Judge Rejects Chiquita’s Effort to Block Release of Documents on Terror Payments
U.S. District Judge Richard J. Leon yesterday rejected legal action by Chiquita Brands International to prevent the release under the Freedom of Information Act (FOIA) of records relating to the company’s illegal payments to a Colombian terrorist group.
Judge Leon upheld the decision by the U.S. Securities and Exchange Commission (SEC) to deny Chiquita’s request for confidential treatment of corporate records it had turned over during the course of SEC’s investigation of its operations in Colombia. “[T]he Court concludes that the SEC’s denial of Chiquita’s request for confidential treatment was reasonable and did not violate the Administrative Procedures Act (“APA”),” the judge said in a ten-page “memorandum opinion” issued yesterday.
The ruling clears the way for the SEC to finish processing FOIA requests submitted five years ago by the National Security Archive relating to illegal payments to the United Self-Defense Forces of Colombia (AUC), a right-wing “paramilitary” organization responsible for the majority of murders, disappearances and forced displacements in Colombia’s internal conflict. The documents at issue are primarily legal and financial records pertaining to more than a decade of “sensitive payments” made by the company and its subsidiaries to the AUC and to leftist guerrilla groups like the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN).
“We are extremely pleased that Judge Leon has dismissed Chiquita’s effort to stop the release of records on its funding of Colombian terrorist organizations,” said Michael Evans, director of the Archive’s Colombia Documentation Project. “This could be the most important collection of documents ever assembled on corporate ties to terrorism,” Evans said. “Finally, the public will be given the opportunity to see the records behind the only case in which a major U.S. corporation has been convicted of funding a foreign terrorist group.”
The illicit payments were first revealed in a 2007 sentencing memorandum issued by U.S. Attorney Jeffrey A. Taylor outlining the terms of Chiquita’s plea bargain in the case. Taylor found that, over an eight-year period, “[defendant] Chiquita made over 100 payments to the AUC totaling over $1.7 million.” The U.S. government designated the AUC as a “Foreign Terrorist Organization” (FTO) on September 10, 2001.
Chiquita has long maintained that the payments were the result of extortion, and the sentencing memo states that the company had never received “any actual security services or actual security equipment in exchange for the payments.” Nevertheless, Chiquita records produced by the U.S. Department of Justice in response to similar Archive FOIA requests reveal that the company did, in fact, receive some security services in return for its payments. “Money for info on guerrilla groups,” read one Chiquita memo, written in March 2000. “Can’t get the same level of support from the military.”
In a 1994 memo, the general manager of Chiquita operations in Turbó admitted that guerrillas were “used to supply security personnel at the various farms.” Company lawyers were understandably concerned. A handwritten annotation on a subsequent draft of the document asked, “Why is this relevant?” and, “Why is this being written?”
In arguing its case before the SEC and U.S. District Court, Chiquita maintained that release of the records would interfere with the fairness of lawsuits pending against the company in the U.S. on behalf of the victims of AUC violence. Judge Leon soundly rejected this argument, saying, “There can be no doubt that the SEC rationally determined from the record that disclosure of the Chiquita Payment Documents would not seriously interfere with the fairness of the Florida Litigation,” citing the company’s failure “to specifically articulate how disclosure of the Chiquita Payments Documents would confer an unfair advantage upon plaintiffs in the discovery process.”
Chiquita further argued that release of the records would unfairly impact a preliminary criminal investigation by Colombian judicial officials of the the company’s illegal activities. Nevertheless, Judge Leon held that, “The SEC properly rejected Chiquita’s argument that judicial officials in Colombia would be unable to exclude improper inferences in reaching a decision.” He noted that, “Judicial officials, unlike jurors, are trained and experienced in distinguishing between proper evidence and adverse publicity.”
Judge Leon also rejected Chiquita’s argument that the records be withheld to prevent the Archive from engaging in a “media campaign based on gross mischaracterizations of released documents.” The judge rightly found that the FOIA requires that plaintiffs show that the release of documents “would” deprive the party of a fair adjudication. “With respect to the Florida Litigation, there is no certainty about the degree of publicity that may result from disclosure,” said Leon in the Court’s decision. “Chiquita has failed to show why common judicial safeguards like voir dare would be insufficient to ensure fairness where there is a ‘large diverse pool of potential jurors.'”
The Court also dismissed Chiquita’s argument that the SEC be forced to “blindly apply the same exemptions and redactions” to overlapping records processed by the Department of Justice nearly three years ago when it produced nearly 5,500 pages of Chiquita records in response to similar FOIA requests. Leon said, “Chiquita cannot cite any legal authority for the proposition that the SEC must adhere to determinations previously made by DOJ regarding Overlapping Documents.”
As important a legal victory as this is for the Archive, an appeal by Chiquita seems likely and will further delay the disclosure of these important records.