The Informant

by Kurt Eichenwald

  “Once Whitacre’s gone, DOJ is out of it.’’

  Bassett took another bite of his sandwich and chuckled. He was expecting a transfer to Albany soon.

  “I’ll probably be out of here before this is over,’’ Bassett said. “Then this will be all your problem.’’

  “Thanks a lot,’’ D’Angelo laughed.

  The next step was sending this matter up the line in the Bureau. The agents agreed that this one might end up going all the way back to headquarters.

  “Let’s see if the Bureau backs us,’’ Bassett said.

  “Yeah, but Mike, what if they don’t?’’

  The agents fell silent for a moment.

  “I’ll tell you, Mike,’’ D’Angelo said, “if they tell us, ‘Don’t follow leads, don’t go after co-conspirators, don’t go after ADM,’ that’s it. I’ll leave the job first.’’

  “I feel the same way.’’

  D’Angelo took another bite.

  “And Mike,’’ he added, “if that happens, I think we should go public.’’

  Bassett nodded. That would be an enormous step for an agent, something almost never done. But he saw the logic.

  “I agree,’’ he said.

  By the end of the meal, the agents were decided. If they were told to ignore Whitacre’s leads— if they were told to obstruct justice—they would resign that day.

  And afterward, they would call 60 Minutes.

  There had been no need to worry.

  In the days that followed, the Bureau reacted with muted outrage to the extraordinary letter from the Justice Department. Their supervisors not only fell squarely behind Bassett and D’Angelo, but they took up the battle for them.

  After hearing about the letter, their supervisor took the matter to Ed Worthington, the Chicago ASAC. Worthington agreed to sign the response to the prosecutors that D’Angelo had written. It oozed diplomacy, although a dig at the prosecutors occasionally slipped through. The letter went through the prosecutors’ requests one at a time. Regarding the net-worth analysis for Whitacre, it stated that requests for foreign-bank information had gone out, but that the analysis could not be completed before the data was delivered. As for obtaining Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 471

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  Whitacre’s tax records, the response pointed out this was not usually handled by the FBI, since it required a court order—something the prosecutors needed to obtain.

  “The U.S. Attorney’s office for the Northern District of Illinois routinely procures tax information via such orders,’’ it read, dripping condescension. “An example can be made available to your office if necessary.’’

  Regarding the matter of the 302s of defense lawyers, the response explained that lawyer contacts are written up in memorandums, not 302s. Still, in the future those would also be shared with the prosecutors. At the bottom, the response addressed the expectation that Whitacre would not be an informant against others.

  “All potential criminal activities revolving around Whitacre’s fraud scheme will be thoroughly investigated prior to the culmination of this case,’’ the response stated. “The FBI will endeavor to complete these investigative tasks as expeditiously as possible. However, thoroughness should not be sacrificed to accomplish this goal.’’

  In the days and weeks that followed, the Chicago Field Office sought support from headquarters for their decision to disregard the prosecutors’ instructions. D’Angelo and Bassett briefed Neil Gallagher, Deputy Assistant Director for the FBI’s Criminal Investigative Division. Afterward, Gallagher told the agents to ignore any instruction to take shortcuts.

  “Keep doing what you’re doing,’’ he told them.

  Signs of strain were emerging in what had been a united front by potential defendants in the price-fixing case. While ADM and its executives still seemed to stand steadfast against a plea, the foreign competitors were wavering—and obviously ready to fall. Miwon’s lysine division—now known by its new corporate name, Sewon—seemed the most geared up to cut a deal. In a series of discussions, Lawrence Kill, a lawyer representing the Korean company, said that Sewon was hoping for a fine of a few hundred thousand dollars; the prosecutors insisted on millions. But as they negotiated, several good signs emerged. First, Kill dangled the tantalizing news that Sewon had maintained documents relating to price-fixing. On top of that, he almost never mentioned J. S. Kim, the Sewon executive most involved in the scheme. Apparently, there would be none of the usual sticking points about the fate of executives.

  That did not hold true for other conspirators. On December 19, Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 472 472

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  lawyers for Ajinomoto called with a proposal. The company would plead nolo contendere—essentially a statement that Ajinomoto did not contest the charges, but was not pleading guilty. The lawyers also hinted that a plea might be possible from Kanji Mimoto, who had collected numbers for the volume agreement. But they said a plea from Kazutoshi Yamada, the managing director, was off the table. The prosecutors listened but were unwilling to cut Yamada free. Still, this was Ajinomoto’s opening bid. Before long, the prosecutors felt confident, the company would come back with a better offer—

  probably when indictment seemed inevitable.

  On December 18, as a driving rain fell in Greenville, North Carolina, a car pulled off the road into the parking lot of a small chiropractic clinic. The driver, Vernon Ellison, a local private detective, maneuvered into a spot near the clinic door and shut off the engine. The swishing wipers that had been fending off the cold rain came to a stop. Ellison glanced toward his passenger, Andrew Levetown from Kroll Associates, the corporate investigative agency that was coordinating the search for Whitacre’s millions.

  “Ready?’’ Ellison asked.

  “Let’s go,’’ Levetown said, throwing open the door.

  Levetown had just arrived from Kroll’s Washington office. Weeks before, Swiss lawyers had obtained many of Whitacre’s records from his bank accounts in that country, and now agents were fanning out wherever money had been sent by wire or check. One name in the records was that of Patti McLaren, who appeared to have received a check for about $8,000 from Whitacre earlier in the year. Kroll detectives tracked McLaren to Greenville, but still didn’t know who she was. Levetown had volunteered to confront her. Ellison, a licensed investigator in the state, was hired to tag along. The two detectives walked toward the clinic door in the rain, pulling their trench coats tight. Inside, the waiting room was filled with patients flipping through old magazines and generally looking bored. Levetown glanced around the run-down office. It seemed the last place that might be associated with a Swiss bank account. Near the front of the office, a woman sat behind a reception desk. The detectives approached her.

  “Excuse me,’’ Levetown said. “I’m looking for Patti McLaren.’’

  The woman looked up. “That’s me,’’ she said.

  Levetown identified himself and handed over his card. Eich_0767903277_5p_02_r1.qxd 10/11/01 3:57 PM Page 473

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  “I wanted to ask you a few questions about some money you received from Mark Whitacre,’’ he said. McLaren eyed the men suspiciously.

  “Well,’’ she said, standing, “this would be awkward right here. Let me find a place where we can talk.’’

  McLaren walked to the back of the office, out of sight. Levetown figured she was probably calling a lawyer. Minutes later, McLaren returned, her face deadly serious.

  “I’ve got nothing to say to you,’’ she said crisply.

  “Well . . . ,’’ Levetown began.

  “I’ve got nothing to say to you,’’ McLaren repeated. She pointed to the door. “You have to leave now.’’

  The detectives headed toward the exit. Levetown glanced back at McLaren. He decided to press her.

  “Do you want to tell us why Mark Whitacre g
ave you eight thousand dollars last May?’’ he asked. McLaren’s anger and contempt showed in her face.

  “We’re a close family!’’ she snapped. “That’s none of your business!’’

  McLaren’s last words provided the necessary clue to her identity. Within hours, Kroll detectives figured out that she was Ginger Whitacre’s sister. Whatever the reason Whitacre had given her money, there was probably little in the story that would help ADM. Levetown headed home.

  The next day, Levetown returned to Kroll’s offices at Eighteenth and M Streets in downtown Washington. His mind was already on other work; beyond the McLaren noninterview, he didn’t expect to have much involvement in the case.

  During the day, a call arrived at the switchboard. Janine Hightower, an office receptionist, answered.

  “Kroll Associates.’’

  “Andrew Levetown,’’ the man on the line requested.

  “May I ask who’s calling?’’

  The caller’s voice turned angry.

  “I’m looking at his business card right now, the one he gave Patti McLaren. I know what he did. I know he’s offering money to get people to tell stories about Mark Whitacre. I want you to get him a message for me. You tell him he not only just made the biggest mistake of his career, but the biggest mistake Kroll has ever made.’’

  The caller clicked off the line.

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  Hightower found Levetown and told him about the bizarre call. He passed the message up the line. Eventually, a decision was made by Kroll’s top officers to notify Williams & Connolly of the call. The news deeply alarmed the defense lawyers. The anonymous Lamet Vov letters, which had stopped months before, had seemed vaguely threatening. Now this call raised those worries again. Something had to be done, they decided. Over the objections of the detective agency’s founder, Jules Kroll, Williams & Connolly ordered the investigation cut back. Kroll operatives were instructed to conduct no further interviews of potential witnesses.

  No one knew it, but the Lamet Vov—the man who had called to Kroll’s offices—had just won a big round.

  Outside of Yokohama, Japan, a letter arrived by overnight mail at the home of Masaru Yamamoto. For six months, Yamamoto, from Kyowa Hakko of Tokyo, had watched helplessly as the American investigation of the lysine price-fixing scheme unfolded. He could hardly believe that Whitacre had been taping their conversations all those years. He felt ashamed and frightened.

  And now, the letter on this day, January 9, 1996, was telling Yamamoto to cut a deal.

  The writer was David Hoech, an American consultant who for years had provided Yamamoto with market intelligence about the agricultural industry. Frequently, his information had been on target—

  particularly details of ADM’s plans, which he had often learned about during conversations with Whitacre. But this time, Hoech was writing with a different type of inside dope. The government, he wrote, appeared to have strong evidence—and Yamamoto needed to be prepared.

  “If the Department of Justice did not have a solid case, they would not have ceased the covert operation using Mark Whitacre,” Hoech wrote. “Since June 27, 1995, they have been interviewing other people.”

  While Yamamoto was out of the reach of American law enforcement, Hoech said that the tapes would almost certainly be damaging and would likely appear in the Japanese media. Then, the consultant offered some blunt advice.

  “I would make a deal with DOJ for immunity from prosecution first for myself, and second to try and protect the company,’’ he wrote.

  “Please accept my advice and thoughts as one friend to another.’’

  Yamamoto set down the letter. He faced a lot of tough decisions.

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  The government cast a wide net of subpoenas as Shepard and Herndon turned to some of the more bizarre allegations raised by Whitacre during his cooperation. Even with their witness’s credibility in shambles, the agents could not ignore his charges. Besides, evidence of other crimes—from stealing proprietary microbes to illegally recording competitors—might give them the leverage they needed to obtain more evidence from ADM in the price-fixing case. Some allegations seemed to hold little promise. One of the first to fall through was the claim that ADM had surreptitiously taped conversations at the Decatur Club. Whitacre had said that his information was secondhand, from secretaries who transcribed the tapes. But, when interviewed, the secretaries seemed to know nothing about it. With only unproven rumor, there was little to do other than hope that subpoenas might bring in real evidence.

  Other allegations seemed to be supported by Whitacre’s tapes, so the agents focused their efforts there. In an early recording, Jim Randall appeared to have been caught saying that he had paid $50,000 to someone named Mike Frein for a proprietary bacitracin bug. Herndon conducted a nationwide computer search, tracking Frein down and calling him. The agent asked broad questions; Frein steadfastly denied any wrongdoing and readily agreed to an interview. Herndon was delighted; this was moving quickly.

  Days later, Herndon received a voice-mail message from Frein, telling him that the interview was off. Instead, Frein said, Herndon should telephone Aubrey Daniel. Herndon dialed the law firm’s main number and asked for Daniel. He was surprised when the call was put right through.

  “This is Bob Herndon. I’m an FBI agent on the ADM case. And I have a message from Mike Frein to call you.’’

  “Yes,’’ Daniel replied. “I don’t represent him, but you’ll be getting a call shortly from someone who does.’’

  The call arrived quickly from William Joseph Linklater, who begged off the interview. He had only recently been hired to represent Frein, he said, and wouldn’t even know his client yet if he saw him. Herndon sighed. With lawyers involved, hopes for an easy Frein interview were over. Then, out of nowhere, a breakthrough.

  A former ADM executive who had received a subpoena agreed to talk to Shepard. On January 17, Shepard met with the former executive, Joseph Graham.* In longhand, Shepard took notes of Graham’s

  *A pseudonym.

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  statements and was excited by what he heard. The new witness said that he had specific knowledge of ADM’s attempts to steal competitors’ technologies—even confirming some things that Whitacre had first described.

  Graham said that he knew about ADM’s attempts to use prostitutes to obtain information from competing companies and to find disgruntled employees. He also said that ADM had tracked down two prostitutes to work near a competitor in Eddyville, Iowa, before Randall pulled the plug on the whole operation. There were other technology schemes, Graham claimed. For example, he was aware that ADM sent people into the sewers near competitors’ plants, in hopes of finding proprietary microbes that had accidentally washed away. The allegation sounded exactly like something Whitacre had told Ferrari.

  Graham also claimed to know about other schemes that Whitacre had never mentioned. He told Shepard that ADM had offered a Nebraska security firm $100,000 to pose as janitors on a competitor’s premises for the purpose of stealing bugs. But the firm turned down the offer, he said.

  Once Graham finished his story, Shepard asked for corroboration such as expense statements. Graham promised to search for the records.

  Shepard hopped on the new information. He immediately flew to Nebraska to meet with the security firm that Graham had mentioned. But the interview was a bust. The firm’s director denied knowing about the one-hundred-thousand-dollar proposal. The director seemed credible to Shepard—but so did Graham.

  On September 24, Graham contacted Shepard with news. While he had been unable to locate the expense statements, something else had turned up. In
one box, he had found a sealed envelope dated June 3, 1991. It was something he had hidden away years before and forgotten. Tearing it open, he had found two folded sheets of paper. It was, he said, the list of questions that ADM had prepared for the prostitutes.

  Herndon nodded a greeting to the radio operator for the Springfield office as he walked toward a fax machine. Shepard had called minutes before with the latest on the prostitute questions, promising to fax over a copy of them right away. Within minutes, a blurry, handwritten list scrolled out. Herndon picked up the sheets and headed back to his desk, reading as he walked.

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  “Questions for Girls, Eddyville,’’ the top read.

  Glancing over the first question, Herndon chuckled. What is cur- rent grind—bushels per day?

  The other questions, given the circumstances when they would have been asked, seemed ridiculous. Is Pepsi-Cola a big customer? Are they planning to add more fructose capacity? Who is the fastest growing wet miller?

  Herndon reached his desk and called over some fellow agents. Several had already heard about the discovery of the question list.

  “You guys have got to hear this,’’ Herndon said. He read out a few questions to the laughs of his colleagues.

  “I can see it now,’’ one agent chuckled. “Some bimbo’s humping away with a Japanese guy who barely speaks English, and she blurts out, ‘Is Pepsi-Cola a big customer?’ ”

  The agents roared.

  The laughter continued throughout the day. Herndon faxed a copy of the questions to the antitrust prosecutors. He also sent a copy to Rodger Heaton in the Springfield U.S. Attorney’s office, since he was likely to handle the case if Antitrust took a pass—a likely prospect, since there really weren’t provisions in the Sherman Act against prostitution or espionage. The questions deflated whatever eagerness existed for the case. They seemed so ridiculous; the prosecutors worried that someone at ADM had been kidding Graham years before, and the man simply didn’t get it. Either that, or whoever had put this idea together was a real buffoon. Topping it off, with Graham insisting that Randall had put a stop to the plan, there was a good chance that no crime had ever been committed—even if the questions were real.