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Banana Republics and Bad Apples Abroad

Last month, quietly overshadowed by a summer of celebrity deaths and violent instability in the Middle East, the Eleventh Circuit Court of Appeals dismissed a lawsuit against the American produce company Chiquita. Filed on behalf of over 4,000 Colombians, the suit alleged that Chiquita financed and provided logistical support for United Self-Defense Forces of Colombia, a violent right-wing militia known primarily for the murder and kidnapping of leftists during Colombia’s civil war.

Chiquita already admitted to doing as much in 2007 when they pleaded guilty to giving the AUC (the Spanish acronym for United Self-Defense Forces of Colombia), a terrorist organization, almost $2 million to smooth its operations in the country. In other words, Chiquita hired a private army to do whatever it deemed necessary in the name of “protection” so that it could make more money.

After acknowledging they had conducted financial transactions with a terrorist organization, Chiquita agreed to a $25 million settlement as part of a plea agreement. According to the Justice Department, between 1997 and 2004 (the years in which the United States government officially designated AUC as a terrorist organization), Chiquita had made $1.7 million in payments to AUC through its Colombian subsidiary Banadex.

Fernando Aguirre, then CEO of Chiquita, classified the payments as extortion. He claimed that the company was paying for the safety of its employees in a chaotic and war-torn environment. In fact, it was integral to the plea agreement that Chiquita should claim that the company never directly paid for security services.

The “we were the real victims here” attitude was eventually repudiated by Chiquita company internal memos gathered through an FOIA request by the George Washington University Law School and the Digital National Security Archive. According to Michael Evans, the director of the National Security Archive’s Colombia documentation project:

These extraordinary records are the most detailed account to date of the true cost of doing business in Colombia. Chiquita’s apparent quid pro quo with guerrillas and paramilitaries responsible for countless killings belies the company’s 2007 plea deal with the Justice Department. What we still don’t know is why U.S. prosecutors overlooked what appears to be clear evidence that Chiquita benefited from these transactions.

In other words, Chiquita paid militias, who killed or kidnapped the people standing in their way of their profits—mostly union leaders, students, and relatively powerless farmers. By 2003, Banadex in Colombia was Chiquita’s “most profitable operation.” That’s what Chiquita got in return for its investment in AUC.

All this being known, why was the most recent suit thrown out? Well, you can blame our über business-friendly Supreme Court for their narrowest-of-narrow way of implementing something called the Alien Tort Statute.

In theory, the ATS allows citizens living in other countries to sue Americans for committing human rights abuses. But a precedent set by the Supreme Court last year in Kiobel v. Royal Dutch Petroleum makes it inordinately difficult to bring these kinds of suits forward. Using the logic of Kiobel, the Eleventh District Appellate Court threw out the Chiquita case because the crimes that occurred abroad did not “touch and concern” the United States, as the decision states. Still, assuming that that’s true (and we should not be not convinced that it is), of what value would such a narrowly defined ATS be? It hardly seems like a deterrent to corporations subsidizing violence at all.

The Chiquita suit is emblematic of a huge legal loophole, but it isn’t an isolated incident. American companies often use the rest of the Western hemisphere as their lawless playground, while U.S. law provides little to no legal recourse for the people who live there. Coca-Cola, for instance, has become a favored cause for college-age activists in America to rally around in the past decade; “the new Nike,” as some have labeled it. The “Killer Coke” movement has focused on the killing of eight workers—one a prominent union leader—by right-wing mercenaries at a Coke bottling factory in Colombia, allegedly at the behest of the company itself.

The incident led to a 2001 lawsuit filed by the United Steel Workers of America and the International Labor Rights Fund on behalf of the workers against Coca-Cola, alleging that the company “hired, contracted with, or otherwise directed paramilitary forces.” The case was eventually dismissed, but an official New York City fact-finding delegation did corroborate the workers’ story in 2004. The delegation found evidence to support Coca-Cola being at least partially responsible for kidnap, torture, and murder. In all, they found at least 179 instances of human rights violations by Coca-Cola in Colombia.

Even more recent than the cases in Colombia, and maybe scarier to Americans by virtue of proximity, is the case of Wells Fargo Bank working in tandem with Mexican drug cartels. Wachovia, purchased by Wells Fargo in 2008, admitted its guilt in laundering as much as $420 billion for the cartels. At least in this case they were punished, even if it was just a slap on the wrist, with a $160 million fine for violating the Bank Secrecy Act. $420 billion is a lot of money to be kept secret. One can only imagine how much weaponry, ammo, bribes, and assassinations it could pay for.

Although the numbers involved are shocking, the crime isn’t anything new. American capital has been used to finance the violent repression of democratic movements in America for at least as long as there has been a global economy to manipulate. The United Fruit Company, for example, had a record of subsidizing brutal regimes and lobbying for the suppression of populist action. Their stranglehold on Central America is legendary, fictionalized in literature by writers such as Gore Vidal and Gabriel García Márquez, and even earning the moniker “el pulpo,” or “the octopus,” in popular vernacular.

It shouldn’t come as a surprise that United Fruit’s intervention in the inner workings of Central American governments is where the term “Banana Republic” originates. Two of United Fruit Company’s most legendary exploits (a term meant literally in these cases), were its involvement with the 1954 coup in Guatemala and the 1928 “Banana Massacre” in which the United Fruit Company successfully lobbied the Colombian government to violently suppresses a labor strike. United Fruit Company eventually merged with AMK in 1970 to become United Brands Company. United Brands was transformed in 1984 into, you guessed it, Chiquita Brands International. The more things change, etcetera.

So what does this all add up to? We have Chiquita paying off murderers. We have Coca-Cola doing the same. We have Wachovia helping to finance the brutality of drug cartels. And we have a recorded legacy of this kind of thing going back before the Second World War. It adds up to more than just a trend, more than a series of random events, and it should compel us to demand more than piecemeal corrective actions like “fixing” the Alien Tort Statute. Instead, we should be shocked into the recognition of how global capitalism actually operates.

These aren’t “bad apples.” This is the heart of it. As a resident of Gabriel García Márquez’s fictional town of Macondo says after his home is wrecked by the greed of an international fruit corporation, “Look at the mess we’ve got ourselves into just because we invited a gringo to eat some bananas.”


[This post has been updated to correct the spelling of Colombia. Our apologies to both South Carolina and South America.]