Chiquita admits it paid terrorists

WASHINGTON - Banana company Chiquita Brands International Inc. admitted in federal court yesterday that for years it paid Colombian terrorists to protect its most profitable banana-growing operation.

The company pleaded guilty to one count of doing business with a terrorist organization. The plea is part of a deal with prosecutors that calls for a $25 million fine and does not identify the company executives who approved the illegal protection payments.

The agreement ends a long Justice Department investigation into the company's financial dealings with right-wing paramilitaries and leftist rebels, both of which the U.S. government deems terrorist groups.

Prosecutors say the Cincinnati company agreed to pay about $1.7 million between 1997 and 2004 to the United Self-Defense Forces of Colombia, known as AUC for its Spanish initials.

The AUC has been responsible for some of the worst massacres in Colombia's civil conflict and for a sizable percentage of the country's cocaine exports. The U.S. government designated the AUC a terrorist group in September 2001.

Chiquita has said it was forced to make the payments and was acting only to ensure the safety of its workers.

But federal prosecutors noted in court yesterday that from 2001 to 2004, when Chiquita made $825,000 in illegal payments, the Colombian banana operation earned $49.4 million and was the company's most profitable unit.

"Funding a terrorist organization can never be treated as a cost of doing business," U.S. Attorney Jeffrey Taylor said.

Chiquita sold Banadex, its Colombian subsidiary, in June 2004 for about $43.5 million.

Besides paying the AUC, prosecutors said, Chiquita made payments to the National Liberation Army, or ELN, and the leftist Revolutionary Armed Forces of Colombia, or FARC, as control of the company's banana-growing area shifted.

Leftist rebels and far-right paramilitaries have fought viciously over Colombia's banana-growing region, though the victims are most often noncombatants. Most companies in the area have extensive security operations to protect employees.

Court documents said there were 10 unidentified company employees who participated in the illegal deals and helped conceal them on company books. Prosecutors would not identify the employees or say whether they remain with Chiquita.

The company is to be sentenced June 1. By law, it faces nearly $100 million in fines if U.S. District Judge Royce C. Lamberth does not accept the $25 million deal with prosecutors.

Chiquita stock has risen sharply since the deal was announced last week, but company shares closed down 17 cents at $13.35 yesterday on the New York Stock Exchange.