The Informant (book)

The Informant

Author	Kurt Eichenwald
Country	United States
Language	English
Subject	Lysine price-fixing conspiracy
Publisher	Random House (hardback) Broadway Books (paperbacks)
Media type	Print (Hardback & Paperback)
Pages	624 (hardback) 656 (trade paperback and movie tie-in edition)
ISBN	978-0-7679-0326-4
OCLC	44045679
Dewey Decimal	364.16/8/0973 1
LC Class	HV8144.F43 E53 2000

The Informant is a nonfiction white-collar crime book written by journalist Kurt Eichenwald and published in 2000 by Random House. It documents the mid-1990s lysine price-fixing conspiracy case and the involvement of Archer Daniels Midland executive Mark Whitacre, inspiring a film adaptation starring Matt Damon as Whitacre.

Plot summary

See also: Lysine price-fixing conspiracy

The Informant is a true-crime account that takes place in Central Illinois during the early 1990s at the Fortune 500 company Archer Daniels Midland, known as ADM. ADM is an agri-business powerhouse and one of the largest companies in the world. Its former chairman, Dwayne Andreas, had extensive political connections to both the Democratic Party and the Republican Party and was also connected indirectly to President Nixon's Watergate. Mark Whitacre is the duplicitous hero of the book. Whitacre was a young rising star at ADM where he was president of the bio-products division and corporate vice president of the company. As a result of some very odd circumstances, Whitacre also became the highest-level executive to turn whistleblower in U.S. history.

One night in early November, 1992, the high-ranking ADM executive did something extraordinary. He confessed to an FBI agent that ADM executives—including Whitacre himself—routinely met with competitors to fix the price of lysine, a food additive. Whitacre’s wife, an elementary school teacher, forced Whitacre to become a whistleblower by threatening to go to the FBI herself if he did not inform the authorities of ADM’s illegal price-fixing activities. The meeting between Whitacre and an FBI agent marked the first time a participant in a price fixing cartel voluntarily tipped off law-enforcement officials. After informing the FBI, Whitacre assisted in gathering evidence by clandestinely taping the cartel’s activity in business meetings in locations such as Tokyo, Paris, Mexico City, and Hong Kong. During Whitacre's undercover work, which spanned almost three years, the FBI collected hundreds of hours of video and audio tapes documenting crimes committed by executives from around the world in fixing the prices of food additives, in the largest price-fixing case in history at the time.

In a stunning turn of events immediately following the covert portion of the case, it was reported in headlines around the world that Whitacre defrauded $9 million from his company at the same period of time he was secretly working for the FBI and taping his co-workers. No sooner did an army of federal agents stage a dramatic raid on ADM's Decatur, Illinois, headquarters than the company hit back with damning evidence that the government's star witness had his own agenda. Whitacre became delusional and lied extensively to the FBI in a failed attempt to save himself. The FBI quickly learned Whitacre was suffering from manic-depression, also known as bipolar disorder, with resulting grandiosity and embellishments in full bloom. Worst of all, Whitacre told stories to the media about FBI agents trying to force him to destroy some of the tapes (stories he later recanted). The Informant focuses on Whitacre's meltdown and bizarre behavior resulting from the pressures of working undercover for the FBI, going into great detail. Whitacre became extremely manic, stopped sleeping most nights, and was seen using a gas leaf blower on his driveway during a thunderstorm at three o’clock in the morning. Whitacre attempted suicide a few months later, but was saved by his groundskeeper.

Whitacre, who earned a Ph.D. from Cornell University in nutritional biochemistry, is the most improbable figure of the story. With his extremely poor judgment associated with bipolar disorder, he believed up to the end that he would become chief executive officer of ADM when the dust settled. His wife tried to convince him otherwise. He was also peculiarly suggestible. After seeing the movie The Firm he imitated its hero, Mitch McDeere, played by Tom Cruise, and began taping the FBI agents and storing the tapes for later use. Indeed, at one point, corporate investigator Jules Kroll, founder of Kroll Associates, was convinced Whitacre was acting out a delusional fantasy based on The Firm and came up with forty-six parallels between the ADM case and the Grisham tale.

In the end, because Whitacre violated his immunity agreement with the government, he was also charged for price-fixing, the same case that Whitacre exposed for the FBI, in addition to wire fraud, tax fraud, and money laundering. In order to save Whitacre, his first attorney, James Epstein, presented a sterling performance to the top U.S. Department of Justice (DOJ) officials, convincing them the government was not duped by Mark Whitacre; that, instead, the government had created Whitacre. Epstein emphasized Whitacre was not trained for FBI undercover projects; he was simply thrown into it with no training whatsoever and with no support to prevent him from cracking under pressure. Epstein told DOJ officials he would go public in a trial with everything Whitacre went through for three years working undercover only to be punished after helping crack one of the largest white-collar cases in history. He convinced the government that Whitacre solved a billion dollar case for the FBI, and that the case was a hundred-fold larger than Whitacre's fraud case. Epstein was successful in getting a very light sentence for Whitacre. However, Whitacre, with his manic-depression fully out of control, saw it differently and fired Epstein because he was not willing to do any jail time.

Whitacre then hired another attorney. They distanced themselves from the government, where Whitacre was no longer of value as a witness. The government used the tapes in the ADM trials, but not Whitacre. Whitacre received a federal prison sentence three times longer than the sentences of the white-collar criminals he exposed in a much larger criminal conspiracy. Kurt Eichenwald, author of The Informant, and several FBI agents adamantly disagreed with the nine-year sentence Whitacre received. The story ends with the FBI agents, along with John Ashcroft, working on their attempt to obtain a presidential pardon for Whitacre. Both during Whitacre's prison tenure and afterwards, Dean Paisley, former FBI supervisor of the case, lobbied for a presidential pardon with support from all three FBI agents and one of the former prosecutors on the case. Paisley traveled to Washington, DC, to meet with government lawyers in his quest for a pardon for Whitacre. With remarkable support from Whitacre's wife and the FBI, Whitacre eventually bounced back after years of jail time and years recovering his mental health, and later, as reported in Forbes magazine, was promoted to COO and president of a California biotechnology company.

As a result of the hundreds of tapes made by Whitacre, the lysine conspirators, including ADM, ultimately settled federal charges for more than $100 million. ADM also paid hundreds of millions of dollars in class action settlements to customers it gouged with the price-fixing schemes. Several Asian and European lysine and citric acid producers, who conspired to fix prices with ADM, paid criminal fines in the tens of millions of dollars to the U.S. government. A few top executives, including the vice chairman of ADM, who was the son of the former powerful chairman, received three years of federal prison time. The ADM investigation, in turn, convinced antitrust prosecutors price-fixing is a far more pervasive problem than they had suspected and led to prosecutions of cartels in vitamins, fax paper, and graphite electrodes. Billions of dollars have been paid in antitrust fines to the U.S. government since Whitacre first blew the whistle in 1992.

Film adaptation

Main article: The Informant!

The book was used as the basis for the movie The Informant!, directed by Steven Soderbergh and starring Matt Damon as Mark Whitacre.

External links

• The Informant — Kurt Eichenwald — official Random House website
• This American Life #168: The Fix Is In (RealAudio) — interview with Mark Whitacre and the book's author, Kurt Eichenwald, from This American Life
• Two-part Booknotes interview with Eichenwald on The Informant, February 4, 2001, and February 11, 2001.