Informant

by Kurt Eichenwald

  Brian Mulroney, who was calling from an airport where he was waiting for a flight, was next. Everyone knew that this moment—effectively turning against the Andreas family—would be difficult for him.

  “Brian?’’ Daniels said.

  A moment’s hesitation.

  “We need to do the right thing for the company and the stock-holders,’’ Mulroney said. “We’ve done a terrific job as a special committee. It’s now the time for us to make the right decision for all those involved.’’

  A few directors nodded in agreement.

  “And I regret that the U.S. government treated people the way they treated the ADM people, that they would have a father testify against his own son,’’ Mulroney continued.

  The next words rushed out without even a breath.

  “I’m sorry, I have to run,’’ Mulroney said. “I’m giving my proxy to Glenn Webb.’’

  Mulroney was gone. He never voted.

  The conference-room door opened. A waitress wheeled in a buffet lunch of salmon, boneless chicken, and pasta salad, distracting the directors. As the waitress laid out lunch, Daniels looked to Webb, the man with two votes.

  “Well, Glenn. How do you vote?’’

  Webb threw up his hands. “I vote in favor.’’

  Daniels turned to Ross Johnson, who had already made it clear where he stood.

  “Yes,’’ Johnson said.

  One more to go. Daniels faced John Vanier, a quiet man who was chief executive of his own agricultural company.

  “Jack?’’

  Vanier chuckled. “Of course I vote yes.’’

  Unanimous. The case was over.

  Their official duties out of the way, the remaining directors turned to lunch. Beattie addressed the group.

  “There’s one other important issue we have to discuss,’’ he said. A decision needed to be reached about the future of Mick Andreas and Terry Wilson.

  On October 17, two days after the record price-fixing settlement with ADM was announced, company shareholders gathered in Decatur for the annual meeting. Those who remembered the company’s combative approach the previous year were surprised to see a subdued Dwayne Andreas take to the stage this time around. No longer did he silence critics; instead, he complimented even vociferous detractors. Most surprising, he issued an apology for ADM’s crimes.

  “I consider this a serious matter, which I deeply regret, and I acknowledge to you that this occurred on my watch,’’ he said. “You have my apology and my commitment that this will never happen again.’’

  Whitacre was never mentioned directly, but neither were Mick Andreas and Terry Wilson. As the ceremonies ended, reporters surrounded Brian Mulroney near the stage. With ADM pleading guilty to price-fixing, one reporter asked, what was the future of Mick Andreas and Terry Wilson?

  “They no longer work here,’’ Mulroney said simply.

  Terry Wilson had retired, and Mick Andreas had gone on leave. Their once stellar careers at ADM were over.

  • • •

  Providing psychiatric treatment to Whitacre had been a whirlwind for Dr. Derek Miller.

  It had taken months to find a lithium level that controlled Whitacre’s manic periods. But, in early October, Whitacre showed signs of trouble, writing a letter to his lawyer that accused the government of being communist. It was the worst time for him to spin out of control. Not only was his case heading toward indictment, but he was leaving Chicago for Biomar’s offices in Chapel Hill, North Carolina—away from his regular sessions with Miller.

  On October 16, Miller dictated progress notes for Whitacre, whom he still referred to as Patrick O’Brien.

  “Mr. O’Brien is really being quite manic, and it is clear that he is not taking his lithium,’’ Miller said. “He denied that he was not taking it to me. But he told his attorney that he was not taking it because he enjoys how he feels when he is not taking it.’’

  Miller planned to refer Whitacre to a North Carolina psychiatrist. He could only hope that Whitacre followed up with the new doctor before he did something self-destructive.

  The teams of prosecutors clustered at a Justice Department conference room, surrounding Jim Epstein. The defense lawyer had come to Washington to take the first steps in the settlement dance for Whitacre. Until now, Epstein thought that the government’s fears of Williams & Connolly had driven decisions in the prosecution of his client. But today, he wanted Washington to understand there was a price to be paid for mishandling Whitacre as well.

  “It’s these guys from ADM who stole hundreds of millions of dollars, defrauding people worldwide,’’ Epstein told the group. “Mark not only told you about it, but he gave you unprecedented evidence to prove it. He helped you stop a multimillion-dollar fraud. He gave you the chance to show that multinational price-fixing is going on.’’

  Epstein looked down the row of faces.

  “When agents go undercover for the FBI, they get trained for the stresses of living a secret life, of having nobody who is really their friend,’’ he said. “We hear this all the time from you guys, about how difficult that is and how easy it is for trained agents to crack.’’

  Not a sound or a movement interrupted the moment.

  “And here was Mark, a civilian with no training. He didn’t choose this as a career. But you guys just shove him in there, you tell him ‘go for it.’ You send him in there without training, without support, without anything to make sure he doesn’t crack under the pressure.’’

  Epstein’s words were having a visible effect.

  “Mark committed a crime. It was indefensible. He stole nine million dollars. But that’s opposed to helping you stop a multimillion-dollar fraud many times that.’’

  Now, Epstein said, because of vagaries of the sentencing guidelines, Whitacre faced more prison than did the executives whose price-fixing involved much more money.

  “Now, we’re not looking for the earth, the sky, and the stars,’’ he said. “We’re looking for something in the area of three years, which is about what the guidelines are for these guys who stole hundreds of millions of dollars.’’

  The option, Epstein said, was a sentencing hearing.

  “We’ll be at a public hearing covered by the world’s press, and I’ll lay out everything Mark did, good and bad. I’ll talk about the lack of training and everything that happened to him because he came forward. Your future whistle-blowers will pick up the New York Times and the Wall Street Journal, and read what Mark’s life has been like because of his decision to cooperate.’’

  Epstein spread his arms.

  “And then,’’ he said, “you’ll never have one of these guys pick up the phone and call you ever, ever again.’’

  Jack Keeney, the Acting Assistant Attorney General in charge of the Criminal Division, was the first to speak.

  “Well,’’ he said, “we have a formidable person across the table from us.’’

  Epstein left with no agreements, but he had made headway. He would have to return a few times to nail down a deal. In the end, he figured Whitacre would receive a five-year sentence, with the potential that the judge could depart downward. It was the best outcome he could imagine. But Whitacre was outraged when he heard that his lawyer was even considering a plea deal.

  “This isn’t right!’’ Whitacre moaned. “ADM’s the bad guys! The Justice Department is covering for them. It’s just ‘dump on Mark Whitacre!’ ”

  Rather than negotiate, Whitacre said, they should sue the government. The FBI had mistreated him. A lawsuit might make them back down. Epstein barely listened. He had heard Whitacre complain many times about being persecuted. The man was disconnected from reality.

  “What do you want me to do, Mark?’’ Epstein asked, exasperated. “You’ve got to focus here. You stole nine million dollars, and basically admitted it on the front page of the Tribune. I’m just doing damage control. We’ve got very few cards in our hand, and I’m going to play them the right way to give you the least possible time.
’’

  Epstein hit the same points again and again, until Whitacre finally seemed convinced. But a few days later, a fax arrived at the office for Epstein. It was a letter from Whitacre, on Biomar stationery.

  “Ginger and I have spent many hours in discussions the past few weeks about which direction we would like to go,’’ he wrote. “We have decided to go a different direction than you had planned and recommended.’’

  Epstein finished the letter and set it on his desk.

  He’d just been fired. And he couldn’t have been happier.

  Fine, go, Epstein thought. You’re not my problem anymore.

  Whitacre had already been searching for new lawyers and was quick to name replacements. The first was Richard Kurth, a lawyer from Danville, Illinois, whom Whitacre trusted. The two had grown close after Kurth had provided advice on selling the house in Moweaqua. During that time, the two had discussed Whitacre’s situation, and Kurth had offered his input. From what he had heard, Whitacre had little doubt Kurth was just the kind of lawyer he needed.

  But Kurth, a specialist in bankruptcy and personal-injury cases, needed help. So he told Whitacre about a friend he had known since law school. The lawyer, Bill Walker, a hulking man with a shock of white hair, ran his own practice in Granite City, Illinois. He was aggressive and loud; he expressed outrage that the government would even consider indicting Whitacre. Walker’s style appealed to Whitacre, and the lawyer was hired immediately.

  One of the most complex white-collar cases ever was now being handled by a personal-injury lawyer and his friend, a small-town solo practitioner.

  At 10:25 on the morning of November 6, a single-page fax arrived in ADM’s legal department. It was addressed to Rick Reising, the general counsel.

  Reising read the fax quickly. It was another unsigned letter relating to Whitacre, one of many ADM had received in recent years. But this one was the most stunning of all.

  “I used to work for the United Brotherhood of Carpenters, the proponent of a shareholder proposal on director liability brought before the Archer Daniels Midland shareholders,’’ the letter read. “The UBC is also a strong supporter of Dr. Mark Whitacre and has helped him, with the help of Cargill, find stronger counsel.’’

  There was one important item, the letter said, that ADM needed to know.

  “Dr. Whitacre discharged Mr. Epstein due to the fact that he would not tell the government about certain tapes that were not in the FBI’s favor.’’

  After Whitacre began taping ADM, it said, he had grown uncomfortable with the local FBI agent running the case.

  “The local agent would tell Dr. Whitacre to take several of the tapes that he felt were in ADM’s favor back home with him and to destroy them,’’ it read. “Whitacre became disenchanted with the FBI, and started taping several meetings with the agents, unknown to them, because of the trust factor. He built a strong file of tapes that the FBI told him to discard and also several tapes of the FBI telling him to discard them. These are the tapes that Mr. Epstein would not let him use because of the strong chance of weakening the government’s case against ADM.’’

  The caller ID device on the fax machine was checked. The sender had tried to block the number, but failed.

  The fax had come from the North Carolina offices of Biomar International.

  Mark Whitacre’s employer.

  The Harvest King team was sharply divided on a single question: What should be done with Mark Whitacre?

  Since July, Lassar and Griffin had been set on charging Whitacre with price-fixing. The evidence from the Japanese and Koreans proved that the conspiracy started many months before Whitacre began cooperating, and showed Whitacre was central to the scheme during that time. Since he had blown his immunity, the prosecutors argued, the jury would be angered if Whitacre wasn’t charged.

  Shepard and Herndon were unconvinced. They couldn’t accept the idea of indicting the man who brought them the case.

  “This is wrong,’’ Shepard said in a conference call. “We wouldn’t have anything if it wasn’t for Whitacre.’’

  Lassar explained his reasoning, adding that even if Whitacre were convicted, his sentence would likely run concurrent with his prison term in the fraud case.

  “Then what difference does it make, Scott?’’ Herndon asked. “It seems unfair.’’

  “He’s not going to be able to handle it,’’ Shepard said. “He’s too fragile. If we indict him, there’s no telling what he’ll do.’’

  In the end, the agents lost the argument. On December 15, 1996, a federal grand jury in Chicago handed up indictments against Mick Andreas, Terry Wilson, and Mark Whitacre, as well as Kazutoshi Yamada of Ajinomoto, charging them each with one count of violating the Sherman Act.

  After flying from North Carolina, Whitacre arrived for a visit to Dr. Miller, seeming agitated and out of control. He had come with his new lawyers, and, with Whitacre’s permission, Miller told Walker and Kurth about their client’s bipolar illness. They had known nothing about it and asked for a book on the subject.

  For a time, Miller sat with his patient alone. He had no doubt that Whitacre’s lithium levels were low. He was manic, babbling about some lawsuit he was planning that he thought would solve all of his problems.

  “When I’m finished with this court case,’’ Whitacre told Miller, “I’m going to become the new CEO at ADM.’’

  Brian Shepard walked into the mail room in the Decatur Resident Agency on the morning of January 9 to check the office answering machine. The digital display showed that there was a message waiting, and Shepard pushed the button.

  “This is Ron Henkoff from Fortune magazine. I have something important to talk with you about, if you could return my call.’’

  Shepard knew of Henkoff; he was the reporter who had written the Whitacre cover story in Fortune. At 11:20, Shepard returned the call. Henkoff got right to the point.

  “I was calling to get your comments regarding some allegations by Mark Whitacre,’’ Henkoff said.

  “I’m sorry,’’ Shepard replied. “I can’t comment.’’

  “Well, I’m giving you the opportunity to comment because of the nature of the information.’’

  Henkoff said that he had heard a tape of what purported to be a conversation between Shepard and Whitacre. In the tape, Henkoff said, someone who sounded like Shepard could be heard playing a recording of Mick Andreas, and then instructing Whitacre to destroy it.

  The bad news kept coming. Henkoff said that Whitacre was planning to sue Shepard. The suit would accuse the agent of hitting him with a briefcase and forbidding him from contacting a lawyer or a doctor during the investigation.

  Shepard felt his insides tearing out.

  “I can’t comment, I’m sorry,’’ he replied.

  Hanging up, Shepard called Mutchnik. “We need to talk,’’ he said.

  Mutchnik patched in Herndon in Springfield.

  “Okay, Brian, what’s up?’’ Mutchnik asked.

  “I was contacted by a reporter from Fortune magazine, the one who did that first article,’’ Shepard said. “Mark’s saying he’s going to file a lawsuit against me. He’s saying I told him to destroy tapes.’’

  “Ahh, jeez,’’ Herndon moaned. “What a jerk.’’

  Shepard was beside himself. How could Whitacre’s new lawyer file this suit based on his word? There couldn’t be a tape—none of this had ever happened.

  “What do we do?’’ Shepard asked, distraught. “Can we just go to court and get him to take it back?’’

  “Brian, it doesn’t work that way,’’ Mutchnik replied. “I don’t know what court it’s going to be filed in, but you can’t just make it go away. Once it’s filed, you have to go through a process. It’ll take time.’’

  Shepard seethed. “This isn’t right!’’ he shouted.

  “Brian, don’t worry,’’ Herndon said. “It’s crap. It’s just Whitacre. Nobody will believe it.’’

  Shepard wasn’t persuaded. “I told
you!’’ he said bitterly. “I told you something like this would happen.’’

  He breathed in heavily. “I knew we never should have indicted him for price-fixing,’’ he said. “I knew it.’’

  Two days later, Fortune magazine sent out a press release with a copy of its latest article, under the headline Betrayal. It was based on another Whitacre interview, but this time with a far different spin.

  “The mole has turned,’’ it read, saying Whitacre was blowing his whistle again. “Now, Whitacre is fingering the FBI itself, accusing one of its agents of ordering him to destroy evidence, denying him access to lawyers and doctors, and driving him to the brink of suicide. And once again, he says the charges are backed up by tapes.’’

  The article quoted Whitacre saying that Shepard had told him to get rid of tapes that were favorable to ADM. Out of concern, Whitacre said, he had begun taping the agent, several times recording him as he gave instructions to destroy evidence.

  “I was realizing the FBI was not much different than ADM,’’ Whitacre said in the article. “They had their own conspiracies. And I was stuck in the middle.’’

  The article did not quote any tapes, and said that the recordings were no longer in Whitacre’s possession. But, it added, sources were saying the tapes still existed.

  The magazine cautioned that there were reasons to be skeptical of Whitacre’s new claims—particularly since they contradicted his earlier praise for Shepard. But the article said that Whitacre had been in secret anguish for months about agent wrongdoing. It referenced a July 1995 letter to Jim Epstein, in which Whitacre laid out his concerns. In the article, Whitacre said that Epstein had persuaded him not to take on the government as an enemy. But now, he told the magazine, he could no longer bear holding back.

  That same day, a faxed copy of the article arrived at my home. I had been covering the bizarre ADM story for the New York Times since the fall of 1995, and was familiar with its frequent twists. This new article, I knew, accurately portrayed Whitacre’s latest allegations. For weeks, Whitacre had been telling me tales of FBI corruption; to support his claim, he had provided me with two documents—the Epstein letter later cited in the Fortune article and a letter apparently signed by his psychiatrist. Both, Whitacre said, proved that he had been discussing FBI wrongdoing since 1995.