In the early 1980 s, Colombian drug barons, large landowners, industrialists, and bankers, with the cooperation of the Colombian government, began to create private paramilitary units to combat the left-wing guerrilla forces. By the mid-1990s, the largest and most well-organized paramilitary group in Colombia was the Rural Self-Defense Group of Cordoba and Uraba (ACCU, named for its initials in Spanish), which in 1994 sponsored a summit of the paramilitary groups that resulted in the formation of the Self-Defense Forces of Colombia (AUC, named for its initials in Spanish), a national federation of paramilitaries.

The AUC grew rapidly and by 1997 had roughly 4,000 combatants. By 2001, there were 11,000 members present in nearly all regions of Colombia. There was some drift from the original purpose of the AUC. While there was some direct combat with armed guerrilla forces, most of AUC's victims were civilians whom the AUC believed to be guerilla sympathizers or those who happened to live in guerilla strongholds. The AUC also had its list of people they believed shared left-wing ideologies of the guerillas such as teachers, community leaders, unions, human rights activists, religious workers, and leftist politicians. The AUC also had a desire to eliminate groups it believed to be "socially undesirable," such as indigenous persons, people with psychological problems, drug addicts, prostitutes, and petty criminals. The AUC had come to terrorize communities.

The behaviors of AUC and the escalation of violence between the paramilitaries and the guerrillas in the Colombian president's Decree 1194 of 1989 (which became legislation in 1991) criminalized both membership in a paramilitary group or support to such groups. However, the so-called Chapter 5 Decree was added, which permitted paramilitary groups to reorganize and, with permission of the Colombian government, could obtain permission to purchase arms and be licensed to provide protection for civilians in high-risk areas. These groups were referred to as convivir units.Between 1997 and 2004, executives in Chiquita operations in Colombia paid \$1.7 million to the AUC for protection of its employees. The AUC, according to the U.S. Justice Department, "has been responsible for some of the worst massacres in Colombia's civil conflict and for a sizable percentage of the country's cocaine exports. The U.S. government designated the right-wing militia a terrorist organization in September 2001."5 Chiquita made the payments through one of its wholly owned subsidiary known as Banadex (Bananos de Exportacion), also the company's most profitable unit by 2003. On April 24, 2003, Roderick M. Hills, a member of Chiquita's board and head of its audit committee; Chiquita General Counsel Robert Olson; and, some reports indicate, the company's outside counsel met with members of the Justice Department to disclose the payments and explain that they had been made under duress. Mr. Hills, a former chairman of the Securities Exchange Commission, and the Chiquita officer (and perhaps its lawyer) were told that the payments were illegal and had to stop. The payments did not stop, and the company's outside counsel wrote to the board on September 8, 2003, advising that "[Department of Justice] officials have been unwilling to give assurances or guarantees of non-prosecution; in fact, officials have repeatedly stated that they view the circumstances presented as a technical violation and cannot endorse current or future payments."7 Nonetheless, the payments continued. From April 24, 2003, through February 4, 2004, Chiquita made 20 payments to the AUC, totaling \(\$ 300,000\). On February 4,2004 , Chiquita sold the Banadex operations to a Colombian-owned company. Chiquita then cooperated with the government by making its records available. In March 2007 , Chiquita entered a guilty plea and agreed to pay a \$25 million fine. Eric Holder, then in private practice but who would later become the U.S. attorney general in the Obama administration, represented Chiquita. Chiquita was on probation for five years and agreed to create and maintain an effective ethics program. As of August 2007, Mr. Hills and four former Chiquita officers, including Mr. Olson, were under investigation by the Justice Department for their failure to stop the payments. A Justice Department official said of the investigation, "If the only way that a company can conduct business in a particular location is to do so illegally, then the company shouldn't be doing business there." In 2008, the Colombian attorney general demanded extradition of Mr. Hills and other officers and board members, but was unable to secure U.S. cooperation and then dropped the proceedings. No action was taken by the Justice Department against the officers and directors of Chiquita. A group of Colombian citizens brought suit against Chiquita for claims of death of family members and torture that they experienced at the hands of AUC in the area of Chiquita operations during the period that Chiquita was paying AUC. Their suit was filed under the Alien Tort Statute (a statute designed to afford recovery for human rights violations experienced by those from other countries as a result of actions by U.S. companies), with tort claims for assault, battery, terrorism, support of terrorism, and other claims under U.S. and Colombian law. The suit was eventually dismissed when a federal appeals court held that claims under the Alien Tort Act had to be made against natural persons and not corporations in order to show causation between the payments and the resulting terrorist acts. \({ }^{9}\) However, an intervening U.S. Supreme Court decision resulted in a rehearing of the case, which reinstated a portion of the plaintiffs' tort claims. A federal judge has also certified the suit as a class action and allowed it to proceed in the United States because a trial in Colombia would pose safety risks to the plaintiffs in the case due to paramilitary violence there. As of March 2017, the class action suit of 200 Colombian citizens whose relatives were killed or tortured has been certified and is moving forward. Chiquita's withdrawal from Colombia was not an end to its issues with AUC, but only the beginning of over a decade of litigation. \({ }^{10}\).........................

Discussion Questions
1. Think about this question: How did Chiquita get into this position in the first place? Why did it feel that it had no choice in these circumstances? What of the sale of its most profitable unit in 2004?
2. Why does the term technical violation creep into our discussions of ethical and legal issues? Reid Weingarten, Mr. Hills's attorney, has said, "That Rod Hills would find himself under investigation for a crime he himself reported is absurd."11" Evaluate Mr. Weingarten's analysis of the situation.
3. Are there any lines you could draw (some elements for your credo) based on what happened at Chiquita?
4. Discuss the relationship between social responsibility and the sustainability initiative and compliance with the law. What benefits do companies gain from social responsibility actions?