The Yanqui Dollar
Mark in Mexico describes the prosecution of United Fruit on charges that it paid extortion money to Colombian Left and Right wing terrorist groups between 1997 and 2004. United Fruit sold its interests, but continued making payments until a deal could be finalized, in order, it alleged, to protect its employees.
Chiquita's lawyer claimed that the money was paid as protection money to safeguard the company's workers. Chiquita says it was approached with dark threats concerning its workers safety and felt it had no choice but to pay. The money was paid initially by check but later payments were made in cash. Chiquita officials at the highest levels of the company were involved and Colombia is now making noise about extraditing them to that country to face trial for supporting terrorism.
Apparently, company officials went to "outside counsel" seeking advice. They were told to stop the payments immediately as such payments were an indefensible violation of US law. Company officials pointed out to their outside counsel that the safety of their employees as well as security of the company's installations in Columbia would be put at risk. The counsel's response? "Get out of Colombia". ...
Company officials then visited the Justice Department and admitted making the payments. Chiquita could only get an admission from the Justice Department that the issue of security was "complicated". However, Justice told Chiquita that the payments must stop. Instead, Chiquita made at least another $800,000 in payments while it negotiated with a Colombian company to buy Chiquita's Colombian banana operations. Chiquita sold its Colombian subsidiary, called Banadex, Chiquita's most profitable operation, to the Colombian buyer.
However, the company's repeated payments to registered terrorist organizations in violation of US law, its continued payments even after being advised by both outside counsel and Justice Department officials to discontinue the practise immediately, and its efforts to hide those payments, whether by check or by cash, led to the prosecution and the plea agreement.
I'm going to describe a scenario that could happen, though I'm not saying it happened in this case. Scene: a backroom in a plush Third World country club. One man to another. "Let's ask the gringos for money to let them keep their company running. If they stay we bleed them. If they go, we get them to sell their company to us at a loss. And even if they pay us and go, we provide proof they paid us and extradite them for the crime of paying us. Then we ask them for a bribe to treat them well in prison. No way we can lose." The other man replies, "why that's a brilliant plan, Paco. There's only one thing wrong with it." "What?", the other man asked. "One day all the gringo companies may be gone and all that will be left are companies from other countries who will take half of what we ask from them and have you hit. And they've never heard of extradition."
Of course nothing like the scenario above ever happens in real life. But how do you do business in a country where corruption is an unofficial part of the legal system?