Informant

by Kurt Eichenwald

  “Mark Whitacre, a high-level executive with the Archer Daniels Midland Company, has reportedly been a Federal Bureau of Investigation informant,’’ Simpson intoned, crediting the news to a report in the Wall Street Journal.

  Whitacre listened, swelling with pride.

  “Hey, Ginger!’’ he called out. “Quick, get in here! You’ve gotta hear this!’’

  Ginger hurried in and listened to the news in wonder.

  In Lake Charles, Louisiana, Kyle Rountree grabbed the top copy from a stack of Wall Street Journals at a local store and paid the cashier. As he headed for the door, he glanced at the lead article.

  Mark Whitacre.

  Whitacre. From ADM. Rountree, the cooperating witness in the FBI’s investigation into the possible theft of Degussa’s methionine secrets, was very familiar with the name. This was a central figure in the methionine case, a man Rountree had discussed with the FBI. Now, it ends up Whitacre had been a cooperating witness, too? Since 1992?

  Rountree found a phone and dialed Special Agent Craig Dahle at the FBI office in Mobile, Alabama.

  “It’s Kyle Rountree,’’ he said when Dahle answered. “What the hell’s going on here?’’

  Ron Ferrari was watching the television news at his house in suburban Chicago when a photograph of his old friend Mark Whitacre appeared on the screen. Ferrari listened as the newscaster described Whitacre’s work for the FBI. Immediately he reached for a telephone.

  Ferrari was a local hero back in his hometown of Moweaqua, thanks to five years as a linebacker with the San Francisco 49ers. His team had even traveled to the Super Bowl in 1985, although a knee injury had kept Ferrari off the field. But Ferrari had long known that he would never be a star and was prepared to fall back on his training in grain marketing. After his professional football career, Ferrari had worked at ADM, where he had met Whitacre. Ferrari had since left the company but kept in touch with Whitacre. He reached his old friend at home.

  “Hey,’’ Ferrari said. “I’m sitting here watching TV, and I saw you.’’

  “Yeah,’’ Whitacre replied. “What do you think?’’

  “What should I think? I can’t believe this.’’

  Whitacre described all of the events of recent days. Ferrari asked a question about Mick Andreas.

  “He’s not going to be with the company anymore,’’ Whitacre said. “I’m going to be taking over. Mick’s gone.’’

  Just off the Whitacre’s driveway, crowds of reporters milled about, some craning their necks for a look at the home of that day’s most newsworthy corporate executive.

  The steady drumbeat of news coverage was overwhelming. The Whitacres’ name was on every television and radio station. It all left Ginger uneasy. Long a private person, she could no longer leave her own home without passing throngs of shouting reporters. Worse, Mark would tell her, anonymous threatening calls were coming to the house. She had never imagined it would come to this.

  Still, for the first few days, Mark seemed happy with the way the story was playing out. Everywhere, he was being portrayed as a corporate hero, a golden boy executive who had been unwilling to tolerate wrongdoing. He liked that.

  But on the third day of relentless coverage, the tide turned. That morning, Whitacre drove to a gas station where there was a newspaper box for the Wall Street Journal. He dropped in a few coins and took his copy, heading back to his car as he scanned the paper. A headline on the front page hit him like a sock in the stomach.

  YOU DIRTY RAT, SAYS DECATUR, ILL. OF MOLE AT ARCHER DANIELS: PEOPLE THINK MARK WHITACRE BETRAYED THEM AND ASK WHY HE TURNED TO FBI.

  Whitacre felt blinded by anger. When did it become time to dump on Mark Whitacre? This wasn’t right. He climbed into the car and drove home, fuming and insulted.

  Later that day, Herndon was in Springfield, listening on the phone as Whitacre angrily rambled.

  “Dwayne and Terry have been bad-mouthing me at ADM,’’ Whitacre ranted. “They’re saying I’m not a good worker and can’t be trusted! How can they be saying that?”

  “Mark,’’ Herndon replied soothingly, “why are you worried about that? You know you’re a hard worker. You’re a workaholic; you do a good job. Look, Mark, these guys violated the law. They’re going to lash out at you.’’

  “Yeah, but . . ’’

  “Mark, listen. Haven’t we talked about this before? How many nights did we tell you how you had to expect the unexpected, that you might be attacked, you might be fired, that some people aren’t going to like you.’’

  “Well, it’s not fair. They shouldn’t be able to say these things. I’m thinking about bringing a slander suit.’’

  “Mark, I’m not an attorney. I can’t give you legal advice. But I don’t know if this is a slander suit.’’

  Whitacre took a breath. Herndon could tell he wasn’t holding up well.

  “Mark, you need to relax,’’ Herndon said. “Hey, want to play some golf?’’

  “No, I’m not going to play golf.’’

  “Well, why don’t you guys take a vacation, just get out of the area. Look, this story is the big thing in Decatur. Get away from it. Go out of town.’’

  Again, Whitacre turned away the suggestion. He had other concerns, he said. He might move sometime, to get away from all this. He had asked for the government’s help in selling his house before but never received a response. What was happening with that?

  Herndon said he still didn’t have an answer. As long as ADM continued paying Whitacre, the government would resist giving him money. But Shepard and Herndon understood Whitacre’s financial concerns. They wouldn’t forget him.

  Five days later, on July 18, two innocuous-looking letters arrived at ADM headquarters. Postmarked on July 13 in Knoxville, Tennessee, both had been sent with no return address and stamps that portrayed President Nixon. One was addressed to Dwayne Andreas, the other to Jim Randall. Even though they were anonymous, the letters contained allegations against Whitacre—and the FBI—that the company took very seriously.

  After they were read and copied, the letters were sent to Aubrey Daniel. He would know how to use them to ADM’s advantage in its fight with the government.

  • • •

  Franklin, Tennessee, nestled in the bluegrass hills twenty miles south of Nashville, is a town whose citizens like to boast of being comfortable not only living beside their history, but in it. The town is built around a fifteen-block Victorian commercial district, featuring at its center a towering statue of a Confederate soldier—one of many markers to the bloody Battle of Franklin in 1864.

  But in 1995 the new battle of Franklin was being won. After years spent renovating the town, young entrepreneurs were beginning to join its citizenry. Property values were climbing. It was a good time to be a real-estate broker.

  Among the brokers who handled Franklin was Gertraud Borasky, a top saleswoman at the Haworth Homes–Century 21. Business had been brisk for Borasky in recent months; the phone was always ringing. One afternoon, Borasky was at her desk when another call came in. She answered pleasantly.

  “Hello,’’ a woman’s voice said. “My name is Ginger Whitacre. My husband and I live in Moweaqua, Illinois, and we’re going to be coming to Nashville to look for a new house. I wanted to see what was available in your area.’’

  “Of course,’’ Borasky said. “What kind of home are you looking for?’’

  “Well, we need nine thousand square feet of living space and facilities for our horses.’’

  Borasky smiled. This would be a big sale. The caller scheduled an appointment for late July. The Whitacres wanted to come down and do some house hunting.

  At 3:19 on the afternoon of July 16, a Sunday, a fax machine for Dwayne Andreas hummed to life at ADM. A one-page typewritten memo scrolled into a tray. The fax “telltale,’’ which normally prints the number of the sender at the top of the sheet, had been disguised. But the first words of the note made clear the intended recipients.

  TO: Aubrey Dani
els and ADM board members.

  FROM: ADM Shareholders’ Watch Committee (ADMSWC)

  What followed was unbelievable. The author—or authors—claimed to be part of a shareholders’ group formed to investigate companies whose stock they owned.

  “We have been gathering information for years and were planning to present our findings at the upcoming shareholders’ meeting,’’ the note read. “Unfortunately, the FBI upstaged us. We were well aware of ADM’s price-fixing activities.’’

  The note accused an ADM officer of billing the company millions of dollars for personal travel on company planes. It also criticized Aubrey Daniel—incorrectly calling him Daniels—implying that he represented the interests of the Andreas family rather than those of the shareholders.

  “We have moles, if I may use the word, inside every division of ADM. You see, this is our company, not the Andreases!’’ it read. “Fifty thousand shareholders are a sleeping giant that is waking up to the alarming actions of Dwayne and his den of thieves!’’

  At the bottom, it was signed, “The Lamet Vov.’’

  Even as those words were printing out of Andreas’s fax machine, the unlisted business fax number for another company director was ringing. Over the next forty-six minutes, the anonymous note would be faxed to more than a dozen sites around the continent—including Montreal, Springfield, Washington, and Minneapolis—to the offices of most every ADM board member.

  Brian Mulroney, the former prime minister of Canada, smiled to his fellow directors as he walked into the sixth-floor boardroom at ADM on July 19. They took their seats around the large circular table dominating the room. Replicas of master artworks, painted through a technique involving computers, hung on the walls beside plaques and honors awarded to Dwayne Andreas over the years.

  Mulroney looked around the table. Seated nearby was F. Ross Johnson, the former chairman and chief executive of RJR Nabisco who had lost a battle to buy the company but won national fame from his depiction in Barbarians at the Gate, the book and movie about the takeover fight. Bob Strauss, the dean of Washington insiders, occupied another seat. Happy Rockefeller, the widow of Nelson and a longtime friend of the Andreases, was chatting with Ray Goldberg, a Harvard University professor. John Daniels, a former ADM chairman, was reviewing material for the meeting.

  The primary agenda item that day was the criminal investigation. Aubrey Daniel was there to make a presentation to the board. He laid out the relevant information developed by that point. Already, the company was facing numerous shareholder lawsuits claiming that price-fixing had damaged the stock value.

  “Based on our experience,’’ Daniel said, “if the directors do not appoint a committee to cope with the litigation, then a group of shareholders can become a self-appointed committee.’’ In essence, if the board didn’t handle this, the shareholders might.

  The directors agreed to form a litigation committee. The newest director—Gaylord Coan, the president of Gold Kist Inc.—announced that he had a conflict of interest. His company was in a partnership with ADM and was a large purchaser of lysine. “I’m not going to sit on this committee,’’ he said after explaining his problems.

  Bob Strauss spoke up. “I also have some difficulties,’’ he said. His firm represented ADM in some matters—and then there was the short-lived representation of Whitacre by his partner, John Dowd.

  After several minutes, the group reached an agreement. Nine of the seventeen directors would serve on the committee, including Mulroney, Johnson, Daniels, and Goldberg. Mulroney was named chairman.

  “It would be best,’’ Aubrey Daniel suggested, “to have cochairmen.’’

  The directors looked at one another. Several eyes settled on John Daniels. Would he take the job? Daniels thought for a second. His grandfather had founded this company; his father had been chief executive. The decision was easy.

  “I’m horrified at what I have heard in the last few weeks,’’ he said. “I feel a close affinity for this company and anything I can do to help I want to do.’’

  Daniels looked at the assembled directors.

  “So, yes,’’ he said, “I will accept the nomination as cochairman.’’

  The next sign of trouble for the government’s investigation appeared the following morning, in the pages of the Chicago Tribune.

  The article led with ADM’s announcement that the board had formed a special committee to deal with the case. A few paragraphs later, it veered in a new direction. Millikin University in Decatur had provided the reporters with biographical information about Whitacre that had been turned over to the school when he was elected to its board. The information showed that Whitacre had earned a master’s degree from the prestigious Kellogg Graduate School of Management and a doctorate in biochemistry from Cornell.

  But, according to the article, the claims were false. Whitacre never received a master’s from Kellogg, a school spokesman told the paper. And, while Whitacre was awarded a doctorate from Cornell, the article said, it was in nutrition, not biochemistry.*

  “Questions about Whitacre’s credibility could become an issue in the government’s grand jury investigation,’’ the paper intoned.

  That morning, Mutchnik laughed as he read those words on his usual 6:53 train to work. He had always thought that something about Whitacre exuded pretense; this story fit his opinion. When Mutchnik arrived at the office, he headed for the phone to call the agents. Herndon was at his desk.

  “Hey, Bob,’’ Mutchnik said, laughing.

  “What’s so funny?’’

  “Hold on,’’ Mutchnik said. “Let me read this to you.’’

  As he listened to the Tribune article, Herndon sighed.

  “Oh, man,’’ Herndon said. “What’s he going to lie about next?’’

  That same day, Mark and Ginger Whitacre were down in Tennessee, walking through a large house with Gert Borasky of Century 21. The tour took more than an hour, but by then the Whitacres were ready to buy. Borasky phoned later that day with a bid of $890,000—$60,000 below the list price. The owners, Paul and Carole Myer, countered with a price of $935,000, and the two sides struck a deal.

  The next day, the Whitacres came back to the house with the realtors, ready to go to contract. Everyone gathered around a table as Mark signed. Paul Myer watched, feeling good. The house had been on the market for more than a month. He was glad the sale was done.

  “Listen, Mr. Myer,’’ Mark Whitacre said after he finished signing. “Can I speak with you outside for a second? I have a question about your hot tub.’’

  “Sure,’’ Myer replied, standing up.

  The men walked out to the deck. Whitacre stopped and looked Myer in the eye.

  “Do you know who I am?’’ he asked in a near-whisper.

  “I know you’re the person who just spent almost a million dollars buying my house,’’ Myer replied, instantly regretting the words.

  “Well, I asked you that question because I was recently on the front page of the Wall Street Journal, regarding Archer Daniels Midland,’’ Whitacre said. “I was an informant for the FBI. I was working with them in an investigation of ADM, my employer. For two and a half years I worked as an informant, taping evidence about price-fixing. Now the case is public, and Decatur is a very small community. So the FBI advised me that it might be good to relocate. That’s why I’m moving here.’’

  Myer stared at Whitacre. Why are you telling me all this?

  “So I’m just wondering if you have any concerns,’’ Whitacre said.

  Myer shrugged. “As far as I’m concerned, I have no need for any of this information,’’ he said. “My only concern is obviously getting the money for the house.’’

  “Don’t worry, I have the money,’’ Whitacre replied. “The FBI’s willing to help me financially, probably by providing a loan to cover the sale of my other house. The government’s making it possible for me to move from Decatur.’’

  A fleeting smile passed over Whitacre’s face. “I have the mon
ey,’’ he repeated.

  It took only a few days for another unsigned note, mailed in San Francisco on July 17, to arrive at Williams & Connolly. This one was addressed to Aubrey Daniel, who by now was growing used to the flood of anonymous letters. It was as if there were two teams out there: “the Lamet Vov,” who sent notes attacking ADM, and other writers who went after Whitacre. The latest note clearly came from someone on the anti-Whitacre side.

  “Sir,’’ it began, “ADM’s Whitacre has some ‘strange’ allies—and a bit of blackmail against him. Check his family, ‘friends’ and Justice people.’’

  The writer cautioned not to hire a “stumblebum investigator,’’ but instead to find somebody “ruthless and smart,’’ like G. Gordon Liddy, the famed Watergate burglar.

  “You’ll be surprised,’’ the letter said at its close, “about who Whitacre really is.’’

  Janet Reno, the Attorney General of the United States, stepped into a Justice Department conference room where Louis Freeh and his top deputies from the FBI were gathering. They had just arrived from Bureau headquarters for their biweekly meeting with the department’s senior staff, including Jamie Gorelick, the Deputy Attorney General. The meetings were intended to keep communications open, and Reno tried to stop by whenever possible.

  The conversation moved along quickly. After reviewing a number of agenda items, Reno spoke. “On the ADM matter, I’ve received letters from their counsel,’’ she said. “They’re represented by Williams & Connolly.’’

  In recent days, Reno said, Aubrey Daniel had sent written complaints to her by messenger. Most everyone at the table already knew about them; Freeh had received copies, and Gorelick had also seen them. The most recent letter complained about press coverage, claiming that “agents of the government” had spoken with reporters. The letter clearly implied that the FBI, Whitacre, or both were the source of the leaks.

  The group discussed the Williams & Connolly complaints, with the FBI taking the opportunity to brief Reno and Gorelick on the progress of the case. The discussion ended in a matter of minutes.