Back at his desk, Herndon flipped open his notepad. He thought for a minute.
Lysine , a feed additive for chickens. Fowl Play, Fowl Ball, Fowl Out.
A crime taking place in Illinois, the Land of Lincoln. Ill Deal. Linc Con.
Decatur, Pride of the Prairie. Lost Pride.
An agricultural company. Feed Greed. Hot Commodity. Field of Schemes.
Worldwide price-fixing. Fixed Income. Trade Imbalanced. Global Il- lusion.
After three hours, Herndon had a list of about sixty suggestions. The next morning, he brought them to Paisley. But his boss didn’t look at them.
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“Brian called with a suggestion that sounds pretty good,’’ Paisley said. “I already forwarded it on to headquarters.’’
The answer came back fast. Headquarters approved.
The lysine investigation was now “Harvest King.”
“Mimoto changed his mind,’’ Whitacre said. “He doesn’t think Hawaii is an acceptable meeting site.’’
It was the evening of August 24, and Whitacre was meeting with Shepard and Herndon in a Forsyth hotel. In the weeks since the idea of a Hawaii meeting had been raised, Mimoto had approached other lysine producers with the proposal. While the possibility of playing golf on world-class courses was tempting, the others thought it too risky. Instead, Whitacre told the agents, they wanted to meet in Paris on October 5.
Other conspiracies also seemed to be brewing, he said. Following the discussions in Vancouver, Wilson was scheduled to travel to Zurich, Switzerland, on September 23 to meet with Ajinomoto’s European affiliate that manufactured MSG. Probably, Whitacre said, Barrie Cox would accompany Wilson. From what he had heard, a citric-acid meeting would also occur, involving Hoffman-LaRoche, the pharmaceutical giant.
“Mick also said I’m getting some new duties,’’ Whitacre said proudly. “I’m going to be responsible for joint ventures and acquisitions worldwide. Mick said that at the next board meeting he was going to recommend me for a raise of one hundred thousand dollars or more.’’
Shepard and Herndon listened to Whitacre’s story with skepticism. Why all of a sudden was Whitacre being paid so much more?
“Well, Mark,’’ Herndon said, “do you think this is money to keep your mouth shut, or maybe additional compensation for the pricefixing?’’
Whitacre looked offended.
“No, nothing like that,” he said. “Guys, I work hard. I’m not spending all my time at price-fixing meetings. They’re paying me for all the work I do.’’
The agents listened. Maybe Whitacre was right; maybe this raise was innocuous. But they decided to keep an eye on how ADM treated Whitacre financially. Maybe the payoff theory would eventually build into something that could be presented to a jury.
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“Let me get this straight,’’ the man said, “I steal files from the firm, turn them over to the FBI, testify against my colleagues, and send them to jail?’’
The actor Ed Harris, playing Special Agent Wayne Tarrance, glanced at the younger man, Tom Cruise.
“They suckered you into this,’’ Harris said.
A nearly full house in the Illinois movie theater watched the screen as Cruise, in the role of a young lawyer named Mitch McDeere, showed his anguish at learning his law firm was involved with the Mafia. The FBI wanted him to cooperate with its investigation. Returning home, he told his wife. She was terrified. In the audience that night in the summer of 1993, Mark and Ginger Whitacre began to feel a bit uncomfortable. This was all too familiar.
The movie version of The Firm, John Grisham’s best-seller, was one of the popular releases that summer. Mark had been a fan of the book when he’d read it years before, and was eager to see the movie. As they watched, the Whitacres could not help but notice similarities between Mark’s situation and McDeere’s. Cruise plays the character as reluctant, unwilling to cooperate at first. Then the government gets tough, threatening him with prosecution; McDeere seems to have little choice but to inform on his coworkers.
Then McDeere turns the tables on the FBI. In the middle of the movie, Cruise meets Harris at a dog track and lays out his demands for his cooperation.
“A million dollars, in a numbered account in Switzerland,’’ Cruise says. “IBG International, in Zurich.’’
Harris pulls back his overcoat. “You sure as hell turned greedy all of a sudden.’’
The McDeere character also demands that the FBI arrange for his brother, who had been convicted of manslaughter, to be released from prison. The agent rages, threatening McDeere with prosecution while acknowledging the charges would be bogus. But McDeere has the upper hand; he is wired and has taped the agent’s every word. If his demands are not met, McDeere implies, the tape would be made public. By the movie’s end, McDeere outsmarts the criminals and the FBI, and takes back control of his life. The credits roll. The theater lights came up as the camera panned away from the Memphis skyline. Mark and Ginger stood, making their way to the exit. They talked about the movie as they walked; Mark had liked the Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 175
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book better. By the time they were in their car, driving toward home, the conversation had shifted. The number of similarities between the movie and Mark’s life, they thought, was sort of spooky. About the only big difference was that McDeere, with his demands for money and immunity, was a lot more exacting than Mark had ever been.
Shepard hung up with the Springfield office and dialed Whitacre’s phone number. It was about seven-thirty on the night of September 26, and the switchboard had just called to say that Whitacre wanted to talk. In recent weeks, flashes of potential problems had started to emerge with Whitacre—nothing significant, but the change was noticeable. Ten days before, Whitacre had told Shepard that he believed he had satisfied the terms of his cooperation agreement; he had wanted assurances that the FBI was trying to investigate other potential subjects without his involvement. Shepard was not surprised by the sudden recalcitrance; he just wasn’t eager for another ride on Whitacre’s emotional roller coaster.
Whitacre answered the phone. He sounded ebullient.
“I’ve learned some important things recently,’’ he told Shepard.
“I’ve been told I’m probably going to be the next president of ADM.’’
Shepard wrote the information down. With Jim Randall almost in his seventies, it was no surprise that ADM might be thinking about a successor. Whitacre had always seemed to believe he had a strong shot. Shepard asked what else Whitacre had heard.
“At least ten of the products produced by ADM are price-fixed,’’ he said.
“Ten?’’
“Yeah,’’ Whitacre said, “and I would estimate that for all of the companies involved, the total extra profit is in the range of eight hundred million to one billion dollars. That’s just profits from the pricefixing.’’
As he wrote down Whitacre’s statements, Shepard pressed him about the information. Whitacre offered few details but said that each company involved in the price-fixing had two or three people who negotiated prices and volumes.
“You know, Brian,’’ Whitacre continued, “if all these companies are charged with price-fixing, they’re going to be paying an awful lot in fines. Don’t you think?’’
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guilty, they might pay large fines. But nobody knows how this will turn out.’’
“Sure, sure I know that.”
There was a moment’s p
ause.
“You know, Brian, I’ve taken a lot of risks,’’ Whitacre said. “And I need to think about my family.’’
“What do you mean?’’
“Well, I’d like it if, in their fine, ADM was ordered to pay me ten years’ salary.’’
“Well, Mark . . .’’
“I mean, Brian, it’s only fair.’’
“Mark . . .’’
“Also, one other thing,’’ Whitacre said. “I never expected this investigation would last as long as it has. And I think I should get total immunity from prosecution if I agree to cooperate through the end of this investigation, however long it lasts.’’
These requests were what the call was really about. Whitacre had demands and wanted them known.
“Listen, Mark,’’ Shepard said, “I can’t grant you immunity. And I can’t give you any answer regarding any type of fine that might be imposed on ADM. But I can tell you that this will all be discussed with the U.S. Attorney’s office at some point.’’
Whitacre raised objections. But Shepard repeated that at this point, there was little he could do.
“Okay, Brian,’’ Whitacre finally said.
Two nights later, Whitacre met with Shepard and Weatherall at one of the Forsyth hotels. Plans were firming up for the lysine competitors to meet in Paris on October 5, the following week. Whitacre told the agents that Mick Andreas wanted him first to meet with the French and negotiate a volume agreement in Europe that would help keep prices high there.
“Mick wants the Europeans on board before he starts dealing with the Asians,’’ Whitacre said.
The meeting sounded promising, but the agents had been unable to obtain authorization from the French government for Whitacre to make any tapes. Once again, a big meeting would go unrecorded. Whitacre arrived home from a meeting with the FBI sometime after dinner. After greeting Ginger and the kids, he walked upstairs to his office.
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He reached inside his suit jacket and removed the recording device in his pocket. Popping it open, he pulled out a microcassette. This was a tape that the FBI knew nothing about. This was one of his recordings of his meetings with the agents. He was just like Tom Cruise, taping the agents when they didn’t know.
Feeling cocky, Whitacre opened the closet and placed the microcassette on a shelf. He found it amusing that he was using a recording device from the FBI to tape its own agents.
On October 5, at 11:53 in the morning, Philippe Rollier walked into the lobby of the Ritz in Paris. Rollier, the president of one of Ajinomoto’s European affiliates, was joined by two colleagues. Almost fifteen minutes later, Whitacre arrived in the lobby, having just come down from his hotel room.
The four men met in the middle of the lobby, then headed down a hallway to the dining area. At that moment, Whitacre glanced quickly at one of the lobby chairs. Brian Shepard was sitting there, appearing to read a newspaper as he worked surveillance with a member of the French national police. Whitacre smiled to himself. Shepard looked like an agent.
We gotta get that guy some new clothes, he thought. Later that same afternoon, Whitacre rushed from the lobby of Le Grand Intercontinental Hotel, toward a line of taxicabs. He jumped into the first one and pulled a piece of paper out of his pocket.
“I’m going to the American embassy,’’ he told the driver, handing him the paper with the address.
As they pulled up to the embassy, Whitacre saw Shepard standing on the sidewalk. The taxi stopped abruptly. Whitacre paid quickly and jumped out. He and Shepard hurried toward the entrance. Whitacre had only a little bit of time until he was expected to join his co-conspirators for dinner.
Inside, Regina Superneau was waiting for them. Superneau was the embassy’s assistant legal attaché, or ALAT. Superneau took Shepard and his witness to an elevator, whisking them to an upstairs office.
Whitacre quickly briefed Shepard on the day’s events. At lunch, Rollier had accepted an ADM proposal to keep lysine prices higher in Europe, even if they fell in America. Afterward, the executives had traveled to Le Grand Intercontinental for the main meeting of lysine producers at 2:20. Formal presentations were made about the official Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 178 178
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lysine association, before turning to illegal activities. They agreed to set the lysine price at $1.20 a pound in America and $1.80 in Europe. But no resolution was reached on the volume dispute. The group agreed that a meeting between Mick Andreas from ADM and Kazutoshi Yamada of Ajinomoto was needed to break the logjam.
“That’s great, Mark,’’ Shepard said. “Now why don’t you go ahead and make your call.’’
As Shepard turned on a tape recorder, Whitacre sat down at the desk and quickly dialed the number for Mick Andreas. He would give Andreas a briefing right in front of Shepard and Superneau. Nobody expected much from the tape; it would just be more evidence that Andreas knew the purpose of the Paris meeting.
Even though the French government would not allow the hotel meetings to be recorded, the agents could at least get one tape out of the meeting. Andreas was expecting to hear developments. And at the embassy, Whitacre was officially on American soil.
Here, they could legally record almost anything they wanted. The FBI agents could feel it—Harvest King was moving toward a critical juncture. The time had come to step up their resources. They explained the plan to Whitacre, who eagerly agreed with the strategy. It was first put into action on October 12. That morning at about six o’clock, Whitacre, wearing dark blue suit pants but no jacket, knocked on the door of room 121 at the Hampton Inn in Forsyth. Herndon answered.
“Hey, how you doing?’’ Whitacre said as he rushed inside the room.
“I don’t have much time.’’
“That’s fine, Mark,’’ Herndon said. “This won’t take long.’’
Herndon brought out a suit jacket that matched the pants Whitacre was wearing. Whitacre smiled. His new recording equipment was ready. For a week, Whitacre and Andreas had never been in the office at the same time, so today was the first opportunity for a face-to-face briefing on the Paris meeting. There was also a good chance that Andreas might discuss meeting with Yamada. This was a day that the recording devices could not fail.
A few weeks before, the agents had asked Whitacre for the jacket. A secretary in Springfield had sewn the small recording device into the lining, and tiny microphones had been placed under the lapels. Whitacre slipped on the jacket. It seemed about the same as when he had turned it over to the FBI.
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“Okay, Mark,’’ Herndon said, “now when you want to turn it on, the switch is here, in the coat pocket.’’
The switch felt tiny, but it was easy to flick on and off. The FBI had done good work.
Whitacre handed Herndon his microcassette and notebook recorders, and the agent loaded them with batteries and tapes. Whitacre put the microcassette recorder back into his breast pocket and then picked up the briefcase. He was ready to go to work, carrying four different hidden recording devices.
At 9:15 that same morning, Whitacre and Wilson walked past the maze of desks in the ADM trading room, heading toward Mick Andreas’s office. Mick had just called, asking for a face-to-face briefing on the Paris meeting. The recording devices hidden in Whitacre’s jacket lining and his breast pocket were running.
“Where do they think we are?’’ Andreas asked.
“We’re really at about sixty-eight thousand tons,’’ Whitacre said.
“They claim we’re closer to fifty.’’
“Forty-five,’’ Wilson growled.
Whitacre shook his head. “They’d like to see us at forty-five. But they think we’re closer to fifty.’’
“And we’re at seventy?’’ Andr
eas asked.
“We’re at sixty-eight now,’’ Whitacre said.
Andreas asked if it was possible just to give up the additional twenty thousand tons of production, but Whitacre said the problem ran deeper than that. The total production sought by the other manufacturers was bigger than the entire market. Prices were bound to collapse if the proposals were accepted.
“I think the problem is we’re working with that Ikeda guy,’’
Whitacre said. “Terry and I, we just can’t work with that guy.’’
Wilson thought Whitacre was being naïve. “Shit,’’ he said. “He’s doing what Yamada tells him.’’
Fixing the problem, Whitacre said, was going to require Andreas to meet Yamada in person.
“He’s the only one I’m worried about,’’ Andreas said.
“That’s right, and I think he’s a reasonable guy,’’ Whitacre said.
“Ikeda’s an asshole, and I think he started this whole problem.’’
“Yamada’s like everybody else—he uses his asshole for negotiating,’’ Andreas said. “He said, ‘Go in there and be tough and don’t give anything away.’ ”
“That could be part of it,’’ Whitacre agreed.
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“Did you get my message to Yamada?’’ Andreas asked. “That I would meet him anywhere?’’
Whitacre nodded. “I’m going to tonight.’’
Something was going to have to be done soon, Whitacre said. Prices simply were not going to hold.
“I think for three or four months, we’re all right, but I think eventually if we don’t come to some terms . . .’’
“Then we could all lose a lot of money,’’ Andreas interrupted. At 3:30 that same day, the three men met again. Andreas wanted to understand more about the size of the lysine market. Whitacre and Wilson described the opinions of the lysine competitors. Wilson rubbed his chin. “The market could easily be off by as much as ten percent,’’ he said.
“In the size?’’ Andreas asked, sounding surprised.
“Yeah,’’ said Wilson.
“Yeah,’’ Whitacre agreed, “that’s right.’’
The Informant Page 23