The Informant

by Kurt Eichenwald

  “We’re all satisfied,’’ Hale said. “We might as well vote.’’

  In alphabetical order, she called on each juror one at a time. The first vote was unanimous.

  Two more times, the jurors repeated the procedure. Review, debate, and vote. By Wednesday afternoon, they had reached verdicts on all three defendants. They chose to sleep on their decision for one day. The next morning, they returned to the jury room and reviewed what they had done. Everyone remained satisfied. Hale summoned the marshal who was seated outside the jury room.

  “We’ve reached a unanimous verdict,’’ she said.

  In the antitrust office, prosecutors and agents were in the middle of a game of Nerf basketball. Shepard was there; a series of meetings had finally been held with him, where he had been assured that Herndon had played no role in excluding him from the trial. Shepard still felt deeply wounded by the slight, but had ended his self-imposed exile. He did not want to miss the verdict.

  Overhead, the group heard a page for Jim Griffin and then Marvin Price, his deputy. Instantly, they understood. There was a verdict. The Nerf ball was tossed aside, and the players grabbed their suit jackets. The lawyers, agents, and defendants found their seats in the Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 557

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  packed courtroom. Forty-five minutes passed, until finally the marshal brought in the jury. Several jurors felt intimidated by the size of the crowd. They stared at the ground as they found their seats. Herndon studied the faces, looking for a sign, a clue. Nothing.

  “Good afternoon, ladies and gentlemen,’’ Judge Manning said to the jurors. “I received your note indicating that you have reached verdicts. Who speaks as foreperson?’’

  Hale identified herself.

  “Ms. Hale, has the jury reached unanimous verdicts as to all three defendants?’’

  “Yes, we have.’’

  “All right,’’ Judge Manning said. “Would you please hand the verdict forms to the court security officer?’’

  The papers were passed from Hale to the officer, who handed them up to Judge Manning. She glanced over them. A look of apparent surprise registered on her face.

  “All right,’’ Judge Manning told the jurors. “I want you to listen very carefully because afterwards you will be polled as to whether or not this is and was your verdict.’’

  The judge looked down at the sheets in front of her. Several prosecutors stared straight ahead, motionless. Herndon, his heart pounding, looked at Mick Andreas. Judge Manning began to read.

  “We, the jury, find the defendant Michael D. Andreas guilty as charged in the indictment.’’

  Herndon turned his eyes away from Andreas, looking at the back of Mutchnik’s head. He swallowed and heard the word guilty two more times. All three men had been convicted. Herndon whispered his thanks to the jurors, then glanced toward Shepard.

  His partner, his friend, looked back and gave him a nod. The hearing wrapped up in a matter of minutes. Everyone remained in place until the last juror filed out. Herndon and Shepard stood, emotional and shaky, and walked toward each other.

  And there, in the center of the courtroom, the two agents embraced. Sunlight cut through the morning haze, flickering in the passing trees. Just past a Chevrolet dealership, I turned left off of Route 25 north. Mobile homes lay scattered on the side of the road, amidst lush greenery. A water tower loomed over the trees. To the left, a brown sign appeared, reading, “U.S. Department of Justice, Federal Bureau of Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 558 558

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  Prisons.’’ I had reached the Federal Correctional Institution in Edgefield, South Carolina. Mark Whitacre’s new home.

  In the months before my visit that day, the decisions that Whitacre made over the years had largely finished playing out. Mick Andreas and Terry Wilson were both sentenced to two years in prison. Whitacre received two and a half years, but Judge Manning allowed six months of that to run concurrent with his term for fraud. In her ruling, Judge Manning found that Whitacre was a leader of the price-fixing conspiracy, which increased his time under the sentencing guidelines. No such finding was made for Andreas and Wilson.* Manning explained the apparent discrepancy, saying that Bill Walker had been the only defense lawyer not to object to the designation.

  The FBI agents whose lives had been affected by Whitacre returned to their jobs. Brian Shepard remained as senior resident agent in Decatur, where he frequently spoke of retiring. Bob Herndon received a transfer back to Kansas City, where he worked on a squad that handled health-care and securities-fraud cases. Tony D’Angelo stayed with the Chicago Field Office and found himself involved in a price-fixing investigation with some of the Harvest King prosecutors. His partner, Mike Bassett, continues to live and work in Albany, New York.

  Many of the prosecutors also saw changes in their lives. Jim Griffin, partly as a reward for his work in Harvest King, was promoted to a position in Washington and was eventually named a Deputy Assistant Attorney General for the Antitrust Division, replacing Gary Spratling, who moved to private practice. Scott Lassar was named United States Attorney for Chicago immediately before the pricefixing trial, leading the prosecutions of federal crimes in that district for years. Robin Mann continued working as an antitrust prosecutor; Jim Mutchnik took a job with a Chicago law firm. In the Fraud Section, Mary Spearing left for private practice, while Jim Nixon joined the National Association of Securities Dealers. Don Mackay continued at the Justice Department.

  People associated with Whitacre during his career experienced varying ripple effects on their lives. Just days after Whitacre’s sentencing, Sid Hulse gave up his fight, pleading guilty to conspiracy and tax fraud. He was sentenced to ten months in prison. David Hoech—the Lamet Vov—continued his letter-writing campaign against ADM,

  *In a ruling issued June 26, 2000, the Seventh Circuit Court of Appeals declared Manning in error in this decision, and ordered her to resentence Andreas and Wilson to longer prison terms. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 559

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  often accusing the government of selling out Whitacre and the shareholders by cutting the plea deal with the company. The Zurich district attorney kept open the investigation of Beat Schweizer, although Whitacre now steadfastly maintains that the Swiss money manager knew nothing of his crimes. The Mobile investigation was ended with no charges brought against Chris Jones or Tim Hall, the former Degussa employees, and no evidence that either knew anything about Whitacre’s frauds.

  Biomar International recovered from the Whitacre whirlwind. It has since changed its name and is planning a public offering of stock. Colin and Nelson Campbell have told associates that the Whitacre experience has steeled their commitment to business ethics; both men are now exploring methods of contributing their stock in the company to a philanthropic foundation they hope to form.

  Some of the most dramatic repercussions were felt by people in other industries, many who never knew Whitacre. ADM evidence of price-fixing in the citric-acid market led to guilty pleas from numerous multinational corporations—including giants like Hoffman-LaRoche and an affiliate of Bayer AG—which had participated in the conspiracies. That, in turn, indirectly helped provide evidence used in a criminal investigation of price-fixing in the huge multibillion-dollar market for vitamins. Several executives pleaded guilty in the vitamins case, including Kuno Sommer, the Hoffman-LaRoche official whom Whitacre had tried to record discussing the citric-acid conspiracy. Eventually, about thirty different grand juries investigated price-fixing in almost every corner of the food and feed industry; by 1999, the government had obtained more than $1 billion in fines. In the wake of Harvest King, it has become apparent that price-fixing was a workaday endeavor around the globe, involving scores of corporations and executives. And yet.

  The only person to step forward and reveal these crimes—despite his
bizarre reasons for doing so—was Mark Whitacre. It took someone as deeply troubled as he—a man so reckless he would steal millions of dollars while working for the FBI—to tip the first domino in what has emerged as a multibillion-dollar criminal enterprise. Cooperating witnesses rarely are without flaws. In the 1970s, Detective Robert Leuci—the so-called Prince of the City—exposed corruption on a grand scale in New York’s legal system, from the police station to the courthouse. And yet, in the end, it was Leuci himself who emerged as perhaps the most corrupt of all, having committed Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 560 560

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  numerous crimes and then perjuring himself about them. In recognition of his assistance, Leuci was never indicted. But in that instance, the same prosecutors who ran the case helped investigate their witness. Unlike in the Whitacre case, no artificial separations were imposed for political or bureaucratic reasons. Prosecutors could judge Leuci based on the whole picture. They understood that few cooperating witnesses are pure—an unreasonable expectation that could easily cripple law enforcement’s ability to obtain evidence of crimes. It is hard to argue that Whitacre should never have served time in jail; his unending lies and flip-flops as he desperately tried to avoid responsibility for his actions guaranteed a substantial prison term. But it does seem that the length of Whitacre’s sentence was driven more by his self-destructive tendencies than by the magnitude of his illegal acts. In the end, it appears the same recklessness that led Whitacre to become a cooperating witness helped to more than double the length of his time in prison.

  I met with Whitacre at the Edgefield prison in a small room just off the visitors’ area. He looked fit; he had lost weight and had been exercising. The hairpiece that had given him such a youthful appearance was gone now. If not for his green prison jumper, he would have looked more like a corporate executive than he ever had before. For hours, we reviewed his experiences. He frequently contradicted the written record—at times, he even contradicted other statements he made in the same interview. Despite the findings of two psychiatrists—and the evidence from his own actions—Whitacre is no longer medicated for psychiatric conditions; he says the Bureau of Prisons has found him in perfect mental health.

  Even from prison, he had continued to insist that the money he stole was part of a vast corporate conspiracy. For the second time, I confronted him with the evidence of his deceptions. There was nothing to support his story of an under-the-table bonus scheme; everything pointed toward the probability that he had simply stolen the money.

  Whitacre argued, bringing up various events that he said supported his story. Point by point, we discussed them. Finally, he nodded. “All right, I’ll tell you the truth,’’ he said. “The only other person who knows this is Ginger. But I’ll tell you.’’

  For more than four hours, Whitacre confessed. Shortly after arriving at the company, he said, he had heard rumors that some executives had engaged in corporate frauds—yet no one seemed to care. And Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 561

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  indeed, just two years after Whitacre’s arrival at ADM, the corporate treasurer left the company amidst allegations of financial wrongdoing, yet no criminal action was ever taken.

  Stealing seemed to pose little risk of punishment. And so, Whitacre stole. “They’re criminals,’’ he said. “What are they going to do if they catch me? How could they risk having a criminal case?’’

  Was he admitting that there were no approvals by senior managers for his money transfers?

  “The bottom line,’’ he said, “is that I started taking money for my own personal use from shareholders, with no approvals whatsoever.’’

  The later multimillion-dollar thefts, he said, only came about when he believed the investigation was coming to a close. He feared that the case put his finances at risk and decided to steal more to protect himself.

  “If I was never working under cover, I never would have taken so much,’’ he said. “It was my way out. It was my severance, you know? I wrote my own severance.’’

  Still, Whitacre denied that the Fujiwara episode had simply been another attempt to defraud ADM of millions—he never would have taken money that way, he said. He also disagreed with the conclusion of FBI investigators that the Nigerian fraud had been a driving force behind his thefts. Even without it, he said, he would have stolen the money.

  Of course, it’s impossible to know whether Whitacre is actually telling the truth. Much of his story remains incomprehensible. Just because he thought he could steal, why did he do it? And once he was caught, why didn’t he simply confess?

  “I don’t know,’’ he responded. “If I could explain that, I probably wouldn’t be here.’’

  Whitacre said he maintained the lie to everyone, including his wife. He only told Ginger the truth about his thefts during one of her many visits to prison. She understood, he said, and forgave him. During our conversation, he often spoke lovingly of his family. Ginger and the children have moved nearby so that they can visit him every weekend. Both Mark and Ginger said their marriage is as strong as ever. In fact, he said, almost everything about prison was better than the years that followed his decision to become a cooperating witness.

  “I felt like when I was at ADM, I lived so many lives,’’ he said. “I wasn’t sure who I was. Does that make any sense? If I was with Brian Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 562 562

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  Shepard, I was an informant. If I was with Mick and Terry, I was Mr. ADM. It was pretty stressful, no doubt about it.’’

  Whitacre said that he has spent his jail time studying, earning multiple degrees by mail in law and psychology. If he could spend the rest of his daylight hours with his family and at school, he said, he wouldn’t mind returning to prison every night.

  “Today, I know more who I am and what I really want out of life,’’ he said. “I’ve gained my life back. I feel the way I want to feel. I sleep better in prison than I have since I don’t know how long. My mind’s at ease.’’

  “So,’’ I asked, “if you could push a button, and it would let you come out of prison and be back at ADM?’’

  Whitacre smiled. “I wouldn’t push it, ain’t no way,’’ he said. “I’m happy now.’’

  Bob Strauss stood before his fellow ADM directors, smiling as he looked toward his friend, Dwayne Andreas. They had gathered in Miami to honor Andreas, who was stepping down as ADM chairman after a quarter century.

  “This is a man I cannot praise highly enough,’’ Strauss said. “He has always had the miraculous ability to move through different worlds—agricultural, political, international. And he has left his mark on them all.’’

  The tributes to Andreas continued for hours, even as the directors celebrated his replacement. Allen Andreas, Dwayne’s nephew, was assuming the top job, taking the position that his cousin Mick had been groomed for during most of his life. In many ways, it was an odd closing of the circle. It was Allen who had placed the original call to the CIA in 1992 about possible saboteurs at ADM—the call that set in motion the events that led to Mick’s downfall.

  After three hours, the meeting broke. The directors headed downstairs, where limousines waited. Dwayne climbed into the front seat of a car; in the back were mostly family members who came for the big day. As the car headed to the airport, a sense of tragedy hung over the group. An era was passing, in a way no one had planned. Mick, Dwayne’s son, his chosen successor, was now a convicted felon. This was a turning point where the reality of everything that had been lost could not be shunted aside.

  The limousines arrived at the airport, driving to the tarmac where corporate planes were ready to whisk board members back to their homes. A number of the directors were already out of their cars, Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 563

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&nbs
p; waiting for their friend. Dwayne emerged from the front seat, taking a moment as others in his car climbed out. Among them was his daughter, Sandy. The emotional moment was proving to be too much for her. Tears filled her eyes. She looked into her father’s face.

  “Oh, Dad,’’ she said.

  Andreas opened his arms and clutched his daughter. Together, they stood near the car, both sobbing with an overwhelming sadness. Standing nearby, the directors and family friends averted their eyes, not wishing to intrude on so private a moment. Then they turned, leaving Dwayne Andreas and his daughter alone in their tears, as they made their way across the tarmac to the awaiting planes. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 564 Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 565

  POSTSCRIPT

  By 2000, Mark Whitacre appeared to have achieved a new sense of balance in his life, finally seeming more comfortable with the truth than with lies. Following the publication of The Informan t, Whitacre would admit his deceits again and again, in television interviews and in communications with the government. As he wrote in a letter to me, by having admitted the truth in our final interview, he was finally able to get beyond his bizarre experiences of the past. With encouragement from government officials, Whitacre applied for executive clemency from the President. He seemed a strong candidate. His self-destructive history, driven by his psychological difficulties, had left him with a sentence that took no account of his unprecedented cooperation in exposing one of the largest corporate conspiracies in history.

  The application received substantial support. FBI agents spoke publicly about their discomfort with the sentence, or wrote letters to the Justice Department expressing their belief that Whitacre should be released. United States senators, including John Ashcroft, the future Attorney General, asked the department to consider the application carefully. For the first time in years, Whitacre and his family felt hopeful.