The Informant

Chapter 1

The large gray van, its windows tinted to block the glances of the curious, pulled away from the Decatur Airport, heading toward Route 105. Inside, four foreign visitors watched as images of the modest town came into view. Working-class houses. An Assembly of God church. A man-made lake. The vast fields of corn that could be seen from the air were no longer visible, replaced instead by an entanglement of industrial plants and office buildings.

These were the sights of a thousand other blue-collar neighborhoods in a thousand other Midwestern towns. Still, on this day, September 10, 1992, it was hard not to feel a slight sense of awe. For years, world leaders had seen these images, perhaps from this very van, in a virtual pilgrimage of power. In the last few months alone, this road had been traveled by Mikhail Gorbachev, the former Soviet leader, and by Dan Quayle, the American vice president. Those men, like leaders before them, had been drawn to this out-of-the-way place in the center of America largely by one company and often by one man: Archer Daniels Midland and its influential chairman, Dwayne Andreas.

Few Americans were familiar with who Andreas was or what he did. But among the world’s moneyed and powerful, he and his grain processing company were known well. In Washington, anyone who mattered was acquainted with Andreas—or more likely, with his money. For decades, he had been one of the country’s foremost political contributors, heaping cash almost indiscriminately on Democrats and Republicans—this year alone, Andreas money would be used by both George Bush and Bill Clinton in their battle for the presidency. The largesse helped transform Andreas into one of Washington’s most important men, even as he remained comfortably ensconced in its shadows. But it also thrust him into controversy. It was the $25,000 from Andreas that operatives of President Nixon laundered into the bank account of a Watergate burglar. Following the wide-ranging investigations that stemmed from the Watergate scandal, Andreas was tried and acquitted on charges of violating campaign-finance laws—but that was for the $100,000 he gave to Nixon’s 1968 rival, Hubert Humphrey.

The foreign visitors traveling to ADM on this day hoped for an opportunity to meet Andreas but were uncertain if they would. At this point, they were scheduled only to speak with others in ADM management, the people who ran its day-to-day business.

If all went well, the visitors expected the meeting to last some time. After all, before the day’s end, there were several important things that they needed to learn. But there was also one important thing that they needed to steal.

The van turned onto Faries Parkway, heading directly toward ADM’s homely, sprawling complex. Yellow flowers planted along the side of the road did little to soften the effect of the property’s jagged barbed-wire fence. At the main gate, the driver gave a nod to the guard before turning right toward the squat, nondescript building that housed ADM’s top brass. The van came to a stop beside the seven-foot bronze statue of Ronald Reagan, mounted on a two-ton granite base, that Dwayne Andreas had erected to commemorate a 1984 visit by the then-president.

Hirokazu Ikeda stepped down from the enormous vehicle, trailed closely by Kanji Mimoto, both senior executives from Ajinomoto Inc., a giant Japanese competitor of ADM. Two other Ajinomoto executives followed—one Japanese, one European. Shading their eyes from the morning sun, the men headed into the building’s lobby and introduced themselves to a receptionist. She placed a call, and within seconds a young, energetic man came bounding down a hallway toward them. It was Mark Whitacre, the thirty-four-year-old president of ADM’s newest unit, the Bioproducts Division. He was a man whom in recent months they had come to know, if not yet to trust.

Whitacre smiled as he stepped into the lobby. “Welcome to Decatur,’’ he said, shaking Ikeda’s hand. “And welcome to ADM.

“Thank you, Mr. Whitacre,’’ Ikeda said in halting English. “Happy to be here.

Whitacre turned and greeted Mimoto, a man closer to his own age who spoke English fairly well. The other two men were strangers; they were introduced to Whitacre as Kotaro Fujiwara, an engineer at the company’s Tokyo headquarters, and J. L. Brehant, who held a similar job at its European subsidiary.

With introductions complete, Whitacre escorted the executives down the hallway toward ADM’s huge trading room, the corporate nerve center where it purchased tons of corn, wheat, soybeans, and other farm products for processing each day. On the front wall of the vast room, a screen flashed up-to-the-minute commodity prices. At row after row of desks, an army of traders barked buy and sell orders into telephones.

Around the edges of the room were various executive offices, most with the doors open. Whitacre stopped at one office and tapped on the door frame.

“Terry?’’ he said. “They’re here.

Terry Wilson, head of the company’s corn-processing division, looked up from his desk and smiled. The expression was more a re- flection of strategy than delight; he was hoping to finish with the Ajinomoto executives quickly, in time for an early afternoon round of golf. Like many American businessmen, Wilson often felt frustrated with the Japanese. In negotiations, they seemed loath to horse-trade; they would listen but often retreated into ambiguity, making no specific commitments. Such tactics were considered a sign of virtue in Japan, the vague responses praised as tamamushi-iro no hy¯ogen o tsukau, or “using iridescent expressions.’’ Whatever its elegant description in Japanese, for Westerners like Wilson, a hard-drinking ex-marine, the approach was tiresome. He was not looking forward to it today.

Wilson stepped from behind his desk, past a television that was broadcasting the day’s news.

“Mr. Ikeda, Mr. Mimoto, it’s been a long time,’’ he said. “You’ve come on a day with such nice weather, it’s a shame you’re not here to play golf.

The men chatted about their golf games as Whitacre led them to the executive meeting room, where they found their places around a conference table. A kitchen staffer appeared, serving iced tea, water, and orange juice. As everyone settled in, Whitacre walked to a wall phone and dialed 5505—the extension for Jim Randall, the president of ADM.

“Jim, our guests are here,’’ Whitacre said simply. He hung up and returned to his seat.

Everyone knew this could be a tense moment. Randall had been at the company since 1968. His skills as an engineer were indisputable; his hands-on role kept the huge processing plants running. Still, the sixty-eight-year-old Randall was no Dwayne Andreas. As much as Dwayne’s smooth and polished style made him the perfect Mr. Outside for ADM, Randall’s gruff, plainspoken approach ensured that he would remain Mr. Inside. He often rubbed people the wrong way, whether he was boasting about his sports cars or ADM’s market dominance. The visitors today expected to hear about the company’s might; they knew that ADM’s invitation to visit was partly for the purpose of scaring them.

Randall walked into the room a few minutes later, introduced himself, and took his place alongside Wilson and Whitacre. Instantly he took control of the meeting and the conversation, describing how ADM was transforming itself into a new company.

Over slightly less than a century, ADM had grown into a global giant, processing grains and other farm staples into oils, flours, and fibers. Its products were found in everything from Nabisco saltines to Hellmann’s mayonnaise, from Jell-O pudding to StarKist tuna. Soft drinks were loaded with ADM sweeteners and detergents with ADM additives. Americans were raised on ADM: Babies drinking soy formulas were downing the company’s wares; as toddlers, they got their daily dose of ADM from Gerber cereals. The health-minded consumed its products in yogurt and canola oil; others devoured them in Popsicles and pepperoni. While most people had never heard of ADM, almost every American home was stuffed with its goods. ADM called itself “the Supermarket to the World,’’ but in truth it was the place that the giant food companies came to do their grocery shopping.

Now, Randall said, ADM was entering a new era. Beginning three years before, in 1989, ADM had taken a new direction, creating the Bioproducts Division. No longer would the company just grind and crush food products. Instead, it was veering into biotechnology, feeding dextrose from corn to tiny microbes. Over time, those microbes, or “bugs” as they were known, convert the sugar into an amino acid called lysine. As people in the business liked to say, the bugs ate dextrose and crapped lysine. In animal feed, lysine bulked up chickens and pigs—just the product needed by giant food companies like Tyson and Conagra.

Until ADM came along, the Japanese largely controlled the market, with Ajinomoto the undisputed giant. Start-up costs alone kept out potential competitors—tens of millions of dollars were required just to develop the proprietary, patented microbes needed to ferment lysine. But ADM abounded in cash; it had already invested more than $150 million in the new business. Now, the world’s largest lysine plant was in Decatur, ready to produce as much as 113,000 metric tons a year. And running it all was Whitacre, a whiz-kid scientist who was almost certainly the first Ph.D. ever employed at ADM as the manager of a division.

“We’re going to be the largest biochem company in the world,’’ Randall said. “It just makes so much sense for us. We have the raw materials available, we have cheap utilities. It’s just a natural.

The Japanese executives listened skeptically but said little. If ADM could produce that much lysine, it would have to gobble up much of the existing market. Building such a huge business struck them as irrational, foolhardy. ADM would have to keep large portions of the plant idle while waiting either for the market to grow or competitors to leave the business. Still, the executives didn’t mind hearing the boasts. They knew that listening as ADM rattled its saber would give them the chance to learn other, truthful information about the company.

As Randall spoke, Whitacre and Wilson did their best not to cringe. For all of Randall’s swagger, they knew the most important fact about ADM’s new effort was being left untold: The company couldn’t get the damn plant to work. The bugs went in the vats, the dextrose went in the bugs and out came—very little. In recent months, a virus had turned up repeatedly in the giant fermenters where the lysine was produced, killing the bugs before they produced much of anything. While ADM was producing enough to have a presence in the market, the virus contamination had cost as much as $16 million so far in lost production time alone. And the pressure was really on: Dwayne Andreas had recently suggested shutting down the plant and trying again with a test model. Meanwhile, Dwayne’s son, Mick, who ran much of ADM’s daily business, had been pounding Whitacre for weeks to fix the problem. But after each attempted solution, the virus returned. It was not something to mention to ADM’s chief competitor.

Ten minutes into his monologue, Randall pushed himself back from the table.

“That tells you about our plant, in a nutshell,’’ he said. “Now, Mark’s going to give you a tour, and we’ll see you back here later for lunch.

The Ajinomoto executives thanked Randall and followed Whitacre out the door. He escorted them to his Lincoln Town Car for the short drive to the plant. There, everyone donned hard hats and safety glasses.

They started the tour in the upstairs lab, where a handful of tiny flasks were being automatically shaken. Inside each of them was a mixture of dextrose and soy flour feeding a small number of microbes. Even as the group walked past, the microbes were multiplying rapidly. The irony was that those tiny cells of bacteria were the multimillion-dollar heart of this giant operation. They were ADM’s proprietary biological secret that had allowed the company to break Japan’s control of the business.

Fujiwara and Brehant asked questions and jotted down notes. The group left the lab, walking past the control room and into the main area of the plant.

The Ajinomoto executives hesitated, awed. In front of them was a plant unlike any they had ever seen, a vast acreage of fermenters. Dozens of them were spread across the plant, stainless-steel giants rising ninety feet toward the ceiling.

The group headed out onto the plant floor, then down a metal staircase. Fujiwara and Brehant walked near the plant manager as he described the operations. Whitacre and Ikeda were a few steps back.

Mimoto, already behind the rest of the group, slowed his pace. He waited until he felt sure that no one was looking. Quickly, he reached into his pocket and pulled out a plastic bag, removing the moist handkerchief inside. He placed the handkerchief on the staircase banister, rubbing it as he walked down the steps. Before anyone noticed, he slipped the handkerchief back into the bag, sealed it, and casually placed it back in his pocket.

Mimoto knew that the multimillion-dollar bacteria used by ADM to produce its lysine was growing everywhere in this plant, even places where it could not be seen. He could only hope that, with the handkerchief, he had successfully stolen a sample of it for Ajinomoto.

Weeks later, Whitacre was at his desk when the intercom buzzed. It was Liz Taylor, his secretary who sat just a few feet outside his office.

“Yeah, Liz, what’s up?

“Somebody’s on the phone for you, but I can’t pronounce his name. But he sounds Asian.

Whitacre picked up the telephone.

“Mark Whitacre.

“Hello, Mr. Whitacre?’’ Liz was right. The caller’s Asian accent was thick.