The Informant
Page 78
January 26, 1998. The cancellation of the stock certificate resulted in a number of disputes between Whitacre and Biomar, now known as BioSignia. A partnership, including Ginger and the children, sued BioSignia and the Campbells in May 2000, claiming that one million shares of the stock—which the suit contends had been paid to Whitacre in lieu of salary—had been improperly canceled by the company. In an earlier discussion of the dispute, J. William Koegel Jr. wrote a letter to Bill Walker dated October 28, 1999. In it, Mr. Koegel said that the company was surprised by Whitacre’s claim that he was owed stock, since the stock never vested. According to the letter, Whitacre testified that he had no claim to the stock during his bankruptcy proceedings, and indeed, no claim of ownership by either Mark or Ginger was made during the course of the bankruptcy. However, the new lawsuit claims that the partnership holds assets on behalf of the Whitacre children. 545–46 Details of Whitacre’s second apparent suicide attempt and the subsequent investigation from written reports on the incident from the Chapel Hill Police Department, listed under case number 9805666, dated February 26, 1998. The report also includes written statements by members of the Chapel Hill Fire Department. 546 Details of the first Urbana hearings from personal observation and a transcript of the proceedings, dated February 26, 1997.
546–49 Some details of the day of Whitacre’s sentencing in the fraud case from personal observation and a transcript of the proceedings, dated March 4, 1998.
EPILOGUE
551–53 Details from the day of opening arguments in the price-fixing case from personal observation and a transcript of the proceedings, dated July 15, 1998. 552 Manning’s criticism was contained in a memorandum and order, filed in April 1998 in U.S. v. Michael D. Andreas et al.
555 Quotes from Herndon’s fax to Shepard from the document. 556–57 Some details of the verdict in the price-fixing case from a transcript of the proceedings, dated September 17, 1998. 558 As of this writing, Yamada of Ajinomoto remains under indictment, and American officials told me that the Japanese executive will be arrested if he attempts to come into the United States. No effort has been made to deport him from Japan—
partly, I am told, out of concerns for international relations and also because of the difficulty in proving he had been adequately served notice of the case. Ajinomoto did plead guilty and paid a ten-million-dollar criminal fine. While only Mimoto pleaded guilty to the charges, Ikeda was granted immunity and testified about his participation in the criminal conspiracy during the trial of Mick Andreas, Terry Wilson, and Mark Whitacre.
Among the other participants, Kyowa Hakko also pleaded guilty and agreed to pay a ten-million-dollar criminal fine. Again, only one company executive—Masaru Yamamoto—pleaded guilty, paying a fifty-thousand-dollar fine. Sewon America Inc., a Paramus, New Jersey, subsidiary of Sewon in Korea, pleaded guilty and agreed to pay whatever fine was deemed appropriate by the court. J. S. Kim also admitted his guilt and was fined $75,000. No other Sewon executives were charged. Finally, Cheil Eich_0767903277_5p_03_r1.qxd 10/11/01 3:58 PM Page 606 606
N O T E S A N D S O U R C E S
Jedang pleaded guilty and agreed to pay a $1.25 million fine for its involvement in the conspiracy. None of its executives were charged.
The litigation between ADM and Mark Whitacre dragged on for years. The company eventually settled or dropped its complaints against everyone but Whitacre himself. That case resulted in a court order that Whitacre pay back $1.7 million in salary and benefits he received from ADM, because of what the court said was his failure to faithfully perform his corporate duties. ADM, in turn, was ordered to reinstate certain stock options that had been awarded to Whitacre. But in the end, the battle was mostly pointless: Whitacre was already on the hook to pay ADM $11 million, and the new judgment was uncollectable, Bill Walker, his lawyer, told reporters at the time.
The patent infringement suit between Ajinomoto and ADM also dragged on for some time. A trial was held in 1996, eventually resulting in a judgment on March 13, 1998. In that judgment, Judge Sue L. Robinson of the Federal District Court for the district of Delaware found that ADM had infringed on Ajinomoto’s valid patent for its threonine microbe. As a result, ADM was ordered to pay Ajinomoto a royalty rate of $1.23 for every kilogram of threonine sold since May 1993. The court also entered an injunction prohibiting ADM from continuing to infringe on the Ajinomoto patent. 559 The plans of the Campbells to donate their stock to charitable endeavors was described in an April 4, 2000, letter to their company’s shareholders and employees. Eich_0767903277_5p_03_r1.qxd 10/11/01 3:58 PM Page 607
ACKNOWLEDGMENTS
As always, there are many to thank.
At the New York Times, Chris Bockelmann and Brent Bowers offered generous amounts of their time reviewing the manuscript and sprinkled their magic throughout these pages. Their suggestions were invaluable. I am also indebted to my boss and friend, Glenn Kramon, who allowed me the freedom to follow my nose on this story and always backed me up. And I owe thanks to John Geddes, who first let me pick up the ADM story and stayed with me whenever the going got rough. Others at the Times offered help at important junctures, including Diana Henriques, David Barboza, Mark Landler, Alison Leigh Cowan, Barnaby Feder, Gina Kolata, Laura Holson, and Adam Liptak. Donna Anderson helped dig up news articles, and Karen Cetinkaya provided photo research. Dylan McClain handled graphics. I was unusually fortunate to work with three talented researchers—
Michael Brick and Jamie Paton, both now reporters in the joint newsroom at the New York Times and TheStreet.com; and Geanne Rosenberg, now a contributing editor at the National Law Journal. Their skills never ceased to astonish me. Remember their names—
they will each do big things in journalism.
My savior, as always, was Diane Obara, a hardworking assistant who was always ready to go the extra mile whenever the work piled up. Also helping out were Jacqueline Durham and Anna DiLegge. I owe particular thanks to Alison Comas, a friend who agreed to read the manuscript in its roughest form to help me determine if I was on the right track. Julianna Patrick saved my life more times than I can count, coming by to help out whenever my schedule proved to be too much. Antonia New provided me with desperately needed suggestions at a critical juncture—and as a result, unknowingly had an effect on Eich_0767903277_5p_03_r1.qxd 10/11/01 3:58 PM Page 608 608
A C K N O W L E D G M E N T S
the events described in this book. And Jamie Moss of Newspros Strategic Communications once again proved her talent with an endless stream of brilliant suggestions.
I also want to thank Peter Comas, Alan Wachtel, Allan Naarden, Scott Burbine, Edward Beja, Kathy Paul, and Errington Thompson. The guys from Gravy—particularly John Fischer, Scott Friesen, Eric Lambert, Adam Payne, Colin Trevorrow, and Brian Ullman—were all amazingly patient with my frequent absences and never complained. Scott once again proved his diverse talents as he led me on an expedition of the Internet. And, for helping me as only a musical cybergenius can, special thanks go to Wes Carroll, the man of a thousand projects and the driving beat behind the House Jacks (www.housejacks.com), one of America’s most talented rock bands.
My agent, Freya Manston, was the first person to hear about the idea for this book and was always its biggest cheerleader. Without her support, this project would never have been completed. I also want to thank everyone at Broadway Books, who provided an incredibly supportive and professional experience. In particular, I want to thank my editor, Suzanne Oaks, who once again guided me on my voyage into publishing. Suzanne was assisted by Claire Johnson, who was always ready to answer my endless questions with patience and a smile. Debbie Stier and Suzanne Herz were both a delight; as marketers, they are what authors’ dreams are made of. When the time came for the heavy lifting—that is, the copyediting of this book—
Deirdre Hare put in an amazing performance, snapping the manuscript into shape in nothing flat. Supervising the entire production schedule and organization was Bette Alexander, who seemed able to accomplish any request with
in moments. Lauren Field spent endless hours conducting a legal review with me, making the book all the better with each suggestion. And those are just a few of the people at Broadway who made this experience so wonderful. I thank you all. Above all, I want to thank my wonderful family. My wife, Theresa Eichenwald, was always there for me—to cheer me on, to get me through the tough days, to lessen the other loads. She was, again, my first reader, my best editor, and my best friend. But this time, she had three helpers: our sons, Adam, Ryan, and Sam. All of them displayed endless patience and support. In truth, this book could not have been written without my family and the contributions they made. But now, it’s finished. So guys, I’m home.
Eich_0767903277_5p_03_r1.qxd 10/11/01 3:58 PM Page 609
INDEX
ABP International, 59, 64, 229, 328–29,
ADM and, 24
576n, 591n
ADM plea negotiations and settlement,
ABP Trading, 377, 394, 411, 419–20, 497,
507–11, 521–23
498, 517, 587n
annual stockholders meeting and, 453,
Acebras, Adolpho, 456, 598n
597n
Ajinomoto Inc.
appearance, 20, 571n
antitrust case against, 413
background, 20, 571n
Eurolysine, 156, 163, 213
birthday, seventy-sixth, 227, 587n
industrial sabotage charges, 17–19, 36,
Buffett, Howard, and, 241–43, 260,
41, 114–15, 124
308, 315, 323–24, 330
lawsuit accusing ADM of stealing
character and personality, 14, 453
microbe, 284–85, 393, 604n
CIA and, 26, 28–29, 31
lysine production, 14–15, 36, 123
early career, 19–21
Orsan, 163
FBI and, 26–28, 32, 82
plea offers by, 472, 487, 503–5, 603n
FBI National Academy ceremony, 290,
price-fixing and, 67, 122–24, 128,
590n
132–33, 144, 150–57, 163, 178,
fear of wiretaps, 23, 572n
189–97, 200–201, 246–48, 483–84,
federal agricultural policies and, 24–25
581n, 582n, 583n
Humphrey’s brain trust, 22, 571n
September 10, 1992, meeting at ADM,
international power of, 25–26
12–16, 67, 570n, 571n
Japanese industrial sabotage and
Akin, Gump, Strauss, Hauer & Feld, 315
extortion story, 19, 28–29, 124, 571n
Allison, Marty, 228, 251, 421, 427, 435,
jets, 189
440, 456, 538, 576n, 588n
June 27, 1995, FBI interview, 307–8
FBI interview, 479–81, 511–18, 601n
Kennedys and, 23
American Cyanamid, 119
lysine production problems and, 15
Anderson, Bob, 160–61, 162, 575n, 583n
office of, 121
price-fixing at ADM, initial briefing,
paranoia about Beattie and Kravis,
54–56
327–28, 488, 500, 507–8
Andreas, Dwayne
political influence and contributions,
accusations of ADM fraud and
11–12, 21–28, 242, 570n, 572n,
kickbacks, 417
588n
Eich_0767903277_5p_03_r1.qxd 10/11/01 3:58 PM Page 610 610
I N D E X
Andreas, Dwayne ( cont. )
93, 110, 128, 143–44, 147, 178–80,
price-fixing at ADM and, 51, 53, 56,
185–97, 201, 244–48, 282,
408, 488
453–54
Randall and, 291, 327
security measures by, 240–41
retirement from ADM Board, 562–63
sentence, 558, 558n
Ronald Reagan statue erected by, 12
sexism of, 182–83, 186–87, 248–50,
Sea View Hotel, Bal Harbour, FL, 22,
585n
26
taped conversations with, 134–36,
Soviet vegetable oil deal, 23
143–44, 179–83, 185–87, 244–50,
Watergate money and, 12, 24, 27, 56,
302
570n
taping, feelings about, 38
Whitacre and, 324
trial and conviction, 551–57, 603n
Whitacre firing considered by, 121–22,
Whitacre and, 15, 44–45, 84–85,
581n
143–44, 173, 235
Andreas, G. Allen, 28–29, 305, 562,
Andreas, Sally, 301
574n
Archer Daniels Midland Company
Andreas, Inez, 22
(ADM), 14, 570n. See also “Harvest
Andreas, Michael “Mick”
King”
accusations of ADM fraud and
Andreas, Dwayne and, 19–29, 571n
kickbacks, 417, 418, 420, 421
annual stockholders meeting, 452–53
appearance, 35
bacitracin, 118, 119–20, 475, 575n
attempt to “flip” by FBI, June 27, 1995,
Bioproducts Division, 12, 14–15, 59,
and subpoenas issued, 292, 296,
229
300–305, 590n
Board of Directors, independent
attorney for, Jim Shafter, 34–35, 305–6
investigation into price-fixing by,
bribe accusation, 439
337–38, 344–45, 400–401, 453–54,
campaign finance laws and, 135
592n
Chicago Commodities Exchange sting
Cayman Islands subsidiaries, 499,
operation and, 27, 39, 572n
502
FBI meeting, November, 1992, 35–38,
China Division, 2
574n
CIA and, 5, 26, 28–29, 31
home of, 35, 36
citric acid, 109, 155, 158, 164, 173,
Humphrey is godfather of, 22, 571n
182, 225, 227, 243, 245, 259, 587n
Ikeda meeting, October 25, 1993,
ethanol production, 25, 408
185–97, 585n
faxes from “The Lamet Vov,” 336–37,
indictment, 506, 510, 528
344
Japanese industrial sabotage and
FBI and, 5, 26–28, 32, 572n
extortion story, 17–19, 28–29, 31,
FBI attempted bugging of offices,
34–38, 114–15, 124
139–40
leave from ADM, 523
federal agricultural policies and, 24–25
legal defense, 315–17, 508–9
Frankel scandal, 27–28, 421,
meeting following June 27, 1995
573n–574n, 593n, 596n
interview with Wilson and Whitacre,
fructose corn syrup, 25, 27, 572n
Country Club of Decatur, 4, 5–6,
gluconate, 109, 110
308–9
headquarters, Decatur, IL, 12
price-fixing at ADM and, 51, 66, 68,
history of corporation, 19–21, 571n
Eich_0767903277_5p_03_r1.qxd 10/11/01 3:58 PM Page 611
I N D E X
611
industrial espionage alleged by, 118–20,
B
422, 467, 480–81, 500, 581n
B Bar Ranch, Emigrant, MT, 344–45
Japanese industrial sabotage and
Bacitracin, 118–20, 475, 575n
extortion story, 17–19, 28–29, 41–43,
Baker, Harold, 541–42, 547–49
112–14, 124, 537–38, 575n
Baker, Jim, 237, 587n
kickbacks and illegal payments
Barbarians at the Gate, 337, 345
allegations, 419–23, 451–52, 453,
Ba
ssett, Michael, 381–83, 390–91, 392–93,
475–77
409, 411, 415–23, 428, 447, 452,
lactic acid, 111, 227
594n
law-breaking attitude at, 136, 389
Albany transfer, 470, 519, 558
legal defense of, 315–17, 330, 341,
Allison interview, 511–18, 601n
357–58, 368, 413
Ferrari interview, first, 440–46, 447,
lysine manufacturing, 14–15, 36, 120,
597n
570n; see also Lysine
Ferrari interview, second, 463–67, 598n
methionine, 118, 236–37, 269, 271
Fraud division memo to curtail
monosodium glutamate (MSG), 164
investigation and, 467–71
phone tapping of, 5, 6
Hoech interview, 490–92
plea negotiations and settlement,
Lamet Vov and, 479
507–11
Richter interview, Mexico, 454–60
political influence, 11–12
Schweizer interview, 495–99
price-fixing and, 3, 27, 51, 68, 93,
Beattie, Richard, 345, 401, 437, 453–54,
109–11, 136–38, 154–57, 163–64,
487–88, 599n
171–72, 178–83, 189–97, 200–201,
ADM plea negotiations and settlement,
213–27, 244–48, 250–52, 453–54
507–11, 521–23
Ronald Reagan statue, 12, 570n
Berkowitz, Sean, 428, 542, 596n
secrecy and security at, 121, 140,
Best Western Shelton Inn, Decatur, IL,
240–41
74–78, 150–52, 583n
“Supermarket to the World,” 14, 171,
Bhawnani, Deepak, 400, 595n
192, 570n
Bilderberg Group, 500, 600n
taping of customers by, alleged, at
Bingaman, Anne, 277–80, 364, 589n
Decatur Club, 79–81, 422, 475, 599n
Biomar International, 438, 493, 501–2,
threonine microbe, 59, 229, 377–78,
539, 544–45, 545n, 559, 600n, 602n
604n
Blalock, Jerry, 545
trading room, 13
Blue Mill Restaurant, 421
tryptophan, 245
Booker, Susan, 237, 258, 281, 505
Whitacre alleged illegal activities at,
Borasky, Gertraud, 336, 343, 387–88, 592n,
256–58, 345–55, 392–93, 417–23; see
594n
also Whitacre, Mark
Brasser, Wayne, 103, 108–11, 125, 307–8,