ADM Insider Aided Inquiry, Sources Say : Probe: An executive at the agribusiness giant reportedly acted as an FBI informant in the price-fixing investigation.
The Justice Department has an unusual weapon in its criminal antitrust investigation of the food additives industry--hundreds of tape recordings and videotapes of officials at agribusiness giant Archer-Daniels-Midland Co., according to sources close to the investigation.
ADM is one of four U.S. grain companies that have received requests for information from the department as part of its global inquiry into the possibility of price fixing of three additives, including the sweetener soft drink companies use. ADM is the only company of the four whose files have been searched by the FBI.
Sources said the department took the extraordinary measure of obtaining a search warrant and sending dozens of FBI agents to seize the company’s files June 27 because the department already had inside information about ADM and wanted to be sure that no documents were destroyed.
The sources said Mark E. Whitacre, president of ADM’s BioProducts Division, had been acting as an FBI informant for three years, taping meetings and conversations with ADM officials and executives of competing companies around the world.
Whitacre’s role was reported in Monday’s Wall Street Journal. Whitacre was traveling Monday and did not return telephone calls seeking comment.
A spokeswoman for Decatur, Ill.-based ADM said Monday that Howard Buffett, vice president and assistant to the chairman of ADM, had resigned. Buffett’s father is Warren E. Buffett, the billionaire investor who is the largest shareholder of Coca-Cola Co., which buys high-fructose corn syrup, the sweetener, from ADM.
The spokeswoman said she did not know when or why Howard Buffett resigned.
In its story Monday, the Journal reported that Buffett resigned because he was troubled by the investigation and by the way ADM was handling it.
Ray A. Goldberg, an ADM board member and professor of agriculture at Harvard University, said he and other board members are waiting impatiently for the company to explain itself.
The other three U.S. companies involved in the investigation are Cargill Inc., A.E. Staley Manufacturing Co. and CPC International Inc. They and ADM control about 85% of the $2.6-billion market for high-fructose corn syrup. ADM has the largest share of that market, about a third.
The investigation will be presented to a grand jury in Chicago.
Investigators are also exploring whether prices may have been fixed for two other products: citric acid, also used in soft drinks, and lysine, an additive used in animal feed grains.
ADM stock fell Monday to a 52-week low for the second consecutive session. The shares tumbled $1.875 to $15.875.
