The Informant

by Kurt Eichenwald

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  Quietly, the hidden camera shut off.

  Andreas looked at Yamada. Now they were alone. This was his moment to be blunt, to underscore that ADM was not going to buckle.

  “Look,’’ he said, “I checked again after Mark just now. I don’t care what your people think, our figures are right. So I don’t care what you do.’’

  “We have to present it differently,’’ Yamada said. “The Asian way is different.’’

  “I don’t care what you do,’’ Andreas said. “Do whatever you want.’’

  Yamada said nothing.

  An hour later, an agent informed Shepard that Whitacre and Ikeda had returned to the room. Shepard switched on the monitor and VCR. Whitacre was standing over the table. The sheet of paper that Ikeda had torn from the easel was still lying amid the clutter. Shepard and Weatherall watched as Whitacre picked up the sheet.

  “I guess I should probably keep this, huh?’’ Whitacre said, folding the paper.

  Shepard and Weatherall watched as Whitacre reached down for his briefcase. Weatherall marveled at how smooth Whitacre had been. He had just taken a risk with a deft maneuver and managed to obtain a key piece of evidence for the FBI.

  This guy, Weatherall thought, was the best cooperating witness he had ever seen.

  Just before seven-thirty that evening, Herndon drove into the parking lot of a Pizza Hut near the Decatur Airport and pulled into a space. Minutes passed before he saw Whitacre’s blue Town Car come around the corner. As soon as Whitacre parked next to him, Herndon hopped in on the passenger side.

  “Hey, Mark. I hear you had a good meeting.’’

  “Yeah,’’ Whitacre said, looking excited. “I think you guys are really going to be pleased with this.’’

  Whitacre was talking a mile a minute, repeating himself. He was obviously pumped.

  “This is just what you guys have been driving home, as far as us showing Mick’s involvement in the conspiracy,’’ he said breathlessly.

  “It’s clear as day. He’s involved in the conspiracy. He divides the Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 198 198

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  market with Yamada. He just divided the market with Yamada. It’s right there. This should really help you with Mick, showing his involvement. Man, it’s a good tape. Mick’s dividing the market. This should give you guys everything you need. Awesome, Bobby.’’

  Herndon sat back. Whitacre needed time to decompress. This was his first chance to talk about everything that had happened.

  “Okay, we’ll have to look at the tape and see what’s there,’’ Herndon said. “We need to get you home to your family, but let me get the tapes first.’’

  Whitacre took out the microcassette recorder. Herndon removed the tape and, using his pen, popped its plastic tabs to ensure it would not be erased. He asked Whitacre questions about the tape as he filled out the paperwork. Whitacre’s suit jacket, with the small recorder sewn inside, was already lying between them on the car seat. Herndon picked it up, then grabbed the briefcase. He planned to remove the tapes from the equipment the next morning.

  About twenty minutes later, Herndon thanked him and said good night. He watched as Whitacre swung out of the parking lot into lateevening traffic. For a moment, he kept an eye out to make sure that Whitacre wasn’t being followed. Herndon was feeling protective of his witness. Whitacre was helping them crack the conspiracy. He was part of the team.

  Days later, on Halloween, Herndon wheeled a kitchen chair into his living room, in front of the television. He had finally received a copy of the Irvine tape and wanted to work on a summary. He slid the tape into his VCR, picked up the remote, and pressed the Play button. One of his family cats, Mookie, jumped on his lap as the scene unfolded. The recording was fabulous. Over and over, Herndon fast-forwarded and rewound the tape, reviewing critical scenes as he listened and watched.

  The time counter, in white letters at the bottom of the video, was approaching 11:00 when Herndon saw Whitacre head to the bathroom. Of course, he left his briefcase behind and it continued taping. Under the law, that portion of the tape couldn’t be turned over to prosecutors—no consenting party was present.

  Later, Herndon watched as Andreas laid out his proposal. Wait a minute.

  On the screen, Herndon saw Whitacre lift the briefcase panel covering the recording device. It was out in the open, there for almost anyone to see. Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 199

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  What is he doing?

  Herndon hit Rewind to watch the scene again.

  What an idiot!

  Herndon would have to talk to Whitacre about this. Later, he called Shepard in the Decatur R.A.

  “You’re not going to believe this, Brian,’’ Herndon said. “But I watched the tape and it looks to me like Whitacre lifted up the panel on his briefcase, right there with everyone around him.’’

  Shepard paused. “You’re kidding,’’ he said.

  Herndon told Shepard the counter number on the tape where Whitacre had opened the case. Shepard hung up. He wanted to see this for himself. If there was a problem with the briefcase, Whitacre could have shut it off. They were going to have to talk to him. He couldn’t be so reckless.

  “Where’s the agreement?’’

  Robin Mann was speaking to the three case agents by telephone. Days before, they had sent her a copy of the Irvine tape, then sat back waiting for the call of congratulations. But Mann had objections: Under the law, it was the agreement that constituted a crime, not the discussion. While Mann felt an agreement had probably been reached, she knew a jury would want to hear the participants declare a deal. Instead, the executives in Irvine had talked around a deal for hours, subtly sliding into an agreement in the last minutes before lunch. It was good evidence, but Mann felt it could have been better. Any good defense lawyer would notice the problems. But as the agents listened on three phones in the Decatur R.A., they felt frustrated. How could Mann not see the agreement? Did she just not want to see it?

  “If this isn’t an agreement, then what are they doing there?’’

  Weatherall asked. “Don’t get bogged down in the words. Look at what the actions are.’’

  “I’ve looked at it, Joe,’’ Mann said. “I see a chart with a lot of numbers, and I can’t really pinpoint what the agreement was.’’

  Weatherall sighed. “It’s right in front of you.’’

  “It could just be a proposal,’’ she said. “All the other companies weren’t there. Nobody said they were in agreement.’’

  Shepard picked up the argument, again explaining that the agreement was clear in the full context of the tape. Weatherall, feeling sour, put down the phone. He stood and walked to the doorway of the back office, where Herndon was listening on the phone.

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  Herndon glanced up. Weatherall waved his arm dismissively and stuck out his tongue. He was making his opinion clear. Herndon stifled a smile. After hanging up, the agents met in the main room. What more did Mann want? Maybe, they theorized, she was getting cold feet about a trial. Finally, after several minutes of complaining, the agents decided to speak with Whitacre about trying to get the word agreement on tape. But that didn’t mean they had to be happy about it. On Monday, November 22, Whitacre was filling out his latest expense report. He had been out of town the previous week and now his desk was littered with receipts. On the form, he wrote that he had traveled to Chicago the previous Monday and Tuesday, attaching his bill from the Embassy Suites on North State Street. For the four days that followed, he wrote that he had been in Miami, at an industry meeting.

  He included daily hotel expenses in Miami of $387.27, but attached no receipt—the bill, he wrote, was coming by mail. Whitacre listed several meals wi
th members of the trade group and included receipts. But the top of each one had been carefully cut off—no one would ever be able to determine the name or location of the restaurants. In fact, nowhere in his expense report was there a single receipt with the word Miami on it. And even though Whitacre usually placed dozens of calls a day, anyone checking would have found no record of any during three of his days in Florida—either from his hotel or on his corporate phone card.

  On his trip, Whitacre had been very careful to avoid creating a paper trail. It would be extremely difficult for either ADM or the FBI to realize that, during the time Whitacre was claiming to have been in Miami, he had not even been in the United States.

  Nailing down proof of the Irvine agreement proved harder than the agents had expected. While ADM and Ajinomoto had walked away convinced that they had reached a deal, each side had a different opinion of the terms. Whitacre and Andreas—and the FBI, for that matter—had believed that the Japanese company had committed to allocating ADM its prior year’s production, plus a big part of the expected fourteen thousand tons of growth in 1994. But Yamada and Ikeda had never expressly said that. Instead, they had retreated behind a vague word— alpha—that they defined as a Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 201

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  “substantial portion of growth.” At no point, though, did they say what growth they were talking about. It was not, as ADM believed, the fourteen thousand tons of growth estimated for 1994. Instead, alpha was part of the growth that might occur beyond the predicted amount. The fourteen thousand tons would be divvied up among the Asian companies alone. ADM’s alpha would kick in only if the market grew beyond that—so, if fifteen thousand more tons were sold in 1994, ADM would receive a substantial part of just the one thousand tons exceeding the predicted growth. In effect, Ajinomoto was telling ADM that it could have most of the food on the plate, so long as everyone else first had a chance to lick it clean.

  Ajinomoto had simply repackaged its earlier proposal. The vague terms that the Japanese had used were not meant to satisfy the other competitors, as Yamada appeared to have said. They were there to appease the Americans. ADM’s attempts to bombard Ajinomoto with logic had gotten nowhere; the Japanese were still convinced that their proposals were intrinsically correct.

  In November, Whitacre taped several arguments with Ikeda about the Irvine agreement but got nowhere. On December 1, he went to Mick’s office to update him on a call from the night before.

  “We talked for like half an hour,’’ Whitacre said, sounding livid.

  “We’re at sixty-seven for ninety-four as far as they understand. I said, ‘God, I can’t believe you were at the same freakin’ meeting.’ I mean, these guys, it’s goddamn Rising Sun.’’

  Andreas nodded. He had discussed the Michael Crichton bestseller with Whitacre before. In a matter of days, Wilson and Whitacre were scheduled to fly to Tokyo for the next price-fixing meeting. Whitacre was so angry that he was asking whether the meeting should be canceled.

  Andreas was calm. The two sides were only five thousand tons apart. Maybe it wasn’t worth the effort.

  “I don’t think we should argue with ’em, do you?’’ Andreas said. Whitacre raised his hands. “I don’t know. What do you think? I think they’re tricky sons of bitches.’’

  Maybe just tell them that ADM expected some growth in ’94 and leave it at that, Andreas said. Alpha had to mean something more than zero.

  The White House nomination for the new Springfield U.S. Attorney sailed through the Senate in weeks. Byron Cudmore, the first prosecutor Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 202 202

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  to meet Whitacre, had been in the job in an acting capacity for more than six months. Now he would be replaced by Frances Hulin, a longtime Illinois prosecutor. In the first days after her confirmation in early January, Hulin was briefed by Cudmore about Harvest King. He had passed much of the day-to-day responsibility for the case to another assistant in the office, Rodger Heaton, but had kept his eye on developments. The prosecutors had been working closely with the antitrust office in Chicago, he told her, and the relationship had been good. The potential significance of the case was obvious, and Hulin sought an immediate briefing from the FBI.

  The meeting took place at 2:00 one afternoon, in the SAC’s conference room at the Springfield office. Shepard made a presentation covering the investigation’s background, while Herndon discussed the apparent effects of each price-fixing meeting on the lysine market. With a chart, he showed a graph that generally tracked the changing price of lysine over time, as well as when each meeting occurred. Hulin was impressed. By the end of the meeting, she was telling the agents how much she was looking forward to working this case to completion.

  The news was bad from the American legal attaché in Japan. Whitacre had taped an earlier price-fixing meeting in Tokyo for the FBI, and for an upcoming gathering, the agents had requested permission for him to use more sophisticated equipment. But the Japanese national police had become uncomfortable with the whole idea. This time, they would not authorize Whitacre to use any FBI recording devices in Tokyo.

  Still, there was a loophole. The Japanese authorities said the restriction did not apply to a “businessman’s recorder.’’ If Whitacre wanted to tape on his own in Tokyo, no one would stop him. Theoretically, it would be a crime, and Whitacre could be arrested. But the Japanese almost seemed to be saying that they would look the other way. The agents discussed the dilemma among themselves. They would have to talk to Whitacre about what was happening. The decision would have to be his.

  Shepard’s expression was grim as he looked across the hotel room table.

  “Mark, we’ve got a problem,’’ he said. “You can’t take our equip-Eich_0767903277_5p_01_r1.qxd 10/11/01 3:56 PM Page 203

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  ment to Japan. We have no jurisdiction and the Japanese government won’t authorize it.’’

  Whitacre listened, nodding. Well, they had faced the same problem before.

  “Okay,’’ he said, “so I guess you want me to take notes like I did in Vancouver?’’

  “Well, sure, you can take notes. But there’s something else I want you to think about. Like I said, we can’t give you recording equipment. But if you tape on your own, and you just happen to give us those tapes, we can’t stop you from doing that.’’

  Huh? Whitacre looked at Shepard, puzzled.

  “So, that means you want me to make a tape in Japan, right?’’

  “I’m not allowed to say that,’’ Shepard shrugged.

  Whitacre sat back. Shepard was essentially telling him to tape without saying it. What was this?

  “Well,’’ Whitacre said, sounding eager, “I’ll go ahead and tape. I’ve decided to tape the meeting.’’

  Shepard pulled a piece of paper out of his pocket. That day, Tom Gibbons, the Springfield technical expert, had told Shepard that some of the best commercial recording devices were made by Radio Shack. Shepard had written down the information.

  “If you’re going to tape, you might want this equipment,’’ Shepard said, handing over the paper. “They have them over at the Hickory Point Mall.’’

  Whitacre eyed the paper suspiciously. He started to speak, but stopped.

  “Now, we can’t buy any of the equipment,’’ Shepard said. “If we did, it would belong to the Bureau. Then it couldn’t be used legally in Japan.’’

  “What happens if I get caught taping there?’’

  “I don’t know anything about Japanese laws, but you could be in trouble. And if you’re arrested, it’s possible that we may not be able to provide much help in resolving the situation.’’

  Whitacre contemplated that a few seconds. When he answered, he kept his voice level, his tone calm.

  “Okay.’’

  On December 2, Whitacre made his way through the Christmas crowds at t
he Hickory Point Mall and headed into Radio Shack. He waited a few minutes until a salesman was free.

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  “I’d like a tape recorder,’’ Whitacre said, looking down at the sheet of paper in his hand. “It’s the Radio Shack Micro-26.’’

  The salesman disappeared, returning with the recording device. Whitacre ordered some triple-A batteries and three ninety-minute microcassettes. The total cost, with tax, was $149.82. Whitacre headed to his car. He didn’t mind spending the money but was uncomfortable with the risk that the FBI was asking him to take. Still, he figured that by taping in Japan, he would help end the investigation faster. Nothing mattered to him more. He climbed into his car, tossing the bag with his new recorder onto the seat. As he drove out, he thought through his discussion with Shepard. He wished he had known about it ahead of time. Then he would have been sure to tape it. If he got into trouble in Japan and the FBI tried to cut him off, at least he would have something he could use to protect himself.

  No matter. Probably he would just talk to Shepard later and recreate the conversation. The FBI had trained him on how to get people to repeat themselves. He was getting good at it.

  The Imperial Palace sits in the center of Tokyo, built on the site of the Edo Castle where the Shoguns ruled until the dying days of the nineteenth century. To the southeast lies the spacious Kokyo Gaien, or

  “outer garden,” a spot where the remaining Fushimi Turret, a watchtower of the old castle, can be seen over the double-arched stone bridge that crosses a moat.

  The gardens were visible to Whitacre and Terry Wilson on December 7 as the car they hired at Narita Airport approached the hotel entryway of the Palace Hotel. Whitacre paid the driver in yen before he and Wilson headed into the hotel lobby. Wilson was looking tired and angry. The long plane trip on Japan Airlines had worsened the pain in his troubled back. These trips were getting to be too much for him.

  Tensions were rising among the lysine producers, even before the Tokyo meeting began. Several of the companies were dissatisfied with the results from Irvine. The Korean companies—Miwon and Cheil—