Friday, November 30, 2007

I am no Superman, I have no answers for you

Recently the Chiquita fruit company plead guilty to a felony for making payments to a right wing paramilitary group, the United Self-Defense Forces of Colombia, or the Autodefensas Unidas de Colombia, commonly known as the AUC.

Chiquita paid protection money to the AUC to ensure that their employees and operations were not attacked. They continued to make these payments until they were charged with MURDER.

What makes this story even more bizarre is the dithering role played by Michael Chertoff, the current head of Homeland Security, who wasn't sure what to do with the case.

[L]egal sources on both sides [of the case] say there was a genuine debate within the Justice Department about the seriousness of the crime of paying AUC.

For some high-level administration officials, Chiquita's payments were not aiding an obvious terrorism threat such as al-Qaeda; instead, the cash was going to a violent South American group helping a major U.S. company maintain a stabilizing presence in Colombia. |In Terrorism-Law Case, Chiquita Points to U.S. - Washington Post| (emphasis added)

Chiquita self-reported in this case, which they hoped would protect them. It didn't. Will this outcome discourage self-reporting in the future?

If companies don't pay off these armies and death squads, how do they operate in these areas?

Do they just pull out? Should they hire their own private military companies (like Blackwater and Dyncorp) and turn the region into their own corporate fiefdom, a literal banana republic in Chiquita's case?

Or maybe, they should pull out of the U.S. They could base themselves in Bermuda instead.

What makes this all the more complex is the Military Commissions Act, Public Law 109-366 which allows the President to declare anyone (citizen or no) who materially aids a terrorist as an enemy combatant and with limited judicial review.
[Military Commissions Act] broadens the definition of “unlawful enemy combatant” to include not only those who fight the United States but also those who have “purposefully and materially supported hostilities against the United States.” The latter group could include those accused of providing financial or other indirect support to terrorists, human rights groups say. ....

Bruce Ackerman, a critic of the administration and a professor of law and political science at Yale University... said the bill “further entrenches presidential power” and allows the administration to declare even an American citizen an unlawful combatant subject to indefinite detention. |Detainee Bill Shifts Power to President - New York Times| (emphasis added)
But enough of the hypothetical questions, let's get back to what happened to Chiquita and how the recent court case came to pass.
[On September 10, 2001, the day before 9/11], the AUC's legal status changed. Then-Secretary of State Colin Powell added the AUC to the roster of "specially designated foreign terrorist organizations." Being placed on this list, which contains mostly Middle East-based groups like Al Qaeda and Hamas, means that U.S. companies cannot legally do business with them....

[In 2003, discovered the AUC's terrorist status and Chiquita's] board decided that the company should disclose the payments to the Justice Department and seek its guidance. So in April of 2003, [Chiquita's attorneys met] with Justice officials led by Michael Chertoff, then assistant attorney general for the criminal division at the Justice Department, now the secretary of Homeland Security.

[Chiquita] told Chertoff that if the company simply stopped paying the terrorists, Chiquita would be endangering its employees. Moreover, suddenly pulling out of Colombia would have serious economic and political repercussions for that country, a close U.S. ally. Chiquita suggested that Chertoff consult with the U.S. Department of State and other federal agencies concerned about Colombia's stability.

Exactly what Chertoff told the Chiquita executives became a hot-button issue in the case. The Justice Department admitted in the plea deal that Chertoff said the payments were illegal and "the issue of continued payments was complicated."

According to [Chiquita's attorneys], Chertoff told the Chiquita officials that "this is a heavier meeting than I expected," and that he would get back to them.

[Chiquita claims] there was an "unspoken but clear understanding" with Chertoff that they could temporarily continue the payments while Chertoff considered the options.

Chertoff declined to comment for this story.

[Chiquita's lead defense attorney, Eric Holder Jr.] told the sentencing court that he suspects the government did not want to explicitly say to stop the payments "and then have blood on its hands if someone was, in fact, killed." So Justice took what Holder called a middle position-acknowledging that the payments were illegal, but not explicitly saying "stop."

Holder was clearly outraged by the department's waffling. He said in court that if Chiquita's disclosure had occurred under his watch as deputy attorney general, and if his Justice Department staff had failed to act on it, "heads would have rolled."

But Chertoff failed to act. Records show that [Chiquita's attorneys] reported back to Chiquita's board of directors that there would be "no liability for past conduct," but there was "no conclusion on continuing the payments." They said Chertoff would get back to them. But he never did.

The executives did, however, eventually hear from the U.S. Attorney's Office. Chertoff handed off the case to U.S. Attorney Roscoe Howard Jr., then the U.S. Attorney in D.C., just before Chertoff left office in June 2003. Howard opened the Chiquita probe as a murder investigation. Murder?

"They [terrorists] were capturing American citizens in Colombia and holding them for ransom or killing them. What would you call it?" asks Howard...

|Blood Money Paid by Chiquita Shows Company's Hard Choices - Law.com|(emphasis added)
Roscoe Howard taught my criminal procedure class in law school and it sounds like he enjoyed nailing Chiquita to the wall on this one. Chiquita paid a $25 million fine but no executives were held personally criminally liable.

The Wall Street Journal had some interesting earlier coverage as well.

No comments: