U.S. BENDING RULES ON COLOMBIA TERROR?

Several Lawmakers Say Multinationals That Aid Violent Groups in
Return for Protection Are Not Being Prosecuted.

WASHINGTON -- For more than a decade, leftist guerrilla and
right-wing paramilitary groups in Colombia have kidnapped or killed
civilians, trade union leaders, police and soldiers by the hundreds
and profited by shipping cocaine and heroin to the United States.

In that time, several American multinational corporations have been
accused of essentially underwriting those criminal activities -- in
violation of U.S. law -- by providing cash, vehicles and other
financial assistance as insurance against attacks on their employees
and facilities in the South American nation.

But only one such company -- Chiquita Brands International Inc. --
has been charged criminally in the United States. Now, a showdown is
looming that pits some members of Congress against the Justice
Department and the multinationals -- including an American
coal-mining company and Coca-Cola bottlers.

The lawmakers say that, in the cases of U.S. corporations in
Colombia, the Justice Department has failed to adequately enforce
U.S. laws that make it a crime to knowingly provide material support
or resources to a foreign terrorist organization -- and they have
opened their own investigation.

Rep. Bill Delahunt (D-Mass.), who is leading the effort, has
questioned whether the Bush administration is putting the interests
of U.S. conglomerates ahead of its counter-terrorism agenda.

Even the plea agreement reached with Chiquita in March -- in which it
acknowledged making the illegal payments -- has been criticized as
far too lenient by many outside legal experts and some high-ranking
Justice Department prosecutors.

"I think they've escaped any kind of appropriate sanctions," Delahunt
said in an interview last week.

"We will take a good, hard look at how American multinationals
operate around the world, using Colombia as a model," said Delahunt,
chairman of the House Foreign Affairs Subcommittee on International
Organizations, Human Rights and Oversight. "It really deserves an
exhaustive effort to examine where we need legislation and if there
are gaps in our criminal code that allow U.S. corporations to aid or
abet violence in other countries that erode our credibility and our
moral standing in the world."

The Bush administration has declared that a hallmark of its
counter-terrorism policy is to go after the financiers of terrorism
just as aggressively as the terrorists themselves -- anywhere in the
world. But the situation in Colombia underscores the difficulty in
prosecuting such goals when it conflicts with American economic
interests abroad and trade relations with friendly governments.
Making the matter particularly sensitive, the U.S. is in the midst of
negotiating a free-trade agreement with Colombia, and sends it
billions annually in military and other aid.

"Do our economic interests trump the war on terror? Are we making
trade-offs?" Delahunt asked. "If we are, at the very least the public
should know about it."

Lance Compa, an international trade specialist at Cornell
University's School of Industrial and Labor Relations, acknowledged
that there were many competing priorities in Colombia.

"But the general proposition that gross human rights violations
should be weighed against trade policy and foreign policy is a
mistake," Compa said. "The paramilitaries have infiltrated the
highest levels of the [Colombian] government, and the Bush
administration is looking the other way.

"It makes it all the more incumbent on U.S. policymakers to put a
stop to any corporate dealings with paramilitary death squads."

Dealings Outlawed

The right-wing United Self-Defense Forces of Colombia, or AUC,
initially began as a security force in response to leftist
atrocities, but it quickly transformed in the 1990s into a brutal
organization with ties to Colombia's military, political and business
establishment. The State Department designated the AUC a terrorist
organization in 2001, making it a crime to provide the group with
financial or other support.

Financial dealings with the paramilitaries have also been outlawed
under a federal "drug kingpin" statute, because such groups are
believed to supply 90% of the cocaine and 50% of the heroin consumed
in the U.S.

For more than four years, lawmakers have been requesting information
from the Justice Department about whether it is investigating
"credible allegations" against some of the American firms, including
some that were named in detailed civil lawsuits and forwarded to
prosecutors, according to letters sent to Atty. Gen. Alberto R.
Gonzales and his predecessor, John Ashcroft.

The lawmakers are particularly concerned about claims that the
Drummond Co. coal-mining operations paid paramilitaries from the AUC
to kill three trade union leaders who were trying to organize workers
at its coal mines in 2001. Drummond has been accused in a civil
lawsuit first filed in 2002 of using the AUC as a de facto security
force that intimidated employees to keep them from unionizing and
demanding higher wages.

Drummond has strenuously denied the claims and is fighting them in a
civil trial that began this month.

In a letter to Ashcroft on June 25, 2003, four lawmakers on House
foreign affairs oversight committees urged thorough investigations of
the Drummond case and allegations against two U.S.-owned Coca-Cola
bottling firms in Colombia that are also accused in lawsuits of
colluding with the paramilitaries. The bottlers, which are
independent of the Atlanta-based beverage giant, have denied any wrongdoing.

Nearly a year later, Assistant Atty. Gen. William E. Moschella sent a
four-paragraph response that said: "We can assure you that this
matter is being carefully reviewed." Moschella said the Justice
Department could not comment on any case until there were public filings.

The lawmakers said they had been unable to get even basic information
about whether an investigation was underway.

A Lower Priority?

Two senior Justice Department officials acknowledged that violent
Colombian groups, particularly the AUC, were not as high a priority
as Islamist jihad groups because they had not attacked American
interests such as embassies.

But critics say that the Colombian groups have killed and kidnapped
more people than Al Qaeda and that the Justice Department's selective
enforcement of U.S. laws opens it up to charges of having double
standards in the war on terrorism.

The Justice Department says it has aggressively pursued corporate
financiers of terrorism, in Colombia and elsewhere.

"The notion that the Justice Department is somehow putting the
interests of U.S. companies ahead of its national security priorities
is baseless," said spokesman Dean Boyd. "The Justice Department takes
seriously any and all allegations about U.S. persons or entities that
may have engaged in transactions with specially designated terrorist
organizations."

The senior Justice Department officials confirmed that they had
launched a probe of Drummond at least several years ago, and that
they had looked at other U.S. firms as well. "We were trying to look
into any allegation there was of any company doing what Chiquita was
doing," one said of the Drummond allegations. "I can't say we pursued
every one of them."
Kenneth L. Wainstein, assistant attorney general for national
security, said he could not discuss ongoing federal actions.

The lawmakers' concerns intensified after Chiquita reached a plea
agreement with the Justice Department in March, in which it admitted
having paid the AUC at least $1.7 million between 1997 and 2004, and
the left-wing Revolutionary Armed Forces of Colombia, or FARC, before
that. Chiquita said it did so to protect its workers, contending that
the guerrilla and paramilitary groups attacked corporations that refused.

Colombia's chief prosecutor, Mario Iguaran, has accused Chiquita and
the AUC of cultivating "a criminal relationship" based on "money and
arms and, in exchange, the bloody pacification of Uraba," the region
where the Cincinnati-based firm's banana plantations were based until
it sold them in 2004.

In May, six congressmen wrote a follow-up letter to Gonzales, asking
whether the Justice Department had investigated their "grave
concerns" that other companies, particularly Drummond, might be
engaging in similar activity. The lawmakers said that Iguaran had
launched a criminal investigation of Drummond and that though the
allegations were unproved, they were "sufficiently credible" for the
Justice Department to launch criminal proceedings of its own.

"If no such probe has begun, we strongly urge that one be started
immediately," wrote Reps. Delahunt, Tom Lantos (D-Burlingame), Howard
L. Berman (D-Valley Village), George Miller (D-Martinez), Eliot L.
Engel (D-N.Y.) and Christopher H. Smith (R-N.J.).

No Response

The Justice Department has not responded to that letter, the lawmakers say.

"In the wake of 9/11, it is shocking to me that allegations of
payments to terrorist groups have not been aggressively investigated
and prosecuted by the Justice Department," Engel said at a June 28
congressional hearing on the issue, the first of what the lawmakers
have pledged will be many.

"I can only imagine the force and speed with which the entire
prosecutorial force of the United States government would come down
on a company alleged to have assisted Al Qaeda or Hezbollah," Engel added.

The congressmen, all top members of foreign affairs panels, vow to
haul in top officials from Drummond, Chiquita and other companies
(which they would not name) that have done business in Colombia to
testify under oath.

At the June congressional hearing, a former Colombian military
captain turned AUC soldier; a human rights worker; and a union leader
testified that numerous U.S. corporations besides Chiquita and
Drummond had been routinely paying off violent groups in Colombia.

This spring, former AUC leader Salvatore Mancuso and group spokesman
Ivan Duque alleged that the payoffs were pervasive and long-standing,
involving multinational fruit companies such as Fresh Del Monte
Produce Inc. and Dole Food Co., as well as oil conglomerates and
other firms. Del Monte and Dole have denied the allegations.

Many more AUC commanders intend to begin speaking publicly about the
financing of their reign of terror "by the banana industry, some coal
companies, big national businesses," Duque said in a published interview.

"Those who broke the law must face the consequences, just as we are."

[sidebar, A Section]

CONGRESSMEN EYE CHIQUITA CASE

The Justice Department Took Four Years to File Criminal Charges After
the Banana Company Admitted to Payoffs to Violent Groups.

WASHINGTON -- As part of an inquiry into corporate payments to
violent groups in Colombia, a group of congressmen wants more details
about the Justice Department's handling of the Chiquita Brands
International Inc. case, including whether the department was too
lenient and why it took four years to file criminal charges after the
banana company admitted making payoffs.

In its plea agreement in March, Chiquita acknowledged that senior
executives knew about the payments by September 2000 or earlier, and
that they continued to make them until February 2004 -- nearly a year
after its own lawyers and the Justice Department told them to stop.

Congressional investigators say they are particularly interested in
an April 2003 meeting in which top Justice Department officials
allegedly told Chiquita to cease the payments. Chiquita says the
Justice Department's warnings were vague.

Current and former Justice Department officials said in interviews
with The Times that the prosecutors handling the Chiquita case had
wanted to bring charges of material support of terrorism against the
banana company and to pursue charges against some of its top
executives by early 2004, if not sooner.

Instead, the firm was charged three years later with one count of
"engaging in transactions with a specially designated global
terrorist" and was levied a $25-million fine, payable over five years.

With annual revenue of approximately $4.5 billion, Chiquita said the
fine would not affect its global operations. No executives were charged.

According to the Justice Department sources, the prosecutors were
incensed by Chiquita's continued payments to the right-wing United
Self-Defense Forces of Colombia, or AUC, after what they described as
repeated warnings. But current and former department officials said
they were opposed on some matters by political appointees in the
department, including David Nahmias, a former deputy assistant
attorney general overseeing counter-terrorism.

The U.S. attorney's office in Washington was leading the
investigation, in conjunction with Nahmias and others at the Justice
Department headquarters a few blocks away.

Nahmias first asked Roscoe C. Howard Jr., then the U.S. attorney for
the District of Columbia, not to conduct search warrants at Chiquita
headquarters in Cincinnati -- but Howard refused. Then he asked that
charges not be filed until Justice Department leadership could meet
with a lawyer for the firm's board, former Atty. Gen. Richard L.
Thornburgh, the current and former officials said.

Nahmias, now the U.S. attorney in Atlanta, and Howard, in private law
practice, declined to comment, saying they could not discuss internal
Justice Department deliberations.

Chiquita's "lawyers went all over D.C. to have meetings" with top
officials at the Justice Department, the Treasury Department and
elsewhere, often without the front-line prosecutors knowing about it,
one of the senior Justice Department officials said. "They were
trying to cause political pressure." Like others interviewed for this
article, the official spoke on the condition of anonymity, saying he
was not authorized to discuss the politically sensitive case.

On April 26, 2004, Thornburgh took his case directly to Nahmias, his
boss Christopher A. Wray and then-Atty. Gen. John Ashcroft in a
two-page confidential letter obtained by The Times. Thornburgh wrote
that Chiquita was merely trying to protect its employees and that a
criminal prosecution would harm U.S. political and economic relations
with Colombia.

"While the department has suggested that a meeting regarding matters
of policy is premature until the investigation is complete ... in
light of the gravity and urgency of these issues, we respectfully
request that you meet with representatives of Chiquita," Thornburgh wrote.

Justice Department officials wouldn't comment on whether Ashcroft or
his successor as attorney general, Alberto R. Gonzales, ultimately
met with Thornburgh or Chiquita board member Roderick M. Hills, a
well-connected Republican lawyer in Washington and a former White
House counsel and head of the Securities and Exchange Commission.

By mid-2004, Chiquita virtually stopped cooperating with the Justice
Department's efforts to gain access to documents and interview
company employees, the current and former officials said. "The case
was essentially shut down until further notice, and then there was no
further notice," said one former prosecutor involved in the case.

As Hills took a lead role for Chiquita in fending off criminal
charges, his son-in-law Steve Bunnell was a senior prosecutor in the
U.S. attorney's office in Washington. In 2004, Bunnell was appointed
head of the office's criminal division, which oversaw the Chiquita
investigation and other prosecutions. The entire field office's
prosecutorial office considered recusing itself from the case due to
the conflict of interest, but ultimately decided only to recuse Bunnell.

Later, senior management in the U.S. attorney's office was also
recused from the case.

Hills' role in the case eventually became a major focus of the
investigation. He was one of three senior Chiquita executives who
told their outside counsel in the spring of 2003 to "just let them
sue us, come after us," even as the firm was pledging to cooperate
with the Justice Department, according to department officials and
court records filed in the case.

And as head of the Chiquita board's audit committee, Hills told
fellow board members that "we appear to [be] committing a felony" in
December 2003, months before the company stopped the payments,
federal court documents show.

Hills, who retired from the Chiquita board last month, declined to
comment. Bunnell, who left the Justice Department on Friday for
private law practice, did not respond to requests for comment.

When the Justice Department finally settled with Chiquita on March
14, none of the senior executives was charged individually. The
department agreed to withhold company officials' names and
identifying descriptions from the publicly released charging
documents and plea agreement. They identified Hills, for instance,
only as "Individual B."

The settlement "was too soft for what they did," one of the senior
Justice Department officials said. The deal awaits formal approval by
U.S. District Judge Royce C. Lamberth.

"We believe that the settlement was in the best interest of the
company," said Chiquita spokesman Michael Mitchell. "We would
certainly not characterize $25 million as insignificant."

Jeffrey A. Taylor, interim U.S. attorney for the District of
Columbia, also defended the settlement, saying the case was
investigated aggressively and prosecuted properly. "We think it's a
fair and just result," he said. "This one was done by the book."

Meanwhile, Colombia's attorney general, Mario Iguaran, has said he is
seeking all of the Justice Department's investigative files on
Chiquita, and he has vowed to extradite company officials to face
charges in Colombia. The Justice and State departments would not say
whether they had received Iguaran's requests or whether they were cooperating.

Mitchell said Chiquita was unaware of any Colombian investigation or
extradition threat.