Informant

by Kurt Eichenwald

  Clark nodded. “Yeah, I’ll do that. But I want you to understand. Any postponement of further action on this case is only temporary.’’

  He looked at the assembled group. “We are not stopping this investigation,’’ he said.

  Just off Interstate 10 in the Louisiana town of Lake Charles, the Players Riverboat Casino floated dockside. The vessel appeared to be of the Victorian era, belying its true age of less than one year. A huge paddle wheel was visible behind it—a nicety required on all casino riverboats by Louisiana gambling laws, even though this one was powered by diesel engines and underwater propellers. In its first few months, the riverboat had brought an economic boom to Lake Charles, an oil town still struggling from the collapse of crude prices in the 1980s. Some folks in town had once considered the boat a sign of moral decay. But now, with money coming in, the casinos were mostly viewed as a blessing, the town’s salvation.

  On August 24, Shepard and Herndon drove past the riverboat and eyed its inviting polished chrome and flashing lights. Perhaps, the agents agreed, they would visit the casino later. But first, they had to stop by a hotel up the street, where Craig Dahle was waiting to introduce them to his cooperating witness.

  Dahle met the two agents in the hotel’s downstairs restaurant for dinner. Everyone was friendly, but the atmosphere was strained. The agents knew that one of the cases was probably going to be derailed before too long. The only question was whose.

  After his meal, Dahle checked his watch.

  “I better get upstairs in case my guy shows up,’’ he said. Shepard and Herndon agreed to come up soon.

  When they arrived, Dahle was still alone. The witness, Kyle Rountree, knocked on the door about ten minutes later. After the introductions, Dahle walked his witness through his story.

  Rountree said that the former Degussa employees, Jones and Hall, now worked at a Lake Charles company called Kronos. Rountree worked with them and made no secret that he disliked Jones. A woman close to Jones had raised Rountree’s suspicions about espionage. She showed him documents from a computer disk she claimed to have found on Hall’s desk. The documents appeared to contain proprietary data on Degussa’s methionine process.

  Rountree mentioned that he had letters between Jones and Mark Whitacre, as well as check stubs documenting ten-thousand-dollar payments from ADM to the two former Degussa executives. A date on one check matched the date on a letter from Whitacre to Jones.

  “You told me something last time about Whitacre and the sign-in sheet at Kronos,’’ Dahle said.

  “Yeah, I remember seeing his name on the Kronos visitor’s log sometime around November of 1992.’’

  Herndon blinked. “How do you remember a visitor’s log from two years ago?’’ he asked.

  “I just routinely check the visitors’ log so I can know who’s coming and going,’’ Rountree said.

  The answer didn’t make a lot of sense to Herndon, but he dropped it. The interview lasted another hour, but Rountree offered no more details about Whitacre.

  After it broke up, Shepard and Herndon walked down the street to the riverboat casino. They were feeling pretty good; there seemed to be no evidence that Whitacre had been involved in wrongdoing. Probably Mobile was nothing to worry about.

  The effort to obtain authorization for wiretaps at ADM was moving ahead. As the lawyers explained it, they probably had enough P.C.—“probable cause”—to persuade a judge. But, for approval, they also needed to demonstrate that the FBI had the technical ability to tap specific company phones. It was a tall order, since the agents couldn’t exactly walk into ADM and start asking about how the company’s phone system worked.

  But then again, maybe they could. At one of the meetings in Forsyth, Shepard told Whitacre that they wanted him to ask Mick Andreas a few questions. All it would take was a little playacting.

  On the morning of September 12, Whitacre turned on the tape recorder in his coat pocket as he walked toward Mick Andreas’s office.

  “Mick, how you doin’?’’ he said at the doorway.

  Andreas looked up from his desk. “Hey, how you doin’?’’

  For a few minutes, Whitacre discussed some proposed investments for his division. Eventually, he mentioned that one lysine competitor was worried about the security of ADM’s phones.

  “I said security shouldn’t be a—for me to call on these phones—I don’t see that as a problem,’’ Whitacre said. “Do you?’’

  Andreas didn’t understand. “What?’’

  “Like for them to call me on a lysine problem on our phones here at the office,’’ Whitacre said. “I couldn’t imagine these phones could be a problem.’’

  “To tap these phones or get into these phones, you gotta get inside the building,’’ Andreas said.

  He pointed to the wire attached to his desk phone. “This phone line doesn’t go anywhere. It goes down into a computer, and then comes out on one of a hundred or five hundred lines.’’

  “That’s what I thought.’’

  “It just does it at random,’’ Andreas said.

  Essentially, the computer guaranteed that a single phone line could not be tapped. Plus, anyone trying to place a tap would have to get past the company’s on-site telecommunications crew, who were on duty twenty-four hours a day. The phones were safe.

  “But that doesn’t mean we go around . . . ,’’ Andreas said, waving his hand in the air. “Gotta be careful what we talk about.’’

  The latest Andreas tape was a letdown for the government. ADM seemed to have a security system in place that was virtually impenetrable. The investigators wouldn’t be able to show a judge that they could tap the specific lines they wanted.

  The application for wiretaps was at death’s door. The agents could still gather information about lysine—in October, meetings were scheduled in Chicago between Ajinomoto and ADM, and the larger group meeting was set for Zurich. But they might have to accept that they would be unable to prove ADM’s involvement in other price-fixing conspiracies.

  Howard Buffett bid good-bye to Congressman Dick Durbin and hung up the telephone. Buffett was feeling pretty good about himself. Maybe he had just saved ADM from being caught up in a scandal.

  A few years back, Buffett had been recruited to ADM from his hometown of Omaha—the city where his famous father, Warren, presided over an investing empire. By the fall of 1994, Howard Buffett was serving as a director, as well as an assistant to Dwayne Andreas. Buffett was the company’s chief spokesman and its prime contact for the nation’s political elite. But Buffett also saw part of his job as helping to keep the company out of trouble.

  The call with Durbin was part of that effort. Buffett had heard days before that the congressman was interested in going to a Chicago Bears football game. Buffett had mentioned that to Dwayne Andreas, who told him to make the necessary arrangements.

  But then Buffett’s secretary brought something to his attention. That summer, a scandal had enveloped Mike Espy, the Secretary of Agriculture for the Clinton administration, because of gifts he had taken from companies—including a basketball ticket from the Quaker Oats Company. Setting up Durbin with seats at a Bears game, the secretary said, sounded awfully similar. Buffett thanked the secretary and telephoned a lawyer to ask about the situation. The lawyer came back with a strong answer—the tickets couldn’t be provided unless Durbin paid part of the cost.

  When Buffett informed Durbin, the response could not have been more gracious. The congressman thanked Buffett for his efforts and promised to pick up part of the tab himself. Buffet felt confident that he had just helped ADM dodge a bullet.

  Not everyone saw it that way. Days later, Dwayne Andreas confronted Buffett. He had heard everything about the tickets. And he was livid.

  “If a congressman asks you to do something, you do it!’’ Andreas snapped. “If there’s something wrong with it, that’s his problem!’’

  Buffett started to explain what the lawyers had said, but Dwayne waved him off.


  “Howard,’’ Andreas said sharply, “you’re useless to ADM if you have to ask for an attorney’s opinion every time you get a request.’’

  The October 11 meeting in Forsyth was a reunion of sorts. Herndon’s first child, a girl, had been born in September, and his participation in meetings with Whitacre had dropped off. So when Whitacre saw Herndon with Shepard in the hotel room, he beamed. For several minutes, they talked about the new baby.

  When they finally got down to business, Whitacre seemed to have little new information. He shared some office gossip about how Dwayne Andreas was angry with executives traveling on company business without authorization. It seemed insignificant.

  Suddenly, Whitacre smiled. “You’re not going to believe what Howard Buffett told me,’’ he said.

  Howard Buffett? The name had been mentioned in the case before, but hardly with any frequency. The agents looked at Whitacre quizzically.

  “You know, Howard Buffett,’’ Whitacre said. “He’s a corporate vice president in public relations. And you know who his dad is?’’

  The agents nodded. Who hadn’t heard of Warren Buffett?

  “Well, Howard doesn’t like Dwayne and Dwayne doesn’t like Howard,’’ Whitacre said. “Dwayne told Howard that he’s useless.’’

  Whitacre looked at the agents expectantly.

  “Howard was talking to me about it, complaining about the Andreas management style. And Howard told me this quote. He said, ‘With what I know about the company, it’s amazing what I could do with these people.’ That’s what he told me.’’

  Shepard leaned in. Was there something here?

  “What more do you know about here?’’ he asked. “Let’s get more specifics. What does this involve?’’

  Whitacre shrugged. “I don’t know,’’ he said. “I didn’t ask him about it.’’

  The agents could almost feel the air draining out of the room. All this build-up for nothing? Herndon wrote it down anyway. Maybe sometime later they would interview Buffett and find out what he knew.

  The meeting droned on, with little accomplished. The agents figured they would be breaking soon.

  “Oh, by the way,’’ Whitacre mentioned casually, “this friend of mine, Kuno Sommer. He’s a Ph.D. He just replaced Mr. Hauri at Hoffman-LaRoche. He’s in charge of their citric-acid business now.’’

  The agents snapped to attention. From earlier tapes, they knew that Hoffman-LaRoche collected the production numbers in the citric-acid price-fixing conspiracy. And now the new head of that operation, this Kuno Sommer, was a friend of Whitacre’s? With the chances for the wiretap application fading, suddenly Whitacre had presented a new avenue for investigation.

  “Tell us about Kuno Sommer, Mark,’’ Shepard said.

  Whitacre brought out Sommer’s business card, showing that his friend was head of global marketing for Hoffman-LaRoche’s Vitamins and Fine Chemicals Division. Herndon and Shepard stared at the card, awed.

  The timing was perfect. The next day, Whitacre was scheduled to accompany Wilson and Mick Andreas to Chicago for a meeting with Ajinomoto at the Four Seasons Hotel. Now Whitacre had another assignment. Herndon told him to ask Wilson about Kuno Sommer. If Whitacre’s friend was collecting numbers on citric, Wilson would have to know about it.

  Whitacre’s face fell.

  “Kuno hasn’t been in the job very long,’’ Whitacre said. “He won’t know anything yet.’’

  The agents pushed him, but Whitacre kept arguing. His message was clear: while he might be willing to record Wilson, Andreas, and the lysine competitors in their conspiracy, he wasn’t comfortable laying a trap for his friend.

  “Mark, who knows how the answer will come back,’’ Herndon said. “Look, if Kuno Sommer is not involved, this might give him the chance to avoid getting caught up in citric. Just ask the question. Let’s find out.’’

  Eventually, Whitacre agreed to ask Wilson about Sommer. The meeting ended, and Whitacre headed out the door. A minute later, Shepard glanced at Herndon.

  “Wow,’’ he said, “this could be our break.’’

  Whitacre opened the driver’s side door on his new 1994 Lincoln Town Car. He liked the green color of this car better than the blue on his old model. When the doors unlocked, Mick Andreas climbed into the front passenger’s seat, while Wilson struggled into the back. Wilson’s bad back was troubling him; his doctor was advising surgery, but Wilson kept putting it off. Whitacre sat in the driver’s seat, easing against the cushion gently. The F-Bird digital recorder was strapped on, and he didn’t want to crush it.

  Putting the car into reverse, Whitacre backed out of his parking place. Soon, he was headed toward the Decatur airport where a corporate plane was waiting.

  “This is your company car?’’ Andreas asked.

  “Yeah,’’ said Whitacre. “Always get the used ones. Last one I had was Buffett’s.’’

  “Very impressive,’’ Andreas joked.

  Whitacre smiled. “Tryin’ to save the company money.”

  Wilson and Andreas chuckled.

  “Well,’’ Andreas said, changing the subject to the upcoming meeting, “Mr. Yamada—”

  “And Mimoto is there,’’ Whitacre said.

  “Who’s that?’’ Andreas asked.

  “He’s the Ikeda replacement.’’ Ikeda had retired sometime before.

  “I’ve never seen him, have I?’’

  “Let’s see,’’ Whitacre mused, “was he in L.A.?’’

  “No,’’ Andreas replied. “Ikeda was there.’’

  Well, Mimoto had replaced Ikeda, Whitacre said. “And he’s just as bad.’’

  “Is he a jerk or is he—”

  “He’s a goddamn prick,’’ Wilson growled from the backseat.

  Andreas looked back. “Why is he a prick?’’

  “He wants everything his way,’’ said Whitacre.

  Andreas faced front again. “How are things shaping up now? What’s our volume going to be?’’

  “Seventy-three thousand tons,’’ Whitacre answered.

  “What’d we tell ’em it would be?’’

  “Seventy-three thousand tons.’’

  “Really?’’

  Whitacre nodded. “We’re comparin’ numbers every month by region,’’ he said. “Every month, Mimoto gets them from everybody.’’

  “Who gets ’em? Mimoto?’’ Andreas asked.

  “Yeah.’’

  “He’s the quarterback?’’

  Whitacre pulled his car to a stop at the airport parking lot. “He’s the quarterback.’’

  “He’s the butler,’’ Wilson said.

  The three men climbed out of the car. Whitacre sidled up to Wilson. This was his chance.

  “Kinda like Roche is on citric, right?’’

  “Yeah,’’ Wilson said.

  “Big quarterback—is that Kuno?’’ Whitacre asked.

  “Yeah.’’

  “He’s a good guy,’’ Whitacre said, coughing. “You’ll like Kuno. I even knew him from my Degussa days.’’

  The three men headed onto the corporate plane.

  About an hour later, the three executives were in an American-United cab, driving from Meigs Field in Chicago to the Four Seasons Hotel. They spent much of their time talking about plans for Whitacre’s division to develop new products. One feed additive called tryptophan, Whitacre said, was proving particularly nettlesome. Considering how long it took for ADM to start manufacturing lactic acid in large quantities, he said, the company was still probably two years away from making tryptophan efficiently.

  Andreas nodded. “We’ll be able to run it.’’

  “We may have some this year,’’ Whitacre said. “Half a truckload or something.’’

  Andreas turned. “What about lactic?’’ he asked. “Are we really ever gonna fix prices on it?’’

  • • •

  It was an Indian-summer day in Chicago, and the crowds on the street were in shirtsleeves and light dresses. A small group was gath
ered in front of the Four Seasons, watching construction work on a nearby church. A cab pulled to the front of the hotel. Whitacre paid the twelve-dollar fare, and the three ADM executives hopped out. Whitacre glanced at the crowd watching the construction and quickly looked away. Bob Herndon was standing among them.

  The executives pushed open the glass door to the lobby and walked in. Herndon turned and followed them, keeping up his surveillance.

  After some initial confusion, the ADM and Ajinomoto executives met in the seventh-floor lobby of the hotel. Andreas grasped Yamada’s hand.

  “How are you?’’ he said. “Good to see you.’’

  He turned to Mimoto. “Mick Andreas,’’ he said, extending a hand. “How are you?’’

  Whitacre smiled, walking over to Mimoto. “My name’s Mark Whitacre.’’

  Mimoto nodded. “Oh, my name is Tani.’’

  Everyone walked into the hotel restaurant and was shown to a table in a private room. The meeting started uncomfortably. A top executive—senior to Yamada—was supposed to have attended but did not. Subtly, the Ajinomoto executives made it clear that Andreas was being snubbed because he had failed to visit Tokyo. Whitacre worsened the tension by mispronouncing the top executive’s name—it was Toba, but he repeatedly said “Tobi,’’ even after he was corrected.

  Andreas did his best to recover. “I know that meetings are very important in Japan. I will make sure we get that organized.’’

  The men offered a toast and sipped their drinks. Mimoto mentioned that one of the Korean companies was creating problems. Miwon had experienced internal strife and had split into two companies—Miwon and Sewon. Lysine was now handled by Sewon, and the new boss was a man who had caused trouble before.

  “They stopped reporting to us,’’ Mimoto said.

  “Oh, they have?’’ Wilson asked.

  Mimoto nodded. “Yeah.’’

  The Koreans were now demanding more volume and felt they were not bound by earlier agreements.

  Wilson snorted. “It’ll destroy the whole goddamn market.’’