The Informant

by Kurt Eichenwald

  Already, Whitacre told the group, his lawyers were making arrangements for appearances on NBC and ABC; an interview with Barbara Walters, the ABC News correspondent, had already been set up, he said.

  “So, I just wanted everybody to know I’m not going to be around much in the next few months. I’m going to be out there, fighting to prove my innocence.’’

  Whitacre finished his speech. Several longtime staff members crowded around him, wishing him luck.

  There would be no media interviews. Instead, plea negotiations with Whitacre moved into high gear. Walker sought a maximum of five years in prison; the prosecutors were unwilling to go below a minimum of seven.

  Days before Whitacre’s trial was scheduled to begin, a tentative deal was struck. Whitacre would plead guilty to thirty-seven felonies, including money laundering, wire fraud, and tax evasion. In exchange for his cooperation, the prosecutors would ask the judge to sentence him below the usual range dictated by the federal guidelines. Under those terms, Whitacre could expect a seven-year prison term. After reaching the tentative agreement, on October 7 Mackay called Jim Griffin, letting him know the developments. Later that afternoon, Mackay and D’Angelo were working in the “war room’’ they had reserved in the Urbana federal courthouse in preparation for the Whitacre trial. The phone rang and Mackay put it on speaker.

  “Don, it’s Scott Lassar.’’

  Lassar was on a speakerphone in Chicago, joined by the rest of the antitrust team. They had heard about the Whitacre plea agreement, he said, and had concerns.

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  “What we’d like is to try and combine the two cases, and arrange for a global plea,’’ Lassar explained. “And—’’

  “His lawyer doesn’t want to combine the cases,’’ Mackay interrupted gruffly. “He’s saying the antitrust case really isn’t high on his radar screen.’’

  “Well, Don, there’s a possibility that the judge might not accept a plea if it doesn’t resolve everything.’’

  Mackay interrupted again with an objection. Lassar pressed forward.

  “In our case, this deal is going to make it look like Whitacre got twenty years off his sentence. It will look sneaky, like we’re trying to put something past them.’’

  Mackay listened, annoyed. He wanted nothing to do with wrapping the cases together. His trial was about to begin. This plea agreement would be a victory. It had been approved up the line in the Justice Department. Now, as far as he was concerned, the antitrust team was trying to mess everything up to compensate for their own mistakes. Lassar continued his explanations. Mackay’s face twisted in rage. Too much coffee and nicotine had combined badly with the stresses of trial preparation. He exploded.

  “Cocksuckers!’’ he screamed in a high, shrill voice. Everyone went silent.

  “I’m sick of you!’’ Mackay screeched. “We’ll go to trial without your fucking cooperation! Good-bye!’’

  Mackay slammed the speakerphone, cutting off the call. Back in Chicago, the assembled group heard an audible click. The room remained quiet.

  “Well,’’ Lassar finally said, “I think that went pretty well.’’

  In Urbana, Mackay was on a tear. His face was cherry red, his breathing labored. D’Angelo and Nancy Jardini, a new prosecutor on the case, stood back as Mackay ranted. D’Angelo feared that the prosecutor was on the verge of a heart attack.

  “Those goddamned cocksuckers!’’ he raged. “You know we’re going to have to try this case because they can’t get their fucking act together! This is all their fault!’’

  The storm clouds passed after ten minutes. Mackay knew that he had handled the situation badly, but remained angry with the antitrust team. The Fraud Section wanted the plea. So soon, the prosecutors came up with a plan.

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  The Whitacre plea would proceed. But until that time, the prosecutors told D’Angelo, the antitrust team was to be kept largely in the dark about what was happening.

  “Case 97-20001,’’ the court clerk announced to a packed courtroom.

  “United States of America versus Mark Whitacre.’’

  The government and defense lawyers stated their names. Judge Harold Baker, from the federal district court in Urbana, looked out over the courtroom. Whitacre, dressed in one of his best suits, sat calmly beside Bill Walker.

  “The clerk informs me this is a change-of-plea proceeding, is that right?’’ Judge Baker asked.

  Walker stood. “Correct, your honor.’’

  Judge Baker glanced toward Whitacre. “Will you come and stand before the court, Mr. Whitacre?’’

  Whitacre walked to a podium.

  “Mr. Whitacre, is it correct that you want to enter a plea of guilty to some thirty-five counts?”

  “Yes, your honor.’’

  Walker interrupted. The real number in the plea was thirty-seven, he said. Baker asked a series of questions, to ensure that Whitacre was capable of making a decision to plead. Whitacre told the judge that he had been diagnosed as a manic-depressive, was taking lithium, and had been hospitalized for the condition twice.

  Judge Baker looked over the plea agreement.

  “The government has agreed not to bring any additional charges against you, is that right?’’ Judge Baker asked. “Provided you haven’t hidden information from them?’’

  “I think it’s limited, your honor, to the Tax Division of the Justice Department and the Fraud Division of the Justice Department,’’

  Walker said.

  Why would Whitacre leave himself exposed to another charge? If he pleaded guilty to everything, the possible jail time wouldn’t change.

  “I want to talk to you guys about that,’’ Baker said, looking at the prosecutors. This agreement wasn’t binding on other agencies of the government? he asked.

  Nancy Jardini stood. “We don’t, as the Fraud Section of the United States Department of Justice, do not have the authority to bind the Antitrust Division or an individual district,’’ she said. “The defendant understands that.’’

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  Turning to Whitacre, Judge Baker asked pointed questions; did he know that this plea would have no effect on the other criminal charges against him? Whitacre said he understood. Judge Baker was satisfied.

  “The court accepts the pleas of guilty,’’ he said. “The court finds the defendant guilty as charged.’’

  Judge Baker continued Whitacre’s bail and called a recess. Crowds of reporters and observers filed out of the courtroom. Many received copies of Whitacre’s printed, official statement, acknowledging that he had reviewed and signed the plea agreement. Near the bottom of the single page, one phrase stood out in bold italics.

  “I regret participating in the money conspiracies that were

  approved by upper management, ’’ it read. Thirty minutes later, D’Angelo called Herndon.

  “Look, I know this is going to be awkward, but you’re the first person I’ve called,’’ D’Angelo said. “Whitacre entered a plea today at twothirty.’’

  “What?’’

  “Sorry. I was ordered not to say anything.’’

  Herndon thanked D’Angelo and hung up, annoyed. Even if Whitacre wouldn’t work out a price-fixing deal, both Shepard and Herndon had wanted to be at the plea. Now, the bickering with the Fraud Section had cost them the opportunity. They had lost a chance for closure.

  Reaching for the phone, Herndon called Shepard, who was taking a day off at home. He wanted to let his partner know about the Justice Department’s latest low blow.

  Months later, two Chicago lawyers pushed through the door to the lobby of a La Quinta Inn near Raleigh, North Carolina. They headed for the front desk.

  “My name’s Sheldon Zen
ner,’’ the older lawyer said to the clerk.

  “I’m looking for Bill Walker.’’

  It was December 28, a Sunday. Zenner and his colleague, Sean Berkowitz, were preparing for the trial of their client, Sid Hulse. For months, they had pushed Walker for an interview with Whitacre—the man Hulse said had approved everything. Whitacre was key to Hulse’s defense.

  Walker arrived in the lobby dressed in sweats, with shoes but no socks. He led the lawyers to a sitting area, near a buffet table offering a Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 543

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  continental breakfast. Zenner and Berkowitz hesitated. This was not the right place for a private discussion. The moment seemed surreal.

  “I’ve been using this as my office away from my office,’’ Walker said. “Lets me work near Dr. Whitacre.’’

  The Chicago lawyers sat.

  “Dr. Whitacre is very supportive of Sid Hulse,’’ Walker said. “He feels terrible about getting Sid involved in this and will certainly do what he can to help out.’’

  For more than an hour, the lawyers discussed ground rules for the interview. Then, Whitacre arrived, looking relaxed and chipper, and found a seat. Hotel guests walked nearby, carrying cereal and muffins to their tables.

  “Okay,’’ Whitacre said. “What do you want to know?’’

  Two months later, on February 6, the fraud team met with Whitacre in the same hotel lobby. They listened angrily as he described his discussions with Hulse’s lawyers; Whitacre had canceled a meeting with the government about the same time, claiming to be too busy. But the biggest problem now was that just weeks before trial, Whitacre was changing his story about Sid Hulse.

  As Walker rested on a nearby couch, Whitacre told a jumbled tale, contradicting himself from one sentence to the next. Mackay and D’Angelo had no doubt that he was once again adjusting his story, this time to protect Hulse.

  Whitacre said he had advised Hulse that there was no need to pay taxes on the illegal money until he brought it back to the United States; then, he claimed to have no memory of discussing taxes with Hulse. The cash that Hulse had kicked back to Whitacre from the first three-hundred-thousand-dollar payment was a loan, he said—

  apparently forgetting that he had already admitted this was a cover story cooked up years before. Other money that went to Hulse from ADM included the repayment of the loan, Whitacre said.

  “Wait a minute,’’ D’Angelo said. “If you owed one hundred thousand dollars, why was Hulse recouping that money through ADM?’’

  Whitacre blinked, pausing. “I don’t remember the reason,’’ he said finally.

  The contradictions continued for hours. Whitacre would change the meaning behind a payment again and again, struggling to extract Hulse from his thicket of crimes.

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  fuming. How could Whitacre be so stupid? He had cut a deal to cooperate, he hadn’t been sentenced, and now—on the eve of Hulse’s trial—he was changing his story?

  “Can you believe this shit?’’ Mackay growled.

  “It’s pretty unbelievable, Don,’’ D’Angelo said.

  At that moment, Mackay shelved any plans of seeking a reduction of Whitacre’s sentence. Let him do the max. Mackay looked at D’Angelo.

  “We’re gonna hammer that SOB,’’ he said.

  Packages and letters from Whitacre began arriving in government and corporate offices around the country. Some simply contained a letter; others came with a packet of supporting documents. Some even included audiotapes. Copies of the same letter went to Janet Reno, Jim Griffin, and Robin Mann. In three short paragraphs, Whitacre acknowledged making mistakes during his time as a cooperating witness and apologized. Some prosecutors also received copies of an affidavit signed by Whitacre. On page 5 was a section that stopped all of them in their tracks.

  “Regarding Brian Shepard,’’ it was headed.

  In the next five paragraphs, Whitacre confessed—in a roundabout way—that he had made up the allegations that Shepard had instructed him to destroy tapes.

  “I did turn in every tape of ADM and its competitors with no exceptions,’’ he wrote. “Furthermore, no tapes were altered at any time.’’

  Whitacre explained that the idea for lying about Shepard had come from a former ADM executive. This person, he said, had persuaded him that ADM would drop its lawsuits against Whitacre if he told the Shepard story. Whitacre wrote that no record of his conversations with this executive would exist, since they had only spoken on pay telephones, using untraceable phone cards.

  At the same time, other packages arrived for staffers at Biomar. Whitacre’s relationship with his new employer had ended after he had pleaded guilty in the fall. Biomar had then canceled certain stock awards given to Whitacre, saying that he had failed to work there long enough to vest.

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  first heard from a distraught employee who had received a thick envelope from Whitacre; others phoned him soon afterward. One at a time, Biomar staffers who by then were aware of the contents brought their packages to Campbell unopened.

  Warily, Campbell popped one open. Inside was a twenty-four-page affidavit and a cassette. Campbell read the affidavit but became so distressed that he was unable to continue. Whitacre was accusing him of a series of wrongdoings. Not only that, but Whitacre said he had been secretly taping his Biomar colleagues, using the recorder he purchased during Harvest King. Copies of the material, Whitacre wrote, had been sent to the Justice Department and the Securities and Exchange Commission for investigation.*

  Campbell shook his head as he read the document. Every criminal accusation was a lie. Some allegations had some vague basis in truth. The company had talked with its lawyers about complying with laws forbidding the bribery of foreign officials; in Whitacre’s version, that became part of an effort to hand out bribes. Eventually, Campbell listened to the tape that Whitacre had secretly recorded at Biomar. As he heard himself speak, in conversations many months old, Campbell felt overwhelmed. The words on the tape were not proof of wrongdoing. They were innocuous, meaningless. But as he listened, Campbell thought that the conversation did not play back the way he remembered it. Periodically, there were clicks and stops on the recording, as it seemed to jump around. Campbell shut off the recorder as the realization overtook him.

  Whitacre, he thought, had spliced the tape.

  At 7:34 on the morning of February 26, the day of Whitacre’s scheduled sentencing, Truck 72 from the Chapel Hill Fire Department raced down East Franklin Street with its lights flashing and siren blaring. Making a turn, the truck pulled to a stop at a house on Deming Road. Jerry Blalock, a firefighter, hopped out of the driver’s seat and hustled up the driveway, toward a burgundy Lincoln Continental. As he approached the car, Blalock saw two garden hoses, taped to the car’s dual tailpipes and threaded through to the driver’s side window. Sitting in the backseat was a blond, baby-faced man who appeared unconscious. A bible rested in the front seat. Nearby were copies of Fortune magazine and other news articles. The firefighters

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  pulled the man out of the car and gave him oxygen. He seemed alert almost immediately.

  “What’s your name?’’ one of the technicians asked.

  The man blinked.

  “Mark Whitacre,’’ he said.

  Hours later, Judge Baker looked out at the lawyers sitting in his court.

  “
Where is the defendant?’’ he asked.

  Bill Walker stood. “Your honor, it’s believed he tried to commit suicide this morning at his home.’’

  The prosecutors wanted Whitacre arrested immediately, Walker said. But instead, Walker offered to fly to North Carolina, to bring his client back.

  Baker rejected the proposal. He issued a warrant for Whitacre, instructing the U.S. Marshal’s Service to take him into custody and bring him back to Urbana.

  Whitacre’s apparent suicide attempt damaged him greatly. The Chapel Hill police concluded that it had been staged, probably to gain sympathy. The detectives found his demeanor and symptoms were inconsistent with a real attempt, and informed the prosecutors and Judge Baker. Whitacre’s sentencing was rescheduled for March 4, 1998. That day, Bob Herndon pushed open the heavy wooden door to Judge Baker’s courtroom, holding it for his wife, Raelene. Herndon had almost decided to stay home. A beloved family pet had died in his arms hours before, and he was emotionally fragile. But Raelene had encouraged him to go; her husband needed to see the case through. Reporters and onlookers packed the courtroom. The Herndons walked in unnoticed, finding seats near the wall on the right side. The agent saw Ginger Whitacre, up in the first row. He said nothing to her. He checked his watch. The hearing was scheduled to begin any moment, and Brian Shepard, as usual, was running late. Herndon kept his eye on the door until Shepard walked in. He waved; he had saved his partner a seat.

  Minutes later, the lawyers arrived, along with Whitacre, who was escorted by federal marshals. His appearance shocked the agents. His cocky self-confidence was gone. He seemed frightened and small. Herndon leaned toward Shepard. “He doesn’t look very good,’’ he whispered.

  “No,’’ Shepard replied, “he doesn’t.’’

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  pre-sentence report. Walker objected to the report’s conclusion that Whitacre had failed to accept responsibility for his crimes by insisting on the existence of an illegal bonus scheme. Walker said there was even a tape from Harvest King that proved Whitacre’s story.