March 19, 2007 / 4:21 PM / 11 years ago

CORRECTED - Chiquita pleads guilty to Colombia terror payments

(Corrects spelling of Colombia throughout.)

By Andy Sullivan

WASHINGTON, March 19 (Reuters) - U.S. banana giant Chiquita Brands International Inc. pleaded guilty on Monday to doing business with a terrorist organization for paying protection money to Colombian paramilitaries between 2001 and 2004.

Chiquita agreed to pay a fine of $25 million, slightly more than half the profits its Colombian banana-growing operation earned during that period. The first payment of $5 million is due at sentencing on June 1.

According to the plea agreement, Chiquita paid more than $1.7 million starting in 1997 to the United Self-Defense Forces of Colombia, a violent right-wing group known by its Spanish acronym AUC.

The payments continued after the U.S. government designated the AUC as a foreign terrorist organization in September 2001. Cincinnati-based Chiquita sold its Colombian subsidiary in 2004.

A Chiquita spokesman said the company has no way to verify whether the independent Colombian growers it now buys bananas from are supporting the AUC or other violent groups.

However, local growers are less likely to face extortion than a big multinational, spokesman Michael Mitchell said. “We believe that our risk profile was materially higher than locally owned firms,” Mitchell said.

Chiquita, one of the world’s largest banana producers, voluntarily disclosed the payments to the Justice Department in April 2003. The Justice Department praised the company for its cooperation.

Chiquita said the AUC made threats against its workers and it made the payments only to protect its employees.

The plea agreement does not cover company executives who authorized the payments and continued them even after Justice told them to stop, Assistant U.S. Attorney Jonathan Malis told Judge Royce Lamberth.

Company officials also may face extradition to Colombia to face criminal charges there.

Businesses in Colombia often face extortion attempts by right-wing paramilitary militias formed in the 1980s to help protect private property from Marxist rebels who have been fighting the state since the 1960s.

By the end of the 1990s both sides, labeled terrorists by Washington, were locked in a dirty war over lucrative cocaine-producing land in which peasants are killed and displaced as a way of controlling territory.

More than 31,000 paramilitary fighters have turned in their guns in a deal offering benefits including reduced prison terms. But many are still fighting as Colombia’s main rebel group has yet to come to the negotiating table.

((Editing by Patricia Zengerle; Reuters Messaging andy.sullivan.reuters.com@reuters.net; 202 898 8360)) Keywords: USA CRIME/CHIQUITA

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