Informant (19 page)

Making it worse was the poor quality of the few tapes Whitacre did record. The agents had enough experience to know the types of recordings that should have been coming in, but it wasn’t happening. Some recordings—such as the Randall airplane tape—were hard to hear. Oftentimes, there were televisions or other distractions drowning out the discussions.

The conversations they
could
hear were of little help. They didn’t want to listen to any more tapes of Brasser; they wanted to hear what people
inside
ADM were saying. But again and again, Whitacre insisted there was nothing to record.

Finally, Shepard ran out of patience.

“Whitacre acts like he’s cooperating, but I don’t think he is,’’ Shepard told Weatherall. “I think he’s trying to wriggle off the hook.’’

Weatherall agreed; Whitacre was still hiding something. The two agents again contacted the Behavioral Science Unit and spoke with Special Agent Steven Etter, who for months had been providing them with advice on how to handle Whitacre. Shepard bounced his plans off Etter, who offered a few suggestions. Then, Shepard called Byron Cudmore, describing his concerns about Whitacre.

“So what’s the plan?’’ Cudmore asked.

“We’re going to put him on the box again.’’

The box.
Another polygraph.

“Sounds good,’’ Cudmore said. “Let me know what happens.’’

Twenty seconds.

“Are you lying about any aspect of your involvement in ADM’s price-fixing operations?’’ Agent Hamara asked.

Whitacre glanced at the chart paper. It was March 10, sometime after seven o’clock at night. Whitacre had been surprised to see Hamara; again, he had been given no warning. Whitacre had tried being casual, telling the agents he was hiding nothing and was willing to take the test. Again, he had been told the questions in advance. This was the one that concerned him.

“No,’’ he said in a strong voice.

As best as he could tell, the ink tracings stayed steady. Whitacre felt relieved. This was the fifteenth question he had been asked during the test and the second about his knowledge of price-fixing. Only two other questions seemed relevant; one asked whether Mick Andreas had directed him to buy bugs from Fujiwara and another whether Cheviron had told him to forward his home phone to the ADM off-premises extension. Whitacre had answered both questions yes.

Hamara asked a final control question and marked the paper with the response. He did not look up.

When Hamara finished with his two sets of questions, he studied the results, translating the tiny movements in the tracings into a numerical equation. Once he toted it up, he had no doubt: Each relevant answer was indicative of deception.

Whitacre had blown the box again.

The agents met behind closed doors for just a few minutes while Whitacre waited in the adjoining room. The agents were quiet; Whitacre could hear nothing. Finally, the door opened and Whitacre stood. The looks on everyone’s faces told him all he needed to know. He started speaking before they could sit down.

“Guys, I’m really tired and I’ve got some stuff I’ve got to do early tomorrow morning. I need to go home.’’

Shepard and Weatherall paused before responding.

“Really, I need to go home,’’ Whitacre repeated. “I’ve got a lot of stuff tomorrow. And I’m really tired. So I really need to go home.’’

If Whitacre wanted to leave, there was little the agents could do to hold him.

“Okay, Mark,’’ Shepard said. “Head on home.’’

Whitacre walked to the door. Shepard and Weatherall watched, silent and frustrated. Whitacre certainly knew he had failed the polygraph. Weatherall felt sure that once their witness was out the hotel room door, he would never return. Even if he did, he would probably keep telling his lies.

The covert investigation, Weatherall thought dejectedly, was all but over.

The telephone rang in the Decatur Resident Agency early the next day. Shepard answered.

“Hey,’’ Whitacre said, his voice a twangy whisper. “It’s Mark.’’

Shepard was stunned to hear from him.

“I want to get together,’’ Whitacre said. “I’ve got more to tell you.’’

“Well, Mark, we’ve . . ’’

“Brian, just listen to me one more time. I really think you should.’’

Shepard paused.

“Sure, Mark,’’ he said. “I’ll get a room.’’

Whitacre arrived that night seeming particularly hyperactive. Shepard and Weatherall listened as he protested that he had told the truth, that he was still working with them, that they could trust him. Over the past day, he’d studied up on polygraphs; he knew they weren’t reliable. People telling the truth failed all the time. He’d read that. He knew.

The agents weren’t buying; the game was over. Whitacre could spend all the time he wanted arguing that the polygraph was wrong; it would get him nowhere.

Soon, Whitacre seemed spent. Weatherall moved in.

“Mark, I know this has all got to be hard, working in an organization where this is happening. I know it’s hard to be reporting on your friends and colleagues. There are no easy choices, and I know that’s tough.’’

Whitacre said nothing.

“But there’s only one good choice for you. That’s all there ever has been. We’re not going away. There’s only one way to protect yourself and to do what’s right. And that’s to start telling the truth.’’

For several minutes, Weatherall tried to get inside Whitacre’s head, trying to empathize with him.

“Now, Mark, I know the truth is tough,’’ he said. “But there’s something you’re hiding, something you’re keeping from us. And I know that’s got to be hard, to be carrying around a burden like that.’’

Whitacre stared at the table.

“Mark, that’s true, isn’t it?’’

Finally, slowly, Whitacre nodded.

Connection.

“I’ll tell you, Mark, the only thing that relieves that burden is to be honest. Can you do that? Make it easier on yourself, Mark. Just talk about it.’’

Weatherall leaned in. “You’ve got to stop worrying about your colleagues, Mark, and start worrying about yourself.’’

Whitacre looked at Weatherall. He was trapped. The meetings with the Asians were starting again; the price war was falling apart. His plan had failed.

He cleared his throat. Nothing had shaken these guys. He was sure they were at the final break point. They were getting ready to prosecute him.

He had only one option.

“For the past five weeks,’’ he said, “I’ve been personally involved in efforts to fix lysine prices.’’

For the next hour, Whitacre talked about price-fixing. He told of his meetings with Ajinomoto and Kyowa Hakko, another major Japanese competitor.

“Does anybody know about these meetings?’’ Shepard asked.

“Mick Andreas. He’s fully aware of them.’’

The talks were far along, Whitacre said. The Japanese had agreed to fix the price at about $1.10 a pound—almost double the recent cost—if ADM would cut its volume. More talks were scheduled on April 30, when a top Ajinomoto executive was coming to Decatur to meet with Mick Andreas. Whitacre said he would be participating in many of the discussions.

The agents listened, feeling a rush. After so many months, a breakthrough. Whitacre was personally confessing to specific crimes. This had to be true. Only a fool would lie like this to an FBI agent.

More important, Whitacre’s demeanor had changed. He wasn’t nervous, didn’t seem shifty. Instead, he was energetic, seeming excited about the prospect of working with the FBI. He had either turned the corner, or he was the greatest actor the agents had ever seen.

“Well, Mark,’’ Shepard said, “I want you to get these things on tape and bring us up to date on lysine. I don’t want to just have your word, I want to hear this on tape. Are you going to do it?’’

Whitacre paused. The agents were right. It had become a simple choice: his colleagues or him.

“Yeah,’’ he said, nodding eagerly. “I’ll give you all the tapes you need.’’

BOOK TWO

HONOR AMONGST THIEVES

C
HAPTER
6

T
he blue Lincoln Town Car approached gate number three in front of ADM headquarters on March 17, St. Patrick’s Day. A guard inside the gate’s security booth peered through the driver’s window. Whitacre lifted a hand off the steering wheel, giving a slight wave. As the guard nodded his recognition, Whitacre slowly eased the car past the fence.

Driving past the Ronald Reagan statue in front of the office, Whitacre tapped the electronic door opener attached to his windshield visor. By the time his car came around the curve, the metal door to the underground executive parking garage was opening. Whitacre felt a rush of tension as he drove in. The microcassette recorder hidden in his coat felt huge. He had used it before, but never like he would today.

Whitacre pulled into his reserved spot. Reaching inside his jacket, he slid the switch on the recorder. Was it on? He looked inside his pocket and saw the red light glowing. He smoothed out the jacket, putting sounds of rustling on the tape.

“It’s currently seven-thirty
A.M.
on Wednesday; Wednesday, March seventeenth,’’ he said into the recorder, staring at a wall as he spoke. “I’m just getting ready to go into my office.’’

Whitacre explained that he had turned on the device now because he felt sure that Wilson and Randall would want to see him immediately. The night before, he was supposed to have spoken with Masaru Yamamoto of Kyowa Hakko, the Japanese lysine company second in size to Ajinomoto. Yamamoto, whom ADM executives called Massy, had not been in, but Wilson and Randall might want a report first thing. It was easier, he told the tape, to turn on the device now rather than later, in front of his colleagues.

Whitacre opened his car door.

“Just getting out of my car and going to the office now,’’ he said.

He spoke to no one as he made his way to his office. Sitting at his desk, he looked at his watch.

“Seven-thirty-three
A.M.
,’’ he said. “Wednesday, March seventeenth.’’

He shuffled some papers, glancing up when he heard someone approach.

“Well, Terrance Wilson,’’ he announced.

Wilson was in no mood for pleasantries. “Did you talk to Massy?’’ he asked.

“Yeah, I called, uh, Massy. He wasn’t in.’’

Whitacre mentioned that afterward, he had heard from Kanji Mimoto of Ajinomoto. Apparently, Mimoto thought ADM had promised in September to cut production if prices went up. But no commitment had been made, Whitacre said. Instead, he and Wilson had promised to raise the idea with ADM management if lysine reached $1.10 a pound. But that never happened—ADM was only receiving ninety-three cents a pound now.

“I said, as long as prices are as low as they are, we had nothing,’’ Whitacre continued. “We’re not gonna go to our management and look silly to ’em.’’

“What’d he say?’’

“He said, ‘We understand it’s a promise. We feel you’ve reneged on your promise.’ ”

As they spoke, Jim Randall walked into the room. The ADM president sat on the desk, arms folded across his chest. Whitacre started his story again.

“We got a call last night,’’ he said.

“You did?’’ Randall asked. “From the Japs?’’

“Yeah.’’

“About what?”

“Got a call on my voice mail to call, and I did from a pay phone. This was Ajinomoto.’’

Randall scrunched his nose. “Your, uh, tap’s off your phone, you know,’’ he said. There was no need to keep using pay phones.

“You think so?’’ Whitacre asked.

“Cheviron told me it was. The FBI is out of it, and they took the tap off the phone.’’

“Okay,’’ Whitacre said. “I still think the pay phone is the way anyway.’’

Whitacre told Randall of the Mimoto conversation.

“He was pissed,’’ Whitacre said.

“Kind of hard to keep him from being pissed,’’ Randall replied.

Randall raised a few issues regarding lysine, mentioning a technical development used by “the Jews.’’ Eventually, he returned to the Mimoto call and Ajinomoto’s belief that ADM had broken its promise.

“What’d he threaten to do?’’ Randall asked.

“He said there’d never be peace, and the price would stay where it is,’’ Whitacre said.

Randall asked a few more questions, then headed out. Whitacre looked at Wilson, and again mentioned Mimoto’s concern about the agreement.

“He said he’d like to talk to you about it at some point, and I said, well . . ’’

“Be right there lookin’ right at ’em,’’ Wilson muttered. “Say, ‘Listen here you little mousy motherfucker.’ ”

Wilson laughed. Neither of them was much concerned about Mimoto’s complaint. They figured it was all just negotiating strategy. There was no promise.

“They’re tricky, you know,’’ Whitacre said.

“Bet you they are,’’ Wilson responded.

“And you know Ikeda’s right there, telling him what to say.’’

“Yeah,’’ Wilson said. “Plus, in 1992, we did exactly what we said we’d do, volume-wise. Exactly.’’

Whitacre fiddled with a pen, trying to contain his excitement. Wilson had just admitted that ADM had promised Ajinomoto to hold to a set volume in 1992.

The executives brought up an out-of-town sales meeting for the lysine division, questioning whether Wilson should attend.

“It’d be unusual for you to do that, wouldn’t it?’’ Whitacre asked.

“Yeah,’’ Wilson said. “It’s not like I’d get laid or something. That’d be a reason to go.’’

Whitacre set down his pen as the conversation came to an end. Wilson headed out the door; Whitacre said nothing as he watched.

“Just had Jim Randall and Terry Wilson in my office,’’ he announced to the tape recorder. For a few minutes, Whitacre summarized the conversation.

“By the way,’’ he added, “there was no discussion with Mimoto last night. That was for illustration purposes only. That was all that was for. Illustration purposes only. So I wanna make that very clear. There’s no discussion with Mimoto last night.’’

Whitacre was starting to repeat himself; his excitement was getting to him. But Whitacre was always hyperactive when he threw himself into a new job.

Whitacre was at his desk the next morning at 11:00. After turning on the tape recorder in his pocket, he opened a black leather case embossed with a gold ADM logo. A pad of paper was inserted on the right side; a calculator and a world map were affixed to the left. Whitacre pulled a pen out of a holder in the case, at the same time pushing down a tiny white switch. He couldn’t see it, but knew the microcassette that the FBI had hidden behind the map was turning.

The previous day had imbued him with an awesome sense of power. He had walked around ADM taping, and no one had suspected. Now, he had an unvarnished portrait of ADM’s corporate ethic for the FBI.

Whitacre headed to Wilson’s office. Mick Andreas was there discussing a recent business deal. For several minutes, the men hashed it through.

“Now, on the lysine thing, totally different subject,’’ Andreas said, looking at Whitacre. “When do the Japanese see you?’’

“The small company wants to see me the fifteenth in Chicago,’’ Whitacre said, referring to Kyowa Hakko.

“That’s a month from now?’’ Andreas asked.

“Yeah. In Chicago.’’

“We got a month to think about it.’’

“Yeah.’’

“In the meantime,’’ Andreas said, “they’re callin’ and dropping hints.’’

“Definitely.’’ The Japanese, Whitacre complained, were pushing on this supposed promise by ADM to cut back. But no such promise had been made, he said.

“I think that’s a good line for you,’’ Andreas said. “When they come to me, I’m just gonna say, ‘Look, first of all, we don’t make deals.’ ”

That, Andreas continued, should be followed up by blaming the Japanese for poor prices in the market. “You should just say to him, ‘Look, these prices are so shitty, and you guys are so disorganized that I don’t know what kind of shit you’re managing.’ ”

Whitacre nodded. “And it’s gotten shittier.’’

Andreas’s words were perfect for the case. ADM’s vice-chairman was telling him to chastise a competitor for bad prices. Whitacre felt excited again. The FBI was sure to believe him now.

From behind his desk, Wilson spoke. “The market’s bigger than we originally said it was. We just took it. So we’re not in violation of nothin’.’’

“Yeah,’’ Whitacre said.

“Fuck ’em,’’ Wilson said.

The men changed subjects, discussing a request from Howard Buffett, the assistant to the ADM chairman and son of Warren Buffett, the famed Omaha investor. Howard often heard from politicians and their money men when they wanted campaign contributions from ADM.

“Howie called us,’’ Whitacre said, “and asked us for funds for somebody, Tommy Thompson or whatever.’’

Thompson, the governor of Wisconsin, was a rising star in the Republican Party. He was in the midst of a fund-raising drive, ostensibly for his 1994 re-election campaign. But party officials were touting him for national office—maybe even a White House run. A war chest to scare off potential in-state challengers was widely seen as a necessary first step in that effort.

But Whitacre said there was a problem.

“Terry and I went up there and told ’em we’re already at our limit and we couldn’t give,’’ he said. “We’re at our limit.’’

Andreas shrugged. “You can go over the limit. Just a small fine.’’

“Yeah,’’ Wilson said, “that’s what we were saying.’’

Whitacre laughed. Andreas was blithely advising that they intentionally violate campaign-finance laws—and Wilson was agreeing. Already, Whitacre was imagining what the world would think about the Andreas family’s political giving if this tape became public.

“If they want a thousand dollars,’’ Wilson said, “you give a thousand dollars.’’

Whitacre laughed again.

“So it costs us nine thousand,’’ Wilson continued, adding an estimated fine for violating election laws.

“Twelve thousand after tax,’’ Whitacre laughed.

Andreas nodded. “That’s true,’’ he said. “You know, if the guy’s up there asking you for money, just don’t give it to him and see what happens.’’

Wilson joined Whitacre in the laughter.

Andreas looked at the two men. “If you wrote a check, you make sure Dad is behind it,’’ he said. “Is Dad asking for ’em?’’

“Oh, yeah,’’ Wilson said, as Whitacre agreed.

“Okay,’’ Andreas said.

The meeting broke up and Whitacre wandered back to his office. Sitting down, he glanced at his watch.

“Eleven-fifteen
A.M.
,’’ he said to the tape. “Bingo!’’

Days later, Shepard set down the headphones for the TASCAM device. For hours, he had been listening to the two tapes Whitacre had finally recorded inside ADM. The sound quality was poor, and Whitacre talked too much. Shepard needed to speak to him about that.

Still, everything was falling into place. Whitacre’s statements now tended to be corroborated by tapes—devastating tapes. A nonchalant attitude inside ADM about lawbreaking—whether on price-fixing or campaign finance—was unmistakable. Whatever else could be said for this evidence, it would certainly have impact on a jury.

The state of the lysine conspiracy seemed clear from the tapes. A price agreement of sorts had been reached the previous year at meetings in Mexico and Paris. But the conspirators did not trust each other. So when prices faltered, everyone sold more to keep up their revenues. Apparently, Ajinomoto had believed that ADM would unilaterally cut production. The tapes made it clear that was not going to work—Ajinomoto wanted ADM restricted to forty-five thousand tons a year; ADM wanted every manufacturer to limit production, with its own allocation set at sixty-five thousand tons a year.

A production limit was critical to the scheme. Price-fixing often won’t hold unless the manufacturers take control of the market’s natural forces—the laws of supply and demand. The higher a product’s price, the smaller the number of consumers who are willing to buy it. That’s why fewer people buy high-priced steak than low-priced hamburger, even if everyone prefers steak. By setting prices high, companies are limiting their market to the steak buyers—consumers whose purchases are not determined by price. But if the companies manufacture more product than the steak buyers want, problems begin. Warehouses and store shelves overflow with unpurchased items. Steak buyers can’t be forced to buy more, leaving the companies with one choice for unloading the backlog: attract hamburger buyers by cutting the price. In the end, price-fixing without a side agreement to limit production will last only as long as it takes to fill a warehouse with unsold items.

Shepard knew that, for the scheme to work long-term, the conspirators were going to have to hammer out a production agreement. And, if everything went well, the FBI would be listening in.

Gathering evidence of price-fixing in products other than lysine was going to be difficult. The separate schemes were organized like classic “hub-and-spoke’’ conspiracies. Wilson and probably Mick Andreas were at the center, coordinating the price-fixing of every ADM division involved. Whitacre was only immersed in lysine—other executives played his role for other products. Making it more complicated, different products meant different co-conspirators. So, if there was price-fixing in citric acid, ADM would be meeting with other corporate conspirators, not the Japanese and Korean lysine producers. For now, the only way to develop evidence of those other schemes was through the hub—Whitacre had to push his bosses to talk about other divisions.

Shepard phoned Cudmore. Now that they had a sense of the case’s scope, they agreed the time had come to beef up their resources. They needed to call the government’s top antitrust experts for help.

In the southern section of Chicago’s Loop area stands an ensemble of buildings that make up the federal contribution to the city’s architectural rhythm. Encircling a plaza adorned with a fifty-three-foot red steel sculpture by Alexander Calder, the buildings are the epicenter for Chicago’s federal law-enforcement effort, housing everything from the district courts to the United States Attorney’s office.

In the spring of 1993, one group of little-known prosecutors worked on the thirty-eighth floor of the John C. Kluczynski Federal Building, the tallest of the steel-and-glass high-rises ringing the plaza. Unlike most federal prosecutors in town, these lawyers were not with the U.S. Attorney’s office and rarely took part in highly publicized cases. They worked instead for the Midwest office of the Justice Department’s Antitrust Division, which enforced the Sherman Act and related laws. Partly because of their complexity, price-fixing and related crimes are often prosecuted by the division, which has the expertise to sift through thousands of documents when piecing together evidence of economic conspiracies.