Banana company Chiquita Brands said Wednesday it has agreed to a $25 million fine and admitted paying a Colombian terrorist group for protection in a volatile farming part of the country.
The settlement resolves a lengthy Justice Department investigation into the company's financial dealings with terrorist organizations in Colombia.
In court documents filed Wednesday, federal prosecutors said the Cincinnati-based company and several unnamed high-ranking corporate officers paid about $1.7 million between 1997 and 2004 to the United Self-Defense Forces of Colombia.
The AUC has been responsible for some of the worst massacres in Colombia's civil conflict and is responsible for a sizable percentage of the country's cocaine exports. The right-wing group was designated by the U.S. government as a terrorist organization in September 2001.
Prosecutors said the company made the payments in exchange for protection. The company also made similar payments to the leftist Revolutionary Armed Forces of Colombia, or FARC, according to prosecutors.
Colombia's banana-growing region is a zone that has been viciously fought over by leftist rebels and far-right paramilitaries.
"The information filed today is part of a plea agreement, which we view as a reasoned solution to the dilemma the company faced several years ago," Chiquita's chief executive, Fernando Aguirre, said in a statement. "The payments made by the company were always motivated by our good faith concern for the safety of our employees."
Details of the settlement were not included in court documents but Aguirre said it would pay $25 million in fines, which it set aside this year. The company reported the deal to the SEC. A plea hearing was scheduled for Monday.
The payments were approved by senior executives at Chiquita, prosecutors wrote in court documents. Prosecutors said Chiquita began paying the right-wing AUC after a meeting in 1997 and disguised the payments in company books.
"No later than in or about September 2000, defendant Chiquita's senior executives knew that the corporation was paying AUC and that the AUC was a violent paramilitary organization," prosecutors wrote in Wednesday's court filing.
Company attorneys made it clear the payments were improper, prosecutors said.
"Bottom line: CANNOT MAKE THE PAYMENT," the company's outside counsel advised in February 2003, according to an excerpt of a memo included in court documents.
In April 2003, company officials and lawyers approached the Justice Department and told prosecutors they had been making the payments. According to court documents, the payments continued for months.
The document filed by federal prosecutors is known as an information. Unlike an indictment, it is normally worked out through discussions with prosecutors and is followed by a guilty plea.