The Informant

by Kurt Eichenwald

  “I don’t believe Dwayne Andreas is a totally honest individual,’’

  Buffett said. “He would do anything to get what he wanted. He’s authoritarian and very cunning.’’

  The agent pressed for details. Buffett mentioned his confrontation with Andreas over the football tickets for the congressman. He said that he believed ADM misrepresented the size of its revenues from one business in order to disguise risks in the stock. But he said he had no direct knowledge of price-fixing and knew nothing about whether ADM secretly recorded visitors to the Decatur Club.

  The interview lasted long into the night. Probably, Schuler thought, the case agents needed to follow up with Buffett. Special Agent Ken Temples arrived at the home of Kirk Schmidt, the controller for the Bioproducts Division. Schmidt opened the door, and Temples flashed his creds.

  “Oh yeah, come on in,’’ Schmidt said. He seemed calm. Almost as if he had been expecting a visit.

  Outside Mick Andreas’s house, Rick Reising was slumped in a chair, reading subpoenas. Beside him, Andreas was reliving his FBI interview. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 309

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  The two heard someone coming and looked up. Jim Shafter was walking across the yard toward them. Reising stood.

  “Here,’’ Reising said, thrusting the subpoenas toward Shafter.

  “Read this and we’ll start.’’

  For a few minutes, Shafter reviewed the subpoenas. “Okay,’’ he said, looking up when he finished. “What’s going on?’’

  “Right now,’’ Reising said, “I don’t know the number, but we’ve got twenty or thirty FBI agents going through the offices, carrying out documents.’’

  “Do we have anybody there?’’ Shafter asked.

  Reising nodded. “Yeah, Cheviron’s people.’’

  “Well, not to interfere, but obviously tell them to keep track of things as best they can.’’

  Reising made a face. “Gee, thanks, Jim,’’ he said sarcastically. The men reviewed everything they knew. Agents were visiting executives all over town; even Dwayne’s house had been hit. Reising looked at his watch.

  “Listen, I’m sorry,’’ he said. “I’ve got to go.’’ Other executives were coming to his house to meet.

  Shafter sat beside Andreas. “Mick, what the hell?’’ he said. “Why don’t you tell me what the FBI talked to you about?’’

  Andreas looked calm. “It was about lysine.’’

  Back at the Decatur R.A., the mood was hectic. Shepard and Herndon showed up after six-thirty and helped coordinate the flow of information that was coming in. In one part of the room, lawyers and agents were watching a computer rigged to pen registers and trap-and-trace devices on some executives’ home phones. Every time a call was placed to or from one of those houses, the other phone number registered on the computer. The group then tried to figure out who the number belonged to.

  Mutchnik was having a blast. He manned the phones, answering with a brisk “CP,’’ for Command Post. He felt like a cop. At one point, Mutchnik was out of his chair when the phone rang. An agent answered and called Mutchnik. “This guy needs to talk to you,’’ he said.

  Mutchnik grabbed the phone. “CP.’’

  “Yeah, hey, this is Ken Temples.’’

  “Hey, Kenny. It’s Jim Mutchnik.’’

  “Hey, Jim. Listen, we’ve got a problem out here.’’

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  Temples sounded floored by something. Mutchnik’s antennae went up.

  “What’s wrong?’’

  “I was just out interviewing an ADM employee named Kirk Schmidt.’’

  “Yeah?’’

  “Well, Schmidt knew we were coming,’’ Temples said. “He said that Whitacre told him days ago all about the raid.’’

  A few minutes later, Mutchnik hung up the phone, shell-shocked. He walked to another part of the office where Mann, Price, and Susan Booker, another antitrust lawyer, were working. He stopped in front of them.

  “Mark told,’’ Mutchnik said simply.

  That grabbed everyone’s attention. “What do you mean?’’ Mann asked.

  “Mark told,’’ Mutchnik repeated. “They knew.’’

  Over the next ten minutes, the word from the field kept getting worse. Another agent phoned in with the same news, that Whitacre had told a woman in his division named Kathy Dougherty about the raid. The biggest shock came from the agent who had interviewed Liz Taylor, Whitacre’s secretary. He not only gave her a heads-up on the raid, but had told her months earlier about his work with the FBI. Shepard and Herndon were enraged. For months, they had held Whitacre’s hand as he poured out his fears of being discovered. In their interviews, they had done everything to protect him, even avoiding the word lysine—the one bait that might have hooked Andreas. And now they learned it was all for nothing.

  People at the company knew that Whitacre had been working for the FBI.

  But now there were bigger concerns. How bad did this get? If ADM executives had received enough warning, they might have concocted a cover story or even planted fake evidence that could be used to exonerate them. This was a potential disaster.

  Just past eight-thirty, the agents were angrily preparing to meet with Whitacre when the phone rang. Herndon answered to find an FBI supervisor from Washington on the line. Freeh, the supervisor informed him, needed a memo by 6:30 the next morning on every interview conducted that night by every agent around the country. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 311

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  Herndon seethed, working the muscles in his jaw. This was a bunch of Washington bureaucrats in action. Freeh was too much on the side of the field agents to demand paperwork in the middle of an operation. Herndon argued, but got nowhere. The fight caught the attention of the antitrust attorneys, who walked over.

  “Look, I’ll try my best,’’ Herndon said into the phone acidly. “I’ll have something for you. But this isn’t right. This isn’t right.’’

  “Well, Bob,’’ the supervisor said, in a condescending tone, “I’ve got to be here all night, too.’’

  Herndon hung up and looked at the lawyers. “You’re not going to fucking believe this!’’

  The lawyers listened as Herndon explained. They told him not to worry about the memo. He and Shepard needed to meet Whitacre. The prosecutors would write the summary for Freeh themselves. Herndon looked at the lawyers, feeling touched. After all the earlier tension, the group had solidified into a real team.

  “Thank you,’’ Herndon said, relieved. “You guys are just great.’’

  With barely another word, he and Shepard hurried out the door. The two agents sat in Shepard’s car, looking out on to the fishing pond off the back parking lot of the Holiday Inn. As angry as Herndon was with Whitacre, Shepard felt even worse. He had known Whitacre the longest; he had stuck up for him and tailored the case for him. He felt deeply betrayed.

  “Hey, Bob,’’ Shepard said as they waited, “let me talk to Mark first.’’

  Herndon nodded. “Okay.’’

  Whitacre pulled beside them. The agents got out of the car, and Shepard opened Whitacre’s front passenger seat. Herndon climbed into the back.

  Whitacre seemed hyped up. He excitedly said that Wilson had been scared by the confrontation. He and Wilson had met with Mick, he said, and the whole conversation was recorded. He thought the tape was really good. Shepard mumbled a few compliments.

  “So,’’ Whitacre said, “how’s everything going? Everything going okay?’’

  Shepard stared hard at Whitacre.

  “Mark,’’ he said abruptly, “who did you tell?’’

  Silence descended on the car for an instant.

  “What . . . what do you mean?’’ Whitacre fumbled.

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  “Who did you tell?’’

  Whitacre stammered out a tangle of words.

  “Well,’’ he said finally, “I had to tell Liz Taylor.’’

  Shepard’s eyes flashed in anger.

  “I told her a long time ago, like, three months ago,’’ Whitacre said, the words rushing out. “I didn’t tell her anything about what you guys are doing. I just said, ‘Look, I’m working with the FBI on some things. I may be out of touch for a while.’ I had to tell her where to contact me. I make a lot of decisions and a lot of times they need to find me. I had to let Liz know where I was going to be, so I told her I was involved with you guys on some things. But she didn’t know anything about what you’re doing.’’

  Shepard stared at Whitacre, waiting for more.

  From the backseat, Herndon could almost see Whitacre’s mind turning. By Herndon’s guess, Whitacre was trying to figure out how much the agents already knew.

  “Well, oh yeah, you know I’ve mentioned Kathy Dougherty to you before,’’ Whitacre said. “She’s a dear friend and a trusted ally. I just didn’t want her to be scared. So I told her a few days ago that some FBI guys would be coming by to talk to her this week and that she should just answer their questions.’’

  “Why did you do that, Mark?’’ Shepard said forcefully. “Come on, Mark. That story doesn’t make any sense. Why did you tell Dougherty?’’

  “It’s just like I said: I didn’t want her to be scared,’’ Whitacre replied, working himself into a frenzy. “You guys don’t know what it’s like. I was just looking out for her interests. And I can trust her. Guys, I can trust her. I mean, nothing’s going wrong tonight. Is anything going wrong tonight?’’

  The agents didn’t answer. They couldn’t explain their fears about fake evidence and false statements. Plus, Whitacre had messed with their careers. They had built him up to their superiors. They were supposed to be his controllers. And he was out of control.

  “Who else, Mark?’’ Shepard snapped, his voice brittle. “Come on, don’t jack us around. Who else? ’’

  It took another minute before Whitacre offered up Kirk Schmidt.

  “I wanted to let him know it was okay to talk to you, ’cause he might not ’cause he’s loyal to me,’’ he said. “You guys don’t understand. I have to work with these people long after you’re gone.’’

  Shepard’s anger got to him. “Mark,’’ he growled, “you could have ruined this entire operation!”

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  Whitacre went white and babbled excuses. It was becoming obvious that the bizarre call received by Agent Bruch on the hello line was probably from one of Whitacre’s friends, checking out his story. From the backseat, Herndon didn’t like what he was seeing. They needed Whitacre’s head clear for the next day. Herndon put a hand on Shepard’s shoulder, signaling that he was about to join the conversation.

  “Time out, Mark,’’ he said slowly. “You know what you did was wrong in our eyes.’’

  Whitacre started to speak.

  “Don’t say anything, Mark,’’ Herndon said. “Look, we can talk about this later, okay? We can get past this. But is there anything else we need to know?’’

  Whitacre shook his head. “No, no, I can’t think of anything, Bob.’’

  “Okay, so let’s talk about tonight,’’ Herndon said. “Did you tell anybody at the company that you’re going to cooperate with the government?’’

  Whitacre paused. “Well, you’ve got to understand. After everything that happened, I was concerned about telling them. I mean, I was just scared.’’

  Herndon held his anger. “Okay, Mark, but listen. You can’t be walking around hearing their legal strategies. You’ve got to let them know first thing tomorrow that you’re going to be cooperating. Okay?’’

  “Okay, okay,’’ Whitacre said, nodding. “I’ll tell them as early as I can.’’

  The tension eased, and the agents told Whitacre about the evening’s developments. By the time they finished up, Whitacre seemed back on an even keel. The agents said good night and headed to their car.

  They drove back to the Decatur R.A., unable to shake the sense that Whitacre was holding back. Why had he disclosed the raids? Did he misunderstand something they had said? After thrashing it through, the agents felt sure they had done nothing wrong. Whitacre had simply been freelancing.

  But that conclusion was even worse. If Whitacre had been foolish enough to disclose the raids, Herndon asked, what other surprises were still out there?

  Rick Reising finished the meeting with his ADM colleagues with one clear conclusion: A major criminal investigation was under way. He needed to line up lawyers, right away. He dialed a contact with Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 314 314

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  Williams & Connolly, a Washington powerhouse with a take-noprisoners reputation in litigation. Founded by Edward Bennett Williams, the politically connected Washington “superlawyer,’’ Williams & Connolly had become a firm feared by prosecutors and sought out by wealthy defendants. Michael Milken, the billionaire junk-bond king, was a Williams & Connolly client during the Wall Street scandals of the 1980s; so was President Bill Clinton as the Whitewater investigation unfolded. Reising called Aubrey Daniel III, a tenacious Williams & Connolly partner whom he knew well. Daniel had made a national name for himself in 1971 leading the prosecution in the court martial of U.S. Army Lt. William Calley for slaughtering civilians in the Vietnamese hamlet of My Lai. Daniel, fresh from law school, delivered a fiery summation that riveted the nation. When President Nixon ordered Calley out of the brig and into house arrest, Daniel wrote a much-publicized letter of protest. That helped attract the attention of Ed Williams, who picked Daniel for his growing firm.

  In the years since, Daniel had built up an impressive corporate clientele. He had done work for ADM—even handling an antitrust case involving possible price-fixing of carbon dioxide. But this time, the case was criminal; people faced prison. Reising needed Daniel in Decatur—right away.

  “Aubrey,’’ he said, “it’s Rick Reising at ADM. We’ve got a problem.’’

  Whitacre arrived home shortly before ten-thirty, shucking off his coat and tossing it onto the couch. Ginger was waiting up. He smiled and walked toward her, taking her into his arms. Everything was working out as well as he could have hoped. Perhaps soon, he would be in position to lead ADM into a new era.

  “This is the end,’’ he said. “Another couple of days and these guys are gone.’’

  The next morning, ADM was in chaos. Howard Buffett sat in his sixthfloor office, still in awe over the events of the last sixteen hours. The raid. The tapes. Even his own FBI interview, at his house right after six o’clock. Everything had gone exactly the way Whitacre had promised so many weeks before, when he had told Buffett all about the pricefixing investigation. Around ten, Buffett gaped as two longtime ADM staffers transported armloads of documents out of Dwayne Andreas’s office and Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 315

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  boxed them up. The movement of paper continued for almost thirty minutes; later, Buffett saw the records being carried away. He made a mental note to tell the FBI what he had seen.

  Sometime later, Dwayne himself stopped by. “So, what did you tell the FBI last night?’’ Andreas asked before launching into a description of his interview.

  Buffett stopped him. “I’m cooperating with the government,’’ he said. “I’ve retained my own lawyer. Anything you tell me is the same as telling the FBI.’’

  Andreas set his jaw, visibly upset. He said nothing more about the investigation.

  Aubrey Daniel arrived that morning at Decatur Airport with a Williams

  & Connolly colleague. Shafter was waiting and drove the lawyers straight to
ADM.

  Once there, the lawyers reviewed the subpoenas. It didn’t take long to figure out the targets—the Feds had cleaned out the offices of Mick Andreas, Wilson, Whitacre, and Cox. Daniel was convinced this was a covert operation. Somebody had cooperated.

  Everyone needed their own lawyers, right away. Daniel, who was most familiar with the white-collar bar, made a series of suggestions. Shafter and Reising accepted each without question. The list was drawn up and the phone calls went out. The personal lawyers would begin arriving in Decatur by that evening.

  In Washington, Bob Strauss hung up the phone, bewildered by the news from Decatur. Strauss, an ADM director, was the consummate Washington insider with roles among the power elite that transcended party labels. He was equally comfortable serving as Democratic Party chairman, or ambassador to the Soviet Union for the Republican administration of George Bush. Strauss was also a confidant and first friend to Dwayne Andreas, a man he had met decades before. As usual, Strauss spoke to Dwayne that day, this time receiving an update on the raid. He heard about the search for lawyers to represent executives. ADM had even sent a plane to Washington to shuttle lawyers to Decatur. Strauss had suggested Bill Hundley, a lawyer with his firm, Akin, Gump, Strauss, Hauer & Feld.

  But after hanging up, Strauss learned that Hundley was not around. There was no time to wait; the ADM corporate plane would be leaving for Decatur in just about thirty minutes. Who else fit the bill? Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 316 316

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  Strauss thought of John Dowd, another prominent lawyer at the firm. Dowd was a former prosecutor who was best known as the lawyer who led major league baseball’s investigation into gambling allegations against Pete Rose.

  Strauss reached for the phone.

  The apparent targets of the investigation were called into Reising’s office one at a time to meet with the lawyers. Whitacre was summoned in the morning. Daniel looked at Whitacre affably.

  “Pleasure meeting you,’’ he said. “I’m Aubrey Daniel; I’m representing ADM in this matter.’’

  The lawyers questioned Whitacre about his FBI interview the night before, and he provided rehearsed answers. Afterward, the lawyers offered assurances. Whitacre shouldn’t worry. ADM would stand by him.