Informant (50 page)

“Okay, Mark,’’ Herndon said. “Anything else that you’re involved in that you need to tell us about?’’

Whitacre shook his head. Just the $500,000.

“Okay,’’ Herndon said. “This isn’t good for the case, and it’s not good for you. But if we know everything now, we can work with it better than if we don’t have the full story. So, I’m asking again, is there anything else?’’

“No. There’s no more. Absolutely, that’s for sure.’’

Silence.

Shepard spoke. “Mark, does Ginger know any of this?’’

“No. Absolutely not. Not at all.’’

Shepard looked Whitacre in the eyes. “Tell her.’’

Herndon nodded. “Brian’s right. You need to brace her before this becomes public. Tell her right away.’’

Whitacre nodded, saying nothing.

The conversation had gone about as far as it could. Shepard started the car. As they drove to Moweaqua, the agents pressed Whitacre on other issues. How many people did he tell about the investigation before the raids?

“Kirk Schmidt, Kathy Dougherty, Liz Taylor. Oh, and Ginger. But that’s it.’’

Whitacre took a breath and waited. Nothing. Apparently, the agents didn’t know that he had also told Buffett, Wayne Brasser, and several others.

Shepard asked if Whitacre knew how reporters were learning details of the case. He replied that coworkers had told him they were speaking with the press.

“They said that they’re doing it because they want to help me,’’ Whitacre said. He decided not to mention his interview with
Fortune
magazine. The article was still weeks from publication.

They arrived at Whitacre’s house, and the agents said that they wanted to go inside for their equipment. They also wanted to see Ginger.

Whitacre trudged into the house. The family was bubbling with excitement about moving to Tennessee and getting away from ADM. The agents asked to speak with Ginger and walked to a distant part of the house.

“How’s he holding up?’’ Shepard asked.

“Terrible,’’ she said. “He’s withdrawing from the family. He’s having trouble with the negative press.’’

“Tell him to be patient,’’ Herndon said. “His day is coming. The press is going to change when the tapes come out. The evidence is very explicit.’’

“I know, Bob,’’ she said. “But he can be difficult. He’s isolating himself from the family. Some days, he’s said he wants to kill himself. This isn’t easy.’’

The agents praised Ginger for keeping the family going. They told her that they understood how hard it was, without mentioning that they now knew it was about to get harder.

About thirty minutes later, the agents thanked Ginger and returned to Mark. They collected their equipment, and Mark followed them to the door. Outside, Shepard faced him.

“Mark, tell Ginger,’’ he said. “She needs to know.’’

“Okay,’’ Whitacre mumbled.

The agents headed to their car, saying nothing as they drove down the driveway. They continued in silence for about a quarter mile down the road.

“Unbelievable,’’ Herndon finally muttered. “Just unbelievable.’’

He looked at Shepard.

“Well,’’ he said, “I guess we know what Aubrey Daniel wants to talk about.’’

C
HAPTER
14

A
ubrey Daniel showed no expression the next day, August 3, as he flipped a page in a black notebook, turning to a photocopy of a check. He glanced across the desk of Gary Spratling, watching as the Deputy Assistant Attorney General studied the same document in an identical binder—one Daniel had given him moments before. Spratling did not speak or show emotion. This, both men knew, was a high-stakes moment. They were wearing their best poker faces.

Despite the impassive reaction, Daniel felt confident that this $2.5 million check could doom the price-fixing investigation. It was the proof, Daniel argued, that the government’s cooperating witness, Mark Whitacre, had stolen millions from ADM—all while working with the FBI.

Every word on the document told part of the story. It was an ADM corporate check, payable to ABP International of Lund, Sweden. It had been cashed at the Union Bank of Switzerland in Zurich. Spratling passed the notebook to Jim Griffin, who examined it before handing it to Scott Hammond, the third government lawyer at the meeting.

Daniel and his colleagues had done their homework, and proceeded to reveal other documents that they said proved their case. They showed the original ABP contract and described a second contract that they said had recently been discovered. They produced affidavits from the people whose signatures appeared on the second contract—Jim Randall of ADM and Lennart Thorstensson of ABP—both saying they had never seen the document before. And they flashed a report by a handwriting expert who concluded that the signatures on the second contract were photocopies.

“The evidence is clear,’’ Daniel said. “The contract is a fake.’’

It was Whitacre, Daniel said, who submitted the bogus contract and requested a check for hand delivery to ABP. Whitacre took the check, and the check was cashed—even though ABP was not owed money and never received it. Whitacre had stolen it, Daniel said.

“This is just the tip of the iceberg,’’ Daniel said. “We have information indicating Whitacre was involved in other fraudulent schemes, beginning as early as 1991.’’

Daniel stared at the government lawyers evenly.

“And the FBI agents assigned to Whitacre may have been a party to his wrongdoing,’’ he said.

What?

“What’s your evidence?’’ Griffin shot back. He was burning; he knew Shepard and Herndon. These were two straight arrows.

“Two anonymous letters were sent last month to ADM,’’ Daniel said.

He described the letters postmarked from Knoxville, Tennessee, that had been delivered to Dwayne Andreas and Jim Randall two weeks before. Both letters contained the same claim—that Whitacre had received $2.35 million at a Cayman Islands bank, paid in 1991 by rogue FBI agents in exchange for his cooperation.

This sounded thin. Not only that, but the date was wrong. Shepard hadn’t even met Whitacre until late 1992.

The prosecutors pressed for details about other schemes, but the defense lawyers refused. At this point, information was power; they were not about to give it away.

As they asked their questions, the antitrust attorneys could not shake gnawing suspicions. ADM had known about Whitacre’s role for only a few weeks, and suddenly he’s a crook? It was too convenient, too perfect.

“How did you discover this $2.5 million transaction?’’ Spratling asked.

The scheme, Daniel replied, was first detected by an attorney reviewing documents relating to patent litigation between ADM and Ajinomoto. The attorney had examined the two contracts with ABP and became suspicious.

“What made him suspicious?’’ Griffin asked.

Daniel shrugged as he threw out some vague words in reply, seeming to sidestep the question.

“What was the timing of this?’’

Daniel fidgeted. “I believe it was after the search of ADM,’’ he said.

The government lawyers paused. Daniel’s equivocal response contrasted sharply with the exacting self-confidence he had exhibited moments before. The change reinforced their suspicions. Did ADM know about the alleged misconduct before the search? Had they kept it under wraps in the event Whitacre ever strayed from the company?

The Williams & Connolly lawyers pressed ahead, arguing that the evidence of Whitacre’s crimes was irrefutable. And the government, Daniel said, was responsible. “That is clear from the unprecedented and unconscionable cooperation agreement between Whitacre and the government.’’

Daniel brought up paragraph eight in the agreement, which required Whitacre to act at the direction of the FBI and the Springfield U.S. Attorney’s office. Then he raised paragraph nine, which said that Whitacre could only engage in crimes with the prior knowledge and approval of the FBI.

“The government appointed itself Whitacre’s supervisor, and every act or failure to act by Whitacre is directly attributable to his FBI handlers,’’ Daniel said. “The requirement that the FBI approve his crimes shows that the agents were either aware of Whitacre’s theft or that Whitacre was violating the terms of his agreement.’’

The implications were obvious. The defense was prepared to argue that either the FBI was hopelessly corrupt or that Whitacre had deceived the agents—destroying the credibility of the chief government witness.

The entire investigation, the defense lawyers maintained, had been driven by Whitacre and motivated by his designs to take over ADM. He had implicated his superiors to eliminate competition for the top job. He had stolen millions. He had lied to the agents or enticed them into crime. The government had gotten into bed with the wrong man.

“Face it,’’ Barry Simon said. “Whitacre’s a psychopath.’’

About that time, Shepard was listening impassively as Whitacre rambled over the phone from his home in Moweaqua.

“Brian, I’m calling for advice,’’ Whitacre said. “I think ADM’s really going to come after me. So I was thinking, do you think maybe I ought to release a statement or grant interviews about this financial stuff?’’

The idea was ridiculous.

“I’m thinking about doing that,’’ Whitacre continued. “I think it might help to make a positive statement to the press before they start hearing ADM’s side.’’

Shepard didn’t pause. “Mark, I can’t give you any advice,’’ he said. “That’s a matter that needs thorough consideration and discussion with your attorney.’’

“I understand,’’ Whitacre replied. “I’m just asking because your advice tends to be sound and reasonable.’’

Silence.

“Mark,’’ Shepard repeated, “I can’t offer you any advice.’’

Work had come to a halt that day at the Chicago antitrust office. The night before, Shepard and Herndon had spoken with Mann and Mutchnik, telling them about Whitacre’s confession to taking $500,000 in kickbacks. They were sure the same story—or one like it—was now unfolding in the Washington meeting with Aubrey Daniel.

By early afternoon, Griffin called with an update. He told them about Whitacre’s apparent embezzlement of $2.5 million. All of his information came from his own notes; Aubrey Daniel had taken all the documents with him when he left. But before Griffin could get into much detail, he announced that he had another meeting. He clicked off.

Dazed, the lawyers kicked back in Price’s office and informally declared the workday to be over. They discussed their suspicions about ADM’s speed in uncovering the documents and railed some more against Whitacre.

But, in truth, their most overwhelming feeling was not about ADM or Whitacre. Rather, they were focused on the knowledge that, with a problem this big, Washington would meddle. After all their work, someone else would probably take charge. This case wasn’t going to be theirs anymore.

It was gone.

Scott Lassar, the First Assistant U.S. Attorney from Chicago, flew in that same day to Washington National Airport for his first meetings at the Justice Department on the ADM case. Since first being contacted about the case days before, Lassar had learned more details of Harvest King and had agreed to join as co–lead counsel. He had already met with Griffin for lunch and reviewed a few tapes. They were impressive. He felt sure they would have impact on a jury.

As his plane winged toward Washington, Lassar could not help but wonder about what was happening there. He had heard the previous day about Daniel’s demand for a meeting, but was still in the dark about what the lawyer wanted. After landing, Lassar headed out of the terminal and took a cab straight to the Justice Department. He arrived for a scheduled appointment with Seth Waxman, Associate Deputy Attorney General. After exchanging greetings, the two lawyers took their seats.

“Well, Scott,’’ Waxman began, “you’ve come on an interesting day.’’

About forty-five minutes later, Mary Spearing, the chief of the Fraud Section in the Justice Department’s Criminal Division, was headed down a third-floor hallway, rounding up prosecutors. She had just been notified that Waxman wanted the Fraud Section represented at a big meeting that was starting right away. Unfortunately, the section’s offices were in the Bond Building, about ten blocks from main Justice. Even if Spearing and her lieutenants hurried, they were sure to be late.

Spearing stuck her head into the office of Donald Mackay, a compact fireplug of a prosecutor with a salty tongue and a devilish smile.

“Don, come on,’’ she said. “We’ve got a meeting over at main Justice.’’

Mackay stood. “What about?’’

“I don’t know,’’ Spearing said. “There’s some case out in Illinois where the shit’s hitting the fan.’’

Before they reached the elevator, the two prosecutors stopped at the office of James Nixon, a staff attorney. Spearing told him to grab his notepad; he was coming, too.

They headed to the street and started walking. None of them even thought to flag down a cab. With the traffic in downtown Washington, they knew they could hike the ten blocks faster than any car could drive them.

About that same time, John Hoyt was at his desk in Springfield. So far, it had been a lousy day. That morning, Kate Killham, the squad supervisor for Harvest King, had come by his office to brief him on Whitacre’s confession. Hoyt could scarcely believe it. How did Whitacre think he could take $500,000 of kickbacks without being discovered?

The rest of Hoyt’s day had been spent assessing damage, briefing his boss, and telephoning Justice Department officials. By 3:45, he had still heard nothing about the latest allegations from Williams & Connolly. At that time, he was speaking with Kate Killham when Don Stukey’s secretary appeared at the office door.

“Excuse me,’’ she said. “The SAC wants to see you.’’

The two supervisors walked across the hall to Stukey’s office. Hoyt started to speak, but Stukey signaled them to be quiet. A voice came across the speakerphone.

“All right,’’ the voice said. “Is everybody there?’’

Nearly a dozen government attorneys sat around a huge wooden conference table in a fourth-floor room at the Justice Department, staring at a speakerphone as they waited for a response to Waxman’s question.

“Yes,’’ a voice from Springfield said. “My ASAC just joined me.’’

Waxman, who was sitting in the middle on one side of the table, explained that he had ordered this emergency meeting to assess where the ADM case stood in light of the allegations raised by Williams & Connolly.

“So what’s the story with this Whitacre guy?’’ he asked into the speakerphone.

“Why didn’t you let us know the source was involved in criminal activities?’’ a voice from Washington said. “Did you know about this?’’

The words struck Hoyt as ridiculous. “What are you talking about?’’ he said.

“We’ve seen the affidavits from ADM that seem to show Whitacre forged a contract,’’ Waxman said. “They have documents tracing it to banks in Switzerland. They have all sorts of documentation of his embezzling.’’

“
We
didn’t have access to their corporate documents,’’ Killham said.

“How could you not know?’’ a voice snapped. “Haven’t you done anything to verify his financial status?’’

Hoyt burned. For years, he had pushed for the manpower that the case deserved. But every request had hit a wall. Now, these lawyers were saying that the agents handling this case—often working nights and weekends for years—
should have done more?
That it was
their
fault?

“The agents in this case have worked hard under enormously trying circumstances,’’ he began.

“Well,’’ a voice said, “Brian Shepard either has to be in cahoots with this guy or he’s the dumbest agent going.’’

“What do you mean?’’ Hoyt asked.

“Williams & Connolly said they have reason to suspect the agents were involved in Whitacre’s wrongdoing.’’

This was becoming surreal. None of these people in Washington knew anything about Shepard—or Herndon and Weatherall for that matter. Yet they were willing to attack their characters, maybe ruin their careers—
because defense lawyers said so?

“You don’t know these agents,’’ Killham said. “These guys are top drawer.’’

Hoyt asked for details of any evidence implicating the agents in wrongdoing. No one would answer the question—or say it was based on a couple of anonymous letters. The trust in Washington for the Springfield FBI had obviously taken a big hit.

“Look, the source has already started opening up about some of this,’’ Hoyt said. “We’re on top of it.’’

The Fraud Section prosecutors walked into the conference room at that moment. Don Mackay was surprised at the size of the crowd. This was no routine meeting.

Whatever this is about, it’s a heater.

“Okay,’’ Waxman said. “Mary Spearing and two of her lawyers from the Fraud Section are coming in.’’

The three found seats. No one explained what was going on or even what case was being discussed. They were left to listen in and piece together whatever they could.

Mackay, a former United States Attorney from Illinois, was surprised to hear lots of names he recognized, such as “ADM” and “Decatur.” It didn’t take long to understand why this case was attracting so much attention.

Under pointed questioning from the Washington lawyers, Kate Killham recounted the previous day’s meeting with Whitacre at the Chinese restaurant. The story did not square with the allegations raised by Williams & Connolly—and many of those were documented. Some of the lawyers expressed their bewilderment.