The company told the government that the payments were made under the threat of violence against them and their employees. But in a surprising move in April 2003, Chiquita decided to disclose to the Department of Justice that the company was still making payments to the Colombian paramilitary group.
Chiquita’s executives also considered but rejected the option of withdraw- ing operations from Colombia. In the minds of the Chiquita’s executives, stopping the payments would risk the lives of their employees. Yet the company continued to make the protection payments, amounting to an additional $825,000. Chiquita officials met with their attor- neys in Washington, DC, and were advised to stop the payments to the terrorist group. In February 2003, a Chiquita employee informed a senior Chiquita officer that the company’s protection pay- ments were illegal under the new U.S. Government declared the Colombian paramilitary group to be a terrorist organization. After the September 11, 2001, terrorist attack in the United States, the U.S.
From 1997 through 2004 Chiquita paid monthly “protection payments” totaling more than $1.7 million.
In a handwritten note, a Chiquita executive said that such payments were the “cost of doing business in Colombia.” The company agreed to make the payments demanded by the paramilitary group, but hid the payments through a series of questionable accounting actions. It stated that it wanted “to help the world’s consumers broaden mindsets about nutri- tion and bring healthy, nutritious, and convenient foods that taste great and improve people’s lives.” Therefore, it was not surprising that Chiquita’s management also wanted to protect its employees and ensure their safety while working for the company. Chiquita’s mission emphasized a strong sense of ethical performance and social respon- sibility. The company’s managers took these threats seriously, because they believed that, in 1995, the paramilitary group had been responsible for bombing Chiquita’s operations and murdering 17 banana workers, who had been gunned down on a muddy soccer field. The paramilitary group made it clear that if the company did not make the pay- ments Chiquita’s employees would be at risk. The company was confronted by a local armed paramilitary group, the United Defense Forces of Colombia, which attempted to extort substantial payments from the company to help fund the group’s operations. Chiquita Brands: Ethical Responsibility or Illegal Action? In the early 2000s, Chiquita Brands International, a Cincinnati–based multinational mar- keter and distributor of food products-widely known for its Chiquita banana brand- found itself in the middle of a crisis in its Latin American operations.