Informant (49 page)

“Man, DOJ should refuse to talk to this guy,’’ Herndon said.

“You’re right,’’ Shepard agreed. “They should say, ‘If you want to talk to the government, Mr. Daniel, you go to Jim Griffin. He’s in charge of this case.’’

The two agents groused another few minutes, until Shepard noticed the time. It was after twelve-fifteen. If they were going to drive over to Whitacre’s for lunch, they needed to leave the office right away.

The drive to Moweaqua took about twenty-five minutes. The agents pulled the car into the driveway, weaving up to the front. Whitacre appeared on the porch. He seemed in good spirits. The three men greeted each other.

“Hey, listen,’’ Whitacre said. “I thought we could go to this Chinese place I know in Taylorville. Nothing fancy, but the food is pretty good.’’

“Sure, Mark,’’ Shepard said. “Sounds great.’’

The men decided to take Shepard’s car. Whitacre got into the back. As they drove to Taylorville, Whitacre chatted about the restaurant. Eventually, he paused, leaning his arms on the front seat.

“Guys,’’ he said, his tone serious. “There’s something I want to tell you.’’

Herndon turned, while Shepard glanced in the mirror.

“My attorney’s telling me not to say anything. It’s something I’ve wanted to talk about for a while, but he wanted to see if ADM raised it. But I want to tell you.’’

This didn’t sound good. Herndon held up a hand. “Mark, wait. Don’t tell us anything. You have an attorney. We need to make sure we’re allowed to hear this.’’

“Bob’s right,’’ Shepard said. “This isn’t like before, Mark. You’re represented.’’

Whitacre sat back, looking disappointed. Both agents could tell he was going to have trouble holding back on his story. Herndon changed the subject.

“So,’’ he said, “how was your trip to Tennessee? What’s the new place like?’’

Whitacre smiled. “Oh, it’s great,’’ he said, launching into a description of the house.

The idle talk continued for some time, as they drove down the small road, surrounded on both sides by cornfields. Eventually, the conversation ran out. Whitacre stared out the window.

He looked back at the agents. Jim Randall had contacted him, he said suddenly.

Herndon fixed him with an intrigued look. “Oh, yeah?’’

“They want to talk to me. It’s about money stuff.’’

“What kind of stuff?’’

“Financial transactions. Stuff I haven’t told you.’’

It had only taken Whitacre a second, but already he had slipped the conversation back to the topic that had been bothering him.

“Is this what you were referring to before?’’

“Yeah.’’

Herndon wavered. He wanted to call the lawyers, to ask how to proceed. But that wasn’t practical. He decided to make sure Whitacre knew what he was doing.

“Mark, you understand your lawyer has advised you not to discuss this matter.’’

“I know.’’

“And we’re not asking you. So anything you say to us is a free and voluntary statement, against your lawyer’s advice. If you tell us about this now, it means you’ll be talking without representation present. You understand?’’

“I understand. But I want to tell you.’’

Both agents sat silently in the front. They thought it was dangerous to say anything. Whitacre was on his own; whatever happened from here on was his decision.

“ADM’s found some questionable financial things involving me. They want to meet with me and Epstein tomorrow to answer questions. If I don’t cooperate, they say they’re going to take ‘appropriate action.’ ”

Whitacre sounded distressed.

“What does that mean, ‘appropriate action’? I mean, are they talking about going to the FBI? Are they talking about going to prosecutors?”

This was getting bad, rapidly.

Shepard looked in the mirror again. “It’s difficult to know what the term means, Mark,’’ he said. “It’s hard to say whether law-enforcement agencies, if advised of the information, would open an investigation and whether they would ultimately refer it for prosecution.’’

For several minutes, Shepard continued a monologue about law enforcement. He talked about the differences between civil and criminal cases, about state, local, and federal agencies, and about how the merits of a prosecution are judged. Herndon listened, hoping his partner could keep his speech going until they reached the Taylorville restaurant, where they could call the antitrust lawyers.

He did. As Shepard wrapped up his primer, they pulled in at the shopping center where the Chinese restaurant was located. After parking, the three men headed in, the conversation temporarily on hold. Herndon noticed a pay phone and hesitated, thinking about calling the lawyers. He decided to wait. A hostess approached the group and guided them to a table near the front.

Whitacre hesitated. “Umm, could we sit in the back?’’

The hostess nodded, escorting the group to a large, round table. They took seats facing a wall, with Whitacre between the two agents. The three men studied the menu and ordered quickly; their food arrived in a few minutes. Herndon tasted his orange chicken. Whitacre was right—this place was pretty good.

The men chatted for a few minutes about the food and whatever else came to mind. No one was going to ask Whitacre anything about the financial issue. The conversation hit a lull. Everyone was uncomfortable.

Whitacre looked down at his food for a moment.

“Let me throw out some hypotheticals,’’ he said. “I’ll talk about some financial stuff and you tell me if they’re wrong and how serious they might be.’’

The agents continued eating, trying to seem casual.

“Suppose a company gave an executive a car, you know, a corporate car,’’ Whitacre said. “But instead of driving it to work, he drove his personal car and gave the company car to his daughter to drive. Would that be a problem?’’

The agents almost wanted to laugh. After the big buildup, Whitacre’s concerns sounded trivial.

“Mark, that may be against corporate policy and there may be IRS issues,’’ Herndon said. “You may have to pay taxes on that, but it shouldn’t be a big problem.’’

Whitacre nodded, looking serious. He paused.

“Well,’’ he finally said, “just hypothetically, let me give you another example. What about if an executive used a corporate airplane for personal use?”

Basically the same thing, Herndon said. Maybe some tax issues, but it didn’t sound like a major problem.

“Okay,’’ he said when Herndon finished, “let me give you another one.’’

“Okay.’’

Whitacre paused again.

“What if, hypothetically, the activity involved was kickbacks by corporate executives?’’

Herndon and Shepard didn’t flinch.

“Well, Mark,’’ Herndon said, “you know better than I do that there are plenty of ways companies try to attract business. I mean, you know, they buy meals at restaurants for potential customers; they buy them tickets to sporting events. They even buy them gifts. That happens.’’

Shepard chimed in. “I don’t know if there would be federal violations involved in something like that. Maybe it’s ethically not right, but it’s done. I mean, it’s widely known that businesses do that.’’

Whitacre pondered the agents’ words. He appeared to be considering how to respond.

“Umm, I need to ask,’’ Whitacre said. “Is this conversation on or off the record?’’

“Definitely on the record, Mark,’’ Shepard replied. “A report will be generated about whatever you say.’’

Herndon shoveled some orange chicken into his mouth, watching Whitacre as he ate. He could tell the man was uncomfortable and that they had some distance to go. But at this point, there was no telling where they were headed.

“Okay,’’ Whitacre said. “Well, what if the kickbacks to executives were generally accepted in the company?’’

“What do you mean?’’ Shepard asked.

“What if the company generally accepted kickbacks to executives? Like ten to twenty thousand dollars for low-level guys and more for higher-level executives.’’

Shepard set down his fork. “How much money are you talking about?’’ he asked.

Whitacre was slow to respond. “Like as much as five hundred thousand.’’

Shepard and Herndon stared at Whitacre, speechless.

“Well,’’ Shepard finally said, struggling to recover, “taking cash in any amount is different from having meals paid for or receiving tickets.’’

Herndon glanced over at Shepard.
Thanks for the brilliant observation, Brian.

“But this is a difficult question,’’ Shepard continued. “The funds sound like they would be corporate, so I’m a little uncertain regarding possible violations.’’

As far as he knew, Shepard said, fraud cases handled by the FBI usually involved federally insured money. Herndon shook his head; he knew almost any embezzlement could be charged as a wire fraud and said so.

“Well, what if the money wasn’t from the executive’s company?’’ Whitacre asked. “Would it be any different if the transaction involved a foreign company?’’

Where was this going? The conversation was driving both agents crazy. Whitacre was giving bits and pieces but never letting them see the whole picture. If a foreign company was involved, it could lead to more violations, Herndon said. But it was hard to say without specifics.

Shepard decided to push. “What do you mean by a foreign company being involved?’’ he asked.

Whitacre ignored the question. “Would it make any difference if it was solicited by a foreign supplier?’’

“No, Mark,’’ Shepard said. “It probably wouldn’t.’’

Herndon couldn’t believe the man was a Ph.D. He was acting like a simpleton. Why was he dragging this out? What was all that garbage about company cars?
And—oh yeah, what about half a million bucks in kickbacks, too?

During the conversation, they had finished their food. They paid their bill and headed to the car. Herndon climbed into the back, and Whitacre took the front seat.

Herndon leaned up on the seat and looked at Whitacre.

“Let’s not go home right now,’’ he said. “Let’s talk about this a bit more, okay?’’

Whitacre nodded, saying nothing. They drove for a short while, going down a country road outside of Taylorville. Finally, Shepard pulled off the road, onto a small embankment beside a cornfield.

“Okay,’’ he said. “When was this first transaction?’’

Whitacre looked down. The “hypothetical’’ cover was being dropped.

“December of 1991.’’

The agents wrote that down. The meaning was not lost on them. Whitacre did this long before meeting the FBI.

“Did you receive money?’’ Shepard asked. “And if so, how was it paid?’’

“By check. There were checks deposited in various accounts. But the amount was always under ten thousand dollars.’’

Herndon winced. The number had a meaning in law enforcement. To guard against money laundering, banks send currency transaction reports, or CTRs, to the government for every transaction involving more than $10,000. But structuring payments so that no check exceeds $10,000 could also be a crime, if the purpose was to avoid the CTR.

“Why below ten thousand?’’ Herndon asked.

“Big checks draw suspicion in a small town.’’

“Is that really the reason, Mark?’’ Herndon asked sternly. “Or were you trying to come under the level that would require the banks to report it?’’

Herndon’s tone shocked Whitacre. He told Herndon that he didn’t understand. Herndon explained the law. Whitacre denied he had been trying to avoid reporting.

“When did you set up these accounts?’’ Shepard asked.

“Over a period of time.’’

Shepard didn’t want to ask the next question. “Did you get any of these checks after meeting me in 1992?’’

Whitacre looked back at Shepard blankly. He nodded.

“A couple may have been deposited after that.’’

The agents’ faces showed their disbelief and anger.

“What are you guys gonna do with this?’’ he asked. “Is ADM going to find out? Is my attorney going to find out?’’

The agents stared at him.
How can he think we wouldn’t turn this over? Who does he think he’s dealing with?

They had to document everything, Herndon explained again. Those records would be turned over to the defense at some point, so yes, ADM would find out. And they would have to tell the prosecutors.

Shepard leaned in, trying to mask his feelings. “Who else knows about this? Who else have you told?’’

“Nobody knows about this.’’

“Oh, come on, Mark,’’ Herndon interrupted. The man who couldn’t keep his role in the case secret didn’t tell anybody about taking kickbacks?

“Really, no, honestly, I didn’t tell anybody.’’

Pause.

“Well, when the transaction happened, Randall questioned me about the amount,’’ Whitacre said. “He said, ‘Looks like you’ll be getting some of this yourself.’ And when he said that he kind of snickered. Kind of snickered.’’

“Okay, Mark,’’ Herndon said, an edge in his voice. “So first nobody knew, now Randall knew. Anybody else?’’

“Nobody. I promise you. No one else at ADM ever said anything about it.’’

“Come on, Mark,’’ Herndon said.

“No, really, I promise you. Nobody else would know.’’

Whitacre shifted in his seat. He looked frightened.

“How much could ADM find out?’’ he asked. “Do they have a way of investigating?’’

Of course they could investigate, the agents said. ADM had the paperwork. They could trace whatever they wanted.

“Well, the company condoned this. I mean, Randall knew all about it. I’m not the only one. Other people do this.’’

There had been a treasurer years back, Whitacre said. A guy named Frankel. He had received money. ADM knew about that, too. The agents wrote down the name.

Whitacre stared into his lap, silent. The magnitude of what was happening appeared to be settling in.

Suddenly, he looked up. “Is this going to affect the price-fixing case?’’

Shepard and Herndon answered in unison. “Yes.’’

Whitacre looked into his lap again.

“Well, you know,’’ he said, looking up, “it was such a pervasive attitude at ADM. I mean, they really promoted this kind of stuff. It wasn’t the same at Degussa.’’

That didn’t change things, the agents said. If he broke the law, he would have to face the consequences.