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Chiquita Brands Part III-C: Of Bananas, Money, Guns, and Drugs: What Did Chiquita Really Do?

July 23, 2010

Readers of my other posts about the Chiquita story will have seized on one of the central issues in determining Chiquita’s liability to the wrongful death claimants under the Anti-Terrorism Act and the Alien Tort Claims Act — how close is the relationship is between Chiquita’s payments to the FARC guerillas and the paramilitaries of the AUC, on the one hand, and the kidnappings and murders that resulted?

The federal court hearing the cases, Judge Marra presiding, ruled against Chiquita in the New Times Missionaries case that allegations of substantial payments over a long period of time preceding the kidnappings and murders are sufficient if proven to make Chiquita liable, without more in terms of actual knowledge of these specific acts of violence. Legal observers and the parties hotly debate whether this standard of “causation” is too loose.  As discussed in Part IIIA of this series, Judge Marra ruled that if Chiquita’s payments were a “substantial factor” in the deaths it is sufficient to make Chiquita liable.  Plaintiffs argue that the payments alone are enough, no knowledge of murders, kidnapping, or the means for them are needed.

Chiquita angrily denies any involvement in guns and drugs.  Chiquita says no such evidence turned up in the DOJ investigation.  Chiquita’s Board appointed a Special Committee that found no evidence of anything more than the payments that were admitted, specifically denying, in a footnote, any Chiquita involvement in arms shipments. Read my discussion of the Special Committee report here and the report itself is here.  

But there are detailed allegations, which purport to be drawn from knowledgeable (if questionable) sources, that Chiquita was doing more than making extorted security payments. Former National Security Council official Lee Wolosky, now at Boies Schiller, filed a complaint on behalf of hundreds of plaintiffs against Chiquita in Henao Montes v. Chiquita Brands, No. 0:10-cv-60573 (S.D. Fla.) which is consolidated for pre-trial briefing with Does 1-976 v. Chiquita Brands International, Inc., No. 10-cv-00404-RJL (D.D.C.)).  The complaint alleges that plaintiffs are either survivors of Colombian nationals who were murdered by the paramilitaries of the AUC, or were themselves injured by the AUC in Colombia, and seek to collect damages from Chiquita under the ATS, the Torture Victim Protection Act, 28 U.S.C. § 1350 note, and state tort law.

These plaintiffs come right out and accuse Chiquita of direct involvement in drug and weapons shipments, to demonstrate a close link between the Chiquita payments and other actions, on the one hand, and acts of kidnapping and murder, on the other.  And they cite some pretty bad people, and some pretty serious organizations, as support.

So who’s right? In Part 1 below, I am going to use an old trick of some judges, and hear the Defendant Chiquita’s argument first that the allegations do not measure up to the legal standard. Then, in Part 2, I will set forth in detail many of the operative allegations from the Henao Montes complaint.

You be the judge.

1.

 In response to the Henao Montes complaint, Chiquita filed a motion to dismiss all the cases, arguing:

The individual claims are set out in now-familiar long strings of short, conclusory paragraphs with virtually no detail about any of the alleged incidents and no facts purporting to tie Chiquita to any asserted death or injury.  (My emphasis.)

As to Chiquita’s role in these purported offenses, the Montes plaintiffs allege that

Chiquita was extorted by the FARC, which motivated Chiquita to pay the AUC…. [T]he new plaintiffs do not explain why Chiquita would want to have its own workers killed or why Chiquita was not equally prone to extortion from the ruthless and violent AUC, which was notorious for attacking those who resisted its demands… [I]n direct contravention of the facts recited in the plea agreement on which they rely [that Chiquita was “instructed” to make payments to the AUC and that “failure to make the payments could result in physical harm to Banadex personnel and property], plaintiffs ask the Court to accept as plausible their unsupported theory that Chiquita paid the AUC in exchange for the AUC’s violent “services” in “pacifying” the banana-growing regions.

Plaintiffs repeat the sensational, and entirely conclusory, allegations that Chiquita

engaged in weapons and drug trafficking. Here too, apart from misstatements or speculation, no facts are alleged to support the bald assertion that Chiquita—a U.S. public corporation that was thoroughly investigated by the U.S. Department of Justice for its extorted monetary payments to these armed groups—engaged in gun running and drug trafficking.

If the Supreme Court’s directives in Twombly and Iqbal mean anything, Federal Rule of Civil Procedure 8 requires more than a plaintiff’s say-so that a public company engaged in a side business of arms and narcotics smuggling, and that the U.S. Department of Justice chose to overlook it

Chiquita crystallized its legal arguments as follows:

  • The theory of liability for “material support of terrorism” does not satisfy the Alien Tort Statute, as construed by the US Supreme Court in Sosa v. Alvarez-Machain, 542 U.S. 592 (2004), which requires clearly defined or universally recognized violations of international law.  Neither the International Convention for the Suppression of the Financing of Terrorism, 39 I.L.M. 270 (December 9, 1997) (“Financing Convention”) nor the hodgepodge of other sources on which plaintiffs rely establishes a universal and clearly defined norm sufficient to give rise to subject matter jurisdiction under Sosa.
  • Trying this case would be intrusive and disruptive to the foreign relations of the United States, as this Court would be called upon to adjudicate plaintiffs’ assertions that the current president and the president-elect of the Republic of Colombia, a close ally of the United States, are complicit in mass murder. These are exactly the considerations the Supreme Court had in mind when it commanded the lower courts to exercise great  caution in recognizing new causes of action under the ATS.
  • A violation of international law ordinarily requires state action, i.e., allegations establishing the direct participation of a government or public official in each of the particular killings or injuries alleged (relying on the appellate decision dismissing allegations against Coca-Cola, Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252 (11th Cir. 2009)).
  • The theory of “crimes against humanity” continues to be unrecognized as an actionable violation of international law, and in any event plaintiffs do not allege any facts tying the alleged killings to an “attack” on a civilian population.
  • Claims that Chiquita was an “accessory” require that the accessory share the wrongful “purpose” of the primary violator.
  • While they may have pled facts sufficient to trigger an inference that Chiquita made payments to the AUC knowing that the AUC would engage in violent conduct, the Complaints lack any facts giving rise to a plausible inference that Chiquita shared the murderous intent of the paramilitaries.
  • Chiquita’s payments to both sides—coupled with plaintiffs’ ready admission that both of these notoriously violent, armed groups routinely extorted private business and that the AUC sought the “elimination of anyone . . . who opposed or complicated [its] control” — support the “obvious alternative explanation,” Iqbal, 129 S. Ct. at 1951, that Chiquita was extorted by both when they controlled the areas where Banadex operated.

Chiquita raises a number of other defenses, such as the statute of limitation and failure to plead necessary elements of state law causes of action, and argues the “prudential limitation on Article III standing non-resident aliens cannot sue in U.S. courts absent compelling circumstances.” (Emphasis mine.)

2.

 So, how do the allegations measure up against these arguments?  I excerpt here for the reader the core of the (unproven) allegations from the Henao Montes complaint (with some notations by me) that specifically allege not only material financial support, but crucial financial support, as well as weapons and narcotics shipments, and that Chiquita did these things to boost profits, control workers, and maintain operations.

C.        Chiquita Purposefully Aided And Abetted The AUC’s Use Of The Paramilitary Terrorism Tactics.

 355.     Until approximately 1997, leftist guerillas controlled the rural northern areas of Colombia, including the banana-growing regions in and around Santa Marta and Urabá.

356.     At all times relevant to the allegations in this Complaint, the Colombian security forces were unable to defeat the leftist guerillas operating in the banana-growing regions and were unable to protect landowners and businesses from guerilla attacks, kidnappings for ransom, massacres, murders, and extortion. The Colombian security forces effectively ceded control of the banana-growing regions to the FARC and the ELN.

357.     Without any opposition from Colombian security forces, leftist guerillas in the Santa Marta and Urabá banana-growing regions created an environment of violence, fear, and danger. Landowners and businesses were regularly subjected to kidnappings for ransom, murders, property damage, extortion, and war taxes. Banana workers and citizens in communities surrounding the banana farms were repeatedly subjected to murder, torture, and massacre by leftist guerillas.

358.     In or around 1982, Chiquita stopped banana operations in Colombia, in part because of the political turmoil and violence pervading the banana-growing regions.

Ed. Note: Plaintiffs argue that Chiquita would later face the choice of leaving, but stayed instead, and got involved in the violence.

359.     In 1989, Chiquita returned to Colombia and resumed banana operations in Santa Marta and Urabá. Upon returning, Chiquita formed Banadex to control all of its business operations in Colombia. By the mid-1990s, all of Chiquita’s Colombian subsidiaries were consolidated under the management of Banadex and its general manager.

360.     Chiquita purchased a large number of banana farms and became a large landowner with approximately 9,500 acres of farmland in the Santa Marta and Urabá banana-growing regions.

361.     Chiquita also steadily increased its workforce to support its expanding banana operations. By the mid-1990’s, it employed, through Banadex,  aapproximately 4,000 people in the banana-growing regions.

362.     At the time it resumed operations in Colombia, Chiquita knew that leftist guerillas controlled the banana-growing regions in and around Santa Marta and Urabá. Chiquita knew the leftist guerillas were hostile to its business interests. Chiquita knew the leftist guerillas would demand the payment of war taxes and that the leftist guerillas controlled the banana-growing regions through almost daily acts of violence, including murder, kidnapping for ransom, and extortion.

Ed. Note: The following allegations detail how Chiquita itself was savaged by the violence of the guerillas. Chiquita says these attacks demonstrate it had no choice but to pay extortion and was not aligned with the extortionists, while the Henao Montes plaintiffs allege Chiquita settled into a pact with the paramilitaries and that payments and other support were less “extortion” than they were some kind of necessary evil.

363.     At the time it resumed operations in Colombian, Chiquita knew that its executives, employees, and property would be subject to attack by leftist guerillas.

364.     Notwithstanding its knowledge, Chiquita first resumed, and then steadily expanded, banana operations in the leftist guerilla-controlled banana-growing regions in and around Santa Marta and Urabá. Chiquita knew it would be required to deal with the FARC and the ELN guerillas in the course of operating its business.

Ed. Note: These paragraphs are directed at Chiquita’s “mens rea” or criminal intent.

(1)        FARC And Other Leftist Guerillas Damaged Chiquita’s Banana Operations By Creating A Hostile And Dangerous Environment In Santa Marta and Urabá.

365.     Shortly after Chiquita resumed business operations in Santa Marta and Urabá, FARC and ELN guerillas began killing Chiquita’s banana workers and causing damage to its physical infrastructure.

366.     In and around the same period of time, the FARC began to extort Chiquita by demanding payments from the company. Chiquita executives understood that the FARC intended to kidnap its employees if the payments were not made.

367.     In order to continue doing business in the Colombian banana-growing regions, Chiquita began making regular payments to FARC and other leftist guerilla groups. At various times, Chiquita also made payments to the ELN. High-ranking officers in Chiquita’s world-wide headquarters were informed of, and approved, payments to the FARC and the ELN.

368.     Chiquita made regular payments to the FARC and the ELN from in or about 1989 through in or about 1997, when the FARC and the ELN controlled the Santa Marta and Urabá banana-growing regions.

Ed. Note: Both sides argue the significance of the extortion of Chiquita, with Chiquita claiming their choices were limited, while the Henao Montes plaintiffs contend Chiquita eventually retaliated against the guerillas in siding with the paramilitaries and, having little choice but to leave, cooperated actively with them.

369.     Notwithstanding regular payments, the FARC and the ELN guerillas continued to violently attack banana workers and infrastructure. The attacks significantly affected Chiquita’s operations in the Santa Marta and Urabá banana-growing regions.

370.     In 1990 or 1991, leftist guerillas kidnapped Chiquita’s security director in Colombia and held him for ransom. Chiquita was forced to negotiate for the director’s release.

371.     Between 1991 and 1997, leftist guerillas kidnapped and held for ransom at least three other Chiquita employees.

372.     In or about 1992, the ELN destroyed Chiquita’s wharf in the city of Turbo.

373.     During the four months between September and December 1993, leftist guerillas killed more than 220 banana workers in the Urabá region. Even though the area was experiencing high unemployment rates, the frequent slaughter of banana workers by the FARC and the ELN made it difficult for banana growers to find enough employees willing to work. According to press reports, the leftist guerilla-fueled violence resulted in a twenty percent reduction in the production and export of bananas from Urabá.

374.     During 1993, leftist guerillas forcibly shut down operations at a number of banana farms, preventing landowners and banana workers from cultivating the land. According to press reports, growers expected the leftist guerilla violence to reduce banana production for the year by up to twenty-five percent in comparison to the previous year.

375.     In 1995, leftist guerillas bombed a packing station owned and operated by Chiquita.

376.     On August 30, 1995, seventeen banana workers were massacred during a raid on a banana plantation by leftist guerrillas with automatic weapons. The guerillas lashed the banana workers hands behind their back, forced them to lay face-down on a muddy soccer field, then shot them in the head.

377.     On August 31, 1995, banana workers went on strike to demand protection from leftist guerillas. The strike shut down all banana operations in the Urabá region. At the time of the strike, Urabá accounted for 70% of all banana exports from Colombia.

378.     On September 20, 1995, leftist guerillas massacred twenty-six banana workers. Leftist guerillas made the workers lie down in a ditch beside the road and then shot them, point blank, in the back of the head. Leftist guerillas captured and shot the workers only a few minutes’ drive from a military base.

379.     The violence caused even more banana workers to flee Urabá. As a result, Chiquita and other banana producers continued to encounter difficulty finding enough employees. According to press reports, growers and producers in the area expected banana production to drop by twenty-five percent in comparison to the previous year.

380.     In 1996, leftist guerillas bombed another packing station owned and operated by Chiquita.

381.     In or around 1996 or 1997, leftist guerillas ambushed, shot, and wounded Chiquita’s Colombian Quality Control Director and his bodyguard while they were inspecting banana farms in a company car. The leftist guerillas spared the Quality Control Director’s life only after discovering that he was not the general manager of Banadex, who was their intended target and was reportedly Chiquita’s most senior employee in Colombia.

382.     In or around 1996 or 1997, leftist guerillas ambushed two cars carrying the general manager of Banadex and Chiquita executives who were traveling to a company farm in Santa Marta. The leftist guerillas opened fire on both cars with automatic weapons. Chiquita’s employees escaped unharmed and evaded capture only because they were inside bullet-proof vehicles.

(2)        Colombian Security Forces Were Incapable Of Defending Chiquita Against Leftist Guerilla Attacks.

383.     At all times relevant to the allegations in this Complaint, Colombian security forces were incapable of defending Chiquita, its executives, employees, and infrastructure, from attacks by FARC and ELN guerillas.

384.     Local and national law enforcement agencies were incapable of defending Chiquita against the FARC and the ELN guerillas. Local law enforcement agencies lacked the weapons, training, and personnel to successfully confront the leftist guerillas. In addition, the effectiveness of most local police agencies was degraded by rampant corruption. The national police force was equally ineffective at confronting leftist guerillas and incapable of defending Chiquita from attack.

385.     Colombia’s military could not defend Chiquita. In fact, the military was unable to defend itself from attack by leftist guerillas. Throughout the 1980’s and 1990’s, the FARC and the ELN regularly attacked military bases, killed soldiers, and stole weapons, munitions, and equipment.

386.     On several occasions, the Colombian Army demonstrated its inability to protect Chiquita from attack by leftist guerillas. For example, following the destruction of its wharf in Turbo, Chiquita asked the military for help. The military informed Chiquita that it could not respond promptly because it did not have flashlights and fuel.

387.     In late 1994, the military notified Chiquita that intelligence indicated that leftist guerillas intended to attack two Chiquita facilities. In a January 8, 1995 letter concerning the impending attacks, Brigadier General Alvarez Vargas of the Colombian Army informed the company that the military could not provide protection. Instead, General Alvarez recommended that the company “make a greater commitment to increase and improve [its] own security.”

(3)        Chiquita Agreed To Provide The AUC With Practical Assistance And Material Support To Pacify The Banana-Growing Regions.

388.     In late 1996 or early 1997, the Banadex general manager, and another Chiquita employee from Colombia, participated in a meeting of banana growers to discuss security issues arising from leftist guerilla activity in the Santa Marta and Urabá regions. The meeting was also attended by Carlos Castaño, the leader of the AUC. (“Castaño Meeting”).

389.     Chiquita’s employees recognized Castaño and were familiar with the AUC. Among other things, they knew the AUC was a participant in the War against the leftist guerillas. They also knew that the AUC used the Paramilitary Terrorism Tactics as part of its strategy for defeating the leftist guerillas and protecting landowners and businesses. From information widely reported in the Colombian media, Chiquita’s employees knew that the AUC’s tactics included, among other things, massacres, extra-judicial killings, forced disappearances, torture, and forced displacements.

Ed. Note: This is the “turning point,” in the Henao Montes allegations, when Chiquita first aligned with the AUC to provide Chiquita with security.

390.     During the Castaño Meeting, Castaño told Chiquita’s executives that the AUC had begun a sustained offensive to drive the leftist guerillas out of the Santa Marta and Urabá regions. Because of what they knew about Castaño and the AUC, Chiquita’s executives understood that the AUC intended to use the Paramilitary Terrorism Tactics.

391.     Castaño asked Chiquita to support the AUC in its War effort against the leftist guerillas in two ways. First, Castaño asked Chiquita to stop making payments to the leftist guerillas. Second, Castaño asked Chiquita to begin paying the AUC.

392.     Castaño informed Chiquita’s executives that the AUC would use money it received from Chiquita to finance Paramilitary Terrorism Tactics that would be used to drive the leftist guerillas out of the Santa Marta and Urabá banana-growing regions; protect the company, its executives, employees, and infrastructure from future attacks by leftist guerillas; and create a business and work environment that would enable Chiquita’s Colombian banana-growing operations to thrive.

393.     At the Castaño Meeting, and at all relevant times thereafter, Chiquita took sides with the AUC in the War against the leftist guerillas and helped to finance and assist the AUC’s efforts in that War.

394.     At the Castaño Meeting, and at all relevant times thereafter, Chiquita agreed, and acted with the intent, to aid and abet the AUC’s use of Paramilitary Terrorism Tactics to drive leftist guerillas out of, and maintain control over, the Santa Marta and Urabá banana-growing regions.

Ed. Note: The next few paragraphs state the crux of the complaint: Chiquita provides assistance and support to the AUC knowing it engages in “Paramilitary Terrorism Tactics” in order for Chiquita to be secure from the guerillas, this support substantially caused the AUC’s violence, and the support was criminal, not the acts of an innocent victim.

395.     Following the Castaño Meeting, Chiquita knowingly and intentionally provided practical assistance and material support to enable the AUC to use Paramilitary Terrorism Tactics for the purpose of (i) driving leftist guerillas out of the Santa Marta and Urabá banana regions; (ii) maintaining control over the banana-growing regions; and (iii) creating an environment where the company’s banana-growing operations could prosper.

396.     According to information developed by the Attorney General for the Republic of Colombia, the agreement between Chiquita and the AUC constituted a “criminal relationship” to bring about the “bloody pacification” of the banana-growing regions.

397.     The assistance provided by Chiquita had a substantial effect on the AUC’s ability to successfully employ the Paramilitary Terrorism Tactics in the two regions. Chiquita knew the AUC was using its assistance to employ the Paramilitary Terrorism Tactics.

(4)        Chiquita Purposefully Assisted The AUC When It Made More Than 100 Payments Totaling Over $1.7 Million Between 1996 And 2004.

398.     For more than seven years – from in or about 1996 through on or about February 4, 2004 – Chiquita, through Banadex, paid money to the AUC in Santa Marta and Urabá. Chiquita paid the AUC, directly or indirectly, nearly every month. From in or about 1996 through on or about February 4, 2004, Chiquita made over 100 payments to the AUC totaling over $1.7 million.

(i)         High-Ranking Company Officers And Directors Knew That The AUC Engaged In The Paramilitary Terrorism Tactics And Approved The Payments.

399.     Chiquita’s payments to the AUC were reviewed and approved by senior executives of the corporation, including high-ranking officers, directors, and employees. No later than in or about September 2000, Chiquita’s senior executives knew that the corporation was paying the AUC and that the AUC was a violent, paramilitary organization led by Carlos Castaño. An in-house attorney for Chiquita conducted an internal investigation into the payments and provided a high-ranking officer in the company with a memorandum detailing that investigation. The results of that internal investigation were discussed at a meeting of the Audit Committee of the Board of Directors in the company’s Cincinnati headquarters in or about September 2000.

Ed. Note: To paraphrase the Watergate mantra, “What did Chiquita executives know and when did they know it?”  It is alleged they learned through an in-house attorney’s investigation and report. In the compliance world, this is a big “red flag.”

400.     For several years, from in or about 1996 until April 2002, Chiquita paid the AUC by check through various convivir in both the Santa Marta and Urabá regions. The checks were nearly always made out to the convivir and were drawn from Banadex’s bank accounts. Chiquita recorded these payments in its corporate books and records as “security payments” or payments for “security” or “security services.”

401.     In or about April 2002, Chiquita seated a new Board of Directors and Audit Committee following its emergence from bankruptcy.

402.     On or about April 23, 2002, at a meeting of the Audit Committee of the Board of Directors in Chiquita’s Cincinnati headquarters, the Audit Committee adopted new procedures for secretly paying the AUC. Pursuant to the new procedures, Chiquita’s executives in Colombia would issue checks payable to an individual employee who would endorse the checks. After converting the check to cash, another Chiquita employee in Colombia was assigned to deliver the funds, in cash, to the AUC.

Ed. Note: The allegation that the Audit Committee knew of, and directed the means for, secret payments is something Chiquita argues was necessary and plaintiffs argue shows a guilty mind.

403.     Beginning in or about June 2002, Chiquita began paying the AUC in the Santa Marta region of Colombia directly, secretly, and in cash according to new procedures established by Chiquita’s senior executives. The Chiquita employee to whom the AUC checks were made payable maintained a private ledger of the payments that did not reflect that the AUC was the ultimate and intended recipient of the payments.

(ii)        Chiquita Continued To Assist The AUC Even After The United States Government Designation Made The Payments A Felony.

404.     The United States government designated the AUC as an FTO on September 10, 2001. That designation was well publicized in the American public media. The AUC’s designation was first reported in the national press by the Wall Street Journal and New York Times, among others, on September 11, 2001. It was later reported in the local press in Cincinnati, Ohio where Chiquita’s headquarters were located. The Cincinnati Post reported the AUC’s FTO designation on October 6, 2001, and the Cincinnati Enquirer reported the designation on October 17, 2001. The AUC’s designation was even more widely reported in public media in Colombia.

Ed. Note: To defeat Chiquita’s innocent victim defense, the Henao Montes plaintiffs argue that Chiquita disregarded published information it could not have missed, as Chiquita argues, that it was now actively funding a banned terrorist organization, thus elevating the seriousness of the actions. This occurred the day before the 9/11 attacks, at a time when attention to terrorist support was at an all-time high.

405.     Chiquita had information about the AUC’S designation as an FTO specifically and global security threats generally through an Internet-based, password-protected subscription service that it paid money to receive. On or about September 30, 2002, a Chiquita employee, from a computer within Chiquita’s Cincinnati headquarters, accessed the service’s “Colombia-Update page,” which contained the following reporting on the AUC. “US terrorist designation International condemnation of AUC human rights abuses culminated in 2001 with the US State Department’s decision to include the paramilitaries in its annual list of foreign terrorist organizations. This designation permits the US authorities to implement a range of measures against the AUC, including denying AUC members US entry visas; freezing AUC bank accounts in the US; and barring US companies from contact with the personnel accused of AUC connections.”

406.     Even after learning that the United States government had formally designated the AUC as an FTO, Chiquita continued to make payments to the AUC in the Santa Marta and Urabá regions of Colombia without applying for a required government license. From on or about September 10, 2001, through on or about February 4, 2004, Chiquita made 50 payments to the AUC totaling over $825,000.

(iii)       Chiquita Continued To Assist The AUC Against The Advice Of Its Outside Counsel In The United States.

407.     On or about February 20, 2003, high-ranking officers and employees of Chiquita spoke with attorneys in the District of Columbia office of a national law firm (“outside counsel”) about the United States government’s designation of the AUC as an FTO and Chiquita’s ongoing payments to the AUC.

Ed. Note: The following allegations of acting against attorney advice go to Chiquita’s criminal intent.

408.     Beginning on or about February 21, 2003, outside counsel advised Chiquita that the payments were illegal under United States law and that Chiquita should immediately stop paying the AUC directly or indirectly. Among other things, outside counsel, in words and in substance, advised Chiquita:

· “Must stop payments.” (notes, dated February 21, 2003)

· “Bottom Line: CANNOT MAKE THE PAYMENT” “Advised NOT TO MAKE ALTERNATIVE PAYMENT through CONVIVIR” “General rule: Cannot do indirectly what you cannot do directly” “Concluded with: CANNOT MAKE THE PAYMENT” (memo, dated February 26, 2003)

· “You voluntarily put yourself in this position. Duress defense can wear out through repetition. Buz [business] decision to stay in harm’s way. Chiquita should leave Columbia.” (notes, dated March 10, 2003)

· “[T]he company should not continue to make the Santa Marta payments, given the AUC’s designation as a foreign terrorist organization[.]” (memo, dated March 11, 2003)

· “[T]he company should not make the payment.” (memo, dated March 27, 2003)

409.     Chiquita ignored the legal advice of its outside counsel and continued to make unlawful payments to the AUC. In February and March 2003, Chiquita made cash payments to the AUC totaling $36,871.

410.     On or about April 3, 2003, a member of the board of directors and a high-ranking officer reported to the full board of directors that Chiquita was making payments to a designated FTO. The board agreed to disclose the payments to the DOJ.

Ed. Note: When can/should extortion victims report the crime to local or US government officials?  Here, the Henao Montes plaintiffs allege that Chiquita ignored what DOJ officials said, but the Special Committee report concluded that DOJ was statements were reasonably misunderstood by company officials.

411.     On or about April 4, 2003, according to the notes of Chiquita’s outside counsel concerning a discussion about the AUC payments, high-ranking Chiquita executives were of the opinion to “just let them sue us, come after us.”

412.     On or about April 8, 2003, high-ranking Chiquita executives instructed the company to continue making make payments to the AUC.

413.     On or about April 24, 2003, a director and high-ranking officer of Chiquita, together with Chiquita’s outside counsel, met with DOJ officials. The DOJ officials told Chiquita that the company’s payments to the AUC were illegal and could not continue.

414.     However, Chiquita continued to make payments to the AUC. Between May 12, 2003 and September 1, 2003, Chiquita made nine cash payments totaling approximately $140,866.

415.     On or about September 8, 2003, Chiquita’s outside counsel advised Chiquita in writing that DOJ officials had repeatedly stated that they could not condone current or future payments to the AUC.

416.     Despite this warning, Chiquita continued to make payments to the AUC. Between September 8, 2003 and December 16, 2003, Chiquita made six cash payments totaling approximately $126,250.

417.     On or about December 22, 2003, a member of Chiquita’s board of directors warned other board members in an email that the company appeared to be “committing a felony” by continuing to make the AUC payments.

418.     Despite this warning, Chiquita continued to make payments to the AUC. Between December 22, 2003 and February 4, 2004, Chiquita made three more cash payments to the AUC totaling approximately $43,023.

419.     On March 13, 2007, the United States filed a criminal information against Chiquita in the United States District Court for the District of Columbia.

420.     On or about March 19, 2007, Chiquita pleaded guilty to one count of Engaging in Transactions with a Specially-Designated Global Terrorist, in violation of 50 U.S.C. § 1705(b) and 31 C.F.R 594.204. In conformity with its plea agreement, Chiquita agreed to a criminal fine of $25 million and was placed on corporate probation for a period of five years.

Ed. Note: The next few paragraphs relate Chiquita’s financial assistance to the violent acts of the AUC.

421.     The financial assistance Chiquita provided to the AUC had a substantial effect on the AUC’s ability to carry out its plan to drive leftist guerillas out of the Santa Marta and Urabá banana-growing regions and its ability to maintain control after regaining the regions from the leftist guerillas.

422.     According to Jose Gregorio Mangones Lugo (“Mangones”), an AUC leader of the William Rivas Front in the Santa Marta banana region, the income the AUC received from Chiquita was essential to its operations in the area. In a normal month, eighty to ninety percent of the income for the William Rivas Front came from banana companies, including Chiquita. The William Rivas Front used the funds it received from Chiquita to pay salaries for paramilitary soldiers, purchase weapons and supplies for the soldiers, and to provide transportation for its operations. Without the payments from Chiquita, the AUC’s William Rivas Front could not have prosecuted the War and used the Paramilitary Terrorism Tactics.

423.     According to Mangones, during the period of time Chiquita made payments to the AUC, the AUC killed many civilians in the Santa Marta region as part of what the AUC “had to do in order to win” the War against the leftist guerillas. Among those killed by the AUC were some individuals targeted for assassination by Chiquita executives in Colombia.

424.     Chiquita made the payments to the AUC for the purpose of facilitating the AUC’s ability to combat the leftist guerillas and employ the Paramilitary Terrorism Tactics for which it had become notorious, including massacres, extra-judicial killings, forced disappearances, torture, and forced displacements of civilians accused of being leftist guerillas and their sympathizers or supporters.

425.     As a result of the funding it received from Chiquita, the AUC had the resources needed to carry out the War against leftist guerillas, their sympathizers, and supporters and to maintain control over the banana-growing regions.

426.     As a result of the funding it received from Chiquita, the AUC killed, injured, or forcibly disappeared the individuals identified in Paragraphs 9 to 252 of this Complaint using Paramilitary Terrorism Tactics.

Ed. Note: The following allegations are the explosive ones (no pun intended – this is serious stuff). Nicaraguan arms offloaded through Chiquita facilities with its knowledge would, if true, seriously change the character of the case. But wasn’t this information known to the US government when it prosecuted Chiquita? Why did it not come out?

(5)        Chiquita Purposefully Assisted The AUC When It Facilitated The Shipment Of Arms And Ammunition Through Its Turbo Port Facilities.

427.     Chiquita facilitated the AUC’s use of Paramilitary Terrorism Tactics by making its seaport facilities in the city of Turbo available to the AUC for illegal arms shipments. Chiquita purposefully made its seaport available in order to assist the AUC in driving leftist guerillas out of the Santa Marta and Urabá banana-growing regions and maintaining control over the regions so the company’s banana-growing operations could prosper.

428.     In 2001, the Nicaraguan National Police made arrangements to exchange 3,000 AK-47 assault rifles and 5 million rounds of ammunition for weapons more suited to police work. The Nicaraguan National Police employed a private Guatemalan arms dealer to handle the exchange. The arms dealer, in turn, arranged to sell the AK-47 assault rifles and ammunition for $575,000 to an arms merchant based in Panama acting on behalf of the AUC.

429.     In November 2001, a vessel named the “Otterloo” left Nicaragua with Panama as its declared destination carrying the assault rifles and ammunition. Instead of sailing to Panama, the Otterloo traveled to Turbo, Colombia.

430.     Bills of lading, shipping invoices, and other documents identified Chiquita as the intended recipient of the arms and ammunition shipment.

431.     The arms and ammunition were off-loaded at sea from the Otterloo onto Chiquita’s barges by Chiquita’s employees and brought to Chiquita’s private warehouse facility where they were stored for a period of time. Chiquita employees and/or agents supervised a fictitious inspection of the shipping containers and arranged to load the weapons and ammunition onto trucks for delivery to the AUC.

Ed. Note: How valid are the arm’s allegations? They are attributed some weight by the General Secretariat of the OAS. But the allegations “upon information and belief” are really conclusions or inferences drawn by plaintiffs counsel, not facts they believe they already can prove.  What is the evidentiary probity of an interview with Carlos Castano, the notorious head of the AUC?

432.     A formal report by a General Secretariat of the Organization of American States concluded that the transfer of arms and ammunition to AUC could not have occurred without accomplices in Turbo.

433.     Plaintiffs are informed and believe that Chiquita facilitated at least four more arms and ammunition shipments through its Turbo port facilities. According to an interview with the Colombian newspaper El Tiempo, Castaño boasted in response to a question about the Otterloo incident, “This is the greatest achievement by the AUC so far. Through Central America, five shipments, 13 thousand rifles.”

434.     Chiquita was aware that it had substantially assisted the AUC’s use of Paramilitary Terrorism Tactics by helping them acquire a large number of military-grade assault rifles together with a large quantity of ammunition for those rifles. The arms had a substantial effect on the AUC’s ability to carry out its strategy to drive leftist guerillas out of the Santa Marta and Urabá banana-growing regions and to, thereafter, maintain control over the regions through the use of Paramilitary Terrorism Tactics.

435.     As a result of obtaining weapons with assistance from Chiquita, the AUC had the resources needed to carry out the War against leftist guerillas, their sympathizers, and supporters and to maintain control over the banana-growing regions.

436.     As a further result of obtaining weapons with assistance from Chiquita, the AUC killed, injured, or forcibly disappeared the individuals identified in Paragraphs 9 to 252 of this Complaint using Paramilitary Terrorism Tactics.

Ed. Note: The introduction of narcotics into the mix also changes the character of the case against Chiquita, like allegations of weapons shipments. The same skeptical questions must be asked, however.

And, in both cases, we will be watching to see whether the same Chiquita executives that felt it necessary to make the payments were advised of and permitted the additional cooperation on guns and drugs, and if so, how they will argue their innocence in the kidnappings and murders that followed.

(6)        Chiquita Purposefully Assisted The AUC When It Facilitated The Shipment Of Narcotics Through Its Turbo Port Facilities.

437.     Chiquita also purposefully assisted the AUC by allowing it to use the company’s private seaport facilities to smuggle large quantities of illegal drugs, especially cocaine, out of Colombia.

438.     According to Colombian prosecutors, the AUC shipped drugs on Chiquita’s boats carrying bananas to Europe. AUC leaders have stated that the AUC tied drugs to the hulls of banana ships at high sea to evade security agencies’ control points. On seven different occasions, the Colombian government seized cocaine hidden in banana shipments on Chiquita’s boats. More than one and one-half tons of cocaine has been found hidden in the company’s produce, valued at over $33 million dollars. Two of the ships on which drugs were found were named the Chiquita Bremen and the Chiquita Belgie.

439.     Upon information and belief, drug shipments could not have been attached to Chiquita’s banana boats, or hidden in the cargo, without the active collusion or willful ignorance of Chiquita employees.

440.     Chiquita knew the AUC obtained large sums of money from its illegal drug trafficking activities. Chiquita also knew the AUC used the money it obtained from drug trafficking activities to finance its participation in the War, including its use of the Paramilitary Terrorism Tactics. Chiquita purposefully allowed the AUC to use its banana boats and ships to help the AUC acquire money that could be used to support and facilitate its effort to drive leftist guerillas out of the Santa Marta and Urabá banana-growing regions and to, thereafter, maintain control over the regions using the Paramilitary Terrorism Tactics.

441.     By providing the AUC with access to its private port at Turbo and to freighters that are owned, operated, or controlled by the company, Chiquita had a substantial effect on the AUC’s ability to carry out its plan to drive leftist guerillas out of the Santa Marta and Urabá banana-growing regions and to maintain control over the regions.

442.     As a result of the funding it derived from drug trafficking activities carried out with assistance from Chiquita, the AUC had the resources needed to carry out the War against leftist guerillas, their sympathizers, and supporters and to maintain control over the banana-growing regions.

443.     As a further result of the funding it derived from drug trafficking activities carried out with assistance from Chiquita, the AUC killed, injured, or forcibly disappeared the individuals identified in Paragraphs 9 to 252 of this Complaint using Paramilitary Terrorism Tactics.

D.        Chiquita Took Sides With The AUC For The Benefits It Would Receive From The Defeat And Expulsion Of Leftist Guerillas, Sympathizers, And Supporters In The Banana-growing Regions.

444.     As a result of purposefully providing assistance and material support to the AUC, Chiquita received significant benefits arising from the AUC’s use of the Paramilitary Terrorism Tactics to drive the leftist guerillas, and their sympathizers and supporters, out of the Santa Marta and Urabá banana-growing regions. Chiquita received additional benefits when the AUC used the Paramilitary Terrorism Tactics to maintain control over the banana-growing regions.

445.     Because the AUC succeeded in driving the leftist guerillas out of the banana-growing regions, Chiquita executives in Colombia were no longer in constant danger of being kidnapped and held for ransom. Chiquita’s executives were no longer subject to great risk of being shot and killed by leftist guerillas. The AUC also protected Chiquita’s banana workers from attacks by leftist guerillas.

446.     The AUC used Paramilitary Terrorism Tactics to ensure that local people living in the banana-growing regions would never again entertain the idea of supporting or joining the leftist guerillas.

447.     The AUC guarded Chiquita’s farms and infrastructure to protect them from being bombed, burned or destroyed by leftist guerillas. The AUC stopped common criminals from hijacking banana shipments, looting company storage facilities, or damaging company infrastructure. The AUC also provided armed escorts to accompany major bananas shipments from the farm to storage facilities and then from storage facilities to the port for shipping.

448.     Chiquita also used the AUC to resolve complaints and problems with banana workers and labor unions. Among other things, when individual banana workers became “security problems,” Chiquita notified the AUC, which responded to the company’s instructions by executing the individual. According to AUC leaders, a large number of people were executed on Chiquita’s instructions in the Santa Marta region.

449.     The AUC also helped Chiquita by “pacifying” the labor union that represented banana workers in the region by assassinating its leftist president and installing a new union leader that would represent both the workers and Chiquita. Following the assassination, the AUC continued to oversee the labor unions on Chiquita’s behalf to ensure that union members did not attempt to take advantage of the company.

450.     Throughout the period of time it made payments to the AUC, Chiquita and the AUC communicated regularly to identify problems and resolve problems.

451.     As the AUC took and maintained control over the banana-growing regions, land prices improved and became stable, benefiting large landowners like Chiquita.

452.     By 2003, Chiquita’s operations in the Santa Marta and Urabá regions were the company’s most profitable banana-producing operation anywhere in the world.

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