The Banana files: Central America Part I

Chiquita SECRETS Revealed; Editor’s note; Stories pierce veil of

Publication: Cincinnati Enquirer
Date: May 3, 1998
By: Lawrence K. Beaupre

Two thousand miles from its banana plantations in Central America,
Chiquita Brands International Inc. is one of Cincinnati’s most
prominent corporations. It is also one of its most secretive.

Controlled by financier Carl H. Lindner Jr., whose aversion to the
press is legendary, Chiquita nevertheless has been thrust
prominently into the public realm in recent years.

As the stories on A1 and in this section describe, Chiquita is
involved in political, environmental, legal and labor controversies
in many parts of the world.

A year ago, The Cincinnati Enquirer decided to look beyond the
company’s press releases to gain a better understanding of how the
Cincinnati-based banana giant operates.

Reporters Mike Gallagher and Cameron McWhirter undertook a wide-
ranging investigation into Chiquita’s business practices. After
conducting scores of interviews in the United States and reviewing
numerous public and internal documents, Mr. Gallagher and Mr.
McWhirter traveled late last summer to Costa Rica, Honduras, Panama,
and the Caribbean islands of St. Lucia and Dominica. They also
traveled to Brussels, Antwerp, Vancouver, New York and Washington,

They spoke to a wide range of sources, including farm laborers and
managers, environmentalists, government officials, financial
experts, lawyers, professors and others.

They interviewed numerous Chiquita executives, who spoke on the
condition of anonymity for fear of retribution. Extensive
documentation also was provided by sources or obtained elsewhere.

Those records included more than 2,000 copies of taped voice mail
messages. These were provided by a high-level source who was one of
several Chiquita executives with authority over the company’s voice
mail system.

The source also provided copies of the same tapes to the U.S.
Securities and Exchange Commission, which has launched its own
investigation into Chiquita.

Chiquita executives often used voice mail as internal memoranda,
often “copying” other executives, sometimes as many as five or six,
with the same message. Many of the messages were highly detailed.

Chiquita executives refused repeated requests for interviews.
Instead, they designated lawyers from the Washington, D.C., office
of Kirkland & Ellis to take questions and provide company answers in
writing. There was none of the give-and-take of a normal interview.

Chiquita, through its lawyers, provided hundreds of pages of
comments and documents, though some of it was not responsive to the
actual question asked. In several cases, Chiquita chose not to
provide any response at all.

We are confident that thorough reporting for more than a year has
resulted in an accurate and eye-opening portrait.

Readers with information or comments may contact us by e-mail at or write to me at The Cincinnati Enquirer,
312 Elm St., Cincinnati, OH 45201.

About the staff

Mike Gallagher, 40, investigative reporter, joined the Enquirer in
1995. He reported and wrote the Enquirer’s award-winning series in
1996 on problems with the cleanup of the uranium-processing plant at
Fernald. E-mail: 75057,

Cameron McWhirter, 34, has been an investigative reporter with the
Enquirer since 1994. His award-winning projects have included an
examination of dangerous flaws in the nation’s interstate parole
system. In 1996, the newspaper sent him to Bosnia to report on the
war’s impact. E-mail:

David Wells, 46, local news editor at the Enquirer, has been with
the newspaper since 1974. He oversees the local news department and
personally directs the investigative team.

Designed by Ron Huff and John Humenik. Graphics by Randy Mazzola.
Maps by Ron Cosby.

All photographs in this report by Mike Gallagher, Cameron McWhirter
or taken from Enquirer files unless otherwise noted. Photo of Sam
Zemurray by Elliot Elisofen, Life Magazine, copyright Time, Inc.
Historic photos on C18 were taken from The Story of the Banana
(United Fruit Co., 1921).

Due to production limitations, Spanish grammatical markers have not
been included in the text.

(Copyright 1998)

Chiquita SECRETS Revealed; Enquirer investigation finds questionable
business practices, dangerous use of pesticides, fear among
plantation workers; Chiquita: An empire built on controversy

Publication: Cincinnati Enquirer
Date: May 3, 1998

A year-long investigation by The Cincinnati Enquirer has found that
Chiquita Brands International Inc., the world’s largest banana
company, is engaged in a range of questionable business practices.

Chiquita, based in Cincinnati at 250 E. 5th St., has disputed
suggestions that any of its practices are improper.

The Enquirer investigation took reporters to the sweltering lowlands
of Central America, where bananas are grown, as well as to Canada,
Belgium, New York and Washington. Findings are outlined in a special
18-page section in today’s Enquirer.

These findings include:

Chiquita secretly controls dozens of supposedly independent banana
companies. It does so through elaborate business structures designed
to avoid restrictions on land ownership and national security laws
in Central American countries. The structures also are aimed at
limiting unions on its farms.

Chiquita and its subsidiaries are engaged in pesticide practices
that threaten the health of workers and nearby residents, despite an
agreement with an environmental group to adhere to certain safety

Despite that environmental agreement, Chiquita subsidiaries use
pesticides in Central America that are not allowed for use in either
the United States or Canada, or in one or more of the 15 countries
in the European Union.

A worker on a Chiquita subsidiary farm died late last year after
exposure to toxic chemicals in a banana field, according to a local
coroner’s report.

Hundreds of people in a Costa Rican barrio have been exposed to a
toxic chemical emitting from the factory of a Chiquita subsidiary.

Employees of Chiquita and a subsidiary were involved in a bribery
scheme in Colombia that has come to the attention of the U.S.
Securities and Exchange Commission (SEC). Two employees have been
forced to resign.

Chiquita fruit-transport ships have been used to smuggle cocaine
into Europe. Authorities seized more than a ton of cocaine (worth up
to $33 million in its pure form) from seven Chiquita ships in 1997.
Although the company was unaware and did not approve of the illegal
shipments, problems were traced to lax security on its Colombian

Security guards have used brute force to enforce their authority on
plantations operated or controlled by Chiquita. In an
internationally controversial case, Chiquita called in the Honduran
military to enforce a court order to evict residents of a farm
village; the village was bulldozed and villagers run out at
gunpoint. On a palm plantation controlled by a Chiquita subsidiary
in Honduras, a man was shot to death and another man injured by
guards using an illegal automatic weapon. An agent of a competitor
has filed a federal lawsuit claiming that armed men led by Chiquita
officials tried to kidnap him in Honduras.

Chiquita Chairman and CEO Carl H. Lindner Jr., his family and
associates made legal but controversial contributions to political
figures at a time the company desperately sought U.S. backing in a
trade dispute over banana tariffs in Europe.

In a statement issued through its attorneys, Chiquita said the
company “has been an active and enthusiastic engine for a better
way of life throughout the region (and) is a leader in preserving,
enhancing and cleaning the environment through Central America.”

Throughout its investigation, the Enquirer sought to meet with Mr.
Lindner and other Chiquita officials, including Keith Lindner, vice
chairman, and Steven G. Warshaw, president and chief operating
officer. They declined. Instead, the law firm of Kirkland & Ellis in
Washington, D.C., was hired to provide company responses to
reporters’ questions. Chiquita, through its lawyers, provided
hundreds of pages of responses, although refusing to address some
questions and avoiding direct responses to others.

Several high-level sources within Chiquita spoke with reporters on
the condition of anonymity, fearing retaliation. They also provided
extensive documents and other information including copies of more
than 2,000 taped voice mail messages recorded by Chiquita

A high-level source told the Enquirer that he has also provided
copies of those tape recordings to SEC investigators. SEC sources
confirmed that they have the tapes and they are part of an
investigation into Chiquita’s business practices. SEC and Chiquita
sources also confirmed that, in April, SEC investigators issued
multiple subpoenas to Chiquita for documents.

Enquirer reporters spent a month in Central America and the
Caribbean late last summer, visiting plantations, government
offices, villages and university research centers. They personally
observed practices and spoke with residents, laborers, Chiquita
managers and government officials. They obtained hundreds of
internal and public documents and interviewed legal, financial and
environmental experts in Cincinnati, Brussels, Antwerp, New York,
Vancouver and Washington, D.C.

Key figures in stories

Baker, Lorenzo Dow – Massachusetts sea captain who helpd begin the
banana trade in 1870.

Bakoczy, Alejandro – chief of security for Chiquita.

Binard, Phillippe – delegate general of the European Community
Banana Trade Association.

Birns, Larry – director of Council on Hemispheric Affairs. A
Chiquita critic.

Black, Eli – owner of United Fruit Co., who in 1970 changed the
company’s name to United Brands. Committed suicide in 1975 while the
company was under investigation for bribing Latin American

Brester, Susan (Chappano) – Chiquita finance executive.

Castejon, Amilcar – Honduran lawyer hired by Chiquita to oversee
payroll and personnel records of COBALISA, a farm service company.

Castro Diaz, Josque Moises – A 21-year-old villager living amid the
San Alejo Plantation in Honduras. He was shot and killed by
plantation security guards.

Coleridge, Ged – Chiquita executive in Belgium concerned with
shipping issues.

Connoley Sevilla, John – former resident and schoolteacher in the
destroyed village of Tacamiche.

Escobar Galeano, Carlos Guillermo – bodyguard of Otto Stalinski and
expected witness in his federal suit. He was shot to death near his
home in Honduras on March 24.

Escobar, Renaldo – Chiquita lawyer in Colombia involved in alleged
bribery with Chiquita executive Douglas Walker.

Flores Discua, Iris Gisela – a lawyer representing the guards and
Chiquita’s Tela Railroad Co. in a shooting case on the San Alejo

Forton, Jorge – Chiquita executive in Medellin, Colombia, involved
in alleged bribery with Mr. Walker and Mr. Escobar.

Gleason, Carolyn – Chiquita’s trade attorney and registered lobbyist
in Washington, D.C.

Hills, David – Chiquita lawyer.

Holst, Eric – New York coordinator for the “Better Banana”
certification program of the Rainforest Alliance.

Hughes, G. Philip – ambassador to the Windward Islands under the
Bush administration. Later a Chiquita consultant.

Kistinger, Robert – Chiquita Banana Group president.

Kondritzer, Gerald R. – Chiquita vice president and treasurer.

Lindner, Carl H. Jr. – chairman and CEO of Chiquita Brands
International Inc.

Lindner, Keith – Carl’s son and vice chairman of Chiquita Brands
International Inc.

Marquardt, Sandra – environmental consultant who formerly headed up
Greenpeace International efforts to ban U.S. export of pesticides.

McBride, Ann – president of Common Cause.

Mendoza, Jorge – an official of Chiquita Tela Railroad Co.
subsidiary in Honduras who was involved in the destruction of the
Tacamiche village.

Moore, Robert – president of the International Banana Association, a
Washington, D.C., group that lobbies for the banana interests.

Murray, Henry – former employee of Chiquita’s Tela Railroad
subsidiary who is leasing Tacamiche banana land.

Obregon, Jose – general manager of the supposedly independent
COBALISA, but carried on Tela payroll.

Olson, Robert – senior vice president and general counsel for
Chiquita Brands International Inc.

Ordman, John – Chiquita senior vice president of finance.

Palma, Arnaldo – general manager of Chiquita’s Honduran operations.

Paz, Benjamin – Chiquita official.

Ploughman, Dale – Chiquita executive in Antwerp, Belgium,
responsible for shipping issues.

Raymer, Joel – Chiquita lawyer.

Rodriguez, Eugene – Chiquita executive.

Rodriguez, Manuel – Chiquita lawyer.

Stalinski, Ernst “Otto” – former consultant for Fyffes, a Chiquita
competitor, who claims Chiquita agents tried to kidnap him in
Honduras in 1990. He has filed a federal suit in Cincinnati against
the company.

Stephens, Clyde – retired chief of Chiquita Banana Research

Theodoredis, Roger – Chiquita executive in Cincinnati assigned to
investigate problems at the company Polymer subsidiary in Costa

Valerin Bustos, Greddy Mauricio – A worker killed by organophosphate
intoxication while working on a Costa Rican plantation controlled by

Veliz Tobar, Carlos Ermelindo – union official shot to death on
Sept. 30, 1994, on a Chiquita-controlled plantation in Guatemala.

Walker, Douglas – Chiquita vice president of operations, fired for
participation in a Colombian bribery scheme.

Warshaw, Steven G . – Chiquita Brands International Inc. president
and chief operating officer.

Welsh, Magnes – Chiquita’s director of investor relations.

Zemurray, Sam “the Banana Man” – architect of the modern banana
industry. Source


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