An Empire Built on Controversy

Chiquita SECRETS Revealed 

MIKE GALLAGHER & CAMERON McWHIRTER
Cincinnati Enquirer 3may1998

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A year-long investigation by The Cincinnati Enquirer has found that Chiquita Brands International Inc., the world's largest banana company, is engaged in a range of questionable business practices.

Chiquita, based in Cincinnati at 250 E. 5th St., has disputed suggestions that any of its practices are improper.

The Enquirer investigation took reporters to the sweltering lowlands of Central America, where bananas are grown, as well as to Canada, Belgium, New York and Washington. Findings are outlined in a special 18-page section in today's Enquirer.

These findings include:

• Chiquita secretly controls dozens of supposedly independent banana companies. It does so through elaborate business structures designed to avoid restrictions on land ownership and national security laws in Central American countries. The structures also are aimed at limiting unions on its farms.
• Chiquita and its subsidiaries are engaged in pesticide practices that threaten the health of workers and nearby residents, despite an agreement with an environmental group to adhere to certain safety standards.
• Despite that environmental agreement, Chiquita subsidiaries use pesticides in Central America that are not allowed for use in either the United States or Canada, or in one or more of the 15 countries in the European Union.
• A worker on a Chiquita subsidiary farm died late last year after exposure to toxic chemicals in a banana field, according to a local coroner's report.
• Hundreds of people in a Costa Rican barrio have been exposed to a toxic chemical emitting from the factory of a Chiquita subsidiary.
• Employees of Chiquita and a subsidiary were involved in a bribery scheme in Colombia that has come to the attention of the U.S. Securities and Exchange Commission (SEC). Two employees have been forced to resign.
• Chiquita fruit-transport ships have been used to smuggle cocaine into Europe. Authorities seized more than a ton of cocaine (worth up to $33 million in its pure form) from seven Chiquita ships in 1997. Although the company was unaware and did not approve of the illegal shipments, problems were traced to lax security on its Colombian docks.
• Security guards have used brute force to enforce their authority on plantations operated or controlled by Chiquita. In an internationally controversial case, Chiquita called in the Honduran military to enforce a court order to evict residents of a farm village; the village was bulldozed and villagers run out at gunpoint. On a palm plantation controlled by a Chiquita subsidiary in Honduras, a man was shot to death and another man injured by guards using an illegal automatic weapon. An agent of a competitor has filed a federal lawsuit claiming that armed men led by Chiquita officials tried to kidnap him in Honduras.
• Chiquita Chairman and CEO Carl H. Lindner Jr., his family and associates made legal but controversial contributions to political figures at a time the company desperately sought U.S. backing in a trade dispute over banana tariffs in Europe.
• In a statement issued through its attorneys, Chiquita said the company "has been an active and enthusiastic engine for a better way of life throughout the region (and) is a leader in preserving, enhancing and cleaning the environment through Central America."

Throughout its investigation, the Enquirer sought to meet with Mr. Lindner and other Chiquita officials, including Keith Lindner, vice chairman, and Steven G. Warshaw, president and chief operating officer. They declined. Instead, the law firm of Kirkland & Ellis in Washington, D.C., was hired to provide company responses to reporters' questions. Chiquita, through its lawyers, provided hundreds of pages of responses, although refusing to address some questions and avoiding direct responses to others.

Several high-level sources within Chiquita spoke with reporters on the condition of anonymity, fearing retaliation. They also provided extensive documents and other information including copies of more than 2,000 taped voice mail messages recorded by Chiquita executives.

A high-level source told the Enquirer that he has also provided copies of those tape recordings to SEC investigators. SEC sources confirmed that they have the tapes and they are part of an investigation into Chiquita's business practices. SEC and Chiquita sources also confirmed that, in April, SEC investigators issued multiple subpoenas to Chiquita for documents.

Enquirer reporters spent a month in Central America and the Caribbean late last summer, visiting plantations, government offices, villages and university research centers. They personally observed practices and spoke with residents, laborers, Chiquita managers and government officials. They obtained hundreds of internal and public documents and interviewed legal, financial and environmental experts in Cincinnati, Brussels, Antwerp, New York, Vancouver and Washington, D.C.

Key figures in stories:

1. Baker, Lorenzo Dow - Massachusetts sea captain who helpd begin the banana trade in 1870.
2. Bakoczy, Alejandro - chief of security for Chiquita.
3. Binard, Phillippe - delegate general of the European Community Banana Trade Association.
4. Birns, Larry - director of Council on Hemispheric Affairs. A Chiquita critic.
5. Black, Eli - owner of United Fruit Co., who in 1970 changed the company's name to United Brands. Committed suicide in 1975 while the company was under investigation for bribing Latin American officials.
6. Brester, Susan (Chappano) - Chiquita finance executive.
7. Castejon, Amilcar - Honduran lawyer hired by Chiquita to oversee payroll and personnel records of COBALISA, a farm service company.
8. Castro Diaz, Josque Moises - A 21-year-old villager living amid the San Alejo Plantation in Honduras. He was shot and killed by plantation security guards.
9. Coleridge, Ged - Chiquita executive in Belgium concerned with shipping issues.
10. Connoley Sevilla, John - former resident and schoolteacher in the destroyed village of Tacamiche.
11. Escobar Galeano, Carlos Guillermo - bodyguard of Otto Stalinski and expected witness in his federal suit. He was shot to death near his home in Honduras on March 24.
12. Escobar, Renaldo - Chiquita lawyer in Colombia involved in alleged bribery with Chiquita executive Douglas Walker.
13. Flores Discua, Iris Gisela - a lawyer representing the guards and Chiquita's Tela Railroad Co. in a shooting case on the San Alejo plantation.
14. Forton, Jorge - Chiquita executive in Medellin, Colombia, involved in alleged bribery with Mr. Walker and Mr. Escobar.
15. Gleason, Carolyn - Chiquita's trade attorney and registered lobbyist in Washington, D.C.
16. Hills, David - Chiquita lawyer.
17. Holst, Eric - New York coordinator for the "Better Banana" certification program of the Rainforest Alliance.
18. Hughes, G. Philip - ambassador to the Windward Islands under the Bush administration. Later a Chiquita consultant.
19. Kistinger, Robert - Chiquita Banana Group president.
20. Kondritzer, Gerald R. - Chiquita vice president and treasurer.
21. Lindner, Carl H. Jr. - chairman and CEO of Chiquita Brands International Inc.
22. Lindner, Keith - Carl's son and vice chairman of Chiquita Brands International Inc.
23. Marquardt, Sandra - environmental consultant who formerly headed up Greenpeace International efforts to ban U.S. export of pesticides.
24. McBride, Ann - president of Common Cause.
25. Mendoza, Jorge - an official of Chiquita Tela Railroad Co. subsidiary in Honduras who was involved in the destruction of the Tacamiche village.
26. Moore, Robert - president of the International Banana Association, a Washington, D.C., group that lobbies for the banana interests.
27. Murray, Henry - former employee of Chiquita's Tela Railroad subsidiary who is leasing Tacamiche banana land.
28. Obregon, Jose - general manager of the supposedly independent COBALISA, but carried on Tela payroll.
29. Olson, Robert - senior vice president and general counsel for Chiquita Brands International Inc.
30. Ordman, John - Chiquita senior vice president of finance.
31. Palma, Arnaldo - general manager of Chiquita's Honduran operations.
32. Paz, Benjamin - Chiquita official.
33. Ploughman, Dale - Chiquita executive in Antwerp, Belgium, responsible for shipping issues.
34. Raymer, Joel - Chiquita lawyer.
35. Rodriguez, Eugene - Chiquita executive.
36. Rodriguez, Manuel - Chiquita lawyer.
37. Stalinski, Ernst "Otto" - former consultant for Fyffes, a Chiquita competitor, who claims Chiquita agents tried to kidnap him in Honduras in 1990. He has filed a federal suit in Cincinnati against the company.
38. Stephens, Clyde - retired chief of Chiquita Banana Research division.
39. Theodoredis, Roger - Chiquita executive in Cincinnati assigned to investigate problems at the company Polymer subsidiary in Costa Rica.
40. Valerin Bustos, Greddy Mauricio - A worker killed by organophosphate intoxication while working on a Costa Rican plantation controlled by Chiquita.
41. Veliz Tobar, Carlos Ermelindo - union official shot to death on Sept. 30, 1994, on a Chiquita-controlled plantation in Guatemala.
42. Walker, Douglas - Chiquita vice president of operations, fired for participation in a Colombian bribery scheme.
43. Warshaw, Steven G . - Chiquita Brands International Inc. president and chief operating officer.
44. Welsh, Magnes - Chiquita's director of investor relations.
45. Zemurray, Sam "the Banana Man" - architect of the modern banana industry.

(Copyright 1998)

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