Informant: A True Story – Book Review

Informantby: Kurt Eichenwald

Publisher: Broadway Books (Random House)

Copyright: 2000 , ISBN: [0767903277]

Cover: Marc J. Cohen

Type: Softcover

reviewed by: Lynard Barnes, June 15, 2005

Summary:  Highly Recommended reading to capture the tone and tenure of modern-day corperate America. [The movie based on this book is a grave injustice to the book. [May 7, 2013 comment])

After reading Kurt Eichenwald’s THE INFORMANT, it is impossible to look at big-business with the same benign indifference. It seems to be a monthly headline that some company has been charged with price-fixing and has agreed to pay a fine. Ethics, or the lack thereof, seem to be a major issue in some segments of the business community as they are in other areas. For this reason we should not be surprised by THE INFORMANT.

In the online journal, in the Business section, a report is headlined: “December 1, 2005, Samsung Pleads Guilty to Price Fixing, By Roy Mark” [accessed in June, 2005]. The article goes on to say that the Department of Justice, “. . . in its three-year investigation, charged that Samsung carried out the conspiracy [to fix the price of DRAM chips] by participating in a series of meetings with competitors to discuss the prices to charge to certain customers.”

The story sounds awfully darn familiar. In fact, it could be THE INFORMANT redux 2005.

In 1992, the Archer Daniels Midland Company, ADM for short, and its BioProducts Division were sprouting along, though with problems, growing microbes to produce such amino acids as lysine. It was a new area for the company. The lysine was sold to animal feed companies to bulk up chickens and pigs. It was a competitive market. Companies such as Ajinomoto Inc of Japan and Sewon Company, Ltd, of Seoul, Korea were competitors. Heading the ADM division was Mark Whitacre, a thirty-four-year-old who had passed through the business corridors of the Ralston Purina company in St. Louis and the Degussa Corporation in New York and Frankfurt, Germany before moving to ADM in Decatur, Illinois.

Whitacre’s history is important in Eichenwald’s telling of the ADM price fixing scandal. If THE INFORMANT was merely a story about a bunch of greedy business tycoons banding together to exploit the ignorance and gullibility of their customers (or “enemies” as they were referred to on occasion), there would be little to fill the nearly 600 pages Eichenwald devotes to its telling. However, THE INFORMANT digs deep enough into the price-fixing scheme and all the ramifications from it that it is truly an eye-opening piece of work. Nothing, however, is as eye-opening as the mechanizations of ADM BioDivision President, Mark Whitacre, who incidently, is the informant in the title of the book.

Eichenwald develops the ADM price-fixing story on three levels. First there is Mark Whitacre. Whitacre gets the story moving by informing his bosses at ADM, starting with the president of the company, Jim Randall, that he thinks there is a sabotage effort underway to destroy the ADM BioProducts Division. Michael Andreas, who ran the day to day operations of the company as vice-chairman, calls his father, Dwayne, the defacto owner of ADM as in chairman and chief executive officer. Together, the two Andreases decide to bring in the Federal Bureau of Investigation–FBI.

Level two: The decision of the Andreas to bring in the FBI was not something like a hammer-tapped knee reaction. In fact, it was not a decision as all. Crime, FBI might be a no-brainer association for most people, but for the rarified denizens of international big business, with trough feeders in and out of government the world over, the FBI is just one of many agencies cloaked under an acronym with a potential use. According to Eichenwald, Dwayne Andreas first turned to the Central Intelligence Agency–CIA–for help with the sabotage alert. It was the CIA who called in the FBI. Following this thread introduced into the story of multiple agencies and entities hovering around the periphery, by the time we get to the Justice Department and the Anti-Trust Division, we can be forgiven for thinking that there is a puppet-master hiding in the coat-closets of the innumerable conference rooms in which the story plays itself out. Given the seemingly confused and tepid manner in which the story is resolved, we might wish there was a puppet-master. However, as it turns out, there were only ordinary people doing ordinary jobs—extremely ordinary people with egos, flashes of brilliance and, most of all, limitations. Thus it was that Special Agent Brian Shepard of the FBI Decatur Resident Agency, under the Springfield, Illinois FBI Office, ended up with the ADM case of industrial extortion/sabotage.

By presenting a sketchy, early history of the Archer Daniels Midland Company and its chairman/CEO, Dwayne Andreas, author Eichenwald establishes a genuine tension: A powerful corporation with a CEO with connections all the way to the White House, against the FBI. However, in reading through that tension, you are left to wonder whether it is artificial or exaggerated. The tension is another thread running through the book, or at least up until the October 8, 1995 meeting of the ADM special committee which decided upon a way to settle the Justice Department case against them. But the question is Who Won?

The third level on which Eichenwald places this story is perhaps the most significant in grasping the real importance of the events chronicled.

From the beginning, when Special Agent Brian Shepard, a sixteen-year veteran FBI agent, is assigned the ADM sabotage and extortion case, we start ticking-off the personal stakes the players have in the way the story turns out.

Shepard, having lived and worked in Decatur for nine years, quickly realizes that the ADM case will be the biggest of his career. Just as quickly he realizes that the case is not really about industrial sabotage. His newly found informant lays out a host of nefarious activities supposedly going on in the corporate corridors of ADM, among which is price-fixing. After one meeting with the agitated and victimized President of the ADM BioProducts Division, Mark Whitarce (the “saboteurs/extortionists” had threatened to kidnap his daughter), Shepard has found a crime, an informant, and the basis of an investigation which eventually leads to some midnight oil burning burnt in low and high places in President Clinton’s Justice Department. Eichenwald sketches Special Agent Shepard as a man investing an extraordinary level of personal energy into “righting a wrong”. Eichenwald does a commendably credible job of this. All the more reason to believe his portraits of some of the other players in the drama. From Shepard’s seemingly personal commitment to justice to the equally passionate “by-the-numbers” approach of the Justice Department’s Anti-Trust Division, you get the impression that you are indeed getting the whole story–no puppet masters hiding in closets.

THE INFORMANT is a rich and engrossing look at big business and law enforcement. It shines a spotlight on human nature, pretty much confirming what is already accepted wisdom. But the depth of Eichenwald’s presentation makes this well worth the re-education.