Informant (62 page)

Nervously, Ferrari told his tale of the $1.5 million. After setting up FES, he had called Whitacre. When he told his friend that he was in the market for consulting work, Whitacre promised to keep his ears open. Then, Whitacre mentioned that he would be receiving a commission soon for some consulting he had done with a Pacific Rim company.

“Did you find it odd that he was doing consulting while working at ADM?’’ Bassett asked.

“I asked that. He said it wasn’t only acceptable, but common and encouraged.’’

“How much did he say the commission would be?’’

“He didn’t tell me. But I expected it would be forty thousand dollars or fifty thousand. He didn’t say, but that’s what I thought.’’

At that point, Ferrari said, Whitacre told him he wanted to receive his commission offshore—without explaining why. Whitacre said he had no overseas account and asked Ferrari if he had access to one.

“So I told Mark about the FES account in Hong Kong,’’ Ferrari said. “He was happy to hear about it, and I agreed to let him use it to receive his commission.’’

“Why didn’t he open his own account?’’ D’Angelo asked.

“Well, he was going to, but he wanted to use mine in the meantime.’’

“And you thought that was fine?’’

“Yeah. I had an account, he’s a friend. Sure.’’

The agents asked about the money, but Ferrari said he had been in the dark. He didn’t know where it was coming from, and wasn’t receiving any of it. Whitacre even offered to pay him for his help, Ferrari said, but he had refused.

“About two weeks later, the bank notified me that my account had been credited with a $1.5 million wire transfer. That was the first I knew about it. I had no idea it was going to be that much.’’

“What was your reaction?’’

“I called Mark that day,’’ Ferrari replied, his voice rising. “I told him, ‘You gotta get that money out of here. What the hell is going on?’ I told him I couldn’t believe such a large payment was related to a commission. He gave some long, complicated explanation.’’

“What was it?’’

“I don’t remember. But it calmed me down. Still, I demanded that he get all the money out of my account. Mark told me to wire like $160,000 to $180,000 to the account of another ADM executive, a guy named Reinhart Richter.’’

He wired the money to Richter and had retained the wire instructions. Afterward, Ferrari said, Whitacre promised to tell him where to send the balance. About sixty to ninety days later, Whitacre gave him instructions to wire the money to a Cayman Islands account. Ferrari said that he never kept a dime.

“You know, Whitacre is telling us something completely different,’’ D’Angelo pointed out.

“I don’t know what Whitacre is telling you. But this is the way it happened.’’

“Whitacre’s saying that you helped create these letters and invoices.’’

Ferrari looked stunned. “I can’t help what he’s saying. I didn’t do it.’’

“How long after you set up this account did you receive the $1.5 million?’’

Ferrari shrugged. “Like a month.’’

“So this happens a month after you set up the account, and nothing else ever happens with the account. But you didn’t set it up to receive this money?’’

Ferrari nodded. “That’s right.’’

“Did Whitacre tell you to set up the account?’’

“No, that was my idea. Mark had nothing to do with it.’’

Still, once he began reading in the newspapers about Whitacre’s money problems, Ferrari said, he began to fear the $1.5 million might be part of it.

“I called Mark, but he said, ‘These things have nothing to do with you,’ ” Ferrari said. “He told me the allegations all had to do with an unrelated transaction.’’

The interview wound down after several hours, with the agents pounding on the portions of Ferrari’s story that seemed to make little sense. Eventually, Ferrari volunteered that he had other dealings with Whitacre. Around 1994, he said, Whitacre had loaned him $25,000, which he had received in three checks of less than $10,000 each. Ferrari explained that he had repaid the loan about twelve months later.

“Did you repay it after the disclosure of the criminal investigation at ADM?’’

“No, that wasn’t why. Mark asked for it back in a phone call, and I paid it.’’

Had Ferrari ever heard of an illegal ADM bonus plan to pay executives offshore?

“Well, through the grapevine while I was in London, I heard something like that, about ADM executives receiving overseas compensation,’’ Ferrari said.

“Who did you hear that from?’’ Bassett asked.

“I don’t recall. But I do remember it had something to do with kickbacks and acquisitions of companies.’’

The agents discussed the records that Ferrari might have, and he agreed to put them together. They served him with a subpoena, requiring his testimony before the grand jury and the production of records.

“Think about what you told us,’’ D’Angelo said. “This is a long time ago; maybe you can’t recollect exactly how it happened. Let’s talk again. We’d like to be able to go into the grand jury and say that you’re cooperating. The worst thing you can do now is lie.’’

Ferrari nodded. “Yeah, I’ll think about it.’’

The agents prepared to leave. Ferrari stopped them.

“Uh, one other thing,’’ he said. “When you look through my records at Wells Fargo Bank, you’re going to find a twenty-five-thousand-dollar deposit from earlier this year. I used the money to pay down debt on our family farm.’’

The agents listened.

“The money came from my Wells Fargo safe deposit box. My wife and I are big savers; we’re very conservative, and we’ve always saved cash. But that money has nothing to do with Whitacre, ADM, or FES.’’

“Where did this cash come from?’’ Bassett asked.

“Just from savings. You know, I accumulated a lot of it before I was married.’’

This, the agents knew, was a topic they would have to revisit. But for now, the interview was over. They said their good-byes and left.

In the parking lot, the agents got into the car and shut the doors.

“This guy’s full of shit,’’ D’Angelo said.

“Yeah,’’ Bassett agreed. “He’s lying. His explanations aren’t good.’’

Bassett turned the key and drove out of the lot. Both men knew that they were far from done with Ron Ferrari.

In the days that followed, Reinhart Richter finally appeared—at least in the press.

After more than a week of haggling with ADM’s lawyers, Richter had been fired on September 22. Now, he was explaining to reporters that it was all part of a cover-up. Whitacre was telling the truth, Richter said, about ADM’s under-the-table bonuses designed to help its executives evade taxes.

In the interviews, Richter admitted receiving $190,000 in secret payments when he joined ADM. But, he maintained, Jim Randall, ADM’s president, had authorized it.

“He said to me, ‘What are you going to do with all that money? Are you going to buy a Ferrari?’ ” Richter told
Fortune
magazine.

Now, said Richter, he was feeling misused and bitter. When he told ADM’s lawyers about Randall’s involvement, Richter claimed that they had refused to listen.

“The lawyers ignored the truth,’’ Richter told
Fortune
. “They were just looking for ways to dump things on Mark and his colleagues.’’

Rapidly, the Chicago agents were facing a new problem: Relations with the prosecutors were deteriorating.

The first signs of trouble had been obvious during the summer, when the fraud prosecutors were pushing to wrap up the investigation quickly. What mattered, the agents had argued, was thoroughness, not speed. During the fall, the problem emerged again, at a meeting in Washington.

“This is an important case,’’ Spearing told the agents. “We need Whitacre indicted by Thanksgiving.’’

“We’re going to do a complete and thorough investigation,’’ Bassett responded. “And if it takes us past Thanksgiving, it takes us past Thanksgiving.’’

The agents argued that if they failed to follow up Whitacre’s allegations of corporate-wide wrongdoing, it would be his ultimate defense. The FBI investigation would be attacked for simply concentrating on him.

“We don’t care about that,’’ one of the prosecutors said. “We want Whitacre prosecuted. We can deal with these other allegations later.’’

This all seemed absurd. They hadn’t been allowed to interview any ADM executives. Records were still dribbling in. How could they close the case without all of the information? Still, by the end of the discussion, the agents agreed to focus their efforts on Whitacre.

But as the 302s came in, prosecutors grew annoyed. What was all this with Ron Ferrari? The 302 of that interview made it seem as though they were going after
him,
not after Whitacre. Finally, on October 13, Don Mackay and Jim Nixon called Rob Grant, the case supervisor with the FBI.

“Listen,’’ Mackay said, “we’re concerned you guys are deviating from the Whitacre investigation into other areas. Remember, at our last meeting we agreed that the focus would be Whitacre and everything else would be put aside.’’

“That’s what’s happening, Don,’’ Grant said. “Whitacre remains the focus. Everything that we’re developing that isn’t directly related to the frauds of him and his co-conspirators is not being addressed right now.’’

The two sides discussed access to information, with Grant spelling out some of the problems that were occurring between Springfield and Chicago because of the still-present Chinese wall. Springfield had interviewed Howard Buffett earlier, but wanted to speak with him again. Whitacre had told the Chicago agents information about Buffett. But, under the rules, none of that could be shared with Springfield before those agents sat down with him.

“Why is that a problem?’’ Mackay asked.

“It’s a fundamental desire on the part of all investigators to know as much as possible about an interview subject,’’ Grant responded.

Well, Mackay said, he didn’t like the restrictions, either, but they had been put in place by high-level officials in the Justice Department.

Abruptly, Mackay changed the subject.

“What’s going on with Scott Lassar?’’ Mackay asked. “What’s he up to? Is he pumping Mike and Tony for information? He’s only supposed to be getting it from us.’’

Grant took a breath. The bureaucracy was getting ridiculous. The prosecutors didn’t even trust each other.

That morning, Jim Epstein stood among a crowd of commuters at the Evanston station, watching as a train to Chicago rumbled to a halt. The doors opened, and Epstein moved forward with the crowd, finding his way to a seat.

Epstein hadn’t bothered to pick up a paper that day; he had plenty of work to review during his commute. He was reading a document when the man beside him brought out a copy of that day’s
Chicago Tribune
. Epstein’s eyes wandered over to check what was going on in the world.

And he froze.

Staring back at him from the top of the front page was a full-color picture of Mark Whitacre, dressed in a suit and seeming to be adjusting his glasses. Panicked, Epstein glanced at the headline that went with the photo.

ADM
MOLE DISCLOSES A CACHE OF
$6
MILLION; OFF-THE-BOOKS SCHEME ENDORSED BY BOSSES, FORMER EXECUTIVE SAYS.

Oh, my God.

“Excuse me,’’ Epstein said to the man beside him. “Can I see that a moment?’’

The man handed Epstein the paper, and the lawyer skimmed it quickly. It was worse than he imagined. In the first two paragraphs, Whitacre admitted acquiring millions of dollars through bogus invoices and then parking the money in overseas accounts.

Epstein sagged in his seat. The only way to save Whitacre from a long prison term was to keep him valuable to the government as a witness in the price-fixing case. But that meant keeping a low profile, not handing ADM more ammunition for cross-examination. And now, right there on the front page of the
Tribune
, his client had just publicly confessed to a multimillion-dollar fraud.

Later that day, Whitacre arrived for a scheduled appointment with his psychiatrist, Dr. Derek Miller.

“So,’’ Miller said after Whitacre took his seat, “I see that you’ve been talking to the newspapers.’’

Whitacre nodded. He seemed achingly depressed.

“Didn’t come out the way I expected,’’ he said. “I thought they were just going to write about my new company.’’

Things had been slipping out of his control, Whitacre explained. He was beginning to feel the way he had before his hospitalization. He recognized that his behavior had become grandiose. He was being secretive with everybody, he said.

“That’s how it’s always been,’’ Whitacre said. “Even when I was a kid, I would constantly disobey my father, but he never found out. He never found out.’’

At the end of the session, Miller told Whitacre that he wanted to increase his lithium levels. And from now on, he said, they needed to meet two times each week.

That night, Ron Ferrari was sitting on a living-room chair in his suburban Chicago home when he heard a knock at the front door. He glanced down a hallway. Through some glass, he saw his old friend Mark Whitacre on the stoop.

Ferrari felt a rush of anxiety. The FBI had rattled him; until then, he had been satisfied with Whitacre’s assurances that the government had no interest in him. Now, he was under investigation. After his first disastrous interview, Ferrari had moved quickly to fix things. He had hired Jeffrey Steinback, a defense lawyer who commanded a good deal of respect from Chicago law enforcement.

Since then, Whitacre had tried contacting Ferrari; today alone, he had left several messages. But Ferrari had decided to cut off contact for a while. Now Whitacre was on his doorstep, and Ferrari didn’t know what to do.

“Susan,’’ Ferrari called to his wife. “It’s Mark.’’

“What does he want?’’ she replied.

“I have no idea,’’ Ferrari said.

Ferrari walked to the door, stepping outside before Whitacre could say a word. He shut the door behind him. He would not let Whitacre in.

“Hi,’’ Ferrari said.

“Why haven’t you called?’’ Whitacre said rapidly. “I’ve left lots of messages.’’

“I know you’ve left messages.’’