The Informant

by Kurt Eichenwald

“That was an excellent presentation, Mark,’’ the man interrupted.

  “Thanks,’’ Whitacre said, shutting off the projector and turning up the lights.

  The men headed out, wandering to ADM’s computer center. After a glance, the tour was over. About an hour after arriving, they were back in the parking lot, climbing into Whitacre’s Town Car. Whitacre drove past the front gate, heading toward a local hotel.

  “So,’’ said Whitacre, “any luck?’’

  The guest, Special Agent Thomas Gibbons, a technology specialist with the FBI’s Springfield office, shook his head.

  “Nothing we can do,’’ Gibbons said. “We can’t broadcast a signal out of the building.’’

  Whitacre nodded. The FBI had hoped to place a transmitter inside ADM that would allow agents to monitor price-fixing meetings. But something was blocking the signal, probably some low-frequency device used to prevent potential bugging by corporate competitors. A transmitter would give the agents nothing but static. The FBI would have to rely on Whitacre’s tapes.

  Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 141

  T H E I N F O R M A N T

  141

  •

  •

  •

  Whitacre was back in his office, staring out the window at the Ronald Reagan statue, when the phone rang. He spun around and reached for the receiver.

  “Mark?’’ a voice said. “David Hoech.’’

  Whitacre smiled to himself. Hoech was one of those people who operated in the shadows of every industry, gathering market information like a detective and using it for clients of his agricultural consulting firm. Whitacre had met him years before, when Hoech came to Decatur for a tour of ADM. During that trip, he had learned a lot about Hoech, and knew that he had lived in Japan. Whitacre also knew that even now, Hoech was in frequent contact with Yamamoto of Kyowa Hakko, one of the consultant’s best clients.

  Weeks had passed since Whitacre had heard from Hoech, so they spent the first few minutes chatting. Then, Hoech began subtly pumping Whitacre for information. What was up with the lysine business?

  “Things are great, David. We’re all set to start producing seventeen million pounds of lysine a month by June. We’re ready to have a price war.’’

  “That’ll be new,’’ Hoech drawled sarcastically.

  “We can win this one, David. At that production level, our cost will be fifty cents a pound. We can ride the price down, and still make profit.’’

  The boast intrigued Hoech, and he drilled Whitacre with questions. Whitacre answered with a confident, almost arrogant tone. By the time he hung up, Whitacre felt pretty clever. The information he had revealed wasn’t public, so he knew Hoech would write it up and send it to Kyowa Hakko. Yamamoto would read it, maybe panic.

  It was all a tactic. Whitacre was using a back channel to pressure Yamamoto to the negotiating table. After all, the faster the price-fixing became serious, the faster Whitacre would be done with the FBI. St. Mary’s Hospital rises beside Lake Decatur like a gleaming white manor. With ample parking, the hospital is a secluded spot right on the way from ADM to Moweaqua, a perfect location whenever Shepard needed a quick meeting with Whitacre.

  As Whitacre headed home one evening, he veered onto Lake Shore Drive, toward St. Mary’s. His briefcase rested on the floor in front of the passenger seat. Shepard had asked him to bring it. Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 142 142

  K U R T E I C H E N W A L D

  Whitacre spotted Shepard’s car in the lot and parked beside him. The agent got out of his car and quickly hopped into Whitacre’s front passenger seat.

  “This should only take a minute,’’ Shepard said.

  Shepard picked up the brown briefcase and wrote down its specifications.

  “We’re going to fix you up with a briefcase like this one,’’ Shepard said. “But we’re going to put a recording device in it, a better one than you have.’’

  “Will I use that as my new briefcase?’’

  “Only sometimes, only when you need it,’’ Shepard said. “Most of the time, you’ll keep your regular one. But it will make taping a lot easier for you.’’

  Whitacre nodded. All these new toys were making the job more exciting. John Hoyt, the Springfield ASAC, pounded the telephone receiver on his desk after disconnecting with Bureau headquarters.

  “Incompetent bureaucratic nincompoops!’’ he shouted, banging the receiver on each word.

  For weeks Hoyt had been pushing headquarters for an additional agent or two. The ADM case was moving rapidly, and his agents were wearing thin. Shepard and Weatherall handled everything—

  interviewing Whitacre, picking up tapes, listening to tapes. They were working fifteen-hour days, most every day. For goodness’ sake, the agents were spending time transcribing the darned tapes. Plus, the loss of two agents from Springfield’s relatively small contingent was rippling across the office. A new agent had been moved to Decatur; somebody else had picked up the work in Champaign; and other agents were needed to replace the agents replacing Shepard and Weatherall. This was a case, Hoyt felt certain, that called for more manpower and attention from the Bureau.

  He had called Washington with his pitch, laying out the investigation’s magnitude and the demands being placed on his agents.

  “Well,’’ the Washington supervisor had replied, “that sounds like a great case. Why don’t you send me an air-tel and tell me when you expect to indict. Maybe we can work it into a national press release.’’

  An air-tel? Hoyt had been around long enough to know that a request for such a written communication was just a brush-off. They weren’t ready to indict, Hoyt had said. They needed agents to investigate, Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 143

  T H E I N F O R M A N T

  143

  recording devices to gather evidence, maybe money to pay sources. They needed resources to get the job done.

  But the words had flown past the Washington supervisor. Antitrust investigations were not something that set hearts racing at the Bureau. They rarely generated headlines, big fines, or lengthy prison terms. Hoyt had heard those unspoken words as the supervisor prattled on about hiring freezes and the needs of larger offices. His protests were pointless. When the call had ended, Hoyt was seething. After pounding the desk, Hoyt slammed the receiver in its cradle. He remembered the promise he had given Shepard many months ago: The Bureau would give him all the support he needed. Hoyt was beginning to realize how hard it would be to keep his word. Yard cuttings were strewn across the Whitacres’ driveway, and Rusty Williams was using a gas-powered blower to clean up the mess. The groundskeeper saw Whitacre driving past the gate, and stepped out of the way. Whitacre stopped the car and climbed out.

  “Hey bud, come on over,’’ Whitacre called. “I want to show you something.’’

  Whitacre opened the back door and pulled out a briefcase. Walking behind the car, he set the case on the trunk. When Williams reached him, Whitacre opened the briefcase and smiled.

  “What do you think?’’ Whitacre asked.

  Williams looked inside. Nothing.

  “It’s a nice briefcase.’’

  “Ah, but wait,’’ Whitacre said excitedly.

  He reached inside, grasping a pocket at the top. Williams heard Velcro tear as a secret compartment lifted. Behind it was a silver tape recorder. Williams didn’t know it, but he was looking at a Nagra, one of the best recording devices used by the FBI.

  “How do you like that?’’ Whitacre buzzed.

  Williams didn’t know what to say.

  “Just start calling me 014,’’ Whitacre said.

  Williams looked at him. “Why 014?’’

  Whitacre smiled. “Because I’m twice as smart as 007.’’

  Around eight-fifteen on the morning of April 15, Whitacre walked into Mick Andreas’s office. He was there to talk about a meeting scheduled in Chicago later that same day with Yamamoto of Kyowa Hakko. The microca
ssette recorder in his pocket was already running. Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 144 144

  K U R T E I C H E N W A L D

  “Well, today’s the big day,’’ Whitacre announced.

  Andreas looked up, smiling. “Today’s the little day,’’ he said in a low voice. Kyowa Hakko was the little Japanese company, Ajinomoto the big one.

  “The little, yeah, the little day,’’ Whitacre said. “The little Jap.’’

  “You’re just goin’ up there to listen, aren’t you?’’

  “Yeah, that’s what Terry and I just talked about.’’

  Just listening did not mean he should forget to let Yamamoto know ADM’s position, Andreas said.

  “Tell him how terrible it is that they never got the price up,’’ he said. “How disorganized they are, or how disappointed we are.’’

  “Yeah,’’ Whitacre said.

  “And you know, our plan is supergood,’’ Andreas continued.

  “Everything is fine, except those guys fucked up the market so that nobody could play.’’

  Yamamoto had to be kept on the defensive. “Go up to him and say, well you know, we tried pulling back,’’ Andreas said, “and all that happened was the price went down.’’

  “Yeah,’’ Whitacre said, “the price went down.’’

  “Who’s leading the price down?’’ Andreas asked rhetorically.

  “They’re leading the price down.’’

  “Especially Ajinomoto,’’ Whitacre said. “I think it would be fair to say that, don’t you?’’

  “Yeah, sure, I would say it.’’

  “Put the blame on the other guy?’’

  “Absolutely,’’ Andreas said.

  “Let them lose a little trust in the big guy.’’

  Andreas nodded. “Exactly. That’s right.’’

  Whitacre glanced at Andreas’s saltwater aquarium, absentmindedly watching the fish. After a few minutes, the meeting broke up. Whitacre headed back to his office.

  Sitting down at his desk, he checked his watch. “Eight-thirty a.m., April fifteenth,” he announced. “Just saw Mick Andreas. For the, for the marching orders.”

  A few hours later, Shepard and Weatherall glanced around a room on the eighteenth floor of the Chicago Marriott Downtown. The Chicago technical team had done a good job. Everything looked normal, nothing out of place. The table lamp, with the hidden FBI video camera inside, matched the decor well. Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 145

  T H E I N F O R M A N T

  145

  The agents went to the FBI command center in room 1817. The technical team was hooking up a monitor that would allow them to watch the Yamamoto meeting. When they turned it on, Shepard and Weatherall noticed that the room’s furniture was not set up properly. The camera was stationary, but no chair was in front of it. They walked back to the meeting room, moving furniture around until they were satisfied.

  Soon, Whitacre showed up at the command center. After introducing him to the technical agents, Shepard and Weatherall took him to the meeting room.

  “Now, Mark, the camera is right over there,’’ Shepard said, pointing at the lamp. Whitacre wondered how heavy it was. He walked over and started to pick up the lamp.

  “Don’t lift that!’’ Shepard said.

  Whitacre put the lamp back down.

  Shepard walked over to one of the chairs. “This is the spot. Make sure Yamamoto sits right here.’’

  “Okay,’’ Whitacre said.

  There were a few other points to remember, Shepard instructed. The FBI could only tape when a person who had consented to the recording was present. If Whitacre left—to go to the bathroom, anything—the FBI had to shut off the camera. So if he was leaving the room, Shepard said, Whitacre should say something to tip off the listening agents. Whitacre said that he understood. Shepard glanced at his watch. It was 5:45. Time for everyone to take their places.

  Whitacre waited in the lobby for fifteen minutes when, at 6:05, Yamamoto came through the revolving door.

  “Massy,’’ Whitacre said, “good to see you again. Welcome back to Chicago.’’

  “Thank you, good to see you too.’’

  Whitacre guided Yamamoto to the hotel bar, where they sat down and ordered drinks.

  For eighteen minutes, an FBI agent conducting surveillance watched as the executives talked, drank, and ate dinner. Finally, at 6:25, the agent terminated the surveillance. It would be picked up again later.

  •

  •

  •

  Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 146 146

  K U R T E I C H E N W A L D

  Just past seven-thirty, Whitacre and Yamamoto paid their bill, walked to an elevator, and stepped in. As the doors closed, an agent posing as a hotel guest picked up a house phone and dialed the FBI command room.

  “On their way up,’’ the agent said.

  Whitacre and Yamamoto stepped off on the eighteenth floor. Another surveillance agent followed. Once the two executives walked inside the meeting room, the agent picked up his pace. He slid a card key into the electronic lock for the FBI command room and opened the door.

  “They’re in,’’ the agent said.

  An agent sitting in front of the black-and-white television monitor turned a knob and pushed down buttons on a video-recording device. It was 17 seconds past 7:40 p.m. The grainy image of chairs in the next room appeared on the screen. Whitacre was standing beside them.

  “Have a seat, Massy,’’ Whitacre said. He positioned himself perfectly, effectively blocking the only other seat in the room. Yamamoto would have to take the chair directly in front of the camera.

  “Good,’’ Yamamoto said from across the room.

  “Would you like another drink?’’

  “I don’t think so,’’ Yamamoto said.

  “Okay, then we’ll get started. If you’d like one at any time, you let me know.’’

  At that moment, Yamamoto appeared on camera. He sat down exactly where the FBI wanted him to be. In the command room, Shepard and Weatherall stood beside the monitor, watching the flickering images. Shepard listened to the conversation on headphones. Even without hearing a word, Weatherall was impressed at how easily Whitacre had navigated Yamamoto into the right chair. Good job, Mark, he thought. Good job. Whitacre’s back was to the camera as he casually walked Yamamoto through the high points of every major price-fixing meeting that the FBI had missed.

  “I realize there wasn’t much business discussed in Hawaii,’’ he said, “but it was a lot of business discussed in Mexico and Paris.’’

  Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 147

  T H E I N F O R M A N T

  147

  Yamamoto grunted in agreement.

  “Like you said, Terry Wilson said if the price, at that time of sixty cents a pound . . .’’

  “Yes,’’ Yamamoto agreed.

  “And he said if the price got to a dollar-five, maybe we could talk to our management. And we said we could maybe convince our management to go to a lower volume.’’

  Yamamoto grunted.

  He and Wilson had informed his management of the discussions, Whitacre said, but the worldwide price never reached $1.05 a pound.

  “Our management saw it as a very messed-up market,’’ he continued, “and they just felt like there’s no incentive to reduce volume.’’

  Whitacre was following Mick Andreas’s instructions to the letter. Shepard listened to Whitacre’s words. He was doing a great job recapping earlier meetings. Yamamoto was not objecting to Whitacre’s characterization. This tape would be good evidence. Whitacre was following his instructions perfectly.

  The talks dragged on for almost two hours as the men debated production limits. At 9:33, they stood, having agreed only to meet again.

  “Okay, Massy,’’ Whitacre said.

  “See you again,’’ Yamamoto said.

  The two men walked off camera.

>   On the headphones, Shepard could still hear the executives talking as they headed toward the door.

  “Okay, bye-bye. Have a good trip back.’’

  “Thank you!’’ Yamamoto replied.

  Silence.

  Shepard slid off the headphones. “That’s it.’’

  Minutes later, a knock came at the door of the FBI command room. It was Whitacre, looking excited and proud. He walked over to Shepard.

  “Did you hear how we talked about all the other meetings?’’

  Whitacre said. “We went into all of them. He talked about everything.’’

  Shepard clapped Whitacre on the shoulder.

  “Excellent job, Mark,’’ he said. “Fantastic.’’

  •

  •

  •

  Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 148 148

  K U R T E I C H E N W A L D

  Every successful federal criminal case is the product of teamwork between investigators and prosecutors. The relationship can be delicate; at some point, agents have to hand off their case and hope that the lawyers can carry it across the goal line. But, until then, prosecutors stand by as critics, letting the agents know if their work will hold up under the harsh realities of the courtroom.

  As a result, the greatest moments of tension emerge when the agents trot out evidence for their prosecutors. Often, those can be days of high expectations; the agents hope to hear praise for their hardwon information, all the time fearing that their work will be greeted with a dismissive wave.

  The day for the first presentation of evidence in the ADM case arrived on April 27, a Wednesday. That morning, Robin Mann arrived at the offices of the Springfield FBI accompanied by Tracy Meares, another Antitrust Division lawyer. Both had come to town eager to review the tapes that they had heard so much about.

  The two prosecutors pushed open the glass doors to the FBI office and headed into the lobby. Byron Cudmore was already there, waiting. Cudmore knew this would probably be his last direct involvement in the case for some time. The Clinton administration, through Attorney General Janet Reno, had just demanded the resignations of almost every U.S. Attorney in the country—Cudmore’s boss among them. Cudmore had been sworn in as acting U.S. Attorney the day before, and expected to have less time for the ADM case.