Transcripts For CSPAN2 Booknotes 20131102 : vimarsana.com

Creating their own image and so i think its valuable sometimes to go behind that. So usually i am the one who is trying to get behind that and tell you whats going on. Next on booktv encore booknotes. The informant is the count of the fbi and Justice Department collaboration with the highlevel informant to collect information implicatiimplicati ng a large corporation. In this booknotes interview from 2000 author Kurt Eichenwald reveals how the scandal in the mid1990s was complicated when the government discovered its source a Senior Executive at the firm was involved in his own illegal activity. This is the second part in a twopart series. You can watch the first part on line on booktv. Org. Cspan Kurt Eichenwald, what is the brief synopsis of the informant . Guest the informant is about the highestranking Corporate Executive who ever worked as a cooperating witness with the fbi, who was producing evidence of an international pricefixing conspiracy at a Company Called Archer Daniels midland, on one level. On the second level, its the story of how that individual, during the entire time he was working with the government and working as a senior officer at the company, was simultaneously losing his mind. And, ultimately, that sends the case spinning out of control in ways that, even while i was going through it, even while i was living through it as a reporter, were pretty hard to believe. Cspan do you remember the first time this story came to your desk . Guest iit was interesting the first time the story came up wasthere had been raids by the fbi on five companies, and it had really not attracted a lot of attention. Then there was an article in the wall street journal that revealed that the cooperating witness was this very seniorranking executive at adm, and that was tantalizing because, i mean, adm, particularly to people in washington, is known as an exceptionally powerful, exceptionally Secretive Company the idea that somebody was out there recording everyone inside without their knowledge waswas certainly tempting. But, for me, thethe moment where i really decided i had to be in on this storybecause at the time it was breaking, i was actually out of towni was in the houston hobby airport. I remember thwith great detail, walkingwalking to myto my plane to dallas, and there was a magazine stand that had the cover of Fortune Magazine with this gentlemans picture, this cooperating witness, Mark Whitacre. His picture was on the cover and the words my life as a mole with the fbi. and i literally stopped and said no out loud and walked over and bought the magazine because, i mean, i write about criminal investigations for a living, and this was the first time i had ever seen, six weeks after the raid, the cooperating witness stepping forward and basically being, you know, a cover boy for an article where he spilled the secrets of what was going on in the investigation. And i read the article on the way from houston to dallas several times, and by the time i landed, called mymydecided that that was it; this was a case that was unlike any other, largely because the witness was doing what he was doing. And i called my boss at the New York Times and said, if nobody else wants to do this story, i would really love to do it. and that. Cspan where were you based . Guest i was based in new york. I was based in new york. And it wasntit was when i got back i picked up the story. Cspan what year was this . Guest this was 1995; it was august of 95. And i ultimately met with Mark Whitacre, who is the informant of the book title, in september. Cspan where is Mark Whitacre today . Guest Mark Whitacre is currently serving a 10 1 2year presprison sentence inin south carolinain a federalat a federfederal prison camp in south carolina. Cspan when did he go into prison . Guest he went to prison in 1998. He is expected to come out inor at least under his sentence, he will come out in 2008. And hehe was a person who, you know, at first, everybody thought he was going to be the hero, and then it ended up that the whole time he was working for the fbi, he was also stealing millions of dollars from the very company they were investigating, laundering the money in swiss and Cayman Islands bank accounts. Cspan whos Dwayne Andreas . Guest Dwayne Andreas is a giant on the political and international landscape. He is a fellow who most americans probably havent heard of, but most politicians probably can never forget. This is a fellow whowhenever theyre talking about Campaign Finance reform, youre always going to hear the name Dwayne Andreas coming up. He, dating back to thethe time of thomas dewey, has been aa major contributor to both political parties. Every white house occupant, going back to at least kennedy, has been a close associate of Dwayne Andreas. And he has had an enormous impact on the laws of this country, as theyveas theyve been shaped. He ishe ishis voice has been heard, and theres not a year that goes by where they dont debate such standards as adding ethanol to gasoline, where thethe biggestthe biggest benefit for that rule is the Archer Daniels midland company. And there are people who say flatout, you know, we are giving adm, we are giving Dwayne Andreas billions of dollars a year. but itsitshishis level of influhis level of influence is virtually unprecedented. Cspan theres aan allusion in your book to bob dole and bob strauss and Dwayne Andreas and David Brinkley, all getting together at a certain place in florida. Guest the sea view hotel, which is owned by Dwayne Andreas. Hehe gained control of it many years ago and became something of afor lack of a better term, a local realtor for the politically powerful and started finding apartments, helping people get inside deals on apartments for hisfor his friends among the powerful in washington, both in the political sphere, like bob dole, like bob strauss, and in the journalistic sphere, like David Brinkley. Cspan and David Brinkley does those ads for adm that are seen on the morning shows, onon sunday morning. Whats that all about . Guest well, admif anybodys heard of them outside of washington, its usually in watching the programs that are most viewed in washington. This week with David Brinkley was sponsored by adm for many, many years. They purposefully advertise on the programs that are tarthat arethat arethat are very widely watched among the people in the halls of power in washington. And so after innumerable years of sponsoring this week with David Brinkley, David Brinkley retired and became a spokesman for adm. Cspan where is Dwayne Andreas today . Guest Dwayne Andreas continues to reside in decatur, illinois, where he is chairmanemeritus of adm and playshe was just recently reelected to the board of directorsplays a role in thein the operations of the company. Cspan how old is he . Guest hes in his 80s. He ishe is a man who is winding down significantly. Cspan mick andreas . Guest the son. Mick andreas was born to power. His godfather was hubert humphrey, also a very good friend ofof dwayne. And mick had always been destined to be his fathers successor, thethe man who would take the throne, the man who would gain control of this corporate and political behemoth, and ultimately, got tripped up and caught inin thethe tapings that took place at the company and was recorded engaging in both criminal conspiracies as well as actions that would certainly cause any member of a board of directors toto wince and perhaps suggest aa resignation discussions ofof female executives, blatantly sexist discussions. And mick is now serving a threeyear prison sentence, which began sometime earlier lastthis year. Cspan you say a couple of times in your book that theres a big statue of Ronald Reagan outside the adm plant in decatur. Howd that get there . Guest reagan came for a visit to decatur in 1984, and Dwayne Andreas decided it would be a wonderful idea to, basically, build a monument to this visit, basically, you know, solidifying his very close relationship with reagan. Reagan had beenhad been raised in dixon, illinois, which, really, is a town not much unlike decatur. And so Dwayne Andreas liked toliked to talk about how, you know, the president and he were just, you know, boys from the midwest. Andand when he came out to decatur, theythey built this multiton statue to reagan, which stands to this day. I mean, thethe visit from reagan was one of the biggest things that hit decatur, in terms of famous people, until gorbachev came to visit Dwayne Andreas a few years later. Cspan you mentioned sea view, florida and decatur, illinois, but theres also several mentions of a manhattan apartment for Dwayne Andreas. Guest yes. I mean, dwaynedwayne is notyou know, he lives in decatur, illinois, but hes not a hick. I mean, this is a guy who has an enormous amount of power, an enormous amount of money, and he hashe has homes in multiple locations. Thethethe home inin manhattan is a reflection of the fact that theyretheyre here a lot. Im sorry, im not in manhattanthat theyre in manhattan a lot. And so hehe jets between manhattan and florida and decatur. Cspan how long has he been with adm . Guest he joined admhehe was brought into adm in the late 1960s when the company waswas really starting to fall apart. They werent able to pay their dividend, they werent able toto report numbers that would make their shareholders happy, and somebody came up with the great idea that, well, theres this fellow, Dwayne Andreaswho, at that point, was already a giant in the agricultural industryand he has a lot of influence. He knows a lot of people. Hes friends with humphrey, hes friends with dewey, hes friends with kenwell, hes friehes frihas a lot of friends in the white house. Hasalways has. Why dont we bring him in . and so a large block of shares were sold to Dwayne Andreas. He was placed on the board, and in no time he was the chairman, and he moved the company from its operations, which were then in minnesota, to decatur, illinois. Cspan what does adm do . Guest adm is a company that all of us do business with every day of the week, whether we know it or want to or not. They makeif you pick up any packaged foods and you turn to the ingredients, youll look at those extremely hardtopronounce items on eachon each description. Those are made by adm, a lot of them. Adm takes farm stapleswheat, soybeans, corncrushes them up and then strips out every last ingredient they can think of. In the way the company worked up until the late 1980s, it was purely aa crusher. It wouldit would crush corn, it would crush all of these staples. And they would make things like citric acid, which youll find in soda popyou know, coke, pepsi, 7up. Theyd make wheat flour. Theyd make sodium gluconate. They make all of these little ingredients, so you end up finding their food in, you know, everything from pepperoni to popsicles. You know, you have evenwhat ive always found amazing is, you know, babies that are having soy formula, well, theyre drinking adm products, and once they graduate to gerber food, well, guess what . They still are. Its sortsort of, you know, americans get raised on a taste of adm. In the late 1980s, they decided that the future of this business was in a form of bioengineering, not creating a new food, but using bacteria with specific jobs to create other ingredients, and the first one they went into is something called lysine, which is used to fatten up pigs and chickens by adding it to their feed. And that requires a particular bacteria, which goes into a gigantic fermenter. You feed them corn dextrose, or at least adm feeds them corn dextrose, and the bacteria ultimately converts that dextrose intointo lysine, which is then packaged and sold to the farmers and goes to the chickens, and we ultimately pay for it ourselves when we buy our chicken mcnuggets. Cspan how big of gross business do they do every year . Guest its a 20 billion a year business. Cspan how many employees . Guest i dont know, but i know it numbers into the thousands. Cspan how many plants around the world . Guest theirtheir plants are everywhere. I mean, thethe exact number, i dont know. Thats the kind of question that i would turn to their sec filings and look up. But they are in asia, they are in europe, they are in america, theyre in latin america. Theythethe plants are just hundreds. Cspan where is decatur, illinois, located . Guest decaturdecaturs smack dab in the middle of the country. Itsits pretty hard to get any more middle of the country than decatur. And its a town that is really a reflection of the companies that are there. I meanwhats interesting, its a town thats had a lot of problems in recent years because you had the adm pricefixing scandal followed very quickly by some issues thatin the local schools, some racial issues that brought the reverend Jesse Jackson into town. And immediately after that, you had the firestone problems with the recall from the tires, and everybody said, well, didnt those tires all come from that plant in decatur, illinois . So this isthis is a town thatsthats been hit byby snational scandal after national scandal. Its kiand its kind of hard. I mean, iive talked to a lot of people in decatur. Its kind of hard on them because, you know, itsits still largely a bluecollar and agricultural community, and, you know, suddenly, thethethethe cameras of the world are focused on them, and it keeps happening again and again and again. Theyre sort of a little perplexed. Cspan how many times have you been there . Guest over the last five years, iveive certainly lost count. Ive been there a number of times. Theres actually this whole corridor rightright around decaturspringfield, champagne and urbanawhere a lot of these events took place. I mean, the fbi was in urwas in champagne and springfield and decatur. The courthouse was in urbana. And so theres a lot of driving on interstate 72. Its a veryits a very long, open drive where you see cornfields, soybean, you know, depending on the time of year. And its aits a drive i got very used to, put it that way. Cspan where are you from originally . Guest well, i was raised in dallas, texas, and now ii live outside of new york city. Cspan and whered you go to college . Guest Swarthmore College in pennsylvania. Cspan how long have you been with the New York Times . Guest for 16 years. Cspan what got you interested in writing . Guest its interesting, what got me interested in writing wasritll sound clichewriting for the school paper. But thethethe biggest thing that got me interested in writing was how boring i thought the school paper was. I remember ii had just written some article about parents night, which i thought was probably the most boring thing in the world, and was talking to a teacher, mike shepherd, whothen i said, gee, i really want to write things that are more interesting. and he said, so why dont you . and heunder his encouragement, i went off and wrote an article about laetrile for the school paper. I thought, well, that was kind of interesting, and that started me down a path of just writing about topics that appealed to me. And, ultimately, you know, ii realized you really canas a writer, you can look at anything, you can do anything. You canif you decide youre interested in politics, well, the reporting for politics is the same as the reporting for a scandal or reporting of a feature story. You know, justyou just have to apply it. And so i started eventuallyat the times, i started jumping around from topic to topic of just things that caught my fancy. Cspan bob strausshow does he relate to the adm corporation . Guest well, bob strauss, starting in about the late 1960s when he and Dwayne Andreas went to the same fundraiser for lloyd bentsen, a senator from texasbob strauss and Dwayne Andreas had been best of friends. They speak by phone all the time. And dwayne ultimately had him nominated and he was approved to be a member of the board of directors of adm. In the course of this investigation, which was almost shakespeareani mean, you had the chairman father ofof immense power standing by as his son isis subject to a criminal investigation, you know, the son who he has chosen to be his successorbob strauss played a very important, behindthescenes role, which is kind of bob strauss way of doing business, basically in terms of smoothing the way toward aa settlement between adm and the government. Therethere was a faction within adm thatthat wanted to fight this case to the death. They hadthey had a lot of good reason. I mean, you know, when theywhen they looked at the case, you had the informant, the cooperating witness, Mark Whitacre, had blown up. I mean, he hadhe had been found to be stealing millions of dollars. He was under criminal investigation himself. There was a possibilityfarfetched, but a possibilitythat the government might not even be able to introduce the audio and videotapes of the criminal activity in admthey might not be able to introduce it in a court. And so there was a faction within adm that wanted to fight this to the end. It was aa foolish approach because, ultimately, everybody else who was in the roomyou know, adm did not conspire withwith Mark Whitacre; they conspired with japanese corporations and european executives and korean executives. And the government went and cut deals with them, and their testimony was used to get the tapes introduced. Adm, by that time, had cut its own deal, having seen the light, i suppose. But mick andreas and one of his colleagues who was also charged, terry wilson, did not. They went to trial and were ultimately convicted. Cspan tterry wilson and mick andreas are in prison where . Guest theyre both in minimumsecurity prisons, which, for the life of me, ive forgotten the name of. But theytheytheythey are inin thein the camps. Cspan ii remember reading a story about when they were resentenced by a judge, because they didnt get enough of a sentence, they were going to be sent to wisconsin somewhere. Have you met either one of these gentlemen . Guest i have to be careful how i answer those questions. I have certainly met them in the context of a trial, so i have, you know, publicly seen them and talked to them. Cspan why do you have to be careful . Guest well, one of the things about being an Investigative Reporter is you make a lot of promises, promises to people aboutabout who youre going to tell thatwhat theyre saying or whether they spoke to you at all. A problem with that deal is if somebody speaks to me or doesnt speak to me, i really cant say because, you know, if you ask me, what about person a, and i say, well, i didnt speak to him, and you ask, well, what about person b, well, i cant answer that question. You know, ive just given it away. And so the rule that i always live by is if i havent, for some other reason, revealed that ive had discussions with this person, or if those discussions did not take place in a public place, i just tend not to answer it and say ii really cant discuss sources of information oror meetings or whatever. Andand its very important because, ultimately, you know, imim nothing more than whatwhat information im able to get, and there have been many a long night withwith corporate insiders, whistleblowers and the rest, you know, in their homes, in parked cars, talking to them about protecting their identity, talking to them about greater truths, and talking to them aboutabout why i can be trusted. And thatthis is sort of the ultimate payoff of that deal. That is thethat is thethat is the obligation that i undertake every time i do one of these stories. Cspan youyou say in here that you had 100 interviews and 800 hours of interviews. Didmick andreas, who was going to be the chairman of the board of admwhat impact did this have on him that you know of, personally . Guest on himon his personal life . Cspan other than the fact that hes in prison, i mean, whatwhat was his reaction to getting caught and getting indicted and getting convicted . Guest well, it was interesting. Getting caught foritonce you view the tapes, once you see whatwhat mick did, it is impossible not to walk away and say not only is this guy a crook, not only is this guy engaged in a scheme to defraud everyone around this country, but given his personal traits, givengiven thethethe clearly sexist attitudes he has, that in a modern corporation, hes reallyhes really not fit to be a Senior Executive. Mick apparently didnt see it that way. Fromfrom his perspective, he was someone who had been trappedentrapped byby Mark Whitacre; that he was somebody who had been manipulated into a situation; that he was not involved in any illegal activities, and as far as he was concerned, everything he was doing was perfectly proper. Now, i mean, youyou look at the tapes, and thats just simply laughable, but mick andreasyou know, his marriage has survived, his family stands by him. Cspan how much money is he left with . Guest quite a bit; tens of millions of dollars. He. Cspan how about terry wilson . Guest terry wilsonterry wilson ultimately is the man who went down in flames for the andreas family. He, at any point, could have cut a deal. He was thehe was the guy they had on tape more than anyone else. He was the guy who would sit there saying some of the juiciest, you know, conspiracy quotes of all. You know, watch your telephones, and, the competitors are our friends, and the customers are our enemies. and the prosecutors, when the case started falling apart, were hungry, eager to make a deal with terry wilson, but he wouldnt do it. From his perspective, he had a moral obligation to the andreas family. He was a man who hadhe had some personal family problems that the andreases had helped him with over the years, and he just made this commitment that hes not going to turn on mick. Cspan any evidence at all that Dwayne Andreas knew what his son was doing . Guest the government chose not to bring charges, and there certainly was not enough evidence to support a charge based on the reviews of the information that i saw. You do, however, have to wonder you know, this was not an activity at adm that was a quiet secret. This was not something where they werethey were fixing prices on lysine and nowhere else. Guest they were involved it in lysine, they were involved in it in citric acid, they were involved in it inincertainly theres evidence they were involved in it in msg. There werecertainly there was evidence they were involved in it in sodium gluconate. There are tapes that support it and you really have to stand back and wonder, where did all this start, and how could all this be going on without the explicit or implicit knowledge of the chairman . now i cant, obviously, conclude one way or the other, but you certainly are in a situation where if he didnt know, its almost as bad as if he did because it was going on everywhere. Cspan how does Brian Mulroney, the former Prime Minister of canada, relate to this story . Guest Brian Mulroney is also a friend of Dwayne Andreas. Itsthis is going to be aa frequent response. Brian mulroney was named as the chairmanim swaswas named to the adm board of directors and was named as cochairman of the special committee of directors, who were charged with settling this case, investigating this case, basically handling the case for the company. And he was a man in a very complex situation because, you know, as i was saying, the evidence was overwhelming, yet he was a very close confidante of Dwayne Andreas. And youre talking about the chairmans son was going to go to jail. So hehe washe was definitely walking through a very complex maze. Cspan ross johnson. Guest ross johnson, man made famous by the book barbarians at the gate, the former chairman of rjr nabiscothe book and movie barbarians at the gate. And he was named as an adm director. He was a member of the special committee, and he also played a role in the ultimate outcome. Cspan now go back to what we were talking about, politics, earlier. Theres a little vignette you have in your book about a man named Howard Buffett and dick durbin. Now you found the dick durbin part of this, and imim not shas it ever been acknowledged that it was him to you . Guest wnow were talking about the Football Game . Cspan the football tickets. Guest thethethere was an acknowledgementii believe it says in the book there was an acknowledgement that they went to the game, but there was not an acknowledgement that they solicited tickets. And thand that section iswhatbasically, what the story is, is thatis that Howard Buffett, who is the son of Warren Buffetti mean, this book really is an allstar cast. Cspan whos Warren Buffett . Guest Warren Buffett is thethe famed investor, whosewhose biographies are snapped up by everyone trying to figure out how Berkshire Hathaway made all its billions. Hes the man who, probably more than anyone elsei think at this point, hes either the wealthiest man or the second wealthiest man, but probably more than anyone else isis the sage ofof modern investing. And his son, howard, was assistant to the chairman, Dwayne Andreas. And in this story, in this event that takes place in the book, there was athere was aa point where they were discussing going to a Chicago Bears game, dick durbin and Howard Buffett. Now whether a request was actually made or not is not quite clear. It is clear that there was a belief that a request was made. And adm and Howard Buffett waswaswas warned by a secretary, well, thisthis this kind of thing, you know, mightmight violate somesome ethics rules. and so they went and had a lawyer look into it, andand the lawyer came back and said, well, its fine as long as the congressman pays for half of it. and buffett called durbin and said, you know, youre reallyyoure going to have to pay for half of it. and durbin was apparently very gracious and said, you know, thank you very much. it was not an issue for him. He wasntapparently he wasnt trying to get free tickets. But Dwayne Andreas had aa different reaction. Cspan ive got the quote here on the page. Guest ok. Cspan howard, talking to Howard Buffett, andreas said sharplythats Dwayne Andreasyoure useless to adm if you have to ask for an attorneys opinion every time you get a request. and earlier he said, if a congressman asks you to do something, you do it. Andreas snapped, if theres something wrong with it, thats his problem. now how do you find that kind of quote . Where do you get that kind of a quote . Guest that quote originally is referenced inHoward Buffett was interviewed a couple of times by the fbi, and whenever an fbi agent interviews a witness, they take notes, which are ultimately transcribed into a document called a 302. Now in the course of the reporting for this book, i obtained virtually all of the 302s that werethat were collected, both for the antitrust investigation and the subsequent fraud investigation. Buffetts interviews were part of the antitrust investigation. And he, very early on, within the first week ofofafter the raids, sat down with the fbi two times. And inii think that story comes from the second time, and he retold that story andand quoted that material. So thatthat was the original source material for that story. Cspan Howard Buffett, throughout your whole book, sounds unhappy. And is he still there . Guest Howard Buffett resigned, basically within days of his second fbi interview. Hehe was uncomfortable with the way things were going at adm, and what was odd is that whitacreyou know, as i mentioned, whitacre was an individual who, in the course of this whole thing, waswas losing his mind. Whitacre had, prior to the raids, notified a number of people inside adm that the fbi was investigating the company; that he was working as a cooperating witness; thatthat they were going to be visited on june 27th, 1995, he told Howard Buffett, at 6 00. And buffett didnt quite know what to make of this when he was told it, you know . So ive heard this story he went out and, you know, rode on his tractor, going, you know, what do youwhat do you do . this is a midwest response, i guess. what do you do when youwhen youre in this position . how does he know if whitacres telling the truth . And at 6 00 on june 27th, the moment of truth came. The doorbell rang. The door is opened. Theres an fbi agent, you know, just as told. And whitacre was telling a lot of information about the investigation, and buffett became increasingly uncomfortable with what he was hearing and decided to resign. Cspan ghow big a deal is this . I mean, put it into perspective for people that may have not paid any attention to this story. And the finehow much was adm fined . Guest adms fine was 100 million, but you have to bear in mind that is athats a deal. It was a deal because adm offered up evidence against other corporations involved in another pricefixing conspiracy, and so they were given a break. You know, its a plea bargain. So ultimately, how big a deal this is, in the antitrust perspective, its the biggest there is. Adm, at that point, was the largest fine ever imposed inin a pricefixing case. Now where this gets more importanti mean, i write about corporate crime for a living, and i have, you know, pick of the litter of what i want to choose. I can write about healthcare fraud, i can write about antitrust, i could write about virtually anything. This is the one i chose for a book for a couple of reasons one, the story in and of itself isis so bizarre as to border on the surreal at times; and two, because when you get right down to it, this was the biggest whitecollar conspiracy ever exposed by the federal government. You know, whenyouyou have to look at not just what happened to adm, but what happened to all the dominos, what happened to all the conspirators. The Japanese Companies cut deals and named adm. Adm cut a deal and named the European Companies in the citric conspiracy. You know, they name others, and the dominos keep falling and falling and falling. In the last four years, you started off with adm paying 100 million. Youve now had i believe its hoffmannla roche pay half a billion dollars. And each domino is knocking over somebody else. Isitsits the interesting thing about price fixing. If youre actually going to be the kind of person who pricefixes, youre not going to say, well, only in this product. you know, were notwere not going to do it in our other products. well, whats interesting is you have different competitors in eachin each product line. So if you were pricefixing in product a and they nail you with tapes, well, you can now go in turn and name everybody youre doing buyoure doing illegal business with in product b, who have the same situation. And so, at this point, there are some 30 grand juries looking into pricefixing in the feed andand in the Food Additives business, who are digging up an enormous amount of information. Cspan a couple of other smallnot small things for the people, but just to connect thethe dots here. Anne bingaman, the wife of senator Jeff Bingaman of new mexicowhat role does she play . Guest Anne Bingaman was the head of the antitrust division throughout most of these events sheshe was the person who supervised the antitrust Division Starting in washington and going down to the chicago field office. And ultimately, shes also the persontheretherethere are quite a number of power plays that go on in this book, and one of them is theres a dispute between the local us attorney in springfield and the antitrust division about when to do the raids, how to go forward, how to handle this. And so there are negotiations, which the springfield us attorney walks away from thinking, now the case is ours. and this sets off a firestorm at the antitrust division. I mean, this is the biggest case theyve ever had, and now theyve turned it over to springfield . And there is ultimately aa Conference Call with quite a number of people on it, where the springfield us attorney reminds Anne Bingaman, anne, remember, we agreed id have the case. and bingaman comes back with a series of statements that melted phones all over the country about, you know, i am the assistant attorney general in charge of antitrust. I have been appointed by the president of the united states. I am here to make sure that we aggressively enforce these laws, and it will be over my dead, kicking, screaming body that you get this case. and that was the end of it for the springfield us attorney. Cspan by the way, is the john r. Block on the board the former agriculture secretary . Guest yes. Yes. Cspan under a republican administration. Guest yes. John block himself is a former farmer, who was then secretary of thesecretary of agriculture, whohe was named to the board after these events really blew up, after the pricefixing case was known, and so, you know, hihis involvement waswaswas virtually nil. But. Cspan you also talk a little bit about Allen Andreas. Who is he, and what role did he play . Guest Allen Andreas plays aato me, what is a fascinating role. Imimim somebody who loves irony andand circles. And at the very beginning of the book, allen was working in 1992 as aas aan executive in the london offices of adm, and there was this bizarre story that emerged from decatur. Whitacre came in saying that he had received a telephone call from a japanese executive saying that a Japanese Company had been sabotaging adms lysene plan. And this japanese executive, whitacre said, had told him that he would reveal the identity of the saboteur and provide these superbugs from japan that could resist the virus that was ubeing used for the sabotage if he was paid 10 million in a swiss bank account. Well, ultimately, the andreases, both mick and dwayne, decide that, you know, this is not something to take lying down, and they call allen. Cspan now wait a minute. Just a second. Dwayne andreas is the chairman. Guest dwayne is the chairman. Cspan . Thethe older of all the andreases. His son, mick, is the vice chairman. Guest yes. Cspan and allen is what relationship . Guest allen is dwaynes nephew, micks cousin. Cspan throughwhat . Dwayne andreas sister or brother, or do you know . Guest imim actuallyi actually dont remember. Iii think its a brother, but im not sure. Cspan ok. Guest and allen has Something Else that makes him beneficial; he has some particularly close contacts with the cia. And so they call allen in london in this bizarre phone call thats described in the book. Cspan the andreases. Guest the andreases. Firstfirst, dwayne calls and says something like, youre goingyou know, do you still have your friends in london . and this sort of code conversation going back and forth. And ultimately, mick calls and lays out the story of the saboteur, lays out the story ofof this individual, this japanese executive, who whitacre was calling fujiwara. And. Cspan mademade it up . Guest yeah. The whole story was mayeah, thats thethe punch line of all this is that the wholethe whole story of the japanese executive is fiction. Cspan fujiwara didnt exist . Guest fujiwell, fujiwara was a real guy, but he never made thishe never made this phone call. Cspan heoh. Guest whitacre had just made it up. And so he tellsmick tellsmick andreas tells Allen Andreas, in london, about this, you know, sinister fujiwara phone call that hed heard about, and allen goes to the cia and says, help us. the cia, in turn, refers itbecause its aits a criminal matter, its a Law Enforcement matter. Its aits aits an extortion plot, essentially. And they refer it to the fbi back in the united states. So in no time, in a couple ofcouple of days actually, afafter thethe phone call to the cia, the fbi shows up in decatur saying, whats this about a saboteur . and like you said, itswhats so ironic about the whole thing is that, ultimately, the whole saboteur story is a phony. It never happened. And then the final irony is this sets in motion the events that lead to the criminal investigation of adm, that lead to the criminal invinvestigation of mick andreas, that knock mick andreas out of his position as heirapparent to take over the company, and in his place is selected Allen Andreas. So its sort ofits sort of this. Cspan hes now chairman of the board . Guest he is now chairman of the Archer Daniels midland company. Cspan go back to ground zero again on this. First of all, what is pricefixing, and why is it a crime . Guest pricefixing isthethe easiest way to say it is tin my mind, its a betrayal of capitalism. The whole concept of capitalism is that you have a bunch of companies out in the free market competing for your business, and theyll either offer the best product or the best price. That then is supposed to reward the most efficient and the mostthyou know, ththose that do the job the best. When you have pricefixing, that doesnt happen. The power of the consumer is dead because, rather than them competing head to head trying to get your business, they just say, forget him. Lets sit down and decide what were going to charge. cspan isnt there a famous quote youve got in here that theabout the competitors and the consumers . Guest thatthatthis is, yeah, the adm quote; that, thethethe competitors are our friends, and the customers are our enemies. cspan and thats what they would say among themselves . Guest yes. On tape. Cspan inside the company . Guest yes. Cspan on tape, the competitor is our friend. The consumer is our enemy. guest well, cabecause the competitor wants higher prices, and the consumer wants lower prices. Well, if a coyoure a company, you want higher prices. So if you just sit down and make a deal with your competitors, youll get higher prices. And the customer, no matter how much he does, you know, value shopping, will still have to pay the same price. Now thats why thats illegal because, ultimately, it undermines the system of capitalism, it undermines consumer confidence, and it creates a system where only the powerful can survive. You know, ifif you come in withwith the ability to do it better, youll get crushed by the rest of the industry. Cspan now to go back to all the basics, this is a company that has Ronald Reagans statue in the front yard; its a company that mick andreas godfather was hubert humphrey; a company where Dwayne Andreas best friends were bob strauss and bob dole and David Brinkley and all these people. Did any of that, through this process when you were studying it, have anything to do with them preventing fromyou know, being investigated in the past . Guest itsits interesting because there is thisthere is this trend atthat you sthat isis evident at the company. The company refuses to cooperate with a criminal investigation of a former executive, for instance, who hadwho had resigned and had been caught up in a financial fraud of his own that hadyou know, completely before any of this other stuff happened. Cspan is that frankel . Guest yes. Cspan and you have bthe reason i mentioned that because you have a veyou have your longest footnote on frankel. Guest frankel kis my longest footnote because i had to give a full explanation why i was making the statements i was making, and it involves swciting a lot of internal government records. Cspan and he disagrees with you . Guest he disagrees with me, but im doing nothing more than saying what iwhat i have from the government records, what ive been told from adm, what ive heard from directors of adm, you know, about what actually happened with frankel. And there was a fraud. There was a fraud thatim sorry, there were allegations of fraud. Thissince nothing was ever charged, i cant say that. There was allegations of fraud, there was a criminal investigation, and adm dragged its feet; didnt really want to cooperate. Now whatwhat was odd about that is that, ultimately, there was athe pricefixing investigation was going on, so youyoull know this in theby reading the footnote; there was a competition between the frankel investigation and the pricefixing investigation, and the pricefixing investigation was the bigger case. You know, youyou didnt want to have fbi agents, you know, trooping around the company on one investigation, while theres awhile theres an undercover investigation going on elsewhere. And so, ultimately, thethe agents on the pricefixing case, you know, played the trump card. Cspan but you point out that wright before the raid, when the fbi was going to raid the companyand i know theres a lot weve not talked about here but right before the raid, Dwayne Andreas is about to be named honorary chairman of an fbi academy . Guest yes. Its one of thoone of those elementsthere werethere were times in the storyyou know, iii tried to convey at the times how bizarre the story was, how. Cspan at the New York Times. Guest at the New York Timeshow bizarre the story was, how many weird things were going on. But, ultimately, you know, newspapers have space limitations, andand you cant really play the kinds of games with truth that im playing here. But thethe fact that Dwayne Andreas waswas going to be named to an honorary position by an Association Affiliated with the fbiand i think it was like two days before the fbi was going to raid his companywaswas something you just couldnt make up. I mean, it wasit was just astonishing. Cspan and the security Vice President , chevron, is still with the company. Guest yes. Cspan did he have any problem in this wholei mean, he was about to bewhat . Was he chairman of the academy . Guest ithei think he actually did. Itsits aits aits an organization that he was affiliated with, and i think he actually was named to a position with that organization. Cspan whatwhatshould companies be that close to the fbi, i mean, to have that kind of relationship . Guest well, i mean, in truth, Law Enforcement cant be a game where, you know, they set themselves up in a shell and say, you know, wellwell wait for the information to come in. i mean, theyre supposed to i mean, theyre supposed to have contacts everywhere. I mean, adm is a company that has its fingers inin a lot of pies all over the world, and Law Enforcement has Close Relationships with, you know, merrill lynch; it has Close Relationships withwith all sorts of companies that are spread out. And its just aa realm of having, you know, contacts for information flow. Now if that, in turnif theres ever any evidence that that, in turn, compromises an investigation, if they said, oh, adms, you know, being investigated for pricefixing, whoa, lets not do that investigation, then youve got a problem. Cspan page 135, of a 600page book that sells for 26, the men change subjects, discussing requests from Howard Buffett, the assistant to the adm chairmanby the way, was Howard Buffett on the board also . Guest yes. Cspan but he was just ahe was just, in title, an assistant to. Guest hishishis title did not reflect hishishis role. Cspan have anything to do with his father, warren . Guest thatthe fact that he was on the board . Cspan yeah, that he was there as the assistant and was. Guest that certainly has been said to me. Cspan ok. Anyway, son of Warren Buffett, the famed omaha investor, howard often heard from politiciansthis is adms Howard Buffettoften 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, and you go on to tell who Tommy Thompson was. This had to do with a campaign contribution. How much of that did you find in this story . Guest campaign contri. Cspan the Campaign Contributions, thethe whole Campaign Finance issue that we talk withso much about. Guest oh. Well, the Campaign Finance issue isis central to understanding adm. I mean, you know, if you look at virtually every campaign sfinance scandal, ultimately you find adm or Dwayne Andreas involved. I mean, mymymy favorite little adm tidbit you know, everybody remembers the famous story of the 25,000 check that was traced from thei think it was the minnesota or the midwest Campaign Finance chairman for the committee to reelect the president in 1972traced to the bank account of a watergate burglar. Cspan nixon campaign. Guest burglar, right. It was. Cspan yeah. Guest andand, you know, they ultimatelywhat isnt as well known is who wrote the check, and the check itself came from Dwayne Andreas. That same year, Dwayne Andreas walked into the white house with an accordion folder full of 100,000 in cash. They have, you know, thethethe Campaign Finance issue isisis central to understanding this companys power and influence. Cspan andreas shrugged, you can go over the limit, just a small fine. this is a quote from here. Iput that into context. Guest well, two things to say about this. Number one, these are not my words. These are not peoples recollections. This is from the tapes. This is actually what they said and what mick andreas is saying there is, basically, ififii believe it wasit was terry wilson had said. Cspan it was, yeah. Guest . Thatthat they had already given to their limit, you know, to Tommy Thompson. They couldnt give him any more and andreas response to that is basically, so what . You know, thethe fines not so big. You can go ahead and goyou can go ahead and break the law. itsits sort of, i guess, the benefit of having the money toto pay the fine. Cspan but, again, going back to where we started in all this, all these connectionsthey have airplanes. Now youyou allude to them in here, but do the politicians use the airplanes . You know, we hear so often that corporate jets are provided to politicians. Guest ii dont know of a circumstance where they did. It doesnt mean it didnt happen, but i dont know of one. Cspan and the relationship to ethanol and bob dole, whatd you find there . Guest well. Cspan and how much federal money goes into adm . Guest oh, billions. I mean, admevery time they talk about recipients of corporate welfare, adm isadm is always at the top of the list. Thethe Ethanol Program alone is billions and billions of dollars. And you have, you knowthe biggest champion of that program for many years was bob dole, and dole was, you know, again, Close Friends withwith Dwayne Andreas. And you have aa federal program which has certainly been heavily questioned in this city as to its social and societal value that, ultimately, is benefiting a Major Corporation that, in turn, is giving huge sums of money to politicians. I mean, ititit doesit does wreak. Cspan as you know, millions of dollars are spent byare spent by adm to television stations to fund news programs and the meet the presses of this world. Any evidence there thatby currying favor with the media, they get a softer treatment in this whole thing . Guest therenot in the book. There were certainly instances whereim going to be very oblique herewhere peoplewhere people in the media expressed discomfort to me when they learned that my book was about adm. And i found that a little bit surprising. Cspan why were they discomforted . Guest because they had relationships orororor close ties on some levels with adm. I mean, you know, its aits a book thatits a book that is not writtenyou know, adm comes out lookfrom this book looking pretty horrible, and its their own words that hang them. And the whole system ofof political contributions and influence looks as bad as anyone imagined. I mean, the end point of thatof that scene you were reading is that, you know, they start laughingly calculating how much the fines will cost. Ananother one talks about how much it will cost after tax. And then mick andreas closes with the line, well, you know, basically, its cheaper to pay the fine than to disappoint the politicians. and when you look at that in the context of whats going on, heres a company that isin just one product line, in lysene, is literally stealing tens of millions of dollars a year from all of us. And then the money is being recirculated back into the political system, back intoback into the media with sponsorship of programs. Now i am not saying thatyou know, that politicians andand the media have to do, you know, background checks on everybody who provides money, but ultimately it does makecertainly makes me very uncomfortable and people who have read the book and talked to me about it very uncomfortable that, you know, when the doors are closed and people think no one is listening, that these corporateyou know, these corporate types who, when theyre in public, talk about First Amendment andand, you know, supportingexpressing their political views, that when the door is closed, really, what theyre talking about is, hey, our business will do better if we pay these politicians, even if were breaking the law. and i think thats something that really should give all of us some pause. Cspan this is the cover of the book. Its called the informant. Weve got a lot more to talk about. Our guest has been the author Kurt Eichenwald. Thank you very much. Guest thank you