News & Politics

CORPORATE FOCUS: Winking at Corporate Fraud

It's not easy criminally prosecuting a major American corporation, especially when one of its top officers is a big Democratic Party contributor.
What is Attorney General Janet Reno trying to hide?

A lot. In part, that's the nature of being in law enforcement. You don't want to tip off the criminal element, so you play things close to the vest. The less said the better.

But in part, Reno is proficient at dodging legitimate questions that have nothing to do with ongoing criminal investigations.

Yes, she has held a weekly press conference since she came into office. But despite hundreds of questions that she has fielded over the years at her weekly press briefing, she has given few substantive answers. It's either "can't talk about that -- it's under investigation" or "get back to me later," or one of a dozen or so other put offs that now come naturally to the Attorney General. She even smiles when she does this -- and what's a reporter to say?

A couple of weeks ago, we attended Reno's press briefing to ask her about a new book -- Rats in the Grain: The Dirty Tricks and Trials of Archer Daniels Midland, The Supermarket to the World, by James Lieber (Four Walls, Eight Windows, 2000).

Lieber, a Pittsburgh-based labor lawyer, documents the federal government's criminal case against ADM and some of its top executives for price-fixing.

The criminal prosecution would never have been launched had it not been for Mark Whitacre, the former ADM vice president who agreed to become a mole for the Federal Bureau of Investigation (FBI) and be wired. As a result of Whitacre's work, the FBI collected hundreds of hours of video and audio tapes documenting executives from around the world fixing the price of lysine, a feed additive.

In October 1996, ADM pled guilty to antitrust crimes and was fined $100 million. Senior vice presidents Michael Andreas, the son of Chairman Dwayne, and Terrence Wilson were convicted of antitrust crimes in 1999 after a trial in federal court in Chicago. They were sentenced to three years in prison each.

Mark Whitacre was charged with accepting millions of dollars in off-the-books payments from ADM -- in effect, stealing from the company. Whitacre pled guilty and was packed off to prison for nine years.

Lieber details the investigation and prosecution of the corporate criminals and their executives in what is perhaps the best documented corporate crime in recent memory.

But he also points out that the FBI had much information indicating that ADM Chairman Dwayne Andreas and President James Randall knew about shenanigans going on throughout the company. Yet, the FBI was not allowed to question them -- ADM's highest ranking executives.

Attorney General Reno, shall we go to page 306? There, Lieber points out that in 1996, Dwayne told the Washington Post that he had known about Whitacre's off-the-books compensation for three years. Whitacre was only fired after ADM learned that he had been working as a mole for the FBI. If he knew about it for three years, why didn't he fire Whitacre immediately?

Or how about page 326, where Lieber points out that ADM board member Howard Buffett, son of Omaha multibillionaire Warren Buffett, told the FBI that in July 1995, during the height of the FBI investigation, he saw a "tub of shredded documents" outside of Dwayne's office. Yet Dwayne was never called to testify about these shredded documents.

For an attorney general who claims to make decisions based on justice, not politics, the failure to interview a big Democratic Party contributor like Dwayne Andreas looks bad. FBI agent Anthony D'Angelo told Lieber that ADM's law firm, Williams and Connolly, was effectively in charge of the investigation from its inception. "Williams & Connolly held a lot of power," D'Angelo said. "They basically ran the show."

So, we go to see Reno at her offices at the Justice Department, where her weekly briefing takes place. And we ask about the troubling allegations raised by Lieber.

"I have not read the book, so I couldn't comment."

Okay, let's put aside the book. You were in charge of the investigation -- why didn't you have your people call Dwayne Andreas and James Randall in for questioning?

"I won't comment in the context of the book, since you are asking questions in the context of the book. I've discovered when questions are asked in a specific context, they are often taken out of context."

We leave the press briefing befuddled, but anxious to get an answer. We call the Justice Department's spokesperson on all matters criminal, John Russell.

John, we ask, why didn't the Justice Department at least bring Dwayne in for questioning?

"Williams & Connolly wouldn't let us question him," Russell says dryly.

What about a subpoena, forcing him to testify?

"We got the information otherwise," Russell said.

From where?

"No comment," he says, as the conversation ends.

We returned to see Attorney General Reno last week, and asked her if she had read Lieber's book yet.

"I still haven't had time to read it," she said.

We offered our copy of Rats in the Grain to the Attorney General. She refused. "No, I have other matters to attend to," she said.

But doesn't it trouble you that Randall and Dwayne get a free pass from even being questioned on this matter?

"I have reviewed it and I can't comment," she said.

It's not easy criminally prosecuting a major American corporation. Hard questions have to be answered and deals have to be struck.

But this apparent deal gave absolute protection to ADM's top two officers, when they should at least have been hauled in for some tough questions about what they knew and when they knew it.

The case needs to be reopened -- now.

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