FBI sting shocks cereals company
Sunday 16 July 1995
Most astonishing have been reports that one of ADM's most senior executives, Mark Whitacre, the president of its BioProducts division, has for three years acted as a mole for the FBI, secretly taping business meetings in cities across the US and abroad.
So far, no charges have been filed against the company, America's largest miller of cereals, nor has the precise nature of the allegations been confirmed. The probe is believed, however, to centre on price-fixing arrangements in the sale of amino acid lysine, a cattle livestock supplement, amino acids, and high fructose corn syrup, widely used in soft drinks.
Also caught in the investigation are three other rival companies, including AE Staley Manufacturing, a subsidiary of Tate & Lyle. With Cargill and CPC International, the company has been served subpoenas by the US government to provide documents pertaining to possible price collusion.
Mr Whitacre, 38, who has had a meteoric rise in the industry and is known in Decatur, Illinois, ADM's base, as a generous benefactor, is said to have blown the whistle on the company in 1992 and offered to assist the government in assembling evidence. With equipment supplied by the FBI, including a wired briefcase, Mr Whitacre apparently taped conversations with executives from other companies in hotel rooms as far away as Tokyo.
More than just a company, ADM is a pillar of the American mid-west, with massive commercial and political influence. With the slogan "ADM, Supermarket to the World", it has for years been one of the main sponsors of the Sunday morning political talk shows on network American television. Its stature has thus rendered the news of the probe doubly shocking, with the consequence that its share price fell by almost 15 per cent in three days last week. Two lawsuits have been filed against it by shareholders.
"Wall Street, as is its custom, is assuming guilty until proven innocent," commented John Mc-Millan, an analyst with Prudential Securities Research. Shaken by news of the investigation, many investors have chosen to bail out, even if, in the long term, prospects for ADM may still be sound. "The easy thing is just to sell and get out of the way," said Mr McMillan.
Another victim of the drama is Howard Buffett, son of American investment guru, Warren Buffett. He reportedly resigned as corporate vice-president of ADM and assistant to the chairman earlier this month. An influence on his decision may have been his father's 7.8 per cent holding in Coca- Cola, a huge customer of ADM's sweetener products.
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
- 5 Of course, teenage girls need role models – but not like beauty vlogger Zoella
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
This 'woman calls police to order pizza' story isn't going where you're expecting
FCKH8: Provocative anti-sexism video showing young girls swearing reinstated by YouTube
Diwali: What is the festival of lights – and how is it celebrated around the world?
Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...