I grew up in Decatur, Illinois, the one-time “Soybean Capital of the World,” home to almost eighty thousand people and also to ADM, one of the world’s most powerful (and least-known) multinational corporations. In central Illinois, ADM transforms the bountiful harvest of some of the world’s best farmland into artificial sweeteners, ethanol and biofeuls, food additives, industrial chemicals, and animal feed (among many other products). During the long reign of chairman and CEO Dwayne Andreas, ADM grew from a small grain company into an international agribusiness behemoth, and also came to wield tremendous political influence. Andreas was close friends with former vice president Hubert Humphrey, and in 1972 Andreas donated $100,000 to the liberal Democrat’s political campaign—the same year in which he gave President Richard Nixon $25,000 that would be used to finance the Watergate break-in. I can also remember seeing local news coverage of Mikhail Gorbachev stepping out onto the tarmac at the tiny Decatur airport—he’d come to my hometown to do business with Andreas.
For many years, ADM has reaped great profits by means of its tremendous political influence. Two of the company’s biggest businesses—ethanol and high-fructose corn syrup—would not be nearly so profitable (and perhaps not profitable at all) if it weren’t for massive government subsidies that have poured billions of dollars directly into ADM’s coffers. (For an outline of the basics of this story, see this Cato Institute report from 1995. You’ll also find insightful discussion of the politics of high-fructose corn syrup and ethanol, and of big agribusiness in general, in Michael Pollan’s 2006 book The Omnivore’s Dilemma.)
But for all its power, ADM could not prevent itself from getting hit with a $100 million fine for its participation in a price fixing conspiracy in the markets for citric acid and lysine (a biological product that promotes growth in livestock). In the early nineties, ADM executives met regularly with their Japanese, Korean, and European counterparts in order to reach agreements on prices and production volumes in lysine, and held similar meetings with producers of citric acid. Such agreements are blatantly illegal under antitrust law, because they permit companies to charge artificially high prices for their products. By fixing prices, ADM and its co-conspirators were effectively stealing many millions of dollars from their own customers.
Corporate price-fixing is normally extremely difficult to prove, but in this case, FBI agents were able to present prosecutors with hundreds of hours of price-fixing meetings secretly taped by an ADM executive named Mark Whitacre. In his absorbing and thorough 2000 book The Informant, the New York Times journalist Kurt Eichenwald tells the complex, bizarre, and utterly fascinating story of how Whitacre worked with the FBI for years, while also lying outrageously in order to cover up his own embezzlement of several million dollars. Part thriller, part character portrait, The Informant makes for thoroughly absorbing reading, and Eichenwald does a masterful job of drawing on interviews, tape transcripts, and other sources in order to place readers right in the thick of the FBI’s investigation into ADM.
It’s not the only book about the price fixing scandal; James B. Lieber’s Rats in the Grain also provides a well-written and incisive account. But Eichenwald’s book tells the story more thoroughly and in much greater detail, while at the same time often reading like a suspense novel—which is no doubt part of why Steven Soderbergh has recently made a film based on the book, starring Matt Damon, which will be released in theaters this fall. I’m eager to see it, and not only because I think The Informant will translate very well to cinematic adaptation. Soderbergh shot the movie in Decatur, and apparently took great care to ensure that the film’s production design is true to Central Illinois in the early 1990s. I’m looking forward to the experience of seeing the world of my own adolescence on the big screen.
But in the meantime: I’d highly recommend Eichenwald’s book.