DOJ Confession Didn’t Help Chiquita
Chiquita International Brands met with a top Justice Department official in April 2003 to disclose paying protection money to a Colombian paramilitary group on a U.S. list of terrorist organizations. Then the company waited for a response.
And waited.
The official was Michael Chertoff, sources told the Washington Post. At the time, Chertoff headed the Justice Department’s criminal division. He is currently the chief of the U.S. Homeland Security Department.
Chertoff confirmed the payments were illegal, but said he would get back to company officials after meeting with the U.S. State Department to discuss the impact on U.S. interests if the banana company left Colombia, sources told the Post. The payments continued for almost another year.
The Justice Department denies that it provided any indications that the payments could continue.
Chiquita’s admission led to a federal probe and a plea agreement in which the company agreed to pay a $25 million fine for making $1.7 million in illegal payments to Colombian groups between 1997 and 2004. (See this ABAJournal.com post for more information on Chiquita’s legal problems.)
Now a federal grand jury is considering whether to charge company officials with criminal wrongdoing for continuing the payments. One possible target is Roderick Hills, a lawyer and former chair of the Securities and Exchange Commission who headed Chiquita’s audit committee. Hills had asked for the meeting with Chertoff, who was a former law firm colleague at Latham & Watkins.
The case illustrates the Justice Department’s new tough stance with companies that voluntarily report wrongdoing, the Wall Street Journal (sub. req.) reports. Critics say the strategy may encourage companies to hide illegality, since their fate will be no better if they come forward.
A lawyer for Chiquita, Eric Holder Jr., says the company had fretted that abruptly stopping the payments could have put company employees in danger.
“Under the circumstances, the company did what it had to do to save the lives of its employees while disclosing fully its actions to U.S. authorities and appealing for their reason and guidance,” Holder told the Wall Street Journal.
