BY DON BOHNING

 What began Jan. 31 as a customs dispute over rice shipped to Haiti for an
 American-owned Haitian company has boiled over into a controversy that has
 halted the little remaining direct U.S. aid to Haiti.

 The dispute centers on Haitian government accusations that the Rice Corporation
 of Haiti tried to smuggle rice into Haiti. The government assessed a fine that the
 two American owners say could cause the liquidation of the company and loss of
 their estimated $5 million investment.

 The company's processing plant on the outskirts of Port-au-Prince, a downtown
 office and a company home were taken over at gunpoint and sealed. The ship
 carrying the rice, on charter to supplier Archer Daniels Midland, was seized but
 finally allowed to leave last week after the rice had been unloaded.

 Although the rice-processing plant is back in operation, it remains firmly under
 Haitian customs supervision to ensure that the fine of about $1.4 million is
 exacted from sale and distribution of the five million-ton plus shipment.

 OTHER CHARGES

 The American owners, Doug Murphy and Larry Theriot, who deny charges of
 illegal activity, fled Haiti across the Dominican Republic border Feb. 24 ahead of
 warrants for their arrest that were first assumed to be connected to the
 contraband charges.

 But Haitian officials now say the arrest warrants and sealing of some of the
 properties were linked to a separate and unrelated ownership fight over the
 company that is being played out in Haitian and Texas courts.

 ``These two things unfortunately happened together, which make it appear as if
 they were related but they are two entirely separate issues,'' Miami attorney Ira
 Kurzban, general counsel for the Haitian government, said in a telephone interview
 from Haiti, where he has been discussing the rice case with U.S. and Haitian
 officials.

 Others see the timing of the two events as more than coincidental, however.

 HOLD ON AID

 In Washington, Sen. Jesse Helms, R-N.C., chairman of the Senate Foreign
 Relations Committee, has put a hold on any aid to the Haitian government and is
 asking the State Department to deny U.S. visas for 10 Haitian officials, including
 two Cabinet ministers and the heads of Haitian police and customs.

 ``Under the guise of a customs dispute, Haitian officials have run the proprietors of
 the U.S.-owned Rice Corporation of Haiti off their property at gunpoint,'' Helms
 said in a letter to Secretary of State Madeleine Albright asking that the visas be
 denied.

 ``In spite of efforts to negotiate a settlement, Haitian officials appear determined to
 extort money from several U.S. businessmen and confiscate their property,''
 Helms added.

 ``I think Mr. Helms has been severely misinformed in this case,'' Kurzban told The
 Herald.

 Haiti has done nothing, he said, other than ``follow the normal procedures in
 smuggling cases. The company has been fined, they have acknowledged their
 guilt and entered into an agreement with the government.''

 ``We paid the duty but paid no fines,'' responded Theriot, the company's secretary
 treasurer, in a telephone interview from Washington, where he has been lobbying
 U.S. officials. ``We have not acknowledged guilt and in fact are not guilty.''

 The U.S. government, meanwhile, has been walking a fine line, trying to help
 resolve the customs controversy and avoid the ownership dispute.

 ``We see this as a purely commercial dispute. . . .'' said a State Department
 official.

 `CORRUPTION'

 One problem might be the Haitian judicial system itself, as described in two U.S.
 government reports released within the past month.

 ``The judiciary is theoretically independent. However, in practice it remained
 largely weak and corrupt,'' the State Department's annual report on human rights
 said of Haiti, adding that ``years of rampant corruption and governmental neglect
 have left the judicial system poorly organized and nearly moribund.''

 The State Department's International Narcotics Control Report, released March 1,
 was even more damning, noting that ``in the justice, customs and port authority
 sectors, corruption remains a thriving force'' and although judges' pay has been
 increased, it remains ``sufficiently meager to make them vulnerable to bribes.''

 ``Similarly, poorly paid customs agents profit from widespread contraband
 activities in Haiti's ports. An estimated two-thirds of Haiti's imports arrive without
 the knowledge of or with the collusion of Haitian customs.''

                     Copyright 2000 Miami Herald