As part of an inquiry into corporate payments to violent groups in Colombia, a group of congressmen wants more details about the Justice Department’s handling of the Chiquita Brands International Inc. case, including whether the department was too lenient and why it took four years to file criminal charges after the banana company admitted making payoffs.
In its plea agreement in March, Chiquita acknowledged that senior executives knew about the payments by September 2000 or earlier, and that they continued to make them until February 2004 -- nearly a year after its own lawyers and the Justice Department told them to stop.
Congressional investigators say they are particularly interested in an April 2003 meeting in which top Justice Department officials allegedly told Chiquita to cease the payments. Chiquita says the Justice Department’s warnings were vague.
Current and former Justice Department officials said in interviews with The Times that the prosecutors handling the Chiquita case had wanted to bring charges of material support of terrorism against the banana company and to pursue charges against some of its top executives by early 2004, if not sooner.
Instead, the firm was charged three years later with one count of “engaging in transactions with a specially designated global terrorist” and was levied a $25-million fine, payable over five years.
With annual revenue of approximately $4.5 billion, Chiquita said the fine would not affect its global operations. No executives were charged.
According to the Justice Department sources, the prosecutors were incensed by Chiquita’s continued payments to the right-wing United Self-Defense Forces of Colombia, or AUC, after what they described as repeated warnings. But current and former department officials said they were opposed on some matters by political appointees in the department, including David Nahmias, a former deputy assistant attorney general overseeing counter-terrorism.
The U.S. attorney’s office in Washington was leading the investigation, in conjunction with Nahmias and others at the Justice Department headquarters a few blocks away.
Nahmias first asked Roscoe C. Howard Jr., then the U.S. attorney for the District of Columbia, not to conduct search warrants at Chiquita headquarters in Cincinnati -- but Howard refused. Then he asked that charges not be filed until Justice Department leadership could meet with a lawyer for the firm’s board, former Atty. Gen. Richard L. Thornburgh, the current and former officials said.
Nahmias, now the U.S. attorney in Atlanta, and Howard, in private law practice, declined to comment, saying they could not discuss internal Justice Department deliberations.
Chiquita’s “lawyers went all over D.C. to have meetings” with top officials at the Justice Department, the Treasury Department and elsewhere, often without the front-line prosecutors knowing about it, one of the senior Justice Department officials said. “They were trying to cause political pressure.” Like others interviewed for this article, the official spoke on the condition of anonymity, saying he was not authorized to discuss the politically sensitive case.
On April 26, 2004, Thornburgh took his case directly to Nahmias, his boss Christopher A. Wray and then-Atty. Gen. John Ashcroft in a two-page confidential letter obtained by The Times. Thornburgh wrote that Chiquita was merely trying to protect its employees and that a criminal prosecution would harm U.S. political and economic relations with Colombia.
“While the department has suggested that a meeting regarding matters of policy is premature until the investigation is complete
Justice Department officials wouldn’t comment on whether Ashcroft or his successor as attorney general, Alberto R. Gonzales, ultimately met with Thornburgh or Chiquita board member Roderick M. Hills, a well-connected Republican lawyer in Washington and a former White House counsel and head of the Securities and Exchange Commission.
By mid-2004, Chiquita virtually stopped cooperating with the Justice Department’s efforts to gain access to documents and interview company employees, the current and former officials said. “The case was essentially shut down until further notice, and then there was no further notice,” said one former prosecutor involved in the case.
As Hills took a lead role for Chiquita in fending off criminal charges, his son-in-law Steve Bunnell was a senior prosecutor in the U.S. attorney’s office in Washington. In 2004, Bunnell was appointed head of the office’s criminal division, which oversaw the Chiquita investigation and other prosecutions. The entire field office’s prosecutorial office considered recusing itself from the case due to the conflict of interest, but ultimately decided only to recuse Bunnell.
Later, senior management in the U.S. attorney’s office was also recused from the case.
Hills’ role in the case eventually became a major focus of the investigation. He was one of three senior Chiquita executives who told their outside counsel in the spring of 2003 to “just let them sue us, come after us,” even as the firm was pledging to cooperate with the Justice Department, according to department officials and court records filed in the case.
And as head of the Chiquita board’s audit committee, Hills told fellow board members that “we appear to [be] committing a felony” in December 2003, months before the company stopped the payments, federal court documents show.
Hills, who retired from the Chiquita board last month, declined to comment. Bunnell, who left the Justice Department on Friday for private law practice, did not respond to requests for comment.
When the Justice Department finally settled with Chiquita on March 14, none of the senior executives was charged individually. The department agreed to withhold company officials’ names and identifying descriptions from the publicly released charging documents and plea agreement. They identified Hills, for instance, only as “Individual B.”
The settlement “was too soft for what they did,” one of the senior Justice Department officials said. The deal awaits formal approval by U.S. District Judge Royce C. Lamberth.
“We believe that the settlement was in the best interest of the company,” said Chiquita spokesman Michael Mitchell. “We would certainly not characterize $25 million as insignificant.”
Jeffrey A. Taylor, interim U.S. attorney for the District of Columbia, also defended the settlement, saying the case was investigated aggressively and prosecuted properly. “We think it’s a fair and just result,” he said. “This one was done by the book.”
Meanwhile, Colombia’s attorney general, Mario Iguaran, has said he is seeking all of the Justice Department’s investigative files on Chiquita, and he has vowed to extradite company officials to face charges in Colombia. The Justice and State departments would not say whether they had received Iguaran’s requests or whether they were cooperating.
Mitchell said Chiquita was unaware of any Colombian investigation or extradition threat.