Wednesday, March 21, 2007

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?

25 Comments:

Blogger TIMOTHY H said...

colombia

3/21/2007 06:46:00 PM  
Blogger wretchard said...

fixed

3/21/2007 06:51:00 PM  
Blogger TIMOTHY H said...

The assumption that United States of America law and the realities on the ground in countries such as Colombia are congruent is fallacious. Compliance with USA law, as the post intimates, requires withdrawal from business and commerce in such countries, where the competition is not hobbled by USA law. ( Analogy: the EU and the Middle East ).
The larger question is how to apply the Monroe Doctrine in this century when local politics in South and Central America are as they are.

3/21/2007 06:59:00 PM  
Blogger Charles said...

what's happening now is that amnesty working its way through congress-- is going to provide the grounds for "harmonizing" the USA system so that its more in line with the countries south of the border....rather than vice versa.

3/21/2007 07:29:00 PM  
Blogger Doug said...

Saudis pay much greater sums in DC as protection money for their agents in this country and their supporting organizations like CAIR.
Karen Hughes is of course fine with that, and welcomes them to the Whitehouse.
Ms Pelosi and Co gave them a forum in Congress.
Bipartisan support for the terrorists.
They must be on our side, I guess.
---
And of course Hormel and the rest pay their protection money to the various entities they need to pay so that raids on illegals remain at token levels.

3/21/2007 08:03:00 PM  
Blogger Elmondohummus said...

"...how do you do business in a country where corruption is an unofficial part of the legal system?"

That's also an issue in the Philippines, as you well know Wretchard. Problem is, I'm not sure there's any good answer.

3/21/2007 08:11:00 PM  
Blogger Ben said...

I don't believe in paying protection money. I believe in taking protection money and investing it in killing the people trying to extort you. If done correctly this option doesn't violate U.S. law.

3/21/2007 08:15:00 PM  
Blogger Doug said...

RITA COSBY, HOST, 'LIVE AND DIRECT': [This gang has committed one of the most] horrific crime scenes ever witnessed by law enforcement, young men, women and children brutally murdered with machetes. These innocent victims were slaughtered and dismembered for no reason at the hand of MS-13.

La Mara Salvatrucha, more commonly known as the MS-13, are considered by the FBI to be the most dangerous gang in the U.S., leaving their mark from El Salvador to Honduras to Guatemala to New Mexico, and now on U.S. soil.

In the last decade, the United States has experienced a dramatic increase in the number and size of this transnational street gang, which has quickly became a nationwide problem.

SAM DEALY, “READER'S DIGEST”: This is a problem that the federal government actually created.

COSBY: Sam Dealy is a reporter for “Reader's Digest,” which did an investigative expose on the MS-13 gang.

DEALY: Our default policy throughout much of the past decade has been simply to, when you catch these guys, deport them. And they head back to Guatemala, or El Salvador, or Honduras, and weak states back there can't control them.

COSBY: The majority of MS-13 members are foreign-born and are frequently involved in human and drug smuggling and immigration violations. Like most street gangs, MS-13 members are also committed to such crimes as robbery, extortion, rape and murder. They also run a well-financed prostitution ring.

This notorious gang, best known for their violent methods, can now be found in 33 states, with an estimated 10,000 members and more than 40,000 in Central America. The FBI says MS-13 are the fastest growing and most violent of the nation's street gangs. So much so, even other gangs fear them.

And you will be stunned to hear that this ruthless gang who will kill for the sake of killing has made its way to cities and suburbs across the country, even settling into small communities and boldly announcing their presence with violence.
Hat Tip Desert Rat:
@ MSNBC

3/21/2007 08:27:00 PM  
Blogger Teresita said...

Doug: Saudis pay much greater sums in DC as protection money...And of course Hormel and the rest pay their protection money...

The solution is obvious: Public financing of all political campaigns at all levels, with no private financing permitted at all. But the K Street lobbyists throw a fit every time someone brings that up.

3/21/2007 09:47:00 PM  
Blogger Alexis said...

ben:

I believe in taking protection money and investing it in killing the people trying to extort you.

And the next thing you know, you are getting served with a subpeona to answer questions at a congressional hearing investigating how an American corporation financed the presidential election of a politician with ties to right-wing death squads...

3/21/2007 09:49:00 PM  
Blogger Doug said...

OT, but well worth the read:
South Vietnam, 1963: Three Courses at the Diamond

Renowned author and reporter David Halberstam has a mesmerizing piece in Gourmet titled “The Boys of Saigon.”

The story revolves around the war reporters Halberstam ran with in Vietnam during the war, and an off-the-beaten-path restaurant called the Diamond. There the author and his cronies congregated for three-course meals prepared in a Vietnamese style tailored to American tastes. Here’s Halberstam writing about the meal:
---
Some of the best food stories are those that serve as bridges between the world of culinary delights and some other place—the entertainment industry, or the criminal underworld, or in the case of Halberstam’s piece, war journalism. Gourmands have a tendency to get lost in their own little self-contained universe of chefs, restaurants, ingredients, and recipes; the stirring thing about “The Boys of Saigon” is that its lushly detailed account of meals from long ago is set against a stark backdrop of daily deadlines, mounting casualties, and political pressure from both Saigon and Washington.

There are certain stories that make an entire magazine worth buying; this piece might justify half a subscription.
(It's in the Oct 2006 issue, in case you can find it at the library, or, if you're lucky, your wife's stash.)

3/21/2007 10:59:00 PM  
Blogger Doug said...

Cutler said...
Revel wrote in 1993:

"As citizens see modern democracy degenerating into political racketeering, as they increasingly feel that the way to get things done is to hustle the system rather than play by the rules, and as they see the system itself hijacked by special interests, you move toward a condition of democratic apathy.

When in a state that calls itself democratic you can no longer expect it to provide basic services effectively through the application of the law, not even security, indeed when it becomes apparent that the state itself - not to mention those who benefit from privileged relations with it - operates outside the law, why should anyone feel a duty to respect it?"
It has never been about 'cheap labor' or 'Mexican housemaids' or gardeners. It is about politicians who do not even think they need to bother with presenting the basic political case to the actual people in order to sell it.

They don't campaign for increased immigration, they simply allow it by deciding which laws they want to enforce. Basic corruption. If immigration laws do not matter, then none of them do. You don't pick and choose."

3/22/2007 12:51:00 AM  
Blogger Meme chose said...

The basic rule here is that Puritans look ridiculous as soon as they venture more than one hour from where they live. That's because their certainties are optimized for one thing: generating status distinctions in their immediate vicinity.

Puritans reside today in the US mostly on the left. That doesn't change what they are.

3/22/2007 01:03:00 AM  
Blogger wretchard said...

Elmondohummus,

I had the Philippines specially in mind. One expat described how, having paid bribes to the previous administration, a huge infrastructure project his firm had built was suddenly stopped in its tracks by the relative of a certain high Filipino official. "We already gave," was his company's excuse. "That was then, this is now," was the retort.

I have seen the gigantic infrastructure project, badly needed by the Filipinos completely idled with my own eyes. And it will remain idled, and the payments to the contractor suspended, until a certain individual is paid his cut.

Now suppose they were to pay, just to get back their investment. No doubt if the transaction came to light his firm would be taken to court in a foreign, I will not say American venue. And there will be no shortage of Filipino Senators, of all stripes, including those who took a cut who will rise in feigned outrage on the floor to denounce these corrupting foreign firms. And just like Marine Cpl. Daniel Smith, a huge leftist driven lynch mob will take this poor "foreign executive" to jail, where for a sum of money, he can be treated relatively well.

I say this simply to record what I think is true. And I suspect things are no different in Mexico or Cameroon.

I guess it would make nice case material for the Harvard Business School. But if I were to write it, the title would be "no way out". It's funny in a way. But you have to have gallows humor.

3/22/2007 03:33:00 AM  
Blogger wretchard said...

Sometimes I wonder how much mental dishonesty is costing the world. Mark Bowden, in his account of the pursuit of the Abu Sayyaf, has video of a local operator describing how he had to speak to the CIA liason man in "code". There were certain words he could not mention, certain concepts that could not be expressed even though they hung in the air like a malevolent apparition. And so it went, the Filipino talking to the American, the both talking in circles. Each struggling with the problem of not saying what they wanted to say when they wanted to say them.

This is extremely reminiscent of the interrogation problem. No one wants to authorize duress, even of the mild kind, but each devoutly hopes someone will "do the right thing" should the time come to save their skins, such as if a plot were discovered to blow up Capitol Hill.

How wonderful it would be if people simply came down honestly on one side or the other. But it seems to me that the entire art of politics comes to down to having your cake and eating it too.

3/22/2007 04:15:00 AM  
Blogger zgolem said...

The solution is obvious: Public financing of all political campaigns at all levels, with no private financing permitted at all.

This simply gives the largest special interest of all, the state, more control over the fundamental machinery of elections.

And does nothing to constrain real corruption. As long as the state is as powerful as it is, money will find its way into the pockets of those wielding power.

3/22/2007 04:59:00 AM  
Blogger Doug said...

"But it seems to me that the entire art of politics comes to down to having your cake and eating it too "
Just Buy Cake Credit Offsets!
Plant and equal amount of Sugar Cane.
---
---
Gore advised lawmakers to cut carbon dioxide and other warming gases 90 percent by 2050 to avoid a crisis.

Doing that, he said, will require a ban on any new coal-burning power plants—a major source of industrial carbon dioxide—that lack state-of-the-art controls to capture the gases.
---
Senator Jim Imhoff:
“Are you willing to make a commitment here today by taking this pledge to consume no more energy for use in your residence than the average American household by one year from today?” Senator Inhofe asked.

Gore Refused

3/22/2007 05:13:00 AM  
Blogger 2164th said...

wretchard said...
"Sometimes I wonder how much mental dishonesty is costing the world. Mark Bowden, in his account of the pursuit of the Abu Sayyaf, has video of a local operator describing how he had to speak to the CIA liason man in "code". There were certain words he could not mention, certain concepts that could not be expressed even though they hung in the air like a malevolent apparition..."

That my friend, is why it feels so good to tell someone to go fuck themselves.

3/22/2007 05:47:00 AM  
Blogger Elmondohummus said...

Wretchard, I think I know which Bowden article you're referring to. I need to head to the library to read it myself.

Also: The really maddening part about corruption in the Philippines is the general acceptance of it. Far, far too many politicians actually see it as just part and parcel of doing business in the Philippines, and don't appear to have any personal problems with it. Yet, they feign outrage whenever it's brought up by an outsider.

I still laugh when I recall the comment of one of my mother's old friends growing up. We were bouncing along a terrible, awful road between Bislig and Butuan in Mindanao. I commented that they should pave the whole damn thing, rather than stretches here and there. His comment: "According to Manila, it already is". 20 minutes later, he finishes the story about the money that was earmarked for such roadwork "disappearing". And how the local senator now has a really nice house in San Francisco, California, USA.

Granted, that's not the same sort of corruption you're talking about Wretchard. You're mentioning payola from businesses to government, and government in turn twisting the blame around and pinning it on the businesses, I understand that fully. But the point I'm making is that whatever form it takes, corruption is so damn commonplace that the effects are impossible to escape. Even in relatively "backwater" parts of the country.

It's so hypocritical and maddening. These are educated folks who are well aware of the relative lack of corruption in other countries; hell, a lot of them have homes here in the US that they frequent. And they know putting their hands out are impediments to progress. Yet they do it.

Maddening.

3/22/2007 06:18:00 AM  
Blogger RWE said...

Just who in the hell do the Chicita people think they are? Paying bribes to people in foriegn conutries just so they can do business!

Only the U.S. Government can do that!

And Wretchard, in regards to that Phillipine "conversation" you describe, it brings to mind that Monty Python sketch where a customer is advised by one manager to "add one thousand to any figure that salesman tells you" and the salesman tells him "just remember that anything my manager tells you you have to reverse 180 degrees."

3/22/2007 07:40:00 AM  
Blogger Charles said...

The north american union project:
http://www.canadafreepress.com/2007/deweese032207.htm


http://americas.irc-online.org/am/386

http://www.suesupriano.com/article.php?&id=3

http://www.newswithviews.com/guest_opinion/guest99.htm

3/22/2007 05:15:00 PM  
Blogger Mike H. said...

RWE, you have hit the nail on the head. In fact it looks as if you've used a framing hammer and sunk the thing. The US Gov. is the only one that can bribe anyone in South America. The answer is simple, United Fruit should give the money to Rep. Jefferson to take down to bribe the folks. Case closed.

3/22/2007 08:48:00 PM  
Blogger PapaBear said...

When you have a culture of corruption, it's hard to remove it. Politicians can only get elected if they promise to pay off the people who got them elected, by stealing from other parties. And it's impossible to stop the corruption, because too many powerful people are dependent on the corruption continuing

I forget whether it was Jefferson or Franklin who said that democracy only works for a virtuous population. It's true. A corrupt population that tolerates corruption will inevitably lead to a dictatorship, simply because it's cheaper to keep one dictator in spendor than it is to tolerate thousands of corrupt officials each taking his cut

3/23/2007 05:23:00 AM  
Blogger Charles said...

I have posted on the Freerepublic thread Called America's Most Dangerous Gang

I received the comment below in reply.
///////////////////

Cal and CKilmer, thank you for the pings, good info you have here.

There is another trend in this gang war, it is happening, and few are aware of it.

The Mexican gangs are killing African Americans, no not for rival gang warfare, but for skin color.

I have picked it up, and wondered if my thoughts were right, but am now hearing it said in the news reports and a little on talk radio. I listen to San Francisco, Denver and Las Vegas, for the talk shows, about 24 hours a day, as I do not watch tv.

I have had Google alerts set for roadside snipers, drive by shooters and mall shooting for a couple of years, the one thing that comes up when you check the articles, is that the dead person was not in any way related to a gang.

This morning on KDWN out of Las Vegas, the radio report was for a car with 4 mexicans, who had drove by and shot into a crowd of African Americans, that were behind a Casino, one was dead, several others hit.

I find it in towns all over the U.S.

No, I don't have a firm opinion of what is behind it, the communist groups are strong in Mexico and the other latin countries, but so is the muslim religion, it has been said that there are jihad training camps in Mexico.

We know the dope comes from Mexico.

I could understand a race war, involving rival gangs, but that is not what I find.

Denver and Las Vegas both have many, often several a day of the drive by shootings, it is not always youths, in the NE, it will be men, stopped in a car, at a stop sign.

In Denver a few months ago, it was a Police Officer, at a stop sign.

There have been several 2 year old children killed, not gang related.

And these are just the ones that i have caught, many days may go past, that I do not have time to look at the alerts.

3/23/2007 08:34:00 AM  
Blogger RWE said...

Mike H:
I suppose everyone would have been much happier if Chicita had used their money to raise an army, defeat both the Left Wing and Right Wing (although there really is no such thing) guerillas, and installed a government there more to their liking.

Perhaps a government headed by William Jefferson? Or William Jefferson Clinton?

3/23/2007 11:54:00 AM  

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