In May 2004, Cincinnati-based Chiquita Brands announced that it had voluntarily told the U.S. Justice Department about payments that its Colombian subsidiary, Banadex, had made to unspecified Colombian terrorist groups.
At the time, the story made few headlines beyond wire-service reports and a piece in the Cincinnati Enquirer. It was soon all but forgotten. It looked like Chiquita had performed a masterful bit of “scandal management,†the branch of public relations that contends, “The cover-up is always worse than the crime, so get it all out as soon as possible.â€
Yet since the announcement late last week that Chiquita and the Justice Department had agreed on a $25 million fine in exchange for a guilty plea, the Chiquita story has only drawn more attention and debate in both the United States and Colombia. Why is this?
1. The details. Unlike Chiquita’s 2004 unilateral announcement, the plea agreement discusses at length what the U.S. company – the successor to the notorious United Fruit Company – is guilty of doing. The indictment – available thanks to a good analysis on Slate – explains:
Defendant CHIQUITA began paying the AUC in Urabá [northwestern Colombia, near Panama] following a meeting in or about 1997 between the then-leader of the AUC, Carlos Castaño, and Banadex’s then-General Manager. At the meeting Castaño informed the General Manager that the AUC was about to drive the FARC out of Urabá. Castaño also instructed the General Manager that defendant CHIQUITA’S subsidiary had to make payments to an intermediary known as a “convivir.†Castaño sent an unspoken but clear message that failure to make the payments could result in physical harm to Banadex personnel and property. Convivirs were private security companies licensed by the Colombian government to assist the local police and military in providing security. The AUC, however, used certain convivirs as fronts to collect money from businesses for use to support its illegal activities.
It turns out that Chiquita made over 100 payments to the AUC, totaling about $1.7 million over nearly seven years.
2. The Colombian government’s unexpectedly strong reaction. Though Chiquita has portrayed its payments as extorted “protection money,†both President Ãlvaro Uribe and Attorney-General Mario Iguarán have called for eight accused Chiquita executives’ extradition to face trial in Colombia.
Uribe may be seeking to distract attention from an ongoing scandal that has consumed several of his supporters in the government and Congress, all of them accused of helping paramilitary groups. With his extradition demand, Uribe sends a message that the list of paramilitaries’ backers in fact goes beyond his support base on Colombia’s right wing.
The call for Chiquita executives’ extradition also taps into a commonly felt frustration among Colombians. Many see their government handing over Colombian citizens to face long jail sentences in the United States, but believe that U.S. citizens accused of trafficking drugs or supporting armed groups in Colombia – including rogue U.S. military personnel who have dealt in drugs or weapons – get slaps on the wrist, such as fines or a few months in prison.
Either way, if the Colombian government wishes to begin punishing foreign executives whose corporations have paid “protection money†to illegal armed groups, it is within its rights to do so – but it may find itself extraditing a lot of people. Such payments are widely believed to have been commonplace for decades. Candidates for extradition run from the German construction company Mannesmann – whose payoffs to the ELN when building the Caño Limón-Coveñas oil pipeline practically underwrote the guerrilla group’s revival from near defeat in the 1980s – to various oil, coal and beverage companies accused of paying paramilitaries to kill union organizers.
3. The convivir connection. It is not good news for President Uribe that, according to the indictment, Carlos Casta̱o ordered Chiquita to funnel its money through a convivir security cooperative. The convivir were a bizarre mid-90s experiment in which the Colombian government encouraged the formation of legal citizen militias to assist the security forces. Predictably, many of the convivir ended up committing abuses and linking with Рor evolving into Рparamilitary groups. They were abolished in 1998.
One of the most ardent promoters of the convivir model was Ãlvaro Uribe, who encouraged their formation during his period as governor of Antioquia department (January 1995-December 1997). The Urabá region, where Chiquita was operating, includes part of Antioquia; the convivir to which Carlos Castaño instructed Chiquita to send payments (the “Papagayo Associationâ€) was in fact founded during Uribe’s term as governor.
So much for “scandal management.†The Chiquita story is likely to be with us for some time – especially if Attorney-General Mario Iguarán makes good on his pledge to keep pursuing “para-businesses.â€
March 21st, 2007 at 7:01 pm
It’s amusing (to me) to think of Chiquita executives being extradited to Colombia; but I’m not sure there’s any moral argument against it.
Really, any American citizen who sells or uses Colombian cocaine is, in some sense, “extraditable.”
Colombians are on firm ground when they assert that their drug problem wouldn’t exist without American users.
March 22nd, 2007 at 12:04 pm
Screw morality, Colombia needs to extradite for the reason elucidated in Adam´s post:
“Such payments are widely believed to have been commonplace for decades.”
If they don´t extradite and punish, then MNCs are going to continue to come to Colombia, pay off paramilitaries or guerillas and fund the violence.
Make no mistake. Shutting off this resource valve won´t stop the war, but it´s vitally important that the Colombian government take every effort possible to restrict paramilitary funding sources and this is obviously a valuable one.
I would also add that not included in Adam´s post is the 3,000 guns that were delivered by Banadex. This goes beyond just paying “protection money” and falls into the category of active support. How many poor farmers were forced off their land by the barrel of those guns? How many innocents killed? How many child soldiers? Etc, etc, etc.
It´s an utter disgrace that the US gov is only giving the responsible parties a slap on the wrist. It´s not up to Colombia to ensure that these “gentlemen” get the justice they so richly deserve.
March 23rd, 2007 at 3:00 pm
Folks, for the sake of equal time on this, during the time I lived in Colombia, (1994-98) and beyond oil outfits were paying the FAC big, big bucks to protect their various pipelines. The money went for proactive protection purposes (i.e., to defend against FARC, ELN, attacks, as opposed the “insurance” payments made to Chiquita to the AUC). Oil company payments, btw, went for everything from salaries, food, and gas, to the purchase of boots and guns. Point is, if you’re some big outfit (I don’t care what country or what industry) and you’re really intent on doing business in the Colombian campo, you’re perforce going to be dealing with one or more of the armed groups operating out there. Colombia’s a bad enough place as is, given its history of violence, but the Uraba region, where Chiquita has historically operated is probably some of the baddest territory going up there, and the FAC and USAID are most likely operating there. Chiquita apparently felt it good work there, make a profit, employ people and keep it going by making payoffs to the AUC, who to be clear, are the worst people and force by far, of any/any group operating in Colombia. Still, given the GOC’s inability to project stabilizing force in that area (and a lot of the rest of the country), what’s the alternative? Fix it so that Chiquita et al, can’t do anything to operate in producing a legitimate, non-coke product? If so, than good bye to that kind of business (I thought the GOC was encouraging alternative crops!) and you can declare the Uraba and similar areas either true no-man’s land or land controlled by someone other than the GOC – which seems to more and more the case, btw down in Putumayo and Caqueta….