cash settlement, Mario Iguarán, Attorney General of Colombia under former president Álvaro Uribe, fiercely condemned the “criminal relationship” between Chiquita and paramilitaries.[li] Standing beside a mass grave of dismembered AUC victims, he stated, “You can clearly see they didn’t pay for security, but for blood.”[lii] Yet by 2009 it was clear that his multiple threats to extradite Chiquita executives for trial in Colombia were mere political rhetoric. Iguarán himself is currently under investigation for ties to the AUC.[liii]
Paramilitaries Speak Out
While U.S. and Colombian government officials have failed to tell the truth, an unlikely source has filled in—former AUC commanders. Demobilized paramilitaries have unanimously rejected Chiquita’s accusation of extortion. On 60 Minutes, former AUC chief Salvatore Mancuso flatly denied that the right-wing umbrella group would have killed Chiquita officials had they failed to make the payments. He said, “The truth is we never thought about what might happen because they did so willingly.”[liv] During the interview, Mancuso also implicated produce giants Dole Food Company and Del Monte for collusion with the AUC in Colombia, and offered to name names before the DOJ and State Department. Éver Veloza García, the former paramilitary commander in Urabá, has made similar confessions and reiterated that Chiquita officials “came to us voluntarily” and benefited from the complete suppression of union strikes.[lv]
Terry Collingsworth, a lead prosecutor for the civil lawsuits brought against Chiquita, has traveled to Colombian prisons on a number of occasions to meet with Raúl Hasbún and José Gregorio Mangones Lugo, alias “Carlos Tijeras.” Tijeras, who previously controlled the banana zone of Magdalena where Chiquita held parallel operations, provided the most damning confession. Tijeras likewise incriminated Dole Food Company, claiming, “We would also get calls from the Chiquita and Dole plantations identifying specific people as ‘security problems’ or just ‘problems.’ Everyone knew that this meant we were to execute the identified person,” usually union leaders or peasants trying to reclaim the land.[lvi]
Despite their candor, former paramilitaries are sometimes hesitant to speak. In an interview with The Council on Hemispheric Affairs (COHA), Collingsworth explained that paramilitaries fear inconsistencies in multiple confessions that could deprive them of benefits from Colombia’s 2005 Justice and Peace program, which offers reduced jail terms in return for their demobilization and confessions. Moreover, Collingsworth noted that the jailed paramilitary commanders he has met with “are claiming that Chiquita and Dole have been visiting them and offering them money not to name names…what they are not telling me is who exactly was visiting them…they are considering their options.”[lvii]
Hope for Justice
On June 3, 2011 U.S. District Judge Kenneth Marra issued a 95-page decision that permitted lawsuits brought by some 4,000 Colombians seeking compensation for AUC violence to move forward. On July 5, Collingsworth amended his complaint to include Chiquita’s payments to leftist guerrillas, and, along with other prosecutors, has expressed great optimism for the cases. Indeed, Chiquita’s 2007 confession provides legally irrefutable evidence of the company’s collusion with the paramilitary forces. Hopefully, a realization of justice will serve as a wakeup call to other U.S.-based corporations in the banana-growing regions and reveal, as one declassified Chiquita document suggested, the true “cost of doing business in Colombia.”[lviii]
References for this article can be found here.