Informant (69 page)

“Tony,’’ Bassett said. “You’re not going to believe this. I got a fax from Hoech.’’

“What?’’

“Yeah,’’ Bassett said. “The guy somehow figured out where we’re staying.’’

Supervisory Special Agent Kate Killham sat down at her computer in the Champaign Resident Agency, ignoring the sound of a train rumbling past her corner office window. Since taking responsibility for overseeing Harvest King, Killham had faced a lot of unpleasant moments. But this one, right now, was surely one of the worst.

For months, Killham had watched as the case tore at Brian Shepard. By any standard, Shepard was an emotional, pessimistic type who keenly felt attacks on his own character—and Harvest King had been loaded with plenty of those. Killham knew Shepard was paying a price in Decatur. He and his family had lost friends, particularly those who worked at ADM. The Shepards had felt snubbed by neighbors and had received the cold shoulder more than a few times. Everything Shepard feared in the first days of the case had come to pass. His home, his commitment, his entire persona as an FBI agent was under attack. He wanted out of Decatur.

Then, a break. A position opened at the St. Thomas Resident Agency, which reported through the San Juan Field Office. With Shepard’s experience and seniority, he was certainly a strong candidate for the job. If he won the transfer, the Shepards could move to St. Thomas and start over. Whenever Shepard was needed on the price-fixing case, he could fly back. It seemed the perfect solution. All Shepard needed was a recommendation from his supervisors, and he could probably start packing his bags.

Stukey and Hoyt turned the job of drafting the recommendation over to Killham, telling her specifically what to write. Now, with her shoes kicked off under her desk, she stared at the computer screen, feeling unsettled. She began by describing Shepard and his background, highlighting his work on Harvest King.

“He is tenacious, hardworking and dedicated,’’ Killham typed. “He is a mature, seasoned agent with a strong investigative background and a deep commitment to the FBI.’’

She reread the memo so far. This recommendation was sure to win Shepard the transfer. She took a deep breath. Now, as ordered, she killed Shepard’s chances. “Recommendation of SA Shepard for transfer to St. Thomas at this time is tempered by his crucial, ongoing contribution to the Harvest King investigation,’’ she typed.

Killham felt terrible. In a few days, that sentence would be sharpened, to ensure no one misunderstood its meaning: Shepard could not be recommended for the job. It seemed so unnecessary. Herndon was topflight; he could manage the case alone. Plus, Shepard could have handled any issues by phone, and flown back for the trial.

Clicking the mouse on her computer, Killham saved the memo and printed it out. An agent’s mental health had been sacrificed to Harvest King. It was, Killham thought, a horrible decision. Brian Shepard deserved better.

As the television cameraman turned on his portable lights, Mark Whitacre slid into a chair beside a potted fern. In front of him, a run-of-the-mill art print adorned the white wall of the conference room at Biomar International. The cameraman asked Whitacre to say a few words for a sound check. He nodded and spoke for a moment.

Across the table, Steve Delaney from
WAND News
in Decatur was in shirtsleeves, ready for his big scoop. For all of Whitacre’s press statements, this would be his first television interview. Even Ginger had agreed to speak on camera. In Decatur, Delaney’s report was sure to be huge.

For more than five hours, Whitacre, dressed in a blue suit with a red tie, took every question Delaney threw at him. Ginger, in an orange dress, looked calm and comfortable when Delaney directed his questions to her.

Sometime during the interview, Whitacre decided to drop his latest bombshell. On a Sunday morning in early March, he told Delaney, he had gone to the office to check his e-mail. In the lot, two men in a car called him over.

“I walked over, and they threw me in the backseat of the car and took me around for twenty minutes,’’ he said.

“Threw you in the backseat of the car?’’ Delaney repeated.

“Oh yeah, very much so, and in a very aggressive way,’’ Whitacre said, a wisp of a smile on his lips. “And they took me around for a twenty-minute joy ride and basically warned me that I better forget everything besides what’s on—this was March third—warned me that I better forget everything besides what’s on tape.’’

Delaney pressed for supporting evidence. But there were no witnesses and no security cameras outside. Still, Whitacre offered vivid details, from the make of the car to the way the back-door locks had been sawed off to ensure that he could not escape.

As Whitacre told the tale, the subtle smile flashed across his face several times. It was an old habit, something Whitacre often did when he was lying.

The entire abduction story was a phony. Whitacre had made it up—telling it to his family, to David Hoech, and now to all of Decatur—as part of a bizarre plan. He was feeling desperate and frightened. He wanted somebody to worry about him, to take charge of the mess he had made. He knew that if he told his lie to Delaney, it would be broadcast across Decatur. Whitacre’s intended audience would almost certainly hear his cry for help.

For Whitacre knew that Brian Shepard watched
WAND News
. Despite everything that had happened, once Shepard heard the frightening but fictitious tale of the abduction, he might fear for Whitacre’s safety. Then, Whitacre hoped, Brian Shepard might feel driven to reach out to him again.

And help.

C
HAPTER
18

T
hrough the expansive windows of his home office in Steffisburg, Beat Schweizer gazed toward the Castle of Thun, its Romanesque towers dwarfed by the majestic Swiss Alps in the distance. It was a breathtaking image, a vision from a childhood fairy tale come to life. But on this day, April 9, 1996, the panorama barely registered with him. The money manager’s mind was racing, caught up in the harsh realities of his life. His dealings with Whitacre had come at a terrible price, costing him security, opportunities, and freedom. Even the once pleasurable prospect of traveling to America was now tainted with fears of arrest.

As computer screens around him flashed the movements of world markets, Schweizer reached a new resolve. He would not allow himself to remain imprisoned in his own country. He wanted to confront his accusers. Schweizer telephoned his lawyer, Kurt Sieger, asking for the names and numbers of American officials involved in the case. In minutes, Schweizer was on the phone with the Office of International Affairs for the United States Department of Justice.

“Hello,’’ Schweizer said in accented English. “My name is Beat Schweizer. I’m calling about the American investigation of Mark Whitacre and ADM.’’

Schweizer’s call seeking a meeting with American investigators signaled a potential break in the fraud case. Until now, he had remained out of easy reach. And, as the man who ran more than $6 million through Whitacre’s bank accounts, he was sure to know more secrets than Hulse, Richter, or the others. There was even the chance—if Whitacre’s story of a corporate-wide scheme was true—that Schweizer moved money for other ADM executives.

Even so, government fumbling almost cost investigators the interview. Schweizer said that he would come to the United States only if he received assurances that he would not be arrested while in the country; the Fraud Section sent back word that they could not guarantee safe passage. Under pressure from Bassett and D’Angelo, the prosecutors reversed themselves, but then informed Schweizer that he needed to speak through his attorney—the
last
thing the FBI wanted. Finally, Bassett became involved in the arrangements with Schweizer, and the money manager agreed to sit down for an interview without his lawyer present.

The meeting took place on May 13 in a conference room at the Fraud Section’s Washington offices. Schweizer arrived alone, dressed in jeans and a sports coat. He took a seat on the far side of the conference table, warily eyeing the agents and prosecutors across from him.

Bassett handled the questioning. Schweizer said he worked at Swiss Bank Corporation in the Cayman Islands before striking out on his own in 1993.

“Have you managed money for many ADM executives?’’

“No. Just Mark Whitacre and Sid Hulse.’’

“How did you meet them?’’

“Hulse was a longtime customer of the bank. He introduced me to Whitacre sometime around 1991.’’

“What did you know about Whitacre’s assets?’’

Schweizer shrugged. “He said he had accounts in Europe, the Far East, Australia, and the Caymans.’’

Australia.
That was new. Bassett brought out some bank records and showed them to Schweizer. They seemed to indicate that Whitacre had accounts in Monaco and Germany, Schweizer said.

“I had assumed he spread his assets around for diversification. But I know nothing about the banks other than the geographic locations. I never confirmed their existence.’’

“What did Whitacre tell you about these accounts?’’

Schweizer thought for a moment. “I remember him telling me that his father had been employed in Australia and that his family was very wealthy.”

Bassett nodded gently with each statement.

“How did Whitacre end up as a personal client?’’

“Around January of 1994, I was contemplating leaving the bank and solicited Whitacre for his business,’’ Schweizer said. “During that time, I also helped him open an account at Swiss Bank Corporation in Zurich.’’

“Why?’’

“I was hoping he would transfer all his assets to Swiss Bank.’’

Methodically, Bassett guided the interview toward the $2.5 million transaction with ABP International—Whitacre’s first deal involving Schweizer, and the one first discovered by ADM.

Schweizer said that when the deal came about, he had not suspected any problems. Whitacre had told him that he and some partners controlled a company called ABP Trading, which was involved in technology transfers.

“Everything about this company sounded appropriate,’’ Schweizer said. “He promised me that his superiors at ADM knew all about it. He said he was dividing his work time eighty percent with ADM and twenty percent with ABP.’’

“What did he want you to do with ABP?’’

“In 1994, he asked me to incorporate a company in Switzerland that would be related to ABP. I tried to persuade him to incorporate offshore, since it would be easier and less expensive. In Switzerland, the government requires a capital deposit of $100,000 before incorporation. But he insisted on Switzerland.’’

Bassett wrote that down.

“Swiss law requires corporations to hire auditors,’’ Schweizer said. “He instructed me to hire Ernst & Young, because it was the same auditing firm used by ADM.’’

Schweizer shook his head. “There is something wrong with this man Whitacre,’’ he said. “Why take this risk, hiring the same auditors as ADM? It makes no sense.’’

“What did you do next?’’ Bassett asked.

Schweizer said he helped Whitacre open a corporate account for ABP Trading at Union Bank of Switzerland. Later, Whitacre delivered the $2.5 million check from ADM, filled out to ABP International of Sweden.

“But the check did not have an endorsement from an official of ABP International,’’ Schweizer said. “Union Bank would not accept it. The people in Sweden needed to endorse it. So Whitacre left and took the check with him. It came back to me with the signature. Then I signed it as an officer of ABP Trading, and the bank accepted it.’’

The investigators already knew that the signature on the back—for Lennart Thorstensson of ABP—was a forgery. Now, if Schweizer was telling the truth, it seemed that Whitacre was the forger.

All but $100,000 of the money was wired to the Caymans on Whitacre’s instructions, Schweizer said, to an account called SPM&C at the Caledonia Bank. From there, it was instantly wired back to Switzerland, to Whitacre’s personal account. It sounded like classic money laundering.

“What did you think was going on?’’ Bassett asked.

“I assumed he was hiding money from his partners,’’ Schweizer said.

“Now, your signature’s on the Union Bank account along with Whitacre’s. Was the one hundred thousand dollars left behind in that account as a fee for you?’’

“No, no,’’ Schweizer said, shaking his head. “That was Whitacre’s.’’

Bassett pressed on the SPM&C account, but Schweizer refused to discuss it, saying the account was private. Money went into it that had nothing to do with Mark Whitacre or any other client, he said.

The words struck Mackay as laughable. He glanced at Nixon and rolled his eyes. This guy was mixing client money into other accounts for no reason?
This was money laundering.

Bassett studied some documents. There was a second ABP transaction, he said, netting Whitacre $3.75 million.

“That occurred about a year later,’’ Schweizer said. “Whitacre came to me just weeks before. He showed me the documentation, and I noticed it again involved ADM.’’

Schweizer stroked his chin.

“I had a bad feeling about it,’’ he said. “He told me again and again that ABP would be doing business with many companies, that there were going to be drug companies and others. But again, it was ADM. I told him I would not accept any more transactions associated with ADM.’’

Once more, Schweizer said, the money was moved around in several accounts, including one on the Isle of Jersey.

“What were you paid for your services?’’

“We agreed I would receive a management fee based on the size of the account, about one percent,’’ Schweizer said. “I was probably paid fifty thousand Swiss francs.’’

A few minutes later, Schweizer mentioned his interviews with Fridolin Triet of the Zurich District Attorney’s office.

“I have spoken to Swiss prosecutors three times, for a total of about twenty-four hours,’’ he said. “I was questioned by Mr. Triet and by lawyers for ADM.’’

The room fell still. “Lawyers for ADM?’’ Bassett asked.

“Yes,’’ Schweizer said. “They were the ones who provided the questions. The translations were very sloppy. Even Triet had trouble understanding them.’’

Bassett asked Schweizer to identify which ADM lawyer had attended the interview. Schweizer said he didn’t know, so the agent began listing names of lawyers.

“That one,’’ Schweizer said after hearing a name.

Bassett took a breath. Schweizer had just identified Aubrey Daniel.
*
ADM’s lawyers were interviewing these witnesses before the government had a chance.

At that point, Bassett brought out a 302 from one of Whitacre’s interviews. Schweizer said he had seen the document before, during a meeting with Swiss prosecutors. That was no surprise; a copy of the confidential document had been sent to Triet for that reason.

Schweizer studied the faces of the assembled group.

“I saw it in the hands of the Williams & Connolly lawyer,’’ he said.

The room went numb with realization.

ADM had been obtaining American law-enforcement records from the Swiss—
right at a time when company executives were still potentially targets.

The investigation had been compromised.

News of the Swiss leak hardened attitudes in the government against ADM. For months, the company’s lawyers had been dragging their feet, seeming to produce documents only when they felt like it. It had been good lawyering and had seemed hardly worth a battle. But now, everything was
backward.
The company had government documents, but the government didn’t have records it needed from ADM. Even ADM’s accountants, Ernst & Young, were refusing to comply.

The agents were particularly suspicious. The subpoenas covered records of ADM subsidiaries in the Cayman Islands, with names such as ADM Feeds Vietnam and ADM Animal Health and Nutrition Ltd. Perhaps, the agents thought, these documents might prove Whitacre’s story of a corporate-wide illegal bonus system. Williams & Connolly filed a motion to quash the subpoena; a secret proceeding on the motion was scheduled before a federal judge in Peoria.

This time, the company could not be allowed to win. This was going to be war.

•   •   •

For three days, beginning on May 30, more than one hundred world leaders gathered on the outskirts of Toronto at the CIBC Leadership Center. They had come to the elegant converted spa for the forty-fourth annual gathering of the Bilderberg Group, an alliance of some of the world’s most influential people. David Rockefeller was there; so was William Perry, the American defense secretary. Joining them were an assortment of monarchs, prime ministers, and industrialists, all invited for secret and frank talks about the direction of world economies and governments.

One executive in attendance, Dwayne Andreas, was keeping his eyes peeled for another invitee—Henry Kravis of KKR—in hopes of being able to confront the buyout specialist. Despite his advisors’ skepticism, Andreas remained convinced that Kravis was working through Beattie to cripple ADM with a price-fixing settlement—leaving it vulnerable to an easy takeover. He wanted to personally tell Kravis that ADM would not be such easy pickings.

Eventually, he cornered Kravis. In a suspicious tone, he spelled out a few details about Beattie.

“Do you want ADM?’’ Andreas asked. “Are you after my company?’’

Kravis stared at Andreas evenly. He had no idea what the man was talking about.

“No,’’ Kravis replied. “I’ve got no interest in ADM.’’

A few minutes later, Kravis disappeared into the crowds of the powerful. Andreas was left behind, uncertain.

By June, Shepard and Herndon were ready to wrap up the investigation into ADM’s possible technology thefts. No new evidence had been developed in the months since Shepard had obtained the purported list of questions for prostitutes from Joseph Graham, the former ADM executive. It was beginning to look like a dry hole.

Other problems seemed insurmountable. For one, the most recent potential crime appeared to have taken place five years before, in June 1991. But prosecutors faced a five-year statute of limitations, probably leaving them out of luck if charges weren’t filed immediately. Topping it off, some of the purported activities might not have been crimes, such as trolling for microbes in sewers near competitors’ plants. After all, garbage was public domain.

Prosecutors pushed the agents to drop the theft investigation and work exclusively on the more promising price-fixing cases. Before shutting down the effort, Shepard and Herndon decided to polygraph Graham. Herndon felt sure the witness would fail. Then, at least he could be comfortable with the knowledge that ADM had not escaped the possibility of being charged on a technicality.

On June 4, Graham sat down with a Bureau polygrapher. During the interview, the polygrapher asked two relevant questions: Did Graham lie when he said that ADM executives had met with a security firm about stealing microorganisms from a competitor? Did he lie when he said that the executives had discussed using prostitutes to gather information about competitors?

Both times, Graham answered that he had not lied.

When the test was done, the examiner called Shepard and Herndon into a room alone.

“He passed,’’ the examiner said.

Graham was apparently telling the truth. And, largely because of statute of limitations problems, there was little the government could do about it.

Anxiety was spreading at Biomar International about the start-up’s finances. Since October, when Whitacre had joined as chief executive, the company—then called Future Health Technologies—had burned through its reserves quickly. A new cash infusion was needed desperately.