1 CR 57-55 13 007 Chirp 13de FOR THE DESTRICT CDLUEBIA URITED STATES AMERICA Governmant CR No 87-55 v CEIQUETA BRANDS INTERNATIONAL EEC 10 02 a m Washington D C - Monday September 17 2097 TRANSCRIPT OF SENTENCING 85 05 Ln- - agvr UNITED STATES DISTRICT JUDGE AFPEARARCES For the Gearermnent JDNATEBN EARTIN MALES ESQUIRE DENISE ESQUERE U S DFEICE 555 Fourth Street vai Washington DC 2339334 2 0 the Defendant 202 202 STEPHEN PONTICIELLD ESQUIRE UNITED STATES DEPAREHERT OF JUSTICE Counterzen-orism Seczion Hazional Security Division 10th Constituticn Avenue Washington D C 20530 02 i 202 an as aowza 250mm FUAD RAMA asgums saw a moszaa 559131123 Jams 24 5 3m 2593332 CDVIHGTON EURLENG maresamse cmlmom veg-37241745 Tilcf a M Sarcasm Of cial Coun chnner CHIQUITA NSD 78 CR 07-55 mm m o fa Page-2 - Washington 20004 2491 2 202 662-6000 5372 202 778 5372 fax 3 alnolderecov - com A mums E THOMPSON 3391733 GENERAL COUNSEL 5 CHIQUITA BRENDS INTERNATIONAL INC 5 - w Court Reporter THERESA M SOREIJSEN 0f ficia1 Court Reporter a A 7 U S Courthouse 3 Washington D C 20001 mchoB wm M Swanson 202-273-0745 O icial Court NSD Lassa Sims awn-rim v m 17-55 seems-17 2007 f hiquim erds International 13 Page erCZZi Emnq 2 THE Via Criminal Case timber 07-55 3 united States of America versus Chiquita Brands 4 International Inc Halis Ms Chenng Mr Ponticiello 5 for the government _ Hr Holder 2412 Garland Hr Rena Ms 5 Hosier Mr They-son for the defense Ms Panzer tor the 1 brbbation-Ofiicer -- i W 3 THE COURT Good morning ladies and gentlemen I 9 take that there is no dispute over the presentence report 0 and we're ready to go forward to sentencing is that 11 correct 1-2 MR ELIE That's correct Your Honor 13 Thut's entrer-r Your Honor 1 4 THE COD Okay 1 raised one preliminary matter 15 with counsel on Friday afternoon and discussed it with them 15 this morning As a result of my having raised the matter 17 Counsel for some of the individuals have informed the Court 13 through various means that they may wish to be heard on the - 15 question but first let me just have a discussion of the 2 0 matter with counsel 21 The question I raised was whether before the 22 Court gives final approval and goes forward with sentencmg 23 the names of the individuals should he made a matter of 24 puhiic record The government had a footnote in their 25 sentencing memorandum in which_they indicated their position masmsgerolscom 'Uicrcsa M orenscn 291 71 ma Dam-331 Conn Reporter CHIQUITA NSD 80 u'nil dSets-of umsic CR 07-55 September 17 2007 Chiggm Blends mitts 5551 mo 3age 4 to not make that public a attoruev nanuel 3 ro ision and I wanted to give the government an 3 opportunity to discuss that and then I wanted to discuss it 4 a little further as well 5 MI Malia 5 MR MALIS Thank you Your Honor 'The governmentis position is 3 Attorney's manual prohibits the government absent 9 exceptional not presant here pronioits the 9 United States from d'sclosing the identities of uncharged ll individuals That manual provision is grounded in case law 12 principally out or the Fifth Circuit and the purpose for it 13 15 to protEtt the reputatinh 1 end privaCV interests of 14 individuals Who the government has decided not to charge 15 It's relying on that provision and the underlying authority 15 The government s position in this matter is that the 17 individuals who are identified by letter in the criminal 13 information as well as in the factual proffer should not 19 be their true identities should not be made public as 20 part of this proceedin 21 THE COURT One reason the Court raised the 22 question was that I was aware that in a proceeding with 23 another component of the Department of Justice but allegely 24 the same Department of Justice a few weeks ago be ore Judge 25 Bates the government insisted on naming the names of the amen-0745 Of cial Court Rtpomr CHIQUITA NSD 81 CR 137-35 Septmbor E7 2007 I 0 to no allow the gavernment to name the names and they even 5 'rought a separate civil action with a temporary restraining order which he denied The Court of Appeals than stayed it names were 9age -5 i ones they were divicanr 1arse-inc of 2 British Airways and Korean Airways and the individuals 3 actually a peered before Judge Bates to try to persuade him 8 revealed But it looked to me somewhat inconsistent with 9 what tie government was doing here 10 I understand the manual has this thing about 11 exceptional circumstances I honestly don't know what 12 Exceptional circumstances were there that the government 15 position that the names would not be 16 MR MALIS That's correct 11 THE cover ind I will say 18 comfort to those individuals I don't 13 require disclosure in order for me to 21 public interest It s not a judicial 13 on but 2 take it after raised the ouestion 14 you've reconferred and the government wants to adhere to its 20 agreement here It seems to me the pl 22 beyond approving a plea agreement that s in the public 23 interest and so I m prepared to go iorward and everybody 24 else can relax that's here to try to intervene this morning 25 or take any other action about individual names disclosed Your Honor then to give some find it necessary to approve the plea ea agreement is in the function to try to go 7m 711 0745 ThrusahiSoumem CVRA D d Cmequmn CHIQUITA NSD 82 v' - I um Lia-mac 5 Sealant- 17 20017 r-Did the company Fiat to ea anythinc on th r 2 question 3 MR HOLDER I could only mess it up Your Honor 4 so I won't say anything 5 THE COURI Okay I ll hear the allocution than 5 from the government first MlLIS- Thankiyoup Yourm oncr WW talu_rl -H h On March 19th of this year th- pa-ties tendered 9 to th- Court the plea agreement that was reached between t e A 10 United States of America and Chiquita Brands International 11 in the context of a criminal investigation 12 into payments that defendant Chiquita made to a 13 federally designated terroriSL organitationeknomn a the 14 ABC 15 Pursuant to that agreement de endent Chiquita 15 agreed to olead guilty to a one count criminal information 17 that charged the company with the felony of engaging in- 18 transactions with a specially-designed global terrorist As 15 a basis for its guilty plea defendant Chiquita agreed to 20 admit as true the facts set forth in the factual profier 21 subitted in support oi the guilty plea Defendant Chiquita_ 22 also agreed to cooperate in the on-going investigation 23 Pursuant to Federal Rule of Criminal Procedure ilic il C 24 the United States and defendant Chiquita agreed that kith 25 the Court s approval the company should be sentenced to a - Theme Iv Somnsau 232 21' Of cial Conn chortcr CHIQUITA NSD 83 n L at 2 pain 0w 3 i mandur 3 qu HimmuEnf 4 nuwawump wwum on unu 0m hw %wwum Mn Wm on mmw Mum mam H m nomnn wno wmwonmww wnanHwa rm wmm w Hmmam n mn wn nwam nocHn meWH wnnmUnm nm 0m arm 4 Um munmwanm ul - 7 W umummn o an Hum mew wn mm mun_ d w mm mUanm Mum m wp uwm n mo mm Ho mmu munwwm awm abunmm mamnmm no WuwonCHm mn nwum up Mam WUo n nona n nWH cw w Hm 63m duvnm mwmo no SWK Sm u mocha mva wn Mun uu1bnanjn w c bw m no nUm nonaunn Em Hm m pm woumw wm wm wnwm no H4 a m wm won 0H pm nOHwonwnm wwm wm anHOwan nwmm n mow admn Huey mo mnwaw Mu HUHQEMW ma mmwnawu% m com armamwnm Wanna NM z onWIOS mm nowa wmu Umwm Ho Nu onmwuwuw wou Hm cam 0% Nu noHoEme W os mm n m G wmwm mm nmwoanm 0H MA bcn- awm man Wm m0H3m@ WHo n no Nm anodmm ww 5W0 Quaumnu wu hann 328 S ma amnp 05w um OmnH noun pagan 0 55 zmu mg UM Jnh-f ar Jamaica Pp 07-55 SWIM 17' 2907 Phi-lube Brands InmnanonaLVan Eagle-8 emergea in Lalombla to list egewosn 2 fighting the Colombia government Defendant Chiquita paid 3 the AUC directly or indirectly nearly every month From 4 199' through February 4 2004 defendant Chiquita made over 5 160 payments to the AUC totaling over $1 7 million 6 From around 1939 through 1997 defendant Chiquita 7 beid'monev to two violent leitswing terroristworgenizations 8 in Colombia namely the FARC and the ELN The FARE and the 9 ELN were federally-designated as foreign terrorist 19 organizations in October 1397 There is no evidence that 11 defendant Chiquita made any payments to the PARC or the ELN 12 after those terrorist groups were designated as foreign 13 terrorist organihntiuup Never-he1ens the Feed and the ELN 1% were no less violent prior to th-ir respective designations 15 as foreign terrorist organizations Indeed it was their 15 violent-canduct that led to those designations 17 In total defendant 18 THE COURT But at the time of those payments it 19 would not have been illegal to make those payments to PARC 20 or 21 MR MELIS It would not have been illegal under - 22 the material support statute or the International Emergency 23 Economic Powers eat and the underlying regulations that is 24 correct Your Honor 25 In total de endant Chiquita paid money to 1hu zhi$mtmaLCVRARd 7m 071417 c O icial Cam Repeat CHIQUITA NSD 85 a 4 Chiquim wnd Emil Int 7 3' Salerno 17 2007 Page 9 1 Colombia terrorists - Lhe Lb- SLR and the or 2 approximately fifteen years These terrorist groups are 3 responsible for 'n astonishing loss of life in Colombia 4 bile their ictims haVe primarily been Colombians they 3 have also included Americans 6 Defendant Chiquita began pa_i-g the ADC sometime 7 '5h 10% There were numerous-points in time_'hen the 3 company made the decision to continue to pay the ADC We 9 highlight here some of the significant ones 10 Defendant Chiquita admitted to paying excuse me 11 continued to pay the ADC even after the payments were 12 brought directly to-the attention of its senior executives 13 during a scare massing held in Say 700 Defendant 14 Chiquita continued to pay the AU after the United States 15 designated the AUC as a foreign terrorist organization on _15 September 10 2001 and as a soecially designated global 17 terrorist on October 30 2001 The company as a corporate 18 entity as distinct from any particular individual had 19 information about these federal designations in spades 20 through the wide spread reporting on it in the public media 21 both in the United States as well as in Colombia which 22 Chiquita had its substantial banana-producing operations 23 Defendant chiguita continued to pay the ADC even 24 after an individual in its Cincinnati headquarters gained 25 direct knowledge of the AUC's designation as a foreign Theresa M Semen EVE-CM 232 271$ Of cial Court Reporter CH IVQU NSD 86 ni_a -97 5 Chair-rah Rand Eege 1 0 1 terrorist organization in seyteubel 283 JO 4 I aternetdbased security information service The company 3 had su scribed to this service in order to receive just this 4 sort of information about important developments in 5 Colombia 5 Defendant Chi-iita continued to pya_the ABC even 7 asha ire burnide counsel told the company plainly 9 directly beginning in late February 2003 to stop the 9 payments Defendant Cliquita continued to pay t-e A c after 10 Department of Justice officials admonished the company on 11 April 24 2003 that the payments were illegal and could not 12 continue Defendant Chiquita continued to pay the AUC after 13 the same out51de counsel advised Lh comyany on Gertemher 14 2003 that the Department of Justice had given no assurances _l5 that the company would avoid criminal charges for making the 15 payments Defendant Chiquita continued to pay the AUC even 17 after one of its direccors acknowledged in an internal 18 email on-December 22 2003 that quote we appear to be 19 committing a felony close quote 20 admitting to the facts in the factual proffer 21 and pleading guilty to the crime charged in the criminal 22 Information Defendant Chiquita admits it committed a crime 23 by continuing to pay the AUC after the ABC was federally 24 designated as a terrorist organizatiOn in the fall of 2001 25 Defendant Chiquita has accepted criminal reaponsibility for Theresa M Swanson CVR-CM 292 271314 Of cial CHIQUITA NSD A Mtg v MJS cpumbcr 17 205' Big-Hm Hand Vetmedonal in Page 11 1 i tne decisions and attioas u Vi_ ey direttums 2 and emoloyees_thatoled to these criminal payments The 3 conduct 05 these corporate accors is of course imputed to 4 the company under the law 5 it is im ortant to note however that not all of 5 Defendant Chiquita's executives agreed with the company's 1 'nAurEb af actlon ' There was dissent at_thewhighestk1evels 3 of the company about the decision to continue to pay a 9 federally-designated foreign terrorist organization and hha 10 decision to risk the coming of this day Chiquita's felony 11 conviction for funding terrorism 2 To begin with on March 10 2003 Chiquita's 13 outside counsel aoyised Lh coopaoy rannGh one of its 14 senior ottibers that Defendant Chiquita quote should 15 leave Colombia close quote Upon first learning of the 15 payments at a board meeting on April 3 2053 one director 17 echoed outside counsel's advice The director objected to 13 the payments and recommended that Defendant Chiquita 19 consider taking immediate corrective action to include 20 withdrawing from Colombia shat same director later lodged 21 an even stronger objection to the full board saying quote 22- l reiterate my strong opinion - stronger now - to sell our 23 operations in Colombia close quote 24 Moreover within one month of his arrival as 25 Defendant Chiquita s new chief executive officer in January Lharms ljcrolssom 131mm M Sarcasm CVR-CM 192 173 4 Of cial Cour Reporter CHIQUITA NSD 88 v - Ins-Ka n F-im PR 07 55 Septemba 17 2 007 1 Page 22 2004 f ernanoo fqniiri d_tiied as payment- had t w' 2 sto_ According to an internal Aguirriistated 3 quote the end of the day if extortion isjthe moans 4 op_randi in Colombia or any other country we will withdraw' 5 from noing business in such a countr' ' close quote- 6 THE So that s the current management 17' it stopped and nothing aasw 5 hapgened since then 9 MR EALIS That's the current this executive 10 officer Your Honor 11 THE COURT That gives the Court some hope 12 MR MALIS The United States filed a sentencing l3 memorandum lasn week sittinc or I in greater detail the 14 facts of this case Defendant Chiquita tiled a terse 15 response to the government s sentencing memorandum In it 15 Defendant Chiquita renewed its nit repeated claim that the 1'7 company was a victim here a victim of extortion and that 13 a company only made these payments to protect its 19 employees 20 Defendant Chiquita iails'to square its claimed 21 victimhood with the facts As a multi-national corporation 22 'Defendant Chiquita was not orced to remain in Colombia for 23 - 15 years all the while paying the three leading terrorist 24 groups that were terrorizing the Colombian people To quote 25 the company's own outside counsel and I quote Eon d13r 3 t 5@ r015 0m That- 53 M Sorenscn 39- 37137143 Of ciai Court Report GHIQUITA NSD 89 Uniwd Sou oi mtnca v 37 33 mm Chiquita Brands m2 Page 13 voluntarily put yourself in this positiOo The duress 2 defense can wear out through repetitioh it s a business 3 decision to sta in harm's way Chiquita should leave 4 Colombia close quote 5 And it was good business for the company 6 Defendant Chiquita turned a 549 4 million profit from its 3 Icioi oie 4 wa5 malting A 8 the illegal payments to the AUC To be clear the time 3 period I'm referring to is from the designation in September 10 of 200i through the end of January 2304 Defendant 11 Chiquita s payments may have protected its workers while 12 they were working on the company s profitable farms but 3 Defendant Chiquita s payments fueled the terrorist 14 violence everywhere else is We do not dispute that the company had no 16 ideological affinity with these terrorisrs Indeed the 17 tact that the coopany paid the left-wing groups the FREE 18 and the ELN ii_st and then later the righ wing group the 19 inc makes plain that this was not ideologically-driven 20 support But the law does not distinguish between 21 malevolent donors and so called benevolent donors and 22 that s because money is fungible 23 Whatever Defendant Chiquite's claimed motivations 24 the company s money paid for the weapons and ammunition that 25 the AU used to kill innocent civilians or it freed up maosams@crols com mouse M Sormsen 202-273-6745 Of cial Cour Rtpo cr CHIQUITA NSD 90 Bangs Suns ox mus-sea v - q Chiquita Brands-ism mt Page 4 4 other AUC money to do the very same thing It just doesn A - unoing stream Defendant matter Terrorism depends on a Chiquita was a substantial tunding stream for the AUC The ADC was able to purchase a lot of Weapons and ammunition with the $1 7 million that the company paid it over the years its conduct should only be examined from the moment in late February 2003 when certain of its senior executives'learned that the AUC was a federally designated foreign terroris organization That ignores the company's admission that it obtained information about the designation directly in 22 23 24 September 2002 from the security intormation servlte Moreover by late February 2003 when Defendant Chiquita's outside counsel advised the company to stop the payments immediately in light of the designation as a foreign terrorist organization the payments had already been reviewed and approved at the highest levels of the company for years The fact of the initial AUC demand in 1997 and any perceived risk to the company's employees from doing business in Colombia were not new topics to Chiquita The payments had been discussed re eatedly in Defendant Chiquita s Cincinnati headquarters including among the new m eagement and the new board that took over the company after it emerged from bankruptcy in early 2002 The company 252-273-0745 CHIQUITA NSD Theresa M Sarcasm Official Court Reponar 91 United Slate of Amcnca v u - Page is 1 had long since made the business judgment to remain in 2 Colombia to keep pay the AUC to record the payments in the 3 company s books and records without ever identifying that 4 these were payments to the AUC and not to -eport the 5 payments to the pertinent-United States authorities In 5 short the only new information that certain executives 7 genes in at gages 21 c the F3 jr mat Basement a chiqpite's we11 established relationship with the AUG 9 threatened the company with a possible v 5 prosecution 10 Defendant Chiquita also claims in its pleading ii that it sought guidance from the Department of Justice th t 12 it never received Here also Defendant Chiquita s pleading 13 ignores the admitted facts The Department of Justice told 14 the Company's representatives on April 24 2003 and here 15 I'm quoting from the factual proffer signed by Mr Holder 16 and by Mr Aguirre that the payments were quote illegal 11 and could not continue close qoote Whether Deiendant 18 Chiquita could conform its conduct with the law and continue 15 to do business in Colombia or whether Deiendant Chiquita 20 had to withdraw from Colombia was a decision for the company 21 to make not a decision for the Department oi Justice 22 Defendant Chiquita received guidance from the Department of 23 Justice The guidance was that the company was breaking the 24 law- It chose to ignore that guidance and continue to break 25 the law That's one of the reasons we are here today Lhamsamnga-oluom M Sort-asst 202-273-0745 O cial Conn Regent CHIQUITA NSD 92 Ali 1 06 Smiles oEAz-Eenca v Scut- 7M1 Chiquita Brands mtcmani mnt 7 Page 26 1 Defendant Chiquita seriousl misjudged what it 2 means to self disclose criminal conduct Selfudisclosure 3 does not in and of itself shield a company from 4 prosecution The apnropriate resolution of a 5 self disclosure case will depend on many factors including 6 the nature and circumstances of the reported activity and 7 tea errorts ia tq r e it Buf there should-be no A micfek about it self isclosure does not give the 9 disclosing party license to continue to commit the crime 10 and that's what happened here 11 tendant Chiquita well understood that- The 12 company's outside counSel made sure of it On September 3 13 2003 outside counsel advised the company in writing that it 14 was acting at its peril and risked criminal prosecution Ear 15 the continued payments In a memorandum sent to the 15 company outside counsel wrote that Department of Justice 17 officials quote have unwilling to give assurances or 18 guarantees of non-prosecution i close quote 19 One final point here about the offense canduct 20 The te rorism statutes do not discinguish among listed 21 foreign terrorist organizations or specially designated 22 global terrorists as to their relative criminality or their 25 relative threat to the national security interests of the 24 United States Our law criminalize payments to the ACU 25 just as they do payments to ames izballah and al Qaeda marmms crolacom - Theresa M_Sorensm 202-273-6745 Of cial Court Reporter CHIQUITA NSD 93 r-i hams nFAmcricaj 7 C'niquila Brands Kinsman-anal Inc Fage l7 1 end of course it is no comfort to the victims of the ABC's IO violence that Defendant Chiquita paid a terroris 3 organization the ff may be less well known that the Others 4 'I've jusn named 5 Turning to the plea agreement Your Eonor Under 5 the plea agreement Defendant Chiquita is required to pay a 7 $25 million criminal fine to the court The fine 3 3 geid in nnu 1 installments of $5 million plus post-judgment 9 interest It's our understanding that the company paid the 10 first installment this morning 11 The plea agreement also requires Defendant 12 Chiquita to be placed on five years' probation One of the 13 required terms of probation is for the company to implement 14 and maintain an effective'compliance and ethics program to 15 ensure that this criminal conduct never occurs again 16 Defendant Chiquita was also required to provide 1'7 cooperation to the United States in the on going 15 investigation into the criminal payments- The United States 19 gave seriOus consi e etion to bringing additional charges in 20 this case Defendant Chiquita provided substantial 21 cooperation post plea in that regard Indeed the United 22 tates consider critical evidence and inionnation that the 23 company provided post plea in making its determination not 2 to bring additional charges in this matter This 25 substantial poet plea cooperation came on top of the @ nh mm Theresa M Son-515 5 2-02-2734 45 rigLf na-rr rpm-LI - CHIQUITA NSD 2 9 32 on 313 5 gun ES magma mun Fur 4 hm noawmu m OOCNH A01 wm EWUHWH Mm Bwa M w wwmum mug awn Onww nrw nm mewmcw no Nam 0m w h wm mwmw who Mn zww mm Em wnmiwm Hum noan m ammnwou Mm E3 lam Gama KW 3 ku Ho noBmwa inw wa mm ww n Hocmw Hum wmnwou uwnnw Noogi wm HM nadmnw m Wm mnwoa Um noa m w Hum a m wa mm mun UHWHU n m Wquwmem mug 0Hw Fm Umaamunm pa wm 3W Ewunhmn Hm num nu vm K Uno wnm 5 mu m m n o Hmn Hm memmBW n Hm me No 5mm aw wnwwo wmomm awn mem wwn d own mum no nn womnu wmw nedwmwo w noommHano numw mm woam man n Wn ao mum n wn m Sm womww mun nwwn m o m om n m mwnnon Mu uo munam n S m pn QanHK Nu mme rm uh MUCH mo oa Guwnmm me mm Hmnog m nm mam mm nocnn n w EJE 933 Z manommnn Dawhz 5 33% can 025 Egan 0155 2mm mm was gain madam E mmom u En uan Hm w Mgbounwmn owcwocmwm Hwawwu Ummawwn wan dwmanWUn mwocn box no dwma nmn -wm waawnnm mUocwu wan Hum Oo Hn m o wwmnoawwm rm Upww arm noabwmw 3 5 wu Um wwnucwH Mn um m mmnwoam n wam 2m Emcm Ewuo meHwnw wowmmeww a I H buwbm Mn wm mwwo vaoH m n no ponm am w nonoum m we mug awn HHDwunwmp vmuwwnK van wn 0 n we n0 wnnwon Ew m me Hmmow wm swn MN wanmwamnnm arm nochn Mm mb wmwum wmxmu no pm m muqqm UHommnanon H wm memmBm n Hm mum EPHS non wnnwon whw Hm mmuwomm 05m mun awnu awmnm mn a W pm 4 awm ump mupm pm mcumww nwmp wmuanK rmnw Hm monm nwn wn Eoupa Um rm Hw wmwanK mde w ommu cummn mwouwH no nmnHoHMmB mmunnw05m n m Hmmavmmw03m wn up amnm - Nu mocH moubH rpm memmBmun th mm u Nu npomm Hmumd m nHwawa nuwn me Nb mmdewH UHoUmm mun Hm Mm nowoaUMwu MOH Hmwmovm cunnmm 5Q Kai- n7 1 1 gonna Ea wag gun Numb 33 Oman 13 1 savanna nz_oc_a zwu mm Chianti Brands mannerisms an CR Fern 11 '1an Base respect u11_ recommends that the Court a_prov the plea 2 agreement and sentence Defendant Chiquita accordingly 3 THE COURT Thank you Mr Halis 4 MR MALES Thank you Your Honor 5 THE COURT Mr Holder 75_ - MR HOLDER May it please tee Court 7 Let me just sap that the assessing not 3 the Z'o to make try to minimize its role in 9 the matter that brought us here today or in any way give an 10 indication to the Court that does anything other than accept 11 responsibility for its actions 12 I think as the Court asked and T think the 13 response was not really an adequate one the company has 14 cooperated I think in an extraordinary way waiving the 15 attorney client privilege making its lawyers available I 16 sat through seven four hour sessions with the lead lawyer 1'1 ion the company at which time he was asked a variety of 18 questions every one of which I think he answered except 1-9 those that went beyond the privilege waiver time If you 20 think about that 28 hours 28 hours of our chief lawyer being questioned and answering those questions 22 However 1 think that certain things said by Mr 23 Malia are either unfair incorrect or draw inappropriate 24 inferences FrankL I don't think-they are worthy o the 25 office that he represents Sunk mm Theresa M Samson 202-273-0745 HF riel F'nuniggoncr CHIQUITA NSD 97 ir-J annex-J v-Im-im V 1 h '7 7 1 Chiquita Brands inlet-national 12c 7 Page The plea and the factual profi_r were carefully 2 worked out The government's sentencing memorandum and Mr 3 rMalis comments this morning i believe are not in the 4 spirit that led to that plea agreement and as a result I 5 believe we have to respond not to everything with which we disagree but juSt to those things that i think are most 7 worthy of comment VA a First and foremost and I think this has to be 9 made clear Chiquita was extorted That is why the payments 10 began that is why the payments continued This was not a 11 business decision No one at Chiquita decided Do you 12 know what let's just try to come up with a way in which we 13 can stay in this country make these payments This is a 14 profitable center for us 15 The paym ts were made because the company was 16 extorted The company iaced real threats Those threats 17 were expressed by the leader oi the ADC and they were 18 consistent with the actions that lead to the deaths of two 19 company employees on two separate occasions before the ADC 20 took over The government as you look through its 21 sentencing memorandum and even in the comments that Mr 22 Malia made today I think almos concedes that in some way 23 that the company was a victim of extortion but cannot bring 24 itself to utter the word but extortion is really what 25 this was all about mm Theresa M Swans-3 1 302-273 0145 Fit-in Carin CHIQUITA 98 7 Chiquita Blends inmational inc age 2 1 The company had to pay as Mr Malls over 1 2 years a variety of terrorist groups because those were the 3 groups that controlled the areas in which the company 4 operated The government of Colombia did not control these 5 areas The company had no choice The notion that the _oon any had Malis indicated a well established 7 relationship with the eell theirs a people Jersey has a well established relationship 9 with Tony Soprano It's all the same thing It s all ebont 10 extortion and force 11 The government makes much of the face in borh its 12 statements today and in its sentencing memorandum about the 13 length of the payments the time period The government 14 says that the payeents were paid even after they were 15 discussed at a board meeting in September of 2000 This is 15 on page three Well one thing that is nhver -- that seems 17 to kind of get lost here is that the payments at the time 13 at that time were no illegal The payment prior to 2001 15 were not illegal The government skips over that face it 20 seems to me entirely too much Everything that happened 21 before September of 2001 did not violate the law of the 22 United States EVerything that er Malis talks about before 23 that is interesting but ultimately not relevant to that 24 which brought us here today or the reason why Chiquita 25 plead guilty diam Therm M Sorenscn 282-273-0745 Rsyo cr CHIQUITA NSD 99 nu United Sat- 5 of mtnca Y Cm 7 began 17 3- 01 1 1 On page six of the seatencing memoranda the 2 government says Chiquita never reported payments beiore the 3 spril '04 meeting Well the company only found out about 4 the payments two months before did a bit if research to 5 find out what was going on and as soon as they possibly 5 cou1d agot and in fact did 1 report the payments Again payments before sege aier 1st were not illega under oi or Colombi e 13w 9 Much is made about the ant that outside counsel 10 Isai the payments have to stop stop the payment Well 11 what you have not heard Your Honor is what that same 2 laayer kn wanr through those 28 hours of debriefing what 13 you have not heard is what he said in the grand jury He 14 said that he was not shocked that the company decided to l5 continue the payments 15 3 think also E'm disturbed by the fact that the 17 government Selectively quotes from the memo prepared by 13 outside counsel on September 8 2003 where lawyers know the 19 payments are continuing the lawyers who prepared this memo 20 and they distussed legal defenses that are not raised are 21 not disCussed by Mr Malis here and at no point in that 22 memo is there an indicated that the lawyers say that the 23 payments have to stop 24 Now let's talk about that April 24th nesting 25 The government would have you believe in its memorandum and dam were com Theresa M Swanson CVR-CM 252-273-0745 Gretta Lauri Ezpu m CHIQUITA NSD 100 3 UnicodSut ofAmc u v sapzemb-er-HTZ BG Page 74- 1 comments today that it was clear that the company 2 was told that the payments had to stop Well what you did 3 not hear is that Mr Chernoif oh 59 said 4 THE COURT He didn't go that far The government 5 said the payments were illegal 5 HOLDER ellj tour 7 asacouar He didn't make the extra step age 3 don't think from wnat i Heard him say 9 MR HOLDER Well as I look at the memorandum 10 THE COURT Maybe he did in the memo 11 MR HOLDER It seems to me that they said it paym uta had so Eton Chernoif said This is a heavier 13 meeting than 2 expedted Future paym 14 complicated issue 15 The government that it was 9 15 the comgany o reel conduct had been 1 months An undercover operation was 18 the parties up until December of 2003 18 In August of 2003 the then 20 General said that the company had done 21 coming forward and was not a target or 22 investigation 23 In September of 2003 a gove 24 asked by that same lead lawyer for the 25 the government want the payments to at ants were a oing to get back to for a period of five elked about between Deputy attorney the right thing by subject of an rnment prosecutor was company asked did op They reply was 1 - ThwaehLSommamCVRA d onwajtcmit 202a273-0745 CHEQUITA NSD 101 macadSm'eoiAmeic-a v Cums - Qtyemherll -LDGI Cbiquila Brands Enwmadaual lac 92 39 2 1 aot yes but E ll Stand on what Mr Chernoff said A 2 simple yes stop the payments could have been made at 3 that goint could have been made on April 24th was not 4 We have retrained from saying 'his beiore but 5 tour Tenor I will tell you why we believe this was so The 9 7 5 averse r i not wantto say 'stop' explicitly add then 3 couldn't say continue' because it did not want to Ed its 7 have blood on its hands if someone was in feet killed It 9 case and so it looked Eor what I considered to be a middle 0 position 11 in the sentencing memorandum the government says 12 that it's not in a pueltLun of wnvidino advice The 13 government doesn't provide advice This to me it seems 14 is Worrisome If a company came in and said that they were 15 'take immediate action of some sort 17 As I told these gentlemen i1 a meeting that we 18 had I think early on in this process if I as Deputy 19 Attorney General a post I was honored to hold had heard 20 that the government had the concerns that they expressed in is paying al-Qaeda would the government not give advice or not 21 this very important area national security and the 22 decided no to say that this conduct had to stop or took 23 immediate action heads would have rolled It seems to me 24 that the government say it's not in the business of giving 25 advice but if this is as imgortant as it says it was it mmsgemlscum Thwsa Swanson IVE-CM 202-273 0745 Of cial Court Reporter nuinulTA NSD 102 UnhodSmuofetmexita V - i KGI ib' - I mu Chiquita Brands Mutational Inc 7 Eg 23 1 needed to do something either give the advice tell the 2 company to stop or take imm-'iate action to make those 3 activities stop and it did none of that A When did Chiquita know of the designation here 5 I believe again the government is being a_little too cute 5 1 rr1e too crafty and this is not what you would expect 7 to hear from the United States It's not what fat noule 7 3 expect to hear from a good prosecucor 9 If you look at the sentencing memorandum there's 10 an indication the quote is The Defendant Chiquita had i 11 information and than it talks about the fact that public 12 media it Uu page even of the sentencing memoraneum 13 the public media was out there There's no proof that 14 anybody that the company was aware of the fact of the 15 designation If the government had that proof that fact 15 certainly would have been something we would have heard 17 today and certainly something you would have seen in 18 Sentencing memoranda The fact is that although that 19 information did appear in the public media there is no 2E proof - there is no proof that anybody in the company ever 21 had that information 22 On page 13 of the sentencing memorandum I will 23 call this the infamous page 13 it talks about financial 24 support to the ADC Again Your Honor that it seems to 25 me is simply an unbelievable thing This was simpl thaesanm s olscom Theresa M Sorcnsen CVR-CM 202-273 0745 Of cial Conn Reporter NSD 103 United Smasamrzarica an en 17-5 rue - Chiquita Brands Intima onaL Inc 9- - extortion 2 A staggering loss of life is escribed There was 3 a staggering loss of life What is not mentioned is that 4 among the people who Were killed as a result of terrorists 5 who control that area Were people who worked for the '5 CDmDany A The company gtoteL ipnded terrorism I would 7 agree with that Yes in the same way that an extortioa 3 victim funds the mafia une menu that is extorted from the 9 company and goes to the ABC is no something that was 10 willingly give it was given at the barrel of a gun and 11 threats 12 On page 13 again that Chiquita's motive is 13 irrelevant That's just not legally true and it s a prime 1% reason why the government has substantial risk had this case 15 gone to trial - 16 We ve heard a lot today abbot $1 7 million going 11 to the we Well that is true but again that's a little 13 that s almosr that s a little deceptive The reality 19 is that $825 000 went to the ADC aEter the time period in 20 which the money became illegal after the designation So 21 the time the money that ought to be talked about is not 22 but $825 000 This to me seems a little too typical 23 of a shading that has happened here both in the sentencing 24 memorandum and the comments that we heard today 25 This motion of wit drawing frorn Colombia lhercsams zcrolsxom Theresa M Screamer CVR-CM 20247343745 1 CHIQUITA NSD 104 United States of cmatica v 7 5 91 th 2097 Chiquita Brands 15mm Inc 3-5 l I mentioned on page 16 and again 2 employees that Chiquita had in 3 they better o i now in tact In 4 withdrawn Given the company's strong labor record around the world and it's strong environmental record around the orist ae5 rhe neoole now betterso f1 today w0uld the 4 000 Colombia be better off are that the company has 8 it s an easy thing to sit in the contort or your office 4n 7 You know in the and Your Honor it seems to me 9 Washington D C and with the benefit oi hindsight and tell 10 the world how easy the choices were 11 The company does not say that it was legally 12 correct That among other necnns is why it entered the 13 plea of guilty here today But Mr Malis' inability to see 14 that this was a difficult decision a moral decision l5 concerns me It concerns me a great deal Great power is 16 given to prosecutors and the single minded focus of some on 17 the prosecution team to get this campany without 18 consi eration of what I believe are rather obvious nuances 19 is alarming 20 I In the and we stand by our plea with these 21 corrections as to the government s statements and ask the 22 Court to impose the agreed upon sentence 23 Thank you Your Honor 24 THE COURT All right I'll give you a chance Mr 25 Malis if you want to say anything further - meresams@cmls com 102 273 0145 E thSpa-crnm D cial Cour Reports RHIGUITA NSD 105 United States ofmnca v cam-'2 Emembs 7 1001 an i 1 MR MALES 2 am not going to respond to what I 2 View as the ad homiaine attacks on this prosecutor I stand 3 beiore the Court as a represen ative of the United States 4 and on behalf of the United States The United states does 5 not retract one word from its sentencing memorandum or the Ahb llnk raap that we provided todthe court this morning - 7 What I would like to simply remind counsel and thed defendant Chiquita is that Chiquita can not eke one or 9 two or three payments in response to a demand that was made 10 in 1997 No doubt in 1977 this was a horrible situation for 11 the company to face when the AUC said Pay this money or 12 else We non hj away rnm that That's part of the 13 factual assertion and the factual proffer and in the 14 criminal information 15 What makes this conduct so morally repugnant is 16 that the company went forward month after month year after 17 year to pay the same terrorists It did so knowing full 18 well that while its farms may have been protected and while 15 its workers may have been protected while they literally 20 were on those farms Chiquita was paying money to buy the 21 bullets that killed innocent Colombians off of those farms 3 22 A necision to engage in a course of conducr over years for 23 an individual would fail to make out any duress claim or any 24 extortion claim For a multinational corporation with 25 choices about where to do business in the world which w amenme nuinHITA M90 106 United Sets ofAmsrica v Him-J- geomag- 1 r Luu't' Chiquita Bands Inert-mom Int to 20 markets to enter which markets to exit as Chiquita did 2 throughout this time period it de business choices 3 about withdrawing from Panama for example later purchasing 4 farms in other countries in other places in the world H or this co_po-atiot to stand before the Court and say it had no choice but to be qupte _a victim of extortion for 7 years while it reaped the profits of those Colombian 3 onerations it does nOt stand any legitimat orurinv I 5 understand that that's the company's position and it's the 10 position the company has maintained tram day one it does 11 not withstand any scrutiny 12 Vour Honor we believe that this 13 plea agreement is in the best interest obviously of both 14 parties or we wouldn't have a plea agreement and we believe 15 that the Court's acceptance of this plea agreement in - 15 entering judgment on Deiendant Chiquita is the appropriate 17 result here 13 Thank you 19 THE COURT p 11 right 311 I will accept the 20 parties' written plea agreement and I will sentence 21 Chiquita in accordance with the agreement I agree with the 22 parties that the plea agreement is a air resolution at the 23 company's criminal culpability It gives me some pause that 24 no individuals are held accountable but that's really 25 beyond the matters that this Court can resolve The Court massamw cpolssom A Thoma 91 202-273 0745 Coin Reporter RHIQIHTA NSD 107 United Siam of America V CE Chiquita Brandi inc 1 1 resolves the queStion before it which is the company's 2 culpability for the crime 3 Whether or not the characterization given by Mr 4 Holder that it started as extortion and remained extortion 5 is correct the company admits and Mr Holder admits it was criminal fromrthe time that tee statutes passed and 7 certainly the company acknowledges once the terrorist 3 organization went on th List in 2001 there's some 5 dispute whether some people in the company knew in 2082 10 certainly they all knew by 2003 and they continued the 11 p vments Clearly the law makes the company liable 12 criminally irom that gain 13 I agree with Holder that there is some risk 14 associated with trial by jury to both sides The risk to 15 the company obviously is that J would impose after the 15 trial and conviction a criminal fine of $95 million rather 17 than $25 million Obviously the risk to the United States 13 is that a jury could decide that under these unique 19 circumstances that a criminal conviction was not warranted 20 So as in all plea agreements I suppose there is a 21 compromise and I find that the _ublic interest supports 22 settling this matter and putting it behind us with the 23 company's admission that what it did was illegal The 2i company's cooperation in the investigation which it clearly 25 has done and I have been impressed during the numerous thucsams@cxolscom Thoma M Sorensm CVR-CM 202-1 3-8745 Of cial CounRapom-I CHIQU NSD 108 Unimd States ofanw ca v - A 7 trim- 5 Scans-mt 11 1 qu Chiquita Bands bene cial Inc 1 chanbers' conferences we've had with both Mr Halls and Mr IQ Holder in the cooperative way that this matter has 3 _roceeded to this date Pursuant to the Sentencing Retorn Act of 1984 IF- it's the judgment of the Court that the defendant UI Jl hnvporation Incorporated is 7 hereby placed on probation for a period of five years The corporation shall abide by tne general tondi in of 9 supervision adopted by the erobation Office and the 10 Eollowing specie1 conditions 11 one the corporation shall implement and maintain 12 an atreceive and ethics program that comparts 13 with the criteria set Earth in U S Sentencing Guidelines 14 Section including but not limited to 15 A naintaining a permanent compliance and ethics 15 office and a permanent educational training program 1 relating to federal laws governing payments to transactions 13 involvin and other dealings with individuals entities or 13 countries designated by the United States Government as foreign terrorist organizations specially designated global 21 terrorists specially-designated narcotics tratfickers 21 andxor countries supporting international terrorism and any 23 other such federally designated individuals entities or 24 countries 25 B Ensuring that a specific individual remains Mrcsa M Sci-onset 202-273-0745 Of cial Conn Reporter CHIQUITA NSD 109 United Starr ofAmc ca v 7 uR GT 55 5 31me 17 ZULU Chiquita Brands mm bml inc sag A 1 assigned with overall responsibility for the com_lience and 2 ethics program and 3 C Ensuring that the specific individual -eports 4 directly to the chief executive officer and to the board of 5 directors of Chiquita Brands International incorporated no 'less frequently than on an_annual oasis on the effectiveness 7 of the compliance and ethics program 8 The second spec1ai CUndiLluu is he corporation 9 shall provide the probation office with income tax return 10 authorization for release of credit information and any 11 other business or fi ancial information of which it has a 11 conLrol or interest 13 It is ordered that the corporation pay a special 14 assessment of required to be imposed by statute due 15 immediately 16 it is also ordered that the corporation pay a fi_e 17 in the amount of $25 million on Count One Payment of the 13 fine shall be according to the following schedule 55 19 million payable upon entry of judgment today 55 million 20 plus post judgment interest computed pursuant to 18 U S C 21 Section payable on the anniversary date of the 22 try and judgment until the full judgment is satisfied - 23 The Probation Office shall release the presentence 24 investigation report to all appropriate agencies in order to 25 execute the sentence of the Court Ihumnu ooisrom 202-273-0745 Theresa M Summon CUR-CM Of cial Court Reponer RHIQHITA N80 110 Ueiwd 522% 1me v CR 67 35 Sate- ber 17 230 Chiquita Branch hisma cmi Inc age 3- 1 The defendant has the right no appeal the sentence 2 imposed by this Court If the defendant chooses to appeal 3 the defendant must do so within 10 days after the Co rt enters judgment 5 nything further we need to do today counsel - 5 MR EQLDERIW for rhe Siegerzs-e Your Hoeor '7 MR MALES Nothing for the govermenti Theo HA 8 you- 9 THE COURT Thank you very much counsel 10 kme eupon the proceedings in the above entitled ll matter were adj corned 44 13 14 TIFICATE OF REPORTER 15 I certify that the foregoing is a 15 correct transcript rom the record DE proceedings in the l7 above entitled matter 18 19 - ymw 20 Theresa M Sor nsen 21 Official Court lieporter 22 1' 23 29 25 Theresa M Sarcasm 201-273-0145 CHIQUITA NSD Of cial Conn R po 111                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu