The Informant

  Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page i More praise for

  THE INFORMANT

  “READS LIKE AN ED MCBAIN CRIME NOVEL . . . within a few pages the reader is hooked. I knew how the story ended, but I still couldn’t put the book down.’’

  — New York Times (daily review)

  “A REMARKABLE, FASCINATING AND FAST-PACED BOOK . . . The strange details that emerge would be laughable in the context of a novel. In The Informant, they just leave a reader breathlessly amazed.’’

  — Portland Oregonian

  “A NEAR MASTERPIECE . . . thrilling, far-reaching, and significant . . . a fastpaced, accessible, race car of a book.’’

  —Salon.com

  “I WOULD SAY THE INFORMANT READS LIKE GRISHAM, ONLY NOBODY EVER COULD HAVE INVENTED THESE CHARACTERS. A tale this riveting and this strange could only have been built from truth.”

  —Sherry Sontag, coauthor, Blind Man’s Bluff

  “SUSPENSEFUL . . . a book that can double as an attractive movie proposal.”

  — Washington Post

  “A GRIPPING READ . . . ONE OF THE MOST COMPELLING BUSINESS

  NARRATIVES SINCE BARBARIANS AT THE GATE. The Informant offers an inside picture of a part of the corporate world that outsiders almost never see—

  one full of covert meetings, secret codes, and industrial espionage. Usually the pulp of airport fiction, here such shadowy doings become the stuff of sound investigative nonfiction . . . A great cops-and-robbers drama—leavened by occasional touches of screwball comedy . . . This is box-office material, and Eichenwald has written a book that reads a lot like a screenplay.”

  — Business Week

  “A THRILLER, filled with espionage, double-crosses, and deceit, where nothing is quite what it first seems.’’

  —Dateline NBC

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  “A COMPELLING NARRATIVE . . . a business book for Grisham readers.’’

  — Chicago Tribune

  “A FASCINATING TALE . . . a cohesive narrative of a corporation that placed itself above the law, an ambitious executive who preferred lies over the truth, and determined FBI agents whose hard work was nearly jeopardized not only by their informant but also by their bosses at the Department of Justice.’’

  — St. Petersburg Times

  “THE INFORMANT IS SUPERB REPORTING in the service of a great story, one with the drama and suspense of a Le Carré novel. Set squarely in the American heartland, delving into the inner sanctum of a global corporation, it explores the shifting boundaries of truth and deception, loyalty and betrayal. It is a remarkable achievement.”

  —James B. Stewart, author, Den of Thieves and Blind Eye

  “A MESMERIZING STORY . . . a thrilling read.’’

  — Washington Monthly

  “WHAT A STORY—AND WHAT AN INFORMANT.’’

  —St. Louis Post-Dispatch

  “IN THIS TRUE ACCOUNT THAT HAS MORE SPY ACTION THAN SOME TOM CLANCY NOVELS, we get double-crossing, dirty dealing, lying, conniving, and wiretapping . . . The Informant is more deceitful and more spellbinding than many works of fiction.”

  —Bookpage

  “A REAL PAGE-TURNER.’’

  —Ira Glass, host, This American Life

  “THIS GRIPPING STORY of the price-fixing case against Archer Daniels Midland is the next A Civil Action.’’

  — The Industry Standard

  “THE INFORMANT IS EPIC IN SCOPE, a tale of human foibles—of greed, deceit, and arrogance—and also of the search for truth. Eichenwald has told it masterfully, with the narrative drive of a novel.”

  —Jonathan Harr, author, A Civil Action

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  “LIKE EVERYONE ELSE WHO HAS RAVED about The Informant, I could not stop reading it . . . Like John Grisham’s The Firm, The Informant is destined for the big screen . . .”

  —ABA Journal

  “THE TWISTS AND TURNS OF THIS NONFICTION WORK LEAVE

  MANY THRILLERS IN THE DUST. Eichenwald’s spare prose and journalistic eye for detail make the pages fly.”

  —David Baldacci, author, Absolute Power and Saving Faith

  “A DILLY OF A BOOK . . . reads like John Grisham on acid, and once begun, you can’t put it down.”

  — Liz Smith, in her syndicated column

  “A COHESIVE, JAW-DROPPING NARRATIVE . . . a compulsively readable legal procedural, The Informant has earned comparisons to the works of John Grisham. But with its dizzying array of subplots, twists, and political maneuvers, the book is more like Grisham’s entire oeuvre compressed into six hundred pages.”

  — The Onion

  “CRITICS ARE THRILLED with this revival of a genre they claim has been all but dead since the early ’80s: investigative nonfiction set in corporate America. By all accounts, Eichenwald’s tale of the Archer Daniels Midland price-fixing scandal, which he covered for the New York Times, is a gripping read.’’

  —Slate

  “THE INFORMANT IS MASTERFUL . . . a suspenseful, engrossing story . . . were this story told as fiction, no one would believe it.

  —The DailyDeal.com

  “A TERRIFIC BOOK . . . a transfixing tale . . . mesmerizes you immediately with a well-crafted filigree of detail . . . the book resembles a tightly constructed novel. It’s full of parallel plots that develop independently, occasionally crisscrossing or passing in the night until the inexorable collision.”

  — Star Tribune (Minneapolis, Minn.)

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  INFORMANT

  This book has been optimized for viewing at a monitor setting of 1024 x 768 pixels.

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  INFORMANT

  A TRUE STORY

  KURT EICHENWALD

  B R O A D WA Y B O O K S N E W Y O R K

  Eich_0767903277_5p_fm_r1.qxd 10/11/01 4:23 PM Page viii t h e i n f o r m a n t . Copyright © 2000 by Kurt Eichenwald. All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. For information, address Broadway Books, a division of Random House, Inc., 1540 Broadway, New York, NY 10036.

  Broadway Books titles may be purchased for business or promotional use or for special sales. For information, please write to: Special Markets Department, Random House, Inc., 1540 Broadway, New York, NY 10036. b r o a d w a y b o o k s and its logo, a letter B bisected on the diagonal, are trademarks of Broadway Books, a division of Random House, Inc. Visit our website at www.broadwaybooks.com

  The Library of Congress has cataloged the hardcover edition as: Eichenwald, Kurt, 1961–The informant: A true story / Kurt Eichenwald p.

  cm.

  1. United States. Federal Bureau of Investigation. 2. Archer Daniels Midland Company—Corrupt practices. 3. Commercial crimes—United States—

  Case studies. 4. Informers—United States—Case studies. I. Title. HV8144.F43 E53 2000

  364.16'8'0973—dc21

  00-034254

  eISBN 0-7679-0896-1

  v. 1.0

  Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page ix To adam, ryan, and sam,

  my wonderful and beloved boys.

  And to my wife, theresa,

  Always.

  Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page x Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page xi You too must not count overmuch

  on your reality as you feel it today,

>   since, like that of yesterday,

  it may prove to be an illusion tomorrow.

  —LUIGI PIRANDELLO

  Six Characters in Search of an Author

  Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page xii Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page xiii AUTHOR’S NOTE

  This book is based on about eight hundred hours of interviews with more than one hundred participants in these events, as well as tens of thousands of confidential corporate and government records, including secret grand jury testimony. Much of the dialogue comes from publicly unavailable transcripts of secret recordings made by a cooperating witness with the FBI over more than two years. Other conversations are based on contemporaneous records of the events or the best recollections of participants. While I have disguised the identities of one witness and of some people mentioned in passing on the tapes, everything else in this book—no matter how unbelievable—is real. Every scene, every name, every crime.

  And every lie.

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  THE MAIN CHARACTERS

  WITH THE ARCHER DANIELS MIDLAND COMPANY

  DWAYNE ANDREAS, chairman and chief executive MICHAEL “MICK” ANDREAS, vice-chairman

  JAMES RANDALL, president

  TERRANCE “TERRY” WILSON, president, corn processing BARRIE COX, vice president, food additives

  G. ALLEN ANDREAS, vice president and chief executive, ADM International RICHARD REISING, general counsel

  MARK CHEVIRON, head of security

  REINHART RICHTER, president, ADM Mexico

  HOWARD BUFFETT, assistant to the chairman

  JAMES SHAFTER, of counsel

  RONALD FERRARI, former product manager, protein specialties IN THE BIOPRODUCTS DIVISION

  MARK WHITACRE, president

  MARTY ALLISON, vice president

  SIDNEY HULSE, vice president

  DAVID PAGE, director of market development

  ELIZABETH TAYLOR, secretary

  ON THE SPECIAL COMMITTEE OF THE BOARD

  BRIAN MULRONEY, former prime minister of Canada F. ROSS JOHNSON, former chairman, RJR Nabisco JOHN DANIELS, former chairman, Archer Daniels Midland RAY GOLDBERG, professor of agriculture, Harvard Business School Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page xvi xvi

  K U R T E I C H E N W A L D

  ADVISORS TO DWAYNE ANDREAS

  ROBERT S. STRAUSS, partner, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C. ZEV FURST, principal, First International

  WITH THE FEDERAL BUREAU OF INVESTIGATION, WASHINGTON, D.C. LOUIS FREEH, Director

  WILLIAM ESPOSITO, Assistant Director, Criminal Investigative Division NEIL GALLAGHER, Deputy Assistant Director of the Criminal Investigative Division EDWARD HERBST, Supervisory Special Agent

  ALIX SUGGS, Supervisory Special Agent

  WITH THE RESIDENT AGENCY, DECATUR, IL

  BRIAN SHEPARD, Special Agent

  WITH THE RESIDENT AGENCY, CHAMPAIGN, IL

  JOE WEATHERALL, Special Agent

  WITH THE FIELD OFFICE, SPRINGFIELD, IL

  ROBERT HERNDON, Special Agent

  DONALD STUKEY, Special Agent in Charge (SAC) JOHN HOYT, Assistant Special Agent in Charge (ASAC) DEAN PAISLEY, Supervisory Special Agent

  KATE KILLHAM, Supervisory Special Agent

  KEVIN CORR, Principal Legal Advisor

  THOMAS GIBBONS, Special Agent

  WITH THE FIELD OFFICE, CHICAGO, IL

  MICHAEL BASSETT , Special Agent

  ANTHONY D’ANGELO, Special Agent

  ED WORTHINGTON, Assistant Special Agent in Charge (ASAC) ROBERT GRANT, Supervisory Special Agent

  WITH THE FIELD OFFICE, MOBILE, AL

  CRAIG DAHLE, Special Agent

  WITH THE UNITED STATES DEPARTMENT OF JUSTICE, WASHINGTON, D.C. JANET RENO, Attorney General

  JAMIE GORELICK, Deputy Attorney General

  SETH WAXMAN, Associate Deputy Attorney General Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page xvii

  T H E I N F O R M A N T

  xvii

  IN THE ANTITRUST DIVISION, WASHINGTON, D.C. ANNE BINGAMAN, Assistant Attorney General

  GARY SPRATLING, Deputy Assistant Attorney General IN THE ANTITRUST DIVISION, MIDWEST FIELD OFFICE, CHICAGO, IL JAMES GRIFFIN, Chief

  MARVIN PRICE, Assistant Chief

  ROBIN MANN, attorney

  JAMES MUTCHNIK, attorney

  WITH THE UNITED STATES ATTORNEY’S OFFICE, SPRINGFIELD, IL FRANCES HULIN, United States Attorney

  BYRON CUDMORE, First Assistant United States Attorney RODGER HEATON, Assistant United States Attorney JOSEPH HARTZLER, Assistant United States Attorney WITH THE UNITED STATES ATTORNEY’S OFFICE, CHICAGO, IL SCOTT LASSAR, First Assistant United States Attorney IN THE FRAUD SECTION, WASHINGTON, D.C.

  MARY SPEARING, chief

  DONALD MACKAY, attorney

  JAMES NIXON, attorney

  PETER CLARK, attorney

  WITH THE DISTRICT ATTORNEY’S OFFICE, ZURICH

  FRIDOLIN TRIET, Investigating Magistrate

  WITH THE LAW FIRMS

  AT WILLIAMS & CONNOLLY, WASHINGTON, D.C. AUBREY DANIEL, partner

  BARRY SIMON, partner

  AT SIMPSON THACHER & BARTLETT, NEW YORK, NY RICHARD BEATTIE, chairman

  CHARLES KOOB, partner

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  K U R T E I C H E N W A L D

  REPRESENTING THE INDIVIDUALS

  JOHN BRAY, King & Spaulding, Washington, D.C. REID WEINGARTEN, Steptoe & Johnson, Washington, D.C. JAMES EPSTEIN, Epstein, Zaideman & Esrig, Chicago, IL BILL WALKER, solo practitioner, Granite City, IL JOHN DOWD, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C. SHELDON ZENNER, Katten Muchin & Zavis, Chicago, IL WITH AJINOMOTO INC., TOKYO

  KAZUTOSHI YAMADA, managing director

  HIROKAZU IKEDA, general manager, feed additives KANJI MIMOTO, deputy general manager, feed additives KOTARO FUJIWARA, engineer

  WITH THE EUROPEAN DIVISION, EUROLYSINE

  ALAIN CROUY, president

  JACQUES CHAUDRET, vice president

  WITH A EUROPEAN AFFILIATE, ORSAN

  PHILIPPE ROLLIER, president

  WITH KYOWA HAKKO KOGYO CO. (BIOKYOWA), TOKYO

  MASARU YAMAMOTO, general manager, bioproducts WITH SEWON CO. LTD./MIWON (SEWON AMERICA), SEOUL JHOM SU KIM, president, Sewon America

  WITH CHEIL JEDANG LTD., SEOUL

  JOON MO SUH, executive

  WITH KROLL ASSOCIATES

  JULES KROLL, principal

  ANDREW LEVETOWN, investigator

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  T H E I N F O R M A N T

  xix

  THE INDUSTRY CONSULTANT

  DAVID HOECH, president, Global Consultants, Hallandale, FL THE ASSOCIATES

  GINGER WHITACRE, wife of Mark Whitacre

  RUSTY WILLIAMS, groundskeeper for the Whitacre family BEAT SCHWEIZER, money manager

  DR. DEREK MILLER, M.D.

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  PROLOGUE

  June 27, 1995—Decatur, IL

  The Country Club of Decatur loomed ahead, and Brian Shepard slowed the pace of his 1994 Dodge Dynasty. Beside him in the passenger seat, Bob Herndon sat in silence, gazing at the club through the windshield. Herndon checked his watch again, although he already knew the time, 6:00 p.m. Right on schedule. Shepard turned onto the club’s inclined driveway, heading to the parking lot as another car followed him up the hill. Passing the club on the right, the midsize sedans maneuvered into two parking spaces, out of place amid the array of Mercedes and BMWs.

  Without a word, Shepard and Herndon popped open their doors and watched as Kevin Corr emerged from the second car. In an instant, Corr joined them, and the three men walked in step toward the club. Despite their differing ages and backgrounds, the three someh
ow looked strikingly similar. They wore short trimmed hair and dressed in dark suits with dark dress shoes. Their suit jackets fit loosely, masking the stainless steel automatic pistols that they carried. They turned away from the small crowd milling outside near the pro shop. As expected, most every club member was there, enjoying the food and ambience of a night at the grill. The upstairs dining hall was sure to be virtually empty, a refuge for local businessmen looking for a quiet place to talk. It was perfect for the plan. Tonight there would likely be no witnesses to get in the way.

  The three men headed toward the club’s canopy-covered entryway. On the horizon, the sun threw a deep reddish glow across the Illinois countryside. Even here, far from the giant milling factories that dominate Decatur, a pungent aroma hung in the air. Newcomers to town usually found the smell disagreeable. But for Decatur residents, the ever-present odor produced by drying corn feed and toasting soymeal Eich_0767903277_5p_fm_r1.qxd 10/11/01 3:55 PM Page 2 2

  K U R T E I C H E N W A L D

  at the powerful Archer Daniels Midland Company had become part of the landscape, no different than the trees or the sky. Locals often joked it was just the smell of money being made.

  The men pushed open the club’s glass door, walking left toward the dining hall. The room was not Decatur’s largest meeting place, but it was certainly among the most elegant, with chandeliers, a grand fireplace, and oceans of white linen draped across circular tables. This night, only one table was occupied, on the far side of the room, where three executives were chatting over drinks. Two of the men were well known in town—even their waitress recognized them as Terry Wilson and Mark Whitacre from the nearby ADM headquarters.

  Corr waited in a foyer outside the dining hall as Shepard and Herndon walked briskly toward the businessmen. The diners barely noticed the approaching men until they came to a stop at their table.

  “Mr. Wilson? Mr. Whitacre?’’ Herndon said.

  The youngest of the diners, a blond man in his mid-thirties with a moustache and a baby face, looked at Herndon with a puzzled expression.

  “Yes?’’ he said. “I’m Mark Whitacre.’’

  Herndon and Shepard reached inside their jackets, bringing out matching leather cases. Two gold shields flashed in the light of the dining hall.

  “I’m Bob Herndon, and I’m an FBI agent. This is Brian Shepard; he’s also an FBI agent. We need to talk to both of you privately, right now.’’

  Wilson, in his fifties with white hair, set down his glass of Dewar’s and water. “What’s this all about?’’