“Mark?’’ the man said, extending a hand. “Hi, I’m Ron Henkoff. Good to see you.’’
Whitacre smiled. Henkoff, a reporter from Fortune magazine, looked just the way he had imagined. Whitacre knew that Fortune was well trusted by Warren Buffett; Howard had told him so. And now Fortune was promising to let Whitacre tell his own story, in his own words. This was his chance to speak to Decatur—for that matter, to the world. Then everyone would understand the choices he had made. They would understand he had done the right thing.
Henkoff invited Whitacre to another room, where a photographer, Chris Sanders, was waiting. The blinds were closed; pieces of cloth were hung up as a background. Whitacre looked occasionally bemused as Sanders snapped shot after shot. One of these, Whitacre knew, was a photograph destined for the magazine’s cover.
Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 343
T H E I N F O R M A N T
343
Once the photography session was over, Whitacre returned to Henkoff ’s room and sat at a table. For several hours under the reporter’s questioning, Whitacre told his perspective on the price-fixing investigation, describing the roles of Wilson and Mick Andreas, the involvement of Kyowa Hakko and Ajinomoto, his first meeting with Shepard, volume agreements, the tapes.
Close to midnight, they were done. Many of the secrets of Harvest King had been revealed.
The Whitacres’ purchase of the house in Franklin, Tennessee, was proceeding without a hitch. Gert Borasky, their real-estate agent, had heard from Whitacre that an associate would be helping him find a mortgage. During their conversations, Whitacre mentioned that he had been working for two years as an FBI informant, but insisted she not tell anyone. It was a secret, he said.
Borasky said she needed something attesting to the Whitacres’ financing. A letter, written July 26, soon arrived at her office from Joseph Caiazzo, a New York lawyer. Caiazzo wrote that he represented a lender who had agreed to provide the Whitacres with financing of up to $930,000 for the purchase.
Everything looked in order. Only one item was curious. Neither Caiazzo nor Whitacre had told Borasky the name of the lender. But the oversight seemed inconsequential.
Nothing seemed to concern Whitacre more than the talk about him inside ADM. Every negative rumor left him arguing fitfully that the comment was a lie. Ginger begged him to stop calling old colleagues in search of scuttlebutt. Sometimes he seemed to agree—only to rush back to the phone minutes later and start his hunt again. In July, Whitacre was visiting family in Ohio when he called Lou Rochelli, the ADM controller. Whitacre asked eagerly if anything was happening.
“Well,’’ Rochelli said, “there’s one thing happening you’re going to be interested in.’’
“ADM’s trying to smear my character!’’ Whitacre wailed to Shepard.
“This isn’t right!’’
It was minutes later. Whitacre explained he had heard that Mick Andreas was instructing auditors to review Whitacre’s expense statements and financial transactions in search of irregularities. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 344 344
K U R T E I C H E N W A L D
“And he’s telling them if they don’t find anything wrong, that they’re supposed to make something up!’’
“Mark,’’ Shepard said soothingly, “we’ve talked to you about this in the past as something you should expect.’’
Despite Shepard’s efforts, Whitacre stayed upset. He didn’t like the way this was going. Definitely not.
A flurry of faxes and letters from the anonymous Lamet Vov continued to arrive throughout July to the homes and offices of ADM executives and directors. One went to Mark Cheviron, ADM’s security chief, urging him to tell what he knew to the board. Another was sent to the company’s chief pilot, urging him to report all improper travel by officers. Each was forwarded to Aubrey Daniel, who was growing angered by what he perceived to be threats.
On July 30, a new, more aggressive fax from the Lamet Vov was sent to ADM directors. It demanded the resignations of Dwayne and Mick Andreas, Terry Wilson, and Barrie Cox. It also insisted that Joe Hale, a company director, be named chief executive and that Mark Whitacre be selected as executive vice president.
“We suggest you get things moving in the right direction, and fast,’’
the fax read. “We can have a book on the street in two weeks exposing our findings that will ruin many people and end careers.’’
Brian Mulroney had no illusions about the allegiances of Williams & Connolly. They were fighting for the company, which in this case could easily mean for the Andreas family. But now Mulroney was in charge of the board’s special committee, a group that did not even exist when Williams & Connolly was retained. What if the committee needed to take an action that might harm the Andreases? How could Williams & Connolly provide objective advice?
Mulroney telephoned his cochairman, John Daniels.
“I’m concerned,’’ he said. “I think we need our own counsel, because we may not be working on the same side of the street as Williams & Connolly before we’re through.’’
Daniels agreed but had no suggestions for which law firm to hire. Mulroney came up with his own idea.
Beneath vast stretches of deep blue in Emigrant, Montana, a team of ersatz cowboys straggled out of the main lodge at the B Bar Ranch, ready for the day’s activities. The summer haying and vegetable Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 345
T H E I N F O R M A N T
345
harvests were still under way at the nine-thousand-acre ranch in the heart of the Rocky Mountains. But there were plenty of other activities available for the wealthy clientele, from fly-fishing in the meandering Yellowstone River to saddling up for some work with cattle herds. Richard Beattie, chairman of the New York law firm Simpson Thacher & Bartlett, was planning on taking advantage of the fishing. A soft-spoken ex-marine, Beattie was a man who traveled in diverse circles, from the political elite of New York’s Democratic Party to the top deal-makers of Wall Street’s investment community. Beattie had also gained fame from his longtime role as a legal advisor to Henry Kravis, general partner with Kohlberg Kravis Roberts & Co., the premier leveraged-buyout firm. Beattie had been a principal advisor in Kravis’s successful takeover bid for RJR Nabisco, besting a competing offer from a group led by the company’s then-chairman, F. Ross Johnson. Beattie, like Johnson and Kravis, had been prominently featured in Barbarians at the Gate, the best-selling book about the takeover fight.
On this day, Beattie was vacationing with an old friend, Kenneth Lipper, a renowned investment banker and former deputy mayor of New York. For the two men and their wives, the trip to the B Bar Ranch was a chance to get away from the hustle and ringing phones of Manhattan. But that morning, a message was waiting for Beattie at the ranch’s front office. Brian Mulroney wanted to speak with him. Beattie found a phone and called right back.
“I called because I need someone to advise a special committee of directors with the Archer Daniels Midland Company,’’ Mulroney said a few minutes later. “And you have come highly recommended to me.’’
Mulroney said he had spoken with one of his fellow directors, Ross Johnson, as well as with Henry Kravis, and both had sung Beattie’s praises.
Despite the sketchy details, Beattie accepted the assignment. He and Mulroney agreed that they would get together at the next meeting of the special committee, at the Washington offices of Williams & Connolly.
The August morning was clear and bright, the hot sun tempered by a cool breeze. Herndon figured it was perfect golfing weather—and a great excuse to show Whitacre that the FBI still cared. He dialed Whitacre’s home number.
“Hey,’’ Herndon said. “It’s Bob. How’s it going?’’
Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 346 346
K U R T E I C H E N W A L D
“Pretty good, pretty good,’’ Whitacre mumbled.
Herndon took a breath. Whitacre so
unded terrible, his voice heavy with distraction.
“Well, I just wanted to make sure everything’s going okay,’’
Herndon said. “I haven’t seen you for a while, and I wanted to see if maybe you’d like to play some golf. I can take an afternoon off if you want to go—’’
“I’m kind of busy,’’ Whitacre interrupted.
“Well, how about Brian and I come by and let’s go to lunch? We need to pick up that equipment, and we’d like to see you and see what’s going on.’’
“Well, yeah, what’s good for you?’’
“Whatever’s good for you, Mark. You tell me.’’
Whitacre flipped through his schedule. He suggested meeting in two days, on Wednesday, August 2.
“That’ll be great, Mark,’’ Herndon said. “We’ll see you then at your house.’’
Later that afternoon, Jim Epstein’s telephone rang. He had been representing Whitacre for less than a month, but already the case was taking up much of his time. He had reached the outlines of a $7.5 million severance agreement with ADM, which would require Whitacre to sit for an extensive exit interview. But those negotiations were not Epstein’s only demands from the case. Between calls from ADM, the government, reporters, and Whitacre, it seemed he was spending most of his day on the phone.
This time, the caller was a surprise. It was Jim Randall, along with a Williams & Connolly lawyer.
“I am calling on behalf of ADM to demand that your client, Mark Whitacre, meet with company officials on the afternoon of August third, at five o’clock,’’ Randall said.
What was this all about? Epstein asked.
“We want him to answer questions about certain financial transactions.’’
On the morning of August 2, Jim Griffin was at his desk in the Chicago office when he heard that Aubrey Daniel was holding for him. He picked up the phone.
“I have an urgent matter to discuss,’’ Daniel said. “I want a meeting immediately, in Washington. And I want it with someone in the division who has the authority to make decisions about the investigation.’’
Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 347
T H E I N F O R M A N T
347
Griffin listened, intrigued. “What does this involve?’’ he asked.
“That’s what I want to discuss at the meeting. I assure you, it’s an important matter, and I wouldn’t be making this request if it wasn’t.’’
Griffin thought for a moment. There seemed to be enough urgency in Daniel’s tone that he couldn’t simply be put off. Griffin decided to take the lawyer at his word.
“I’ll arrange something,’’ Griffin said, “and get right back to you.’’
Shepard shook his head. “What do they think they have now?’’ he asked.
The news of Daniel’s demands for a meeting hit like a dousing of cold water. Griffin had made arrangements to hold the meeting the next morning and had already booked his flight to Washington. The agents thought the response was excessive; probably this was just going to be another complaint about leaks in the press.
“Man, DOJ should refuse to talk to this guy,’’ Herndon said.
“You’re right,’’ Shepard agreed. “They should say, ‘If you want to talk to the government, Mr. Daniel, you go to Jim Griffin. He’s in charge of this case.’’
The two agents groused another few minutes, until Shepard noticed the time. It was after twelve-fifteen. If they were going to drive over to Whitacre’s for lunch, they needed to leave the office right away. The drive to Moweaqua took about twenty-five minutes. The agents pulled the car into the driveway, weaving up to the front. Whitacre appeared on the porch. He seemed in good spirits. The three men greeted each other.
“Hey, listen,’’ Whitacre said. “I thought we could go to this Chinese place I know in Taylorville. Nothing fancy, but the food is pretty good.’’
“Sure, Mark,’’ Shepard said. “Sounds great.’’
The men decided to take Shepard’s car. Whitacre got into the back. As they drove to Taylorville, Whitacre chatted about the restaurant. Eventually, he paused, leaning his arms on the front seat.
“Guys,’’ he said, his tone serious. “There’s something I want to tell you.’’
Herndon turned, while Shepard glanced in the mirror.
“My attorney’s telling me not to say anything. It’s something I’ve wanted to talk about for a while, but he wanted to see if ADM raised it. But I want to tell you.’’
This didn’t sound good. Herndon held up a hand. “Mark, wait. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 348 348
K U R T E I C H E N W A L D
Don’t tell us anything. You have an attorney. We need to make sure we’re allowed to hear this.’’
“Bob’s right,’’ Shepard said. “This isn’t like before, Mark. You’re represented.’’
Whitacre sat back, looking disappointed. Both agents could tell he was going to have trouble holding back on his story. Herndon changed the subject.
“So,’’ he said, “how was your trip to Tennessee? What’s the new place like?’’
Whitacre smiled. “Oh, it’s great,’’ he said, launching into a description of the house. The idle talk continued for some time, as they drove down the small road, surrounded on both sides by cornfields. Eventually, the conversation ran out. Whitacre stared out the window. He looked back at the agents. Jim Randall had contacted him, he said suddenly.
Herndon fixed him with an intrigued look. “Oh, yeah?’’
“They want to talk to me. It’s about money stuff.’’
“What kind of stuff?’’
“Financial transactions. Stuff I haven’t told you.’’
It had only taken Whitacre a second, but already he had slipped the conversation back to the topic that had been bothering him.
“Is this what you were referring to before?’’
“Yeah.’’
Herndon wavered. He wanted to call the lawyers, to ask how to proceed. But that wasn’t practical. He decided to make sure Whitacre knew what he was doing.
“Mark, you understand your lawyer has advised you not to discuss this matter.’’
“I know.’’
“And we’re not asking you. So anything you say to us is a free and voluntary statement, against your lawyer’s advice. If you tell us about this now, it means you’ll be talking without representation present. You understand?’’
“I understand. But I want to tell you.’’
Both agents sat silently in the front. They thought it was dangerous to say anything. Whitacre was on his own; whatever happened from here on was his decision.
“ADM’s found some questionable financial things involving me. They want to meet with me and Epstein tomorrow to answer Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 349
T H E I N F O R M A N T
349
questions. If I don’t cooperate, they say they’re going to take ‘appropriate action.’ ”
Whitacre sounded distressed.
“What does that mean, ‘appropriate action’? I mean, are they talking about going to the FBI? Are they talking about going to prosecutors?”
This was getting bad, rapidly.
Shepard looked in the mirror again. “It’s difficult to know what the term means, Mark,’’ he said. “It’s hard to say whether law-enforcement agencies, if advised of the information, would open an investigation and whether they would ultimately refer it for prosecution.’’
For several minutes, Shepard continued a monologue about law enforcement. He talked about the differences between civil and criminal cases, about state, local, and federal agencies, and about how the merits of a prosecution are judged. Herndon listened, hoping his partner could keep his speech going until they reached the Taylorville restaurant, where they could call the antitrust lawyers. He did. As Shepard wrapped up his primer, they pulled in at the shopping center where the Chinese restaurant was located. After parking, th
e three men headed in, the conversation temporarily on hold. Herndon noticed a pay phone and hesitated, thinking about calling the lawyers. He decided to wait. A hostess approached the group and guided them to a table near the front.
Whitacre hesitated. “Umm, could we sit in the back?’’
The hostess nodded, escorting the group to a large, round table. They took seats facing a wall, with Whitacre between the two agents. The three men studied the menu and ordered quickly; their food arrived in a few minutes. Herndon tasted his orange chicken. Whitacre was right—this place was pretty good.
The men chatted for a few minutes about the food and whatever else came to mind. No one was going to ask Whitacre anything about the financial issue. The conversation hit a lull. Everyone was uncomfortable. Whitacre looked down at his food for a moment.
“Let me throw out some hypotheticals,’’ he said. “I’ll talk about some financial stuff and you tell me if they’re wrong and how serious they might be.’’
The agents continued eating, trying to seem casual.
“Suppose a company gave an executive a car, you know, a corporate car,’’ Whitacre said. “But instead of driving it to work, he drove his Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 350 350
K U R T E I C H E N W A L D
personal car and gave the company car to his daughter to drive. Would that be a problem?’’
The agents almost wanted to laugh. After the big buildup, Whitacre’s concerns sounded trivial.
“Mark, that may be against corporate policy and there may be IRS
issues,’’ Herndon said. “You may have to pay taxes on that, but it shouldn’t be a big problem.’’
Whitacre nodded, looking serious. He paused.
“Well,’’ he finally said, “just hypothetically, let me give you another example. What about if an executive used a corporate airplane for personal use?”
Basically the same thing, Herndon said. Maybe some tax issues, but it didn’t sound like a major problem.
The Informant Page 44
