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SEC Testimony of Robert Kistinger, January 6, 2000, p. 87.

The New Chiquita Papers: Secret Testimony and Internal Records Identify Banana Executives who Bankrolled Terror in Colombia

SEC Deposition Transcripts Detail Years of Payments to Colombian Paramilitary, Guerrilla Groups

Top Chiquita Exec: “Not Realistic” to Halt Colombia Operations over Guerrilla Payments

 

Posted April 24, 2017
National Security Archive Briefing Book No. 586
Edited by Michael Evans
For further information, contact: mevans@email.gwu.edu Twitter: @colombiadocs

 


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The “Cost of Doing Business in Colombia”

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Chiquita Papers Home

Chiquita Papers Document over $800,000 in Payments to Colombian Guerrillas

The New Chiquita Papers: Secret Testimony and Internal Records Identify Banana Executives who Bankrolled Terror in Colombia

Chiquita’s Terrorist Funding, Bureau of Prisons Admits CIA Afghanistan Prison Visit, and More.

Court Rejects Chiquita's Bid to Hide Terror Payment Records

“Did your fruit fund terrorists?” New Report Asks Why Chiquita Blocked 9/11 Victims Bill

Judge Rejects Chiquita’s Effort to Block Release of Documents on Terror Payments

Big Victory for Plaintiffs in Chiquita Paramilitary Suit

The “Cost of Doing Business in Colombia”

The Chiquita Papers: Banana Giant's Paramilitary Payoffs Detailed in Trove of Declassified Legal, Financial Documents

 

CHIQUITA PRESS LIST

“Colombians Seek Probe of Chiquita Execs for Terror Funding”
by Associated Press, The New York Times, May 18, 2017

“Colombians Seek Probe of Chiquita Execs for Terror Funding”
by Associated Press, The Washington Post, May 18, 2017

“Colombians Seek Probe of Chiquita Execs for Terror Funding”
by Associated Press, U.S. News and World Report, May 18, 2017

“La Bananera Chiquita Acusada de Crímenes Contra la Humanidad”
by Mercedes Arancibia, Periodistas en español.com, May 20, 2017

“How Bananas Became Big—and Dangerous—Business in Colombia”
by Rick Paulas, Pacific Standard, May 19, 2017

“Con prueba en mano piden investigar a ejecutivos de Chiquita Brands por vínculos con Paramilitares”
Caracol Radio, May 19, 2017

“Piden a la CIP investigar a directivos de Chiquita Brands”
El Tiempo, May 18, 2017.

“Organizaciones piden a la CPI investigar role de Chiquita Brands en el conflicto armado”
El Espectador, May 18, 2017

“Pedirán a CPI indagar cúpula de Chiquita por apoyar paramilitares en Colombia”
Agencia EFE, May 18, 2017

“Piden a la Corte Penal Internacional investigar a Chiquita Brands”
by AFP, El Colombiano, May 18, 2017

“Chiquita Papers Reveal of $800,000 paid to Colombia Guerrillas”
by Stephen Gill, Colombia Reports, May 15, 2017

“Chiquita Papers Expose Executives”
by Marina Wang, Bogota Post, May 12, 2017

“La Sociedad Civil Lleva a Chiquita Brands ante la Corte Penal Internacional”
by Pilar Chato, Colombia Plural, May 18, 2017

“Defensores piden investigar a Chiquita Brands”
El Colombiano, May 19, 2017

“Piden a la CPI investigar a directivos de Chiquita Brands”
El Tiempo, May 18, 2017

“Colombia Chiquita Brands Paid Armed Groups for Defense: Report”
Telesur, May 3, 2017

“Chiquita ‘Contributed’ to Colombian Paramilitary Crimes, ICC told”
by Stéphanie Maupas, Justiceinfo.net, May 18, 2017

“New ‘Chiquita Papers’ Expose how Banana Execs Fueled War and Terror in Colombia for Decades”
Telesur, April 25, 2017

 

IN THE NEWS


“Did Your Fruit Fund Terrorists?”
By Natasha Del Toro, Fusion Media
October 8, 2014

"Underreported: The Chiquita Papers"
Radio Interview: The Leonard Lopate Show (WNYC)
April 14, 2011

"Court Documents Reveal Chiquita Paid for Security"
By Jim Lobe and Aprille Muscara
Inter Press Service
April 7, 2011

"Chiquita pagó por seguridad a 'paras': NSA"
El Espectador (Colombia)
April 6, 2011

"Militares colombianos habrían incentivado a Chiquita a pagarle a Auc"
El Tiempo (Colombia)
April 7, 2011

"Lo que prueban los memorandos de Chiquita Brands"
La Silla Vacía (Colombia)
April 11, 2011

"La práctica teórica"
By Antonio Caballero
Semana (Colombia)
April 9, 2011

"Cuestión de tiempo"
By Laura Gil
El Tiempo (Colombia)
April 7, 2011

"El oro del diablo"
By German Patiño
El País (Colombia)
April 10, 2011

"El Ejército pidió el primer aporte para los paramilitares"
Noticias Uno (Colombia)
April 11, 2011

"Revelan amplia relación de la bananera Chiquita con paramilitares colombianos"
By David Brooks
La Jornada (Mexico)
April 8, 2011

"Chiquita pagó por seguridad a los 'paras' de Colombia"
El Comercio (Ecuador)
April 7, 2011

 

TIMELINE

timeline

Washington, D.C., April 24, 2017 - Ten years ago, Chiquita Brands International became the first U.S.-based corporation convicted of violating a U.S. law against funding an international terrorist group—the paramilitary United Self-defense Forces of Colombia (AUC). But punishment for the crime was reserved only for the corporate entity, while the names of the individual company officials who engineered the payments have since remained hidden behind a wall of impunity.

As Colombian authorities now prepare to prosecute business executives for funding groups responsible for major atrocities during Colombia’s decades-old conflict, a new set of Chiquita Papers, made possible through the National Security Archive’s FOIA lawsuit, has for the first time made it possible to know the identities and understand the roles of the individual Chiquita executives who approved and oversaw years of payments to groups responsible for countless human rights violations in Colombia.

Today’s posting features the first in a series of articles published jointly by the National Security Archive and Verdad Abierta highlighting new revelations from the Chiquita Papers, identifying the people behind the payments, and examining how the Papers can help to clarify lingering questions about the case.

* * *

 

The New Chiquita Papers: Secret Testimony and Internal Records Identify Banana Executives who Bankrolled Terror in Colombia

 

In the last few years of the 1990s, Chiquita Brands International, the U.S.-based fruit company, fell under a cloud of suspicion. An exposé in the Cincinnati Enquirer, the company’s hometown paper, revealed some of the banana giant’s dirtiest secrets—among them: the messy fallout from bribes paid to Colombian customs agents by officials at Banadex, Chiquita’s wholly-owned Colombian subsidiary.

The Securities and Exchange Commission (SEC)—the U.S. financial crimes watchdog—was also looking into the bribery allegations. The agency subpoenaed thousands of Chiquita’s internal records and soon made a startling discovery. Tucked away in the same accounts where Chiquita concealed the bribes were millions of dollars in additional payments to a rogues’ gallery of armed groups, including leftist insurgents, right-wing paramilitaries, notorious army brigades, and the controversial, but government-approved, “Convivir” militias.


SEC Testimony of Robert Kistinger, January 6, 2000, p. 87.

With these documents in hand, the SEC deposed seven Chiquita executives, each of whom played a different role in administering the so-called “sensitive payments.” In secret testimony on January 6, 2000 Robert F. Kistinger, head of Chiquita’s Banana Group based in Cincinnati, Ohio, told the SEC he had direct knowledge about many of the payments to armed groups, especially when they began in the late 1980s, but claimed that he had become less and less involved with the specifics over time. In his view, the amounts of money paid to the groups—hundreds of thousands of dollars per year—were simply not large enough to affect the company’s bottom line.

Kistinger, who is a named defendant in a massive civil litigation case pending against former Chiquita executives in U.S. federal court, and a likely target of future investigations in Colombia, said it was “not realistic” to halt Chiquita’s Colombia operations over such insignificant amounts of money. “I’m sorry,” he said, “it doesn’t hit the scorecard.”

“We’re not going to stop doing business in Colombia, because, you know, we’re going to have to spend an extra $25,000. That’s not realistic. Right?”

In 2013, Chiquita brought a rarely-seen “reverse” Freedom of Information Act (FOIA) lawsuit against the SEC in an effort to block the agency from releasing transcripts of these depositions (and thousands of additional documents) to the National Security Archive, a non-governmental research group based in Washington, D.C. Two years later, a federal appeals court panel rejected Chiquita’s claim, clearing the way for the release of more than 9,000 pages of the company's most sensitive internal records.

It’s easy to see why the company would want to keep them under wraps. The secret, sworn statements from the SEC probe are the de facto oral history of Chiquita’s ties to terrorist groups in Colombia—a unique and damning firsthand account of how one multinational corporation developed and routinized a system of secret transactions with actors on all sides of the conflict in order to maintain normal business operations—even thrive—in one of the most conflictive regions of the world, all the while treating the payments as little more than the “cost of doing business in Colombia.”[1]


Chiquita auditor's notes, ca. 1997.

This article is the first in a series from the National Security Archive and Verdad Abierta, the award-winning Colombian news website, highlighting new revelations from the Chiquita Papers, identifying the people behind the payments, and examining how the Papers can help to clarify lingering questions about the case. What was behind Chiquita’s decision to wind down payments to guerrillas and increase payments to their right-wing rivals? Exactly how much money did Chiquita pay to the various armed groups? What was the role of the Colombian security forces in encouraging the tilt toward paramilitaries? Did Chiquita knowingly fund specific acts of violence? And at what point did employees and executives with knowledge of the payments understand that the company was dealing with paramilitary death squads and not a government-sponsored militia group?

 

* * *

 

The new set of Chiquita Papers has for the first time made it possible to know the identities and understand the roles played by individual Chiquita executives like Kistinger who approved and oversaw years of payments to groups responsible for countless human rights violations in Colombia. These records are of particular importance now that Colombian authorities have signaled that they are prepared to prosecute business executives for funding groups that committed war crimes and other atrocities during the conflict.

Ten years ago, Chiquita became the first major multinational corporation convicted of “engaging in transactions with a specially-designated global terrorist.” In a March 2007 sentencing agreement with the U.S. Department of Justice (DOJ), Chiquita admitted transferring some $1.7 million[2] to the United Self-defense Forces of Colombia (AUC) from September 10, 2001, when the group was first named on the U.S. State Department's terrorist list, through June 2004, when the payments ceased.

Even after outside attorneys warned in February 2003 that it “[m]ust stop payments” to the outlaw paramilitary organization, Chiquita continued to pay the AUC for another 16 months. Until that point, Chiquita’s strategy, set forth by senior executives in Cincinnati, was to “just let them sue us, come after us.”[3]

The AUC was a loose federation of rightist militants and drug traffickers responsible for a terrible legacy of violent acts in Colombia going back to the 1980s. Chiquita began to pay the AUC sometime in 1996-1997, just as the group launched a nationwide campaign of assassinations and massacres aimed at unionists, political activists, public officials and other perceived guerrilla supporters, often working with the collaboration or complicity of Colombian security forces. Over the next several years, the AUC dramatically increased its numbers and firepower, raised its political profile, infiltrated Colombian institutions, drove thousands of Colombians from their homes, and for the first time challenged guerrilla groups for control of strategic areas around the country.

Chiquita agreed to pay a relatively modest $25 million fine as part of its deal with the DOJ, but not a single company executive has ever been held responsible for bankrolling the AUC’s wave of terror. Nor have any Chiquita officials faced justice for millions more in outlays to the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN), the Popular Liberation Army (EPL), and practically every other violent actor in the region.

Efforts to hold individual Chiquita executives accountable for financing the groups are complicated by a deliberate decision on the part of the U.S. Justice Department to withhold the names of the people behind the payments scheme. At the September 2007 sentencing hearing in the terror payments case, U.S. government attorneys specifically argued against the public identification of the Chiquita officials “to protect the reputational and privacy interests of uncharged individuals.”

Instead, the Factual Proffer memorializing the plea agreement revolves around ten anonymous “Relevant Persons” identified only as “Individual A” through “Individual J.” The public version of a 2009 report by Chiquita’s Special Litigation Committee (SLC) likewise omits the names of most of the individuals identified in the report, replacing them with anonyms like “Chiquita Employee #2,” “Banadex Employee #1,” and “Chiquita lawyer.”

In 2011, the Archive published its first Chiquita Papers, posting, revealing, among other things, that the company appeared to have engaged in quid pro quos with guerrilla and paramilitary groups in Colombia, contrary to the Factual Proffer’s finding that Chiquita had not derived any benefit from the payments.


The original Chiquita Papers revealed the company had engaged in quid pro quos with guerilla and paramilitary forces in Colombia

The first Chiquita Papers collection offered some important new revelations, but lacked a coherent contextual narrative. There were few indications as to who had written the documents, and it was nearly impossible to say for sure how the named individuals related to one another. Handwritten notes, auditing records, legal memos, and accounting schedules—among thousands of pages of internal records released under FOIA by the DOJ—offered tantalizing clues, but few concrete conclusions could be drawn from them.

The key that unlocks many of the mysteries of the Chiquita Papers is the secret testimony given by Kistinger and six other Chiquita officials during the SEC’s expansive bribery investigation. Through a relatively simple, if laborious, process of cross-referencing among the three sources, it is possible to identify almost all of the individuals whose names were scrubbed from the Factual Proffer, the SLC Report, and the SEC testimony—effectively stripping away the redactions that have shielded Chiquita personnel from scrutiny and that have helped guarantee impunity for individuals linked to the payments.

The records are the primary evidence behind a 2016 declaration (submitted by the author) identifying Chiquita “persons of interest” in the pending U.S. civil litigation. Those positively identified through this process include members of Chiquita’s board of directors, the corporate security team, regional and country operations managers with responsibility for Colombia, accountants and internal auditors, attorneys, and third-party bagmen who, over more than a decade, facilitated, negotiated, and delivered payments directly to guerrillas and paramilitary groups.

As the most thoroughly-documented case study on the role of multinational corporations in Colombia’s conflict, the new set of Chiquita Papers should factor into the forthcoming investigations of transitional justice authorities created by the recent peace accord with the FARC. The Special Jurisdiction for Peace (JEP) will prosecute the most serious crimes committed during the conflict, while the recently-approved Colombian Truth Commission is an extrajudicial body established to provide clarification about the worst abuses of the conflict and to explain the phenomena that perpetuated the longest continuous war in the world.

* * *

Buried inside nearly 400 pages of SEC testimony are many of the clues needed to learn the identities of executives and managers at Chiquita who authorized and carried out the “sensitive payments” program but whose names Chiquita, the DOJ, and the SEC tried to hide from public view.

One of the witnesses who is easier to identify is John Ordman, who was Senior Vice President of European Banana Sourcing for the Chiquita Fresh Group. SEC censors redacted almost every indication of his identity from the transcript, save for one, near the beginning, in which he was asked to spell his last name (“O-r-d-m-a-n”).


SEC Testimony of John Ordman, September 23, 1999, p. 5.

By linking Ordman to this particular testimony, it becomes clear that he is “Chiquita Employee #2” in the SLC report and also “Individual J” in the Factual Proffer, and was for many years a central player and an important informational link in the secret payments operation. As “Individual J” in the Factual Proffer, we now know that Ordman was specifically instructed to “continue making payments” to the AUC on May 5, 2003, long after the company realized that to do so was a felony violation of a U.S. law against funding terrorism.[4]

Based in Costa Rica, Ordman was a key link between Chiquita’s Colombian operations and senior executives at company headquarters in Cincinnati. He told the SEC he had “bottom line operational responsibilities” for “essentially all of Chiquita’s activities in Colombia” for more than a decade after Chiquita returned to Colombia in the late 1980s. His main point of contact was the general manager in Colombia, who personally approved many of the payments.

Ordman’s testimony confirms that the guerrilla payments were “a big deal” in Cincinnati and were discussed “at some pretty high levels in Chiquita.”

“[S]o it was discussed with me and I discussed it with my boss and so forth and so on.”


SEC Testimony of John Ordman, September 23, 1999, p. 67.

The testimony of Ordman’s direct superior, Robert Kistinger, is equally revealing. As Senior Executive Vice President of the Banana Group and later President and Chief Operating Officer of Chiquita's Fresh Group in Cincinnati, Kistinger, like Ordman, was well aware of the security challenges in Colombia and was directly involved in creating and overseeing corporate policies governing payments to armed groups.

His vivid accounts of the dire security situation there are key to identifying him as one of the seven SEC witnesses and as one of the ten “Relevant Persons” whose names were censored from DOJ’s Factual Proffer.

For example, in one of the SEC transcripts, the witness characterizes Colombia as “somewhat of a war zone” exactly matching a quote that the SLC report attributes directly to the “SEC testimony of Robert Kistinger.”[5]


Report of Chiquita's Special Litigation Committee, p. 58.

Compare the above text to the raw transcript from the SEC interview, below.


SEC Testimony of Robert Kistinger, January 6, 2000, p. 37.

From there, it is relatively simple to identify Kistinger as the Factual Proffer’s “Individual D,” one of two Chiquita executives who told Colombia-based staff to “continue making payments” to the AUC on April 8, 2003.[6]


The Factual Proffer in the terrorist payments case omits names of individuals behind the scheme.

As with Ordman, the Kistinger testimony provides a wealth of new information on how “sensitive payments” were approved and managed at the company and includes critical information about the corporate chain-of-command. Kistinger confirms that the general manager and the chief accounting officer at Banadex—the officials responsible for the routine management of the payments—reported to him through Ordman, and that Kistinger then reported to Dennis Doyle, who approved the company’s first payment to the FARC in the late 1980s.[7]


SEC Testimony of Robert Kistinger, January 6, 2000, p. 17.

Later in his testimony, Kistinger again confirmed that most of the information he received about payments to illegal groups came from Ordman. Asked how he learned about the approval process for “sensitive payments,” Kistinger replied, “Discussions with John.” When asked to verify whether a statement was an accurate characterization of “the level of detail” about guerrilla payments “[t]hat Ordman was giving you,” Kistinger replied, “Yes…Absolutely.”


SEC Testimony of Robert Kistinger, January 6, 2000, pp. 73-74.

* * *

To Ordman and Kistinger, who were based outside of the Colombian “war zone,” payments to insurgents and death squads, alarming at first, soon became business as usual—the price to be paid for access to the rich plantations of Colombia’s violently-contested Atlantic coast.

In their SEC statements, both describe a process of becoming comfortable with the legal justifications in place and the specific procedures the company had established to handle the payments.

Kistinger said he viewed the payments as a “normal expenditure,” not unlike the purchase of fertilizers or agrichemicals—“an ongoing cost” of the company’s business operations.


SEC Testimony of Robert Kistinger, January 6, 2000, p. 82.

Ordman also preferred to focus on the big picture, describing an increasingly hands-off approach to the payments where he was mainly “concerned about the general level of activity,” the size of the expenditures, and the general trend in payment activity—whether the amounts paid were fluctuating for any reason. Ultimately, he said he was “comfortable that this was being handled in a responsible way”—that the payments were “not being handled willy-nilly or out of control.” Of the groups on the receiving end of those payments, Ordman said he “knew them to be taken seriously.”


SEC Testimony of John Ordman, September 23, 1999, p. 70.

No one took the illegal armed groups more seriously than the people whose job it was to secretly negotiate, approve, and deliver cash payments to them. The SEC transcripts reveal that Chiquita’s Colombia-based staff were less comfortable with the payments than their bosses in Costa Rica and Cincinnati, and that at least one employee openly questioned whether the company had moved beyond protection payments and was willingly funding the operations of violent groups.

The story of these individuals—country operations managers, accountants, security personnel, and the shadowy network of intermediaries they relied on to communicate with insurgents and paramilitaries—will be the subject of the next article in this series.

 

THE DOCUMENTS


 

NOTES

[1] See, “The ‘Cost of Doing Business in Colombia,’”Unredacted (the National Security Archive blog), April 7, 2011. https://nsarchive.wordpress.com/2011/04/07/the-cost-of-doing-business-in-colombia/

[2] $1.7 million figure is not adjusted for inflation.

[3] SLC Report, p. 89, fn. 132.

[4] For instance, the “O-r-d-m-a-n” testimony includes a portion where he says he was told that by another employee that he had approved an illegal bribe to a Colombian port official, “because I was absolutely convinced that it was a payment to the guerrillas...” SEC Testimony of John Ordman, p.155.


SEC Testimony of John Ordman, September 23, 1999

In the SLC report, the exact same quote, uttered in the same context, is attributed to the SEC testimony of “Chiquita Employee #2,” indicating that this individual is probably John Ordman.

According to [Chiquita Employee #2’s] SEC testimony, [Banadex Employee #1] told him that he approved the customs payment because he “was absolutely convinced that it was a payment to the guerrillas. . . .” SLC Report, p. 56, fn. 79.

A similar process was used to determine that Ordman is also the Factual Proffer’s “Individual J,” who the Justice Department said was told to “continue making payments” to the AUC on May 5, 2003. The SLC report describes a remarkably similar conversation of May 5, 2003, in which Ordman (here as “Chiquita Employee #2”) and another individual (who has been separately identified as another person) are told by a “Chiquita lawyer” to resume making payments to the AUC. SLC Report, 95.

[5] Kistinger is one of several Chiquita executives who is named in the SLC Report.

[6] The SLC reveals that at this meeting Kistinger and Olson (along with a Chiquita lawyer and “Chiquita Employee #1”) met with Banadex Employees #5 and #10 and told them to continue making payments to the AUC. SLC Report, p. 89. As “Individual C” has been separately identified as Robert Olson, “Individual D” is Robert Kistinger.

[7] SLC Report, p. 30.

 

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