Sunday, May 11, 2008

Chiquita and 60 Minutes

60 Minutes aired a special on Chiquita Banana, The Price of Bananas, in which they reported on the issues that faced this company in trying to operate in Colombia and their self-reporting to the DOJ of violations in making illegal payments to a paramilitary group in Colombia.  Their self-reporting resulted in the company facing a significant penalty - a $ 25 million dollar fine and 5 years probation. (see Sentencing Memo here) The company also was the subject of a prosecution and plea, and not the recipient of a deferred prosecution agreement.  To a large extent, this recent report mirrored and expounded upon the work of former Wall Street Journal reporter Laurie Cohen, who back in August 2007 discussed the dilemma faced by Chiquita in trying to protect employees and also trying to comply with the law. (see Laure Cohen, Chiquita Under the Gun, WSJ)   

Some interesting points:

  • 60 Minutes reported that "the Colombian government is now talking about extraditing Chiquita executives to Colombia." The extraterritorial application of U.S. laws by the DOJ may be coming back to haunt them as other countries may now think they have the right to come into the U.S. and proceed against corporate executives here.  The cost of a company operating abroad may be significantly increased if CEOs, or others within the U.S., start facing indictment in other countries. 
  • The 60 Minute Special includes names of other companies that are alleged to be in violation, although the source of the allegations is in prison and charged with offenses in Colombia. One has to wonder if the DOJ has investigated these other companies, or if the only one who gets prosecuted is the one who comes forward and does the right thing by turning themselves into the government.  Based on this 60 Minute Special one might have a certain skepticism about whether the government is taking a proactive role in this investigation.  On the other hand, the effect of the WSJ article, and now 60 Minutes, may stimulate further DOJ activity. Of course, there is also the possibility that they did investigate and find no merit to the allegations that other companies were involved in illegal payments.
  • The DOJ took a positive approach in not indicting individuals after Chiquita turned themselves into authorities. Perhaps this will send a message to corporate executives at other companies that they need to work with the DOJ to avoid individual liability. This could place the company against the individual when an individual may be trying to protect themselves from personal liability while the company is saying that proof is not present, so the company should not self-report.
  • Why is it that Chiquita received a plea with conviction, while other companies get a deferred prosecution agreement?  Is this but another example of the enormous discretion of the DOJ?

(esp)

Addendum - ABA Jrl Law News Now - Colombia Extradites 14 Warlords to Face U.S. Drug Charges

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Comments

Was the DOJ decision not to prosecute Chiquita really a postive approach, or a decision by the administration to cover up deeper involvement of Colombian goverment officials with the AUC in order to protect our support of the Uribe goverment, our investments in Colombia and the passage of the free trade agrement with Colombia? What message are we sending about our resolve to fight a war on terrorism while looking the other way when it suits us. Chiquita's excuse that it was protecting its workers is ridiculous. In my oppinion, DOJ should have hammered Chiquita on this, and should be getting as much information they can from those involved in these deals. Mancuso perhaps?.

Posted by: Luz Nagle | May 11, 2008 5:39:39 PM

This is just another example of how the government lacks perspective. It is obvious to so many Americans that the government does seem to think they own us, the people, and are willing to sell our freedom away, often for little more than a banana. We have to remember that WE have a government and WE need to force them to act in defense of freedom. Where is the politician acting to enhance freedom? If you can't see that we're starting to sell the rope that hangs us then you aren't paying attention.

Posted by: SenatorMark4 | May 12, 2008 5:19:25 AM

Another example of the shortfalls of self-reporting.

As a defense lawyer, I would tell those executives who are going to appear before congress to negotiate a 6002 immunity deal before giving the colombian goverment a factual basis to convict them

Posted by: Percuriam | May 12, 2008 7:11:01 AM

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