How to Become a Top Banana

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As 1995 gave way to 1996, the money kept gushing from the Lindner empire, much of it in smaller, harder-to-trace donations. In February a Lindner executive gave $10,000 to the D.N.C., and American Financial Corp. contributed $15,000. In March, Lindner directed $10,000 each to the Minnesota, North Carolina, Tennessee and Iowa Democratic parties, $15,000 to the Michigan Democratic Party and $5,000 to the Connecticut Democratic Party. In April he steered $10,000 to the Pennsylvania Democratic Party.

With at least an additional $95,000 of Lindner money in the Democratic Party's bank accounts, the U.S. Trade Representative on May 8 took its banana case to the WTO. At long last, the Clinton Administration was ready to mount a global trade war on Lindner's behalf.

A spokesman for Chiquita dismissed the suggestion that campaign contributions by Lindner had anything to do with the USTR's taking the case. "It is well known that Carl Lindner has been actively involved and a major contributor to candidates and other causes on a multipartisan basis for many decades," he said.

Former Trade Representative Kantor also insisted that contributions played no part in his decision. "The staff made a unanimous recommendation to me that we bring the case," he said.

Of Lindner's contributions, Kantor said, "I couldn't have cared less. It made no difference to us whatsoever. We didn't hear a word from the White House."

Be that as it may, the USTR decision to pursue a trade war over bananas was sharply at odds with its handling of similar agricultural issues. Consider this: today, even with the tough trade restrictions still in place, Chiquita controls 20% of the European market. By way of contrast, the USTR has negotiated with Japan to allow American companies a 3% share of the Japanese market for rice.

In other words, the U.S. went to war on behalf of one American company that already had 20% of a foreign market, and it negotiated to secure 3% of another foreign market for the benefit of seven to 10 American companies.

Over the next two years, Lindner continued to dispense cash to the Democrats. In June 1997, two installments of $10,000 each went to the Democratic National Committee Services Corp. In November he gave $75,000 to the D.N.C. and in February 1998 another $75,000. That was followed by contributions of $10,000, $10,000, $25,000, $50,000, $25,000 and $5,000.

Throughout this period, Lindner and Chiquita enjoyed a close working relationship with the USTR office. Copies of U.S. government correspondence with heads of state in other countries were voluntarily turned over to Lindner. Finally, on Nov. 10, 1998, the USTR proposed 100% tariffs on several dozen European imports. The agency said the increased tariffs would be imposed on March 3, 1999, if Europe did not relent and relax its restrictions on Latin American bananas.

The products included pecorino cheese, certain wines, apple juice, bath preparations, candles, furs, coniferous wood, paper boxes, lithographs, cashmere sweaters, women's suits, dresses, skirts, bed linens, scissors, sewing machines, vacuum cleaners, food grinders, windshield wipers, dolls, photographic equipment, chandeliers, glass Christmas ornaments, sweet biscuits, wafers, felt paper, plastic handbags, coffee or tea makers, electric toy trains, greeting cards, stoves and ballpoint pens.

In short, it was a list of products bearing absolutely no relation to bananas.

While government officials were assuring reporters that the tariffs would never be levied, the U.S.-based companies that would be affected were taking no chances. In all, 42 types of products were targeted for tariff increases and, as it had to do by law, the USTR asked interested parties to respond.

Respond they did, setting off a furious lobbying campaign to try to get off the banana hit list. Companies and politicians showered the agency with letters warning of potential job losses in their districts if the increased tariffs were imposed.

At a USTR hearing on Dec. 9 attended by trade associations and Washington lobbyists, various interest groups spoke out against the tariffs, saying they would cripple or possibly destroy their businesses.

"The imposition of a prohibitive duty on ballpoint pens would have a devastating effect on Gillette's writing-instruments business in the U.S.," a representative for the Gillette Co. warned.

"Subjecting these dolls to a 100% duty could well result in the collapse of the entire line of American Girl products," a representative for Mattel cautioned.

"The imposition of a 100% duty rate on articles of fur clothing and garments will seriously impact our members, making their garments outrageously expensive, even for a luxury product," declared a representative of the Fur Information Council of America.