Informant

by Kurt Eichenwald

  At that time, a prosecutor named James Griffin was returning to his job as Deputy Chief of the Atlanta antitrust office, having just wrapped up a stint as an American advisor on legal issues to the Hungarian government. A quiet, open-faced man with a full head of white hair, Griffin was an unusual mix of refined and rowdy. Few in the office would have guessed that Griffin, with his soft-spoken manner, could often be found at home, cranking up the latest grunge-rock music on his stereo. He seemed an unlikely person to be one of the Antitrust Division’s top litigators.

  Griffin was settling back in at his eleventh-floor office in the Atlanta federal courthouse when a call came from Washington. A receptionist told him that it was Joseph Widmar, Deputy Assistant Attorney General in charge of all criminal prosecutions in the Antitrust Division. Griffin picked up the phone.

  After some idle conversation about the trip to Hungary, Widmar got to the point.

  “I want to talk to you about our chief opening in Chicago,’’ he said.

  “Yeah, I understand that’s open.’’

  “I want you to consider it.’’

  “Why?’’ Griffin asked. He was happy in Atlanta. Plus, he had once experienced a Chicago winter and wasn’t too eager to live through that again.

  Widmar spent some time describing the advantages of becoming an office chief. But, he stressed, the Chicago office offered some particularly appealing benefits. There were important cases going on there, Widmar said, and the division would want Griffin to play a hands-on role in those.

  Griffin listened, intrigued. He knew about the cases; the division was small enough that it was easy to hear about promising cases in the pipeline. He was particularly interested in the ADM investigation. The chance to play a role in a case of that magnitude was attractive. He was sorely tempted and told Widmar that he would think about the offer. It would not be long before he accepted.

  • • •

  About the same day Widmar placed his call to Griffin, an aggressive young lawyer in the Chicago antitrust office was preparing to go to trial.

  Jim Mutchnik, who had just turned thirty a few weeks before, had been working for about two years on an investigation of potential bid rigging at a Kansas City shopping mall. It had been a blast. He had traveled to Kansas City, working side by side with an FBI agent. Together, they found witnesses and recorded conversations among the targets of the investigation. Some targets had cut deals. Now, the trial of the remaining defendant was scheduled to begin in a few weeks. Even though Mutchnik had to get ready, no one expected the case to go to a jury. The defendant, whose health was failing, was sure to plead it out. The evidence against him was too overwhelming.

  Mutchnik was typing on his computer, his back to the office door, when he heard a voice behind him.

  “Hey, do you have a minute?’’

  Mutchnik turned in his chair. Marvin Price, the acting chief of the office, walked in and took a seat.

  “Listen, Jim, it looks like your case might go away and you’re going to need something to do,’’ Price said. “I want to see about getting you involved in the Grains case.’’

  Mutchnik recognized Grains as the division’s odd internal code name—short for Grains and Field Beans—for the ADM case. He had heard bits and pieces about it from Robin Mann.

  “It’s a good case,’’ Price said. “And it needs your help. You’ve obviously done a lot of work with the FBI. It’s got tapes and you’ve done all that. Robin needs another person on the case.’’

  Mutchnik nodded. This was just the kind of assignment he wanted.

  “That sounds great, Marvin,’’ he said.

  Soon, Mann heard that Mutchnik had joined the case and came to see him. As she described the investigation, not a lot registered with Mutchnik. It was just a bunch of names and places. He was going to need to review the voluminous case records.

  But now, a full team of antitrust prosecutors was finally forming for Harvest King.

  At 3:45 on December 5 in Columbus, Ohio, Federal District Judge George Smith called a recess in the trial unfolding in his courtroom. He asked the lawyers for the government to come to his chambers.

  The trial was the country’s most prominent antitrust prosecution in more than a decade. The General Electric Company had been indicted, accused of fixing prices in the industrial diamond market. GE was fighting the charges, and just days before, the prosecution had rested its case.

  Once the lawyers arrived in his chambers, Judge Smith gave them shocking news. Before the case went to a jury—before GE even presented a complete defense—he was dismissing the charges. Judge Smith found that, based on the government’s evidence, no reasonable person could conclude that the company had committed a crime. GE had won, in the most embarrassing way possible for the government.

  News of the government’s crushing defeat crackled through the nation’s courtrooms and law firms. Everywhere, the questions began to be asked: How could the Antitrust Division have fumbled so badly at the prosecutorial equivalent of the Super Bowl? Was this a group that choked when the stakes were high?

  Those questions resounded in Springfield. For weeks, tensions had been building between the U.S. Attorney’s office and the Antitrust Division. Often, the agents received complaints from one set of lawyers that they didn’t know information the others had been told. The styles were starting to conflict—the antitrust lawyers were used to moving slowly, while the U.S. Attorney’s office was more familiar with fast-moving, politically charged cases. But in this situation, neither side was completely in control.

  In the weeks that followed the GE decision, articles critical of the Antitrust Division appeared in a variety of publications. The most damning, published in American Lawyer magazine, was faxed to the FBI’s Springfield office. Agents and supervisors read the article with a growing sense of anxiety. Devastating phrases jumped out:

  The Justice Department antitrust division has had a reputation in recent years for not taking cases to trial—and when they do take them to trial, losing them. . . .

  A lot of lawyers distinguish between prosecutors and antitrust division lawyers.

  By the time everyone had digested the article, the agents could not help but worry about what this meant for the ADM case. Was the Antitrust Division up to the job?

  • • •

  In Springfield, a train slowly pulled into the station. Rodger Heaton stood nearby, watching passengers step onto the platform. Finally, he saw them: Robin Mann, Susan Booker, and the new prosecutor on the team, Jim Mutchnik. The antitrust lawyers had arrived for their latest meeting with Whitacre.

  Heaton greeted them and escorted them to his car. Popping open the trunk, he shoved some tennis balls and a racquet aside to make room for their luggage. The lawyers traveled to an inexpensive restaurant for lunch before driving to the Decatur Resident Agency to find Shepard and Herndon.

  The meeting on this day was intended to help the lawyers write a search warrant in preparation for the raid of ADM. They needed descriptions of the office layout and details about the computer system. Whitacre had been preparing for days to answer their questions.

  When the group arrived at the FBI offices, Shepard and Herndon were waiting for them. Mutchnik introduced himself, and the agents welcomed him. The lawyers walked into Shepard’s office, and Mutchnik slid into the seat behind the desk. A spot in the center of the room was reserved for their star witness.

  Whitacre arrived shortly afterward. The lawyers wanted to meet with him alone this time; Shepard and Herndon took him to another room for a few minutes to make sure he was comfortable with the idea. Afterward, they escorted Whitacre back to the office where the lawyers were waiting.

  “Okay, Mark,’’ Shepard said. “Just talk to these guys, and we’ll be right next door if you need us.’’

  Shepard and Herndon left, closing the door behind them. Whitacre sat down, looking confident. The lawyers greeted him; Mutchnik introduced himself.

  The questioning began, with Heaton
taking the lead. Whitacre was astonishingly prepared. He had even brought some ADM documents with him, spelling out internal details of the company.

  Mutchnik sat silently behind the desk, impressed with Whitacre. He seemed to be a top-notch executive, involved in an array of important areas at ADM. As Mutchnik listened, he thought about Whitacre’s salary—a few hundred thousand dollars a year, from what he understood. It seemed ridiculous, given the value Whitacre brought to ADM. As far as Mutchnik was concerned, Mark Whitacre was tremendously underpaid.

  • • •

  Herndon popped the latest tape into his TASCAM playback unit with a sense of anticipation. After weeks of being pressed by the agents, Whitacre had finally recorded a conversation with his friend Kuno Sommer from Hoffman-LaRoche. Herndon was eager to hear the man suspected of being at the center of the citric-acid conspiracy.

  The conversation began at counter 123. Herndon listened as Sommer talked about a recent trip to China. Sommer mentioned that Terry Wilson had given him a tour of ADM’s vitamin C plant and said that he wanted the two companies to talk about their situations with that business. Herndon listened, curious. What was Terry Wilson from the corn-products division doing involved in ADM’s vitamin business?

  The tape rambled on, with Sommer saying next to nothing about citric acid. Sommer also expressed concerns about talking on the phone—it was easier, he said, to speak in person.

  Herndon shut off the TASCAM. Sommer wasn’t going to trip up easily.

  It was becoming obvious that there wouldn’t be a simple way to crack open the citric conspiracy. There were still months of planning necessary before the lysine case could go overt. Other attempts to pursue price-fixing in citric or any other product might risk the secrecy of the lysine case. And right now, secrecy was paramount; if anyone learned what the government was doing, the whole investigation could be endangered.

  Whitacre smiled as he walked into Howard Buffett’s office on the sixth floor of ADM headquarters. The office was unlike any other in the building. Corporate toys decorated the room, from trucks emblazoned with logos from Coca-Cola or ADM to a plastic Coca-Cola bottle that played music.

  “Hey, Howard,’’ Whitacre said, leaning against a credenza behind Buffet’s desk. “How’s it going?’’

  Buffett looked at Whitacre, clasping his hands behind his head.

  “Not so well, Mark,’’ he said. “I’m thinking of leaving the company.’’

  The news was a shock. Whitacre liked Buffett and considered him a good friend at ADM. They talked all the time.

  Whitacre pressed him, hoping to change his mind. But Buffett was fairly well decided. He had been talking about the idea with his father, Warren. He didn’t like handling investor relations or watching the way the company was run, Buffett said. The atmosphere at ADM made him uncomfortable.

  Beyond that, even though Buffett was an ADM director, Dwayne Andreas often dealt with him like a child. He handled work for ADM in Mexico, where his title “assistant to the Chairman,’’ had about the same prestige as “chief janitor.’’ To gain credibility, he had asked for a new title—one beneath his true role. But Dwayne had refused.

  Whitacre argued to no avail. Buffett’s frustrations with the company and the Andreases were running too deep. But Whitacre was certain that as soon as the investigation went public, the Andreases would be gone. It was only a matter of months.

  Taking a breath, Whitacre glanced at the office door. It was closed.

  “I wouldn’t leave if I was you,’’ he said. “Things are going to be changing.’’

  “Why?’’ Buffett asked. “What do you mean?’’

  Whitacre leaned forward.

  “You never know what will happen, Howard,’’ he said softly. “Not too long from now, you and I might be running this place.’’

  CHAPTER 11

  Mark, are you an idiot?’’

  Ginger Whitacre sat on a couch in the family room, cradling a cool drink and staring at her husband in disbelief. For days, he had been endlessly upbeat, almost unreasonably so. But now he was going over the edge. For the past few minutes, as logs crackled in the fireplace, Ginger had listened to Mark describe the glorious future he saw for himself—at ADM.

  “No, really,’’ Mark replied earnestly. “When all this goes down, I’m going to be the only one left. Dwayne will be gone, Mick will be gone, Terry will be gone. I’m going to be the only one who can run ADM.’’

  Ginger threw up her hands. “That’s totally illogical,’’ she said. “How can you possibly stay there when you’ve just taken down the company? You think they’re going to pat you on the back?’’

  Mark shook his head. His pep talk with Howard Buffett had emboldened his own expectations. If someone like Buffett—an ADM director—was dissatisfied, other directors almost certainly would feel the same way. Buffett had postponed his resignation plans, so now Whitacre felt he was guaranteed at least one ally on the board. Once ADM’s crimes were exposed, Whitacre was convinced, everything would change. He was sure his name would be high on the list of candidates for the permanent chief executive of the company—perhaps even the only one there.

  “Ginger, they need me,’’ Mark said. “They need me to run this company. I’m valuable to them. And I did the right thing. The board is going to understand that. They’re going to respect that.’’

  Ginger kept arguing, trying to persuade Mark of how irrational his beliefs were. But he wouldn’t budge. He was convinced that he would soon be running ADM as a reward for his work with the FBI. He had expressed these thoughts in the first days of the investigation, but had dropped the foolish ideas. Now, somehow, the same unreasonable expectations had crept back into his mind.

  The more Ginger saw that glint of excitement in Mark’s eyes, the angrier she became. This sudden pipe dream could not have come from nowhere; something had to have triggered it. He was acting as if he had been brainwashed. As Mark argued about his bright destiny, she became certain of who was to blame.

  Brian Shepard.

  Ginger seethed at the FBI. They were lying to her husband just to keep him in line. They didn’t care about him at all. Of that she was convinced.

  “We’re worried about our guy,’’ Herndon said. “We want to make sure we look out for him.’’

  On the other end of the phone, Jack Cordes from the FBI’s contract review unit asked a few questions. What Herndon wanted was not unprecedented but would take time. There were lots of bureaucratic hurdles to clear before the FBI could pay someone who lost his job after working as a cooperating witness.

  It was January 10, 1995. With planning under way for the raids on ADM, Shepard and Herndon were beginning to worry about Whitacre. He had become unrealistic, talking all the time about becoming a hero and running ADM. The agents did their best to brace him for the probability that he would be fired, but didn’t press. At this point, Whitacre’s feelings were bound to be complex. If he needed to believe in a bright future to get through the day, the agents couldn’t rip that away. But they could make sure Whitacre wasn’t abandoned if he ended up unemployed.

  Shepard and Herndon had expressed their concerns to the prosecutors, who were split on the issue. Some wanted the matter resolved by the FBI; others vehemently opposed paying anything. Whitacre wasn’t some drug dealer, they argued; he would find another job. But a jury would always look askance at a witness who had been given money by the government.

  In the end, the matter was left to the FBI’s discretion. By the end of the call with the contract unit, the agents felt more at ease. At least they had gotten the ball rolling.

  Six days later, Shepard and Herndon flew to Atlanta to prepare for the price-fixing meeting scheduled for January 18 at the Atlanta Airport Marriott. When they arrived, the sixteen-story hotel was exceptionally busy. The Cobb Room, where the lysine executives were planning to meet, was booked until 11:00 the next night, leaving Shepard and Herndon cooling their heels for hours. When the agents finally gained access t
o the room, they saw it had problems, as always. It was spacious enough, with a wood veneer conference table, plenty of padded chairs, and a small buffet cart against a wall. But there was no end table for the lamp; the only furnishing that could hold the camera was a large dresser in the wrong part of the room. Shepard and Herndon moved heavy furniture late into the night.

  The room reserved for the command center also made the agents uneasy. It was connected by an inside door to the Cobb Room, meaning that the agents might be heard. Herndon grabbed a towel and stuffed it under the connecting door. It was hardly a high-tech solution. But it would work, so long as the agents whispered.

  Early the next morning, Whitacre appeared at Shepard’s hotel room, ready for the day. Herndon handled the briefing, again reminding Whitacre to announce if he was leaving the room and to let other executives do as much of the talking as possible.

  As Herndon spoke, Shepard walked across the room to check the briefcase recorder one more time. He placed it on the bed and turned it on.

  Nothing.

  He tried again. Still nothing.

  “We might have a problem here,’’ he said evenly.

  Herndon came over to look, and the two agents struggled with the case for several minutes. Shepard couldn’t understand it. He had tested the device in Decatur, just before they had flown to Atlanta.

  Whitacre stood by watching helplessly. Finally, he checked his watch.

  “Hey, guys,’’ Whitacre said with an uncomfortable urgency to his voice. “I should probably be in the room when everybody else arrives.’’

  The agents agreed and Whitacre headed down to the meeting room. A few minutes later, the frustrated agents swept up the briefcase and hurried to the command center. Shepard dropped into the seat in front of the monitor, while Herndon called the Atlanta FBI in search of the agents assigned to provide backup.

  The Atlanta agents arrived a few minutes later, and Herndon showed them the briefcase unit. After studying it, the group agreed that somehow, the new batteries had died. One of the Atlanta agents, Jay Spadafore, said he had a spare set in his car and rushed to get them. He needed to hurry—the meeting next door was starting. Shepard turned on the camera.