Informant (80 page)

17–19
Some details of the meeting between Whitacre and Mick Andreas from the Andreas FD-302, November 4, 1992, as well as the first FD-302 of Mark E. Whitacre, dated November 4, 1992, for case number 192B-SI-45899.

19
Andreas’s decision to call his father, Dwayne, about the Fujiwara allegations is described in his 302 of November 4, 1992.

19
Details about the death of Shreve Archer from the
New York Times
, Novem-ber 11, 1947, p. 27. Information about the early days of Archer Daniels Midland from Marion E. Cross,
From Land, Sea and Test Tube: The Story of Archer-Daniels-Midland Company
, an unpublished 1957 corporate biography.

20
Details about Thomas Daniels’s background from Kahn,
Supermarketer to the World
, pp. 152–53.

20
Details about Andreas’s early days at Cargill from Wayne Broehl Jr.’s in-depth history
Cargill: Trading the World’s Grain
(Dartmouth College, 1992), pp. 682, 687–88, 708–9.

20
Details of Andreas’s youth from a series of original family papers obtained by the author, and from
Fortune
magazine, “Oh, How the Money Grows at ADM,’’ October 8, 1990.

20
Dwayne Andreas’s height and weight from
Current Biography
, March 1992.

20–21
Descriptions of the paranoia and fear of the early 1950s are provided in Fred J. Cook’s
The Nightmare Decade
(Random House, 1971), a fabulous exploration of the history and psychology of the anti-Communist hysteria of that time.

21
Details of Andreas’s trip to Moscow, and the reaction at Cargill, from Broehl,
Cargill: Trading the World’s Grain
, pp. 762–64.

21–22
Details of the evening of Humphrey’s nomination from Theodore H. White,
The Making of the President: 1968
(Atheneum, 1969), p. 354, and
Boston Globe
, “Hubert All Smiles at TV Set,’’ August 29, 1968, p. 28.

22
Andreas was deemed part of the Humphrey brain trust by James Younger in “The Humphrey Brain Trust,’’
Chicago Tribune Magazine
, October 20, 1968, p. 65.

22
The details of Andreas’s contribution to Humphrey’s 1948 senate campaign from Hubert Humphrey,
The Education of a Public Man: My Life and Politics
(Double-day & Co., 1976), p. 295.

22
Humphrey’s vacations with Andreas and his selection as Michael Andreas’s godfather from Carl Solberg,
Hubert Humphrey: A Biography
(W.W. Norton & Co., 1984), p. 231.

22
Andreas’s relationship with Thomas Dewey from Kahn,
Supermarketer to the World
, pp. 105–10.

22
Andreas’s world travels from Peter Carlson, “Chairman across the Board,’’
Washington Post Magazine
, July 14, 1996, p. 14. Also from Solberg,
Hubert Humphrey: A Biography
, pp. 219–20, 414–15, and Kahn,
Supermarketer to the World
, pp. 85–94.

23
Details of Andreas’s bid to sell butter to the Soviets from the
New York Times
, “Sales of Butter to Soviet Barred,’’ January 20, 1954, p. 1.

23
The method Andreas used to deliver oil to the Soviets was described in Carlson,
Washington Post Magazine
, July 14, 1996, p. 16.

23
Andreas’s and Humphrey’s encounter with Bobby Kennedy at the Mayflower from Solberg,
Hubert Humphrey: A Biography
, p. 231.

23
Andreas’s fear of wiretaps from a series of letters from his brother Osborne Andreas to Professor George Vetter of New York University. The letters, written throughout the 1960s, were obtained by the author and are not publicly available.

24
Nixon’s invitation to Andreas to join his cabinet from Kahn,
Supermarketer to the World
, p. 108.

24
Andreas’s twenty-five-thousand-dollar cash contribution into the safe-deposit box from Theodore H. White,
The Making of the President: 1972
(Atheneum 1973), p. 297. Andreas’s one-hundred-thousand-dollar cash contribution at the White House from Charles R. Babcock, “Soft Money Is Like the Man Who Came to Dinner,’’
Washington Post
, June 24, 1994, p. A4.

24–25
Andreas’s effects on federal policy from Carlson,
Washington Post Magazine
, July 14, 1996. Also, see Timothy Noah, “Ethanol Boon Shows How Archer Daniels Gets Its Way in Washington with Low-key Lobbying,’’
Wall Street Journal
, December 29, 1993, p. A10.

25
Dialogue from the O’Neill/Gorbachev conversation from Kahn,
Supermarketer to the World
, p. 39, and Tip O’Neill with William Novak,
Man of the House
(Random House, 1987), p. 293. The dialogue in the books differs in some minor ways. The dialogue in this book is a combination of those two descriptions.

26
Andreas’s role in back-channel communications between Gorbachev and Reagan from Carlson,
Washington Post Magazine
, July 14, 1996, p. 13.

26
Andreas’s role in briefing White House and State Department officials from a personal letter written by his brother, Osborne Andreas, to Professor George Vetter of New York University, on December 24, 1961. The author also obtained copies of summaries of conversations forwarded by Andreas to other departments of the government.

27
The federal price-fixing case against ADM on fructose would be dismissed in 1991 by a federal judge in Iowa for lack of evidence.

27
ADM’s history of legal problems from Carlson,
Washington Post Magazine
, July 14, 1996, p. 28.

27
ADM’s role in training FBI agents for the sting at the commodities exchanges from Sue Shellenberger,
Wall Street Journal
, “Grain Maverick,’’ February 9, 1989, p. 1; Greg Burns,
Chicago Sun-Times
, “ADM Helped Undercover Agent Learn CBOT Ropes,’’ October 17, 1990, p. 35.

27
Mick Andreas’s reaction on learning of ADM’s role in sponsoring the FBI from Paul Craig Roberts,
Washington Times
, “Price-fixing Fabricators?” January 31, 1997, p. A16.

27
In a letter to the author, Thomas Frankel essentially denied everything I have written in this book about him, describing my references to him as “misleading, inaccurate, and incorrect.” However, much of the information comes directly from government records, and every portion of the book related to Frankel—with the exception of the direct quotes from government records that appear below—was shown to representatives of ADM or its executives, who did not dispute the accuracy of what appears here.

The public story about the resignation of Frankel was reported by Scott Kilman, “Archer-Daniels Treasurer Resigns after Securities Losses Are Discovered,’’
Wall Street Journal
, September 16, 1991, p. A8. The following day, a criminal investigation into possible wire fraud was opened at the FBI’s Chicago Field Office, case file number 196B-CG-82508. Several financial institutions and ADM were subpoenaed in the course of the investigation. ADM’s cooperation in the case, however, was limited. Without the eager participation of the victim in the case, the investigation was closed without prosecution in July 1993. But ADM officials told me that the circumstances surrounding the Frankel affair were far broader than were ever publicly revealed. Afterward, the head of the board’s audit committee stepped down for failing to detect the transactions, a director involved in the situation said.

A July 23, 1993, letter written by Special Agent Gregg Schwolback to a prosecutor in the Chicago U.S. Attorney’s office details the specifics of the investigation into Frankel’s activities. It stated, “By way of background, the investigation involved a $14.6 million loss to Archer Daniels Midland Company, Decatur Il., which had been caused by the Treasurer, Thomas H. Frankel, between 1984 and August 1991. The loss resulted to ADM because Frankel failed to place a $26 million hedge position to offset the company’s $350 million short position, a position which ADM had held since 1984. Since the hedge position had not been placed by Frankel, ADM began to incur losses as interest rates declined over the seven-year period. By August 1991, the cumulative loss to ADM totaled $14.6 million. Frankel prevented detection of the loss by creating fictitious internal trading documentation and other records to make it appear as if the hedge position existed throughout the seven-year period. On August 30, 1991, Frankel resigned after other ADM officials discovered the loss and the fictitious trading documentation and other records which he had created.’’

The Frankel investigation was impeded by several factors in addition to ADM’s reluctance to cooperate, according to government records and interviews. According to the July 23 letter, a review of documents subpoenaed from ADM “failed to reveal any violations of federal law that occurred in the Northern District of Illinois,’’ which is covered by the Chicago office. The letter mentioned that the proper venue for the Frankel investigation was with the Springfield division, but that it was unlikely to be pursued there because Springfield “was presently conducting an investigation of ADM for price-fixing.’’

On July 20, 1993, Agent Schwolback contacted Special Agent Joe Weatherall, who by that time was a co–case agent on the price-fixing investigation. Schwolback asked about the possibility of conducting a joint interview of Frankel when the price-fixing case was more fully developed. According to a memo of the call written by Schwolback that day, Weatherall said that “because of the progress being made in their case, they did not want Frankel to be interviewed at this time.’’ According to the memo, Weatherall indicated that Frankel would have to be interviewed at some point in the price-fixing investigation, but that interview never took place.

One important question in the investigation was what had happened to the $26 million that government records say was supposed to have been used to create a hedge position. ADM officials said that the company believed some of the money may have ended up with Frankel himself. According to interviews with the government, that was considered by the FBI as a possible “theory of the crime,” but the case was closed before the question could be adequately pursued. According to investigative notes reviewed by the author, information developed later in the related ADM cases showed that a bank account linked to Frankel had attracted the attention of bank compliance officials because of large sums of money moving through it. It is not clear whether this account was linked in any way to possible wrongdoing since, ultimately, no further information about it was ever developed, and no charges were ever brought against Frankel.

28–29
Allen Andreas has never before been publicly disclosed as the executive who contacted the CIA. However, his conversations with Dwayne and Mick Andreas were described—without mentioning Allen’s name—during the trial of
U.S. v. Michael D. Andreas et al.

CHAPTER TWO

31–32
Some details of Worthington’s call to John Hoyt from an internal teletype, from FBI-Springfield to FBI headquarters, dated November 5, 1992.

32–34
Some details of Shepard’s personal history from
U.S. v. Michael D. Andreas et al.

33
Shepard’s residence in Matawan from local real-estate records. The time of the commute from that town from the
New York Times
, “If You’re Thinking of Living in: Marlboro,’’ July 12, 1987, section 8, p. 11. Marlboro residents relied on the Matawan train station.

35–38
Some details of the FBI interview of Michael Andreas from his 302 dated November 4, 1992, for case file number 192B-SI-45899.

37
The statements by the FBI that ADM could keep any “superbug’’ that the company obtained from Fujiwara was supported in testimony of Mark Cheviron before the Special January 1996 Grand Jury, on November 12, 1996, in the case titled “In Re: Grand Jury Investigation,’’ court caption number 95 GJ 573.

38
The stories Whitacre told at ADM of his personal history were described in
Macleans
, “The Mole Who Cracked a Conspiracy,’’ February 22, 1999, p. 49. Also from a sworn deposition from Reinhart Richter of May 18, 1998, in the civil case
Archer Daniels Midland Company v. Mark Whitacre et al.
, case number 96-2237, filed in the United States District Court for the Central District of Illinois.

38–40
Whitacre’s anxiety about speaking with the FBI has been described in several documents. First, Shepard discussed Whitacre’s general anxiety at the time in his court testimony in
U.S. v. Michael D. Andreas et al.
It is also mentioned in the grand jury testimony of Mark Cheviron, before the Special January 1996 Grand Jury, on November 12, 1996, in the case titled “In Re: Grand Jury Investigation,’’ court caption number 95 GJ 573. Finally, Whitacre alluded to it himself in
Fortune
,
“
My Life as a Corporate Mole for the FBI,’’ September 4, 1995, pp. 56–57.

39
Some details of Mark and Ginger Whitacre’s personal history from “Little Miami High School 15th Year Reunion Information Sheet,’’ dated June 8, 1991. A copy of the document was provided by a former classmate of the Whitacres.

40–41
Shepard described the delay in speaking to Whitacre during his court testimony in
U.S. v. Michael D. Andreas et al.

The plan of action for the Fujiwara investigation was described by Shepard in a teletype to FBI headquarters, dated November 5, 1992.

42–43
Shepard’s first interview with Mark Whitacre is described in several documents, both confidential and publicly available. The foremost record of the meeting is the FD-302 dictated by Shepard for file #192B-SI-45889. Shepard also described the meeting in his testimony during
U.S. v. Michael D. Andreas et al.
Details were also contained in an FBI teletype prepared by Shepard on November 5, 1992. Finally, additional information about the meeting was described by Mark Cheviron in his testimony before the Special 1996 Grand Jury.