Objecting to Holder's Memo

When Eric Holder |1| issued his paper on “Bringing Criminal Charges against Corporations”—known as the Holder Memo—in 1999, the Chiquita Brands scandal was still as fresh as its bananas. Having become embroiled in a complex legal mess, the company hired Holder, who would find a solution to Chiquita’s problems within a decade.

Part of the problem had come to public light in May 1998, when the Cincinnati Enquirer published an illegally obtained voice mail in which a Chiquita executive explained that the Securities and Exchange Commission was investigating an entry in the company’s books as a possible bribe. The upshot of Chiquita’s swift legal action against the paper was dramatic: the Enquirer was forced to pay Chiquita $10 million in reparations and to print an apology on the following Sunday, Tuesday and Wednesday.

But the entry was indeed a bribe. Chiquita’s application for a duty-free zone off the coast of Turbo, Colombia, had initially been rejected. Yet once the payment had been made, in March 1997, the special status had been granted without further ado.

Two years later, then Deputy Attorney General Holder submitted the Holder Memo, the Justice Department’s first attempt to codify its assessment of a company’s cooperation in a criminal investigation. The memo challenged the hitherto unquestioned rights to counsel and to confidentiality between a client and an attorney. It allowed federal prosecutors to waive these rights in exchange for characterizing a corporation as cooperative and guaranteeing that it would not be prosecuted for the crime under investigation.

Holder was a partner at Covington and Burling when, on September 10, 2001, the U.S. State Department designated Colombia’s AUC—the country’s right-wing paramilitary umbrella group—a terrorist organization. Soon thereafter, on October 3, the SEC announced a non-prosecutorial agreement with Chiquita but fined it for making an “illegal payment” to secure a “port facility” in Turbo, Colombia. That November, ten containers filled with AK-47s and ammunition arrived at Chiquita’s duty-free port in Turbo, where they were delivered straight into the hands of the paramilitaries.

The illicit shipment had all the trappings of an international scandal and promptly called into being an investigation by the Organization of American States, or OAS. Perhaps unsurprisingly, the resulting OAS report failed to mention Chiquita, which went on to earn the OAS “2004 Corporate Citizen of the Americas Award.”

Yet by April 2003, Chiquita had voluntary disclosed to the Department of Justice that some of its executives had met with the AUC leader at the Chiquita facility in Turbo in March 1997. Following that meeting, Chiquita had made a series of payments to the AUC, exceeding $1.7 million by February 2004. But the disclosure to the DoJ made no mention of the initial bribe or that the meeting with AUC leader marked the acquisition of Chiquita’s duty-free facility. Nor was there a word about the illicit gun shipment to the AUC. This was no full disclosure, nor was it full cooperation.

Holder returned to policy-making in June 2005, when—together with the other members of the Bipartisan Working Group of Former Government Officials—he signed a set of recommendations for reauthorization of the Patriot Act. The group’s recommendations manifestly disregarded a request made by the American Bar Association on behalf of the American Trial Lawyers Association, which called for a revision of the Holder Memo provisions in the Patriot Act.

The first application of the Holder Memo principles to subjects of the Patriot Act was coordinated by Holder himself. In response to his arguments that Chiquita had made payments to the AUC to protect its employees from possible attacks, and that the banana giant had cooperated in the subsequent investigation, the Department of Justice agreed in March 2007 that none of the company’s executives would face criminal charges. Colombia’s Attorney General has a different take on the matter. Justice will clearly not be done for the victims of the AUC if his office does not take over the case of Chiquita. He has thus called for a truly full disclosure from Chiquita, and for the extradition of 20 company executives so that they may be prosecuted in Colombia. If justice is not to be further obstructed in the United States, the nominee for Attorney General should actively support the enactment of legislation that protects attorney–client privileges—the very same privileges that were secure before the advent of the Holder Memo.

1. Eric Holder is the Obama’s Secretary of US Justice Department. The author of this article is a Colombian journalist investigator that has been followed the Chiquita’s illegal payments for 11 years. On February 2009, Ignacio Gómez tried unsucessfully to release this article in several American newspapers while Holder's confirmation was being discussed at the U.S. Congress.

February 2, 2009

By Ignacio Gómez G.
Colombian Journalist

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