The Colombian government has launched an investigation into reports that employees of Chiquita Brands International Inc. and its Colombian subsidiary were involved in the bribery of customs agents to obtain storage space at a government-owned compound.
Officials at the Colombian Embassy in Washington, D.C., also confirmed they will ask U.S. Securities & Exchange Commission (SEC) investigators to provide copies of tape-recorded voice-mail messages of employees of Chiquita and its Colombian subsidiary detailing the bribe scheme and efforts to cover it up.
The tapes were provided to the Enquirer and to the SEC by a high-level Chiquita source with authority over the company's voice-mail system. Chiquita President and Chief Operating Officer Steven G. Warshaw disputed this week that anyone had such authority. Those tapes, if released by the SEC to Colombian investigators, will be used in the Colombian government's own bribery probe, according to Alfonso Lievano, commercial adviser of the Foreign Trade Ministry's Colombian Government Trade Bureau in Washington.
The SEC has begun a formal investigation of Chiquita and its subsidiaries on a wide range of topics, including the Colombian bribery scheme and hidden control of supposedly independent companies in Latin America, according to company and SEC sources.
SEC investigators served multiple subpoenas on Chiquita in April seeking documents, voice-mail messages, reports, memos, etc., in connection with its probe of the Cincinnati-based banana giant, according to SEC sources. The information also was confirmed in voice-mail messages of Robert Olson, Chiquita's general counsel, and other company officials.
The Enquirer also has been provided voice-mail messages linking one of Chiquita's lawyers - Manuel Rodriguez - to an effort to cover up the bribe scheme to prevent Colombian and U.S. officials from connecting the banana company to the illegal act.
"Yes, we are investigating all this and it is a very serious matter," said Mr. Lievano. "It is also a most delicate matter but one that must be looked into. We will be asking the SEC for those records (voice-mail tapes)."
Also confirming the Colombian probe was Fidel Cano, the Colombian Embassy's press attache. "My government will want answers to what is going on in this matter with Chiquita. This will all be looked into."
The Colombian authorities said they learned of the alleged bribe scheme after the Enquirer published an 18-page special section Sunday describing the findings of a yearlong investigation into questionable business practices by Chiquita.
The bribery incident involved paying customs agents in Turbo, Colombia, to help Chiquita's Colombian subsidiary Banadex obtain use of a large government storage facility.
The Enquirer detailed the bribery scheme in its Sunday report. The voice-mail tapes and high-level Chiquita sources described how, after learning of the scheme, company officials took action to hide it.
The tapes reveal that two company executives have been forced to resign: Douglas Walker, vice president for operations, and Reinaldo Escobar, a lawyer for Chiquita's Banadex subsidiary.
Jorge Forton, a Banadex executive in Medellin, Colombia, also is being forced to resign, but company officials, including Mr. Warshaw, allowed him to stay on temporarily while he sought other employment in the United States, according to the tapes.
High-level Chiquita sources, and the voice-mail messages, show Mr. Escobar and Mr. Walker were given generous severance packages and signed confidentiality agreements preventing them from discussing any company business, including the Colombian incident. Mr. Forton also signed a confidentiality agreement, the tapes show.
After leaving Chiquita, Mr. Walker was hired by Corporex Cos. Inc. in Northern Kentucky. As part of Mr. Escobar's severance package, he has been hired as an outside lawyer in Colombia for Chiquita, company records revealed.
One high-level Chiquita executive provided the Enquirer with the voice-mail messages to back up his information. Citing fear of losing his job and company retaliation, the executive requested confidentiality.
Mr. Walker, in a Nov. 17, 1997, voice-mail message to Mr. Olson, confirmed the bribery issue as the reason he was leaving the company. In his message, Mr. Walker said a friend had told him that he heard "Jorge Forton and myself had been fired for bribing a Colombian official for a warehouse facility in Turbo. So he has it pretty close to accurate if not completely accurate."
Mr. Escobar, in a Dec. 13, 1997, voice-mail message to Mr. Rodriguez, said Colombian custom agents were paid so Banadex could use the government compound for storage, thus saving the company more than $1 million in private storage costs at the Colombian port.
Discussing how payment was made to Colombian customs agents to secure the storage area, Mr. Escobar said: "What happened, remember, Manuel, was that the company, for security reasons, delivered what had to be delivered to the customs agents, who gave it to a third party and this party to its final destination, which means a lot of time without being traced."
Mr. Walker, Mr. Escobar and Mr. Forton declined repeated Enquirer requests for comment.
Mr. Cano, the Colombian Embassy press attache, said the Colombian government "does not lease or rent space" at its custom facilities - including Turbo - to private companies such as Chiquita. "That is strictly for use by our government."
Mr. Rodriguez, in an Oct. 16, 1997, voice-mail message to John Ordman, Chiquita's senior vice president of finance, described what sparked the company officials' decision to offer the three men incentives to resign in lieu of being fired. Mr. Rodriguez's message was in Spanish and was translated for the Enquirer.
"Hey, John Ordman, there was an article in El Tiempo newspaper (in Colombia) where it was reported that ten custom officials were arrested for alleged corruption and paybacks," Mr. Rodriguez said. "It is important that you know this because apparently there has been several others, 30-60 custom people were arrested and are being investigated and will obviously make statements against other officers and it is going to come to light regarding all types of corruption."
Mr. Rodriguez then discussed why it would be a good idea to allow Mr. Escobar to resign and give him a Chiquita consulting contract instead of fining or firing him for his involvement in the Colombian incident.
"We have to give him that consulting contract for many reasons, but the other additional point is that if Reinaldo questions this action, we would have to prove (his) termination to the (Colombian) authorities, which means that we have to reveal the fact that the payment was made and try to justify the firing.
"This has legal repercussions, but in addition, it has greater political repercussions," he said. "Particularly . . . given that (Colombian President Ernesto) Samper wants to make an example against the multinationals, and what a better time than to declare war on Chiquita over this point. This would have international repercussions . . . Therefore, it is a very delicate issue.
"Let me tell you that the same situation can be made in relation to Walker and Forton. If they decide to fight this (forced resignation) I don't see that we have any other option. Up to a certain point we're risking that possibility."
Chiquita lawyer David Hills, in a Dec. 10, 1997, voice-mail message to Mr. Olson and Mr. Warshaw, also advised against firing Mr. Escobar, because the only way to legally do that would alert Colombian authorities to the fact the bribery occurred. Additionally, he added, notifying Colombian authorities would publicly tie Chiquita to the bribe.
Mr. Hills' message, in part, said, "We can only fire him (Escobar) with cause because of his involvement in the Colombian problem if we file a criminal charge against him with Colombian authorities. Clearly we would not want to do that because we would be implicating ourselves. So, basically, the only thing we can ask Reinaldo to do is basically have a, we're basically asking him to resign, which doesn't put us in the best legal position."
Chiquita, in a written response through its lawyers to the Enquirer, declined to discuss the Colombian incident, the resignations of the employees or whether the company violated any U.S. laws.
The company response did say, "Chiquita's 'Code of Conduct for Associates' requires employees to comply at all times with the laws that affect the company's business."
Corrupt activities committed by U.S. companies abroad may fall under the U.S. Foreign Corrupt Practices Act (FCPA).
The act, passed in 1977, followed a series of international scandals in which American companies operating overseas were caught bribing foreign officials, paying kickbacks for contracts and committing other acts that would be illegal in the United States. The act prohibits U.S. companies or their employees from offering a bribe to influence a foreign government official's acts or decisions.
The act also requires that U.S. companies maintain accurate records of their foreign operations.
The SEC and the U.S. Justice Department have responsibility for investigating reports of FCPA violations.
(Copyright 1998)
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