The phrase banana republic was coined in the early 20th Century to describe countries dominated by large corporations which operated plantations marked by the ruthless exploitation of their workers. Perhaps the most notorious of those companies was United Fruit, which used both its economic power and the might of the U.S. military to rule much of Central America. The latter was seen clearly in the 1954 ouster of the populist Arbenz government in Guatemala in a coup engineered by the CIA.
United Fruit later changed its name to United Brands and then to Chiquita Brands International, but its behavior did not cease to be scandalous. In the 1970s, for instance, it was revealed to have paid a large bribe paid to the president of Honduras.
Another major controversy with its origins in the 1990s has tainted the company for three decades, culminating in a recent jury verdict against Chiquita in a federal civil lawsuit in Florida. That controversy stemmed from the company’s decision to make payments to a rightwing paramilitary group in Colombia, supposedly to protect its personnel and operations in the country. Chiquita continued to bankroll the group, the United Self-Defense Forces of Columbia (known by its Spanish initials AUC), even after it was designated as a Foreign Terrorist Organization by the U.S. government.
Chiquita eventually found itself the target of an investigation by the U.S. Justice Department, and in 2007 it pleaded guilty to criminal charges and paid a penalty of $25 million.
But that was not the end of the matter. Families of farmers and other civilians slaughtered by the AUC brought suit against the company in the U.S. with the help of EarthRights International. They argued that Chiquita improperly benefitted from the group’s reign of terror, including the purchase of land at depressed prices that had been owned by murdered farmers. It took 17 years of litigation, but the jury in the first of a series of trials just awarded the plaintiffs $38.3 million in damages.
Chiquita plans to appeal, but the verdict was a major accomplishment in the effort to hold large corporations responsible for abuses in connection with their foreign operations. In its statement hailing the verdict, EarthRights International said: “This historic ruling marks the first time that an American jury has held a major U.S. corporation liable for complicity in serious human rights abuses in another country, a milestone for justice.”
While it is true that Chiquita has major offices in Florida, the company has its international headquarters in Switzerland. Chiquita is owned by two Brazilian firms: Cutrale and the Safra Group. Fortunately, these complications did not prevent the jury from finding the company culpable under U.S. law.
Chiquita is not the only large company to have gotten into legal jeopardy for bankrolling an entity designated as a terrorist group. In 2022 Lafarge S.A., part of the Swiss building materials group Holcim, and its Syrian subsidiary pleaded guilty to a criminal charge brought by the U.S. Justice Department, accusing them of conspiring to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front, both U.S.-designated foreign terrorist organizations. Lafarge was sentenced to probation and ordered to pay $777 million in penalties.