In April 2003 Roderick M. Hills, then-head of Chiquita Brands International Inc.'s audit committee, went to the Department of Justice with other Chiquita representatives with a stunning admission: The company had been making illegal payments to a violent Colombian group that the U.S. branded as terrorists.

In years past, the admission might have been enough to get Chiquita off the hook. Companies and their executives who reported wrongdoing and agreed to cooperate often have enjoyed lenient treatment. Many received a "deferred prosecution" in which no charges were filed unless they committed additional crimes.

But things didn't work out that way for Chiquita -- or for Mr. Hills and some colleagues. In March of this year, Chiquita pled guilty to engaging in transactions with a terrorist group and agreed to pay $25 million in fines, the first time a major U.S. company was charged with having financial dealings with terrorists. Now Mr. Hills, a former chairman of the Securities and Exchange Commission, faces the possibility of personal criminal charges. A federal grand jury is looking at his role, and that of other high company officials, in continuing the company payments for almost another year after the meeting with the Justice Department.

The investigation illustrates the recent posture taken by U.S. authorities to prosecute aggressively even when companies turn themselves in for breaking the law. Critics say that strategy could cause difficulties if companies decide they suffer no worse by waiting to get caught. "This case will make companies think twice about self-reporting," says Stetson University law professor Ellen Podgor.

Read it all from the front page of yesterday's Wall Street Journal.

Filed under: * Economics, Politics • Economy • Terrorism

1. AnglicanFirst wrote: If the year were 1943 and an American executive was discovered or admitted to making a financial payment to a German armaments manufacturer, what would his fate have been. If the terrorists in question are the FARC or the FPLN, then there is no question that they are declared enemies of the United States.  There is no declaration of war and they are not a government, but by their own words, they are our enemies. BTW, as a non-WSJ subscriber, I couldn’t read the whole article. August 3, 8:41 am | [comment link]

2. NancyNH wrote: The price of bananas went up ten cents per pound at our local market. Does that mean that we, the consumers, are paying the fine? And does that mean that our purchases of bananas helped terrorists? Even up here in Northern NH, we had an incident where three men bought all the TracFones from two stores. The FBI is investigating. So anyone who thinks they can escape the effects of terrorists is mistaken. Just MHO. August 3, 9:01 am | [comment link]

3. NancyNH wrote: P.S. The men were Middle Eastern, and our local police seemed reluctant to mention that! August 3, 9:02 am | [comment link]

4. libraryjim wrote: Well, THIS gives new meaning to the term “Banana Republic”. August 3, 9:41 am | [comment link]

5. The_Archer_of_the_Forest wrote: Brings back fond memories of the United Fruit fiasco. August 3, 11:02 am | [comment link]

6. Padre Mickey wrote: Chiquita was buying protection from the Right Wing Paramilitaries, not the FARC. The same kind of people United Fruit supported, the kind of terrorists the U.S.A. has supported in the past. The history of U.S. corporations here in Central and South America is terrible. Chiquita Banana is the source of a lot of trouble in the province of Bocas del Toro here in Panamá, también. August 3, 6:51 pm | [comment link]

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