Monday, December 12, 2011
Chiquita Bands a Rotten Deal For Charlotte?
When Charlotte City Council votes this evening to approve paying Chiquita $875,000 in cash, they will do so without any notable criticism.
Charlotte and Mecklenburg County will each pay Chiquita $875,000 plus tax investment grants, the State of North Carolina will fund other grants for a deal that combined tops out at over $22 million,
The idea, that having Chiquita Brands call Charlotte home is a major score for Charlotte has already begun to fade as the reality and perhaps buyers remorse has set in.
Not everyone agrees that the Chiguita name is something Charlotte should be associated with, there are after all those pesty murders of South American labor union workers and organizers. Not to mention millions of dollars paid to right wing para military groups in Columbia and El Salvador.
Plus taxpayers still have to come out of pocket for the deal.
As things often go in Charlotte this deal was sealed behind closed doors back in September. City Council members who support the move and are proud to say that bringing Chiquita to Charlotte is good news add that it won't cost the taxpayers an additional money as the dollars will come from the city's capital reserve fund. In other words "we'll use the money we have already sucked out of your collective pocket".
Under the deal, according to Charlotte Observer Mecklenburg County will also pay the company $875,000 over three years. So make that "sucked" out of both pockets.
The city and county payments will be tied to the company meeting job-creation benchmarks over three years. The company will eventually have at least 417 jobs at its corporate headquarters, according to the agreement. But as we know these job creation numbers are really just fluff and never come close.
"The payments have a 10-year "clawback," meaning Chiquita must repay some or all of the money if it leaves the city in that time or reduces the number of jobs it has here." Again this is really just for show.
In addition to the cash payments, the city and county are tentatively set to offer Chiquita a business investment grant of $730,000. The grant is 90 percent of the new property taxes Chiquita is expected to create over the next five years. After five years, the company would pay its full share of property taxes. More from the Observer is here.
And here's a strange twist, two completely opposite groups the Tea Party and Occupy Charlotte also opposed the funding.
This from Pundit House and Christian Hine:
The President of CAUTION, a Charlotte based Tea Party organization, and a spokesperson for Occupy Charlotte announced today that their respective organizations stand in opposition to a proposed incentive package for Chiquita Brands International that will be voted on by the Charlotte City Council during their December 12 meeting at the Government Center.
The membership of both organizations voted unanimously at their most recent meetings to oppose the use of taxpayer money for the benefit of any one particular company.
The rest of the Pundit House coverage is here.
Cedar's take: The amount of money as for the big picture goes is not great, neither is the nice smoke up your butt idea that Chiquita will bring 400 plus job to Charlotte. But it makes you wonder if maybe Charlotte City Council would have taken such a keen interest is doing something to save First Union or fight off the Fed's slaughter of Wachovia that we might be a little better off. How did Charleston land a Boeing Plant and Greenville a BMW factory expansion and Charlotte end up with Banannas?
But things are deeper and more troubling. There is the strange connection with US Attorney General Eric Holder and Charlotte and Chiquita.
When President-Elect Obama selected Eric Holder as his choice for attorney-general, several observers raised questions about the nominee’s role as a private lawyer defending Chiquita Brands. Holder helped Chiquita negotiate a plea agreement with the Justice Department for the years of payoffs that the company made to paramilitary groups in a part of Colombia where the right-wing militias massacred hundreds, perhaps thousands, of civilians.
More about Holder and Chiquita is here.
Confidential internal memos from Chiquita Brands International reveal that the banana giant benefited from its payments to Colombian paramilitary and guerrilla groups, contradicting the company's 2007 plea agreement with U.S. prosecutors, which claimed that the company had never received "any actual security services or actual security equipment in exchange for the payments." Chiquita had characterized the payments as "extortion."
March 2000 notes of Chiquita Senior Counsel Robert Thomas indicate awareness that payments were for security services.
"These documents are among thousands that Chiquita turned over to the U.S. Justice Department as part of a sentencing deal in which the company admitted to years of illegal payments to the paramilitary United Self-Defense Forces of Colombia (AUC)--a State Department-designated foreign terrorist organization--and agreed to pay a $25 million fine."
More about Chiquita's para miliatary operations can be found here.
More about Chiguita move from the Cleveland,com here.
It's all a little too much to take in, but the bottom line is simple. Is Chiquita Brands the type of corporate citizen Charlotte wants? I think the answer should be no.