Chiquita Brands: Guilty Plea on Dealings with Colombian Terrorists

Cincinnati-based Chiquita Brands International will plead guilty to charges of violating federal law by doing business with terrorists. The plea is part of an agreement with the Department of Justice that will also require the company to pay a $25 million fine. The DoJ accused Chiquita's Colombian banana-producing subsidiary of paying $1.7 million to the right-wing United Self-Defense Forces of Colombia [AUC] in at least 100 installments from 1997 through 2004. Payments went on even after the company was informed that the group had been designated a terrorist organization in 2001. Chiquita is also alleged to have paid off the left-wing Revolutionary Armed Forces of Colombia [FARC]. According to a company statement, Chiquita voluntarily informed the U.S. government in 2003 that it had been forced to pay extortion to the groups. "The payments made by the company were always motivated by our good faith concern for the safety of our employees," Chiquita said. In 2004, the company sold the Colombian banana business to Invesmar Ltd. for $51.5 million.

Sources: Bloomberg, MarketWatch (I, II)
Commentary: Jim Cramer's Mad Money Lightning Round Picks, Feb. 7 • Chiquita Brands Is Appealing, Just Be Careful Not To Slip • A Contrarian Strategy For Quick Capital Gains
Stocks/ETFs to watch: Chiquita Brands International, Inc. (CQB). Competitors: Fresh Del Monte Produce Inc. (FDP)

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