By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
By Albert Samaha
For decades, such smarmy tactics paid off, helping Chiquita corner more than half the world market. Now, however, the global economy isn't what it used to be, and in the last seven years, the company suffered a near-fatal stock drop$51 a share to $10. But don't cry for Chiquita. Chairman and CEO Carl Lindner has resorted to hardball tactics, such as his famous threat to sue The Cincinnati Enquirer over its May 1998 exposé of Chiquita's business practices in Latin Americawhich so humbled parent company Gannett that it renounced the story and coughed up a $10-million-plus settlement.
Last month, Lindner's fingerprints were all over a new scare tactic: the Clinton administration's threat to impose tariffs on $500 million worth of European imports, from pecorino cheese and German coffee makers to cashmere sweaters and Louis Vuitton handbags. With a hook like that, it's no surprise that The New York Times ran the story on the front page December 22, toeing the company line and warning that the tariffs will "chill the blood of shoppers along Rodeo Drive and wandering the aisles at Balducci's."
But what's all this got to do with bananas? The yuppie tariffs are the latest salvo in a battle royale between the U.S. and the European Union. The issue: import quotas implemented in 1993 to increase European banana imports from former colonies in places like the Caribbean, while limiting the cheaper bananas that come from Latin American plantations owned by U.S. multinationals.
And while U.S. companies continue to dominate the European banana market, to hear Chiquita tell it, the EU quotas are the equivalent of a fungal scourge that has devoured the company's stock price. Chiquita, the Clinton administration, and the Times all insist the proposed tariffs are retaliation. The crime: Europe's refusal to obey a World Trade Organization ruling, demanding a quota adjustment.
There's another side of the story, which the Times gave short shrift. In the words of the EU's trade commissioner, Sir Leon Brittan, the proposed tariffs are "unilateralism at its worst," designed to help offset the U.S. trade deficit, even though no bananas are grown in the U.S. and few American jobs are at stake. If you don't believe the EU, con sider the Third World argument: enforcing the tariffs would deprive Caribbean farmers of their banana profits and push them deeper into the illegal drug trade. (And you know what they say about the drug trade and the CIA.)
Instead of parsing the EU's counterarguments, the Times' David E. Sanger chose to repeat Clinton's guffaw about Sir Brittan's pronunciation of "bo-non-nas." He also reported uncritically the administration's denial of any connection between the proposed tariffs and Carl Lindner, who has showered Democrats with what the Times called "significant donations."
The Times neglected to report that in the mid 1990s, just as Lindner was filling Democratic coffers, his company was lobbying the administration to file a complaint with the WTO, opposing the EU banana quotas. The complaint was filed on April 11, 1996, and the next day, Lindner began paying $500,000 to state Democratic committees.
That's not to say Sanger was playing dumb. He did use Lindner's soft money as the basis for the assertion that the tariff proposal is "steeped... in politics," which was contradicted by the Times editorial the same day. The editorial dismissed Lindner's contributions as an excuse for the Europeans "to claim, inaccurately, that this is about politics." A reprise in the Times Sunday business section said "only cynics" would raise the Lindner connection.
One wishes the Times would approach the yuppie tariffs with more skepticism. (To be sure, a Times business story in November pointed out that the proposed tariffs are more a publicity stunt than a serious threat.) But then again, no U.S. newspaper seems to be looking beyond the EU banana quotas for other possible causes of Chiquita's financial rot. And therein lies a fascinating paradox. At the same time Chiquita is predicting millions of dollars in losses in Honduras due to Hurricane Mitch, the company may be indirectly responsible for much of the damage Mitch caused to its crops, given the company's track record on progressive environmental policies.
The Washington Post was almost on to this in a November 19 foreign news story, which stated that the flooding in Honduras had destroyed "not just the banana crop, but the plants themselvesin other words, virtually the entire banana industry." Estimating a $255 million drop in annual exports from Honduras over the next two years, Chiquita president Steven Warshaw told the Post, "This is by far the most devastating loss the industry has encountered in the last 25 years."
But the Post didn't report the backdrop for the flooding, which can be summed up in one word: deforestation. During many decades in Honduras, the scrubby hillsides were cleared for peasant housing and farming, while Chiquita reserved the fertile plains for its banana plantations. Since 1960, 30 percent of Honduran forest has been lost, and experts agree that deforestation partially caused the flooding.
In the two months since the hurricane, the deforestation-flooding connection has been addressed in op-eds in The Boston Globe and The New York Times and in a Times editorial by Tina Rosenberg. But even the esteemed Rosenberg failed to mention Chiquita. (Is it something in the drinking water on 43rd Street?)
So far, the only writer to hold Chiquita accountable for its behavior is Alexander Cockburn, whose kickass column in the New York Press chronicled 100 years of turpitude in Latin America.
A cynic might say it's no secret why the media continues to let Chiquita slide. Just look at what happened to Cincinnati Enquirer reporter Mike Gallagher, whose investigative series challenged the company on everything from its environmental and labor policies to compliance with land ownership and foreign bribery laws. After Chiquita's lawyers discovered that Gallagher had accessed the company's voice mail, they sent out the word that one reporter's wiretap vio lation was more heinous than anything the company could have done to some peasants down in rural Honduras.
Before you could say Carmen Miranda, Chiquita brought Gallagher to his knees, and this fall the former reporter agreed to disclose his confidential sources to a county prosecutor. Meanwhile, his series, posted at www.coha.org, contains plenty of leads that could inform the next exposé of banana chicanery. But if Carl Lindner has his way, U.S. readers will continue to be fed press releases about the rising price of pecorino.
For the marketing masters at The New Yorker, owning a copyright means never having to say you're sorry.
At least no one apologized to freelance illustrator Adam McCauley last year, after a drawing he contributed to The New Yorker's Talk of the Town section turned up on a Christmas card distributed by the magazine's business department. The card was sent to hundreds of people on the magazine's payroll, with the conspicuous exception of the artist whose drawing appeared in recycled form on its cover.
"I didn't find out about it until later," McCauley recalls, "when a friend of mine who's an artist for The New Yorker called and said, 'I saw your Christmas card."' McCauley complained to the magazine, only to learn that The New Yorker's contract demands the right to use artwork not just for one-time publication, but also for marketing any tie-in products they can dream up, such as calendars, desktop diariesand corporate Christmas cards.
McCauley is a Hawaii-based artist whose very retinal portfolio is posted at www.adammccauley.com. He says he does as many as five jobs a week for magazines, which typically buy the rights for one-time publication only. But not The New Yorker, which asks for global rights on the first date. McCauley notes that the prestige of going to press alongside Eustace Tilley is incentive enough for most artists to sign away their rights in a blink. "No one's going to refuse to be published in The New Yorker," he says.
Nevertheless, McCauley was "shocked" by the cavalier way he was treated, when the magazine could have easily notified him and paid "even the minimal amount" to secure reprint rights. He complained to the Graphic Artists Guild, which was already warning artists to read the fine print before they sign a Condé Nast contract.
Guild executive director Paul Basista says that while the industry is moving toward universal rights, Condé Nast was a "pioneer" of the practice. "They decided early on that intellectual property had value, but only if they owned the rights." In a December 1997 letter to company chairman S.I. Newhouse, Basista asked Newhouse to scrap the clause in the contract that demands universal rights without any additional payment, as well as a retroactive clause that backdates the waiver of rights to all work published since August 1, 1994. He got no response.
Today, Basista recommends that artists revise the contract or ask for a new one. But it's not worth the hassle for Adam McCauley, who ain't gonna work on Maggie's farm no more. "They market The New Yorker as this arty thing," says McCauley, "yet they really exploit artists. They could set a much better example."
A spokesperson for Condé Nast declined to comment.