SUNS #4289 Monday 28 September 1998
UNITED STATES: A GUILTY PLEA IN CHIQUITA BANANA EXPOSE CASE
Washington, Sep 24 (IPS/Jim Lobe) -- A reporter who exposed a broad array of allegedly illegal practices by Chiquita Brands International Inc. in Central America and the Caribbean, has pleaded guilty to intercepting internal company communications.
However, Michael Gallagher declined to end his silence about the case, which has badly embarrassed Chiquita, the world's second-largest banana company, as well as the 'Cincinnati Enquirer,' which published and then apologised for Gallagher's investigative articles.
Gallagher, who could receive a sentence of up to 30 months in prison, has agreed to cooperate with an investigation of how some 2,000 voice-mail messages were taken from the Cincinnati, Ohio-based corporate giant, county prosecutor Perry Ancona said Thursday.
Chiquita is the direct descendant of United Fruit Co., whose control over Central American governments earlier this century gave rise to the term "banana republic." The company, which has been controlled by billionaire Carl Lindner since 1984, said in a statement that Gallagher's guilty plea marked an "important milestone for all citizens and organizations who are concerned about the privacy of their personal communications."
The company did not address the substance of the charges contained in his original articles, claiming that they are the subject of an ongoing investigation by the U.S. Securities and Exchange Commission (SEC). Chiquita has long maintained that it complies with all relevant laws in
its overseas operations.
Gallagher's articles, which were based on substantially more documentation than the voice-mail messages, alleged a series of abuses by Chiquita. These ranged from bribery, to setting up dummy
corporations to evade local landholding laws, to unsafe spraying practices in its banana plantations in Colombia, Honduras, Ecuador, and elsewhere in the Caribbean Basin region.
"Chiquita has done everything it can to divert attention from the underlying substance of the story to the way that some of the information was obtained," said Larry Birns, director of the Washington-based Council on Hemispheric Affairs. Birns, a major critic of the company, obtained some of the voice-mail messages from Gallagher when the latter was preparing his stories.
"It really hasn't denied that what was said in the story was true, and now that the voice-mail question has been resolved, hopefully the press will turn its attention to the real story - how the company spent millions of dollars bribing officials throughout the region and buying influence in Washington," he said.
[The United States aggressive pursuit of a trade dispute at the WTO over the EC banana regime, and the licensing regime for marketing inside the EU, in violation of the EC's GATS obligations, has been attributed to the interests of Chiquita bananas TNC, and the campaign contributions of its owner to both parties in the US].
"It's bad to steal voice mail," according to Jim Naureckas of Fairness and Accuracy in Reporting (FAIR), a media watchdog group. "But the behaviour depicted in the stories themselves, if true, is much more serious."
The case has created a major sensation among journalists here, if only because of the spectacular way in which the 'Enquirer' repudiated a story in which it had invested tens of thousands of dollars, as well as the talents and experience of its top investigative reporter. The articles were also vetted by lawyers from both the newspaper and the giant Gannett newspaper chain before publication.
Less than two months after the story was published, however, the 'Enquirer' fired Gallagher, printed a bold-faced apology on its front page, agreed to pay Chiquita close to $15 million and to refuse to
answer questions regarding the accuracy of the stories themselves. Gannett, which also owns 'USA Today' among many other publications, removed the stories from all of its newspapers' libraries.
The Enquirer's apology stated that Gallagher had falsely claimed to his editors to have obtained the copies of the voice-mail messages from a high-ranking executive in the company. "The Enquirer has now become convinced that the charges raised by the articles ... created a false and misleading impression of Chiquita's business practices," it said.
The newspaper's capitulation shocked media insiders and critics. "This is a striking departure from previous practice and it suggests that their first allegiance is more to the financial concerns (of a possible lawsuit) than it is to the truth or lack thereof in the original work," Bill Kovach, curator of the prestigious Nieman Foundation at Harvard University, told 'Newsday,' a major daily on Long Island, New York.
Lindner, who is a famously litigious top contributor to both the Democratic and Republican parties, was also Gannett's second-largest shareholder and the Enquirer's owner until 1985 after failing in a bid to take control of the company. This has prompted speculation that his leverage in negotiating a settlement may have been especially compelling.
Chiquita has also sued Gallagher for libel, trespass and illegal wiretapping in an apparent drive to force him to return the taped messages. The company is reported to be particularly concerned about the tapes' possible use by others.
Ernst Stalinski, an agent of Irish fruit exporter Fyffes, has a pending lawsuit against Chiquita for allegedly hiring police in Honduras to kidnap him as part of an effort to prevent him from buying bananas. Gallagher reportedly permitted Stalinski's lawyer to listen to some of the communications which may have been pertinent to his case.
Other messages may be relevant to a shareholders' suit filed against management based on its alleged manipulations to "artificially inflate the earnings of Chiquita," as well as possible actions by banana workers and their supporters here and in Europe.
According to Birns, the company has little to fear from the Honduran government whose laws, according to Gallagher's reports, have been systematically violated by Chiquita.
After Honduras' foreign minister asked Birns for copies of the voice messages he had obtained from Gallagher last December, he handed them over to a senior embassy official here. "Within 20 minutes, Chiquita's lawyers in Washington had them," said Birns.
Birns pointed to a 1997 report by Honduras' attorney general who found a pervasive culture in Honduras that "allows the transnational companies to easily buy government employees."
In its annual ratings of government corruption released earlier this week, Transparency International found that international businesses saw Honduras as the second-most corrupt country in Latin America, and the third most corrupt in the world.
But Transparency International has no index of those who bribe, transnational corporations and enterprises or their home countries.