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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n