Mark Whitacre

Mark Whitacre
Mark Whitacre
Born May 1, 1957 (1957-05-01) (age 54)
Morrow, Ohio
Charge(s) Wire fraud, tax fraud, money laundering, price-fixing[1]
Penalty >10 yr. in federal prison camp (but served ca. 8½ yrs. for good behavior)[2]
Status Released
Occupation COO & President of Operations
of Cypress Systems, Inc.[3][4]
Spouse Ginger (Gilbert) Whitacre (married 1979)[5][6]
Children Three adult children[6]

Mark Edward Whitacre (born May 1, 1957) came to public attention in 1995 when, as president of the BioProducts Division at Archer Daniels Midland (ADM), he was the highest-level corporate executive in U.S. history to become a Federal Bureau of Investigation (FBI) whistleblower. For three years (1992–1995), Whitacre acted as an informant for the FBI, which was investigating ADM for price fixing. In apparent retaliation for his role as an informant, ADM investigated Whitacre's activities and, upon discovering suspicious activity, requested the FBI investigate Whitacre for embezzlement. As a result of US$9.5 million in various frauds, Whitacre lost his whistleblower's immunity, and consequently spent eight-and-a-half years in federal prison. He was released in December 2006. Whitacre is currently the chief operating officer and President of Operations at Cypress Systems, a California biotechnology firm.

Contents

Early life and education

Whitacre was born on May 1, 1957 and grew up in Morrow, Ohio.[5] He holds B.S. and M.S. degrees from Ohio State University,[5] and earned a Ph.D. in Nutritional Biochemistry from Cornell University (1983).[5][7]

Career

Whitacre was an executive at Degussa and Ralston Purina prior to joining ADM, where he was president of the BioProducts Division from 1989 until August 9, 1995.[5]

In 2006, Whitacre was hired by Cypress Systems Inc., a California biotechnology company, as the President of Technology and Business Development.[2] In March 2008, he was promoted to the company's Chief Operating Officer (COO).[3][8]

Legal issues

ADM price-fixing

See also: Lysine price-fixing conspiracy

In 1992, during an ADM-initiated investigation of corporate espionage and sabotage, Whitacre informed an FBI agent that he and other ADM executives were involved in an illegal multinational lysine price-fixing scheme.[9][10] Whitacre's wife pressured him into becoming a whistleblower after she threatened to go to the FBI herself.(Eichenwald 2000,[page needed])

Over the next three years, Whitacre worked with FBI agents to collect information and record conversations with both ADM executives and its competitors.[5] ADM ultimately settled Federal charges for more than US$100 million and paid hundreds of millions of dollars more to plaintiffs and customers (US$400 million alone on a high-fructose corn syrup class action case).[9][11][12][13]

Whitacre embezzlement

A few years into the price-fixing investigation, Whitacre confessed to his FBI handlers that he had been involved with corporate kickbacks and money laundering at ADM.[5] Whitacre was later convicted of embezzling US$9 million; some of this criminal activity occurred during the time he was cooperating with the FBI.[1][14]

Sentencing and release

Represented by high profile lawyer, John M. Dowd, Whitacre pled guilty, without a trial, to tax evasion and fraud and was sent to prison on March 4, 1998.[1] Although some officials in the FBI and the Department of Justice opposed the length of the penalty, Whitacre was sentenced to ten and a half years in Federal prison—three times longer than his price-fixing conspirators. In December 2006, he was released on good behavior after serving eight and half years.[15][16]

Differing perspectives

Kurt Eichenwald

In his 2000 book, The Informant, Kurt Eichenwald, a former New York Times reporter, portrays Whitacre as a complex figure: while working for the FBI as one of the best and most effective undercover cooperating witnesses the U.S. government ever had, Whitacre was simultaneously committing a US$9 million white-collar crime.[17] According to Eichenwald, preceding the investigation Whitacre was scammed by a group in Nigeria in an advance fee fraud, and suggests that Whitacre's losses in the scam may have been the initial reason behind his embezzlement activity at ADM.[17] (This possibility is discounted by James B. Lieber.)[6][18]

Eichenwald writes that Whitacre lied and became delusional in a failed attempt to save himself, making the FBI investigation much more difficult.[19] The Informant details Whitacre's bizarre behavior, including Whitacre cracking under pressure, increasing his mania, telling the media that FBI agents tried to force him to destroy tapes (a story that Whitacre later recanted), and attempting suicide.[19] Two doctors later diagnosed Whitacre as suffering from bipolar disorder. Eichenwald concludes that Whitacre's sentence was unjust because of his mental instability at the time.[20]

Eichenwald, two prosecutors, an FBI agent, and Mark Whitacre (during his incarceration) were featured on a September 15, 2000, episode of the radio program This American Life about the ADM case.[21] Eichenwald referred to Whitacre's sentence as "excessive and a law enforcement failure" because Whitacre never received credit for his substantial cooperation in assisting the government with the massive price-fixing case.[21]

Eichenwald's account of Whitacre has been called into question by the syndicated columnist Alan Guebert,[22] following the disclosure in August 2007 that Eichenwald paid his sources on another story.[23]

James B. Lieber

In his 2000 book, Rats In The Grain, attorney James B. Lieber focuses on ADM's price-fixing trial and presents Whitacre as an American hero overpowered by ADM's vast political clout.[15] Rats In The Grain presents evidence that the U.S. Department of Justice often subjugated itself to ADM's political power and well-connected attorneys in prosecuting Whitacre. Lieber reveals that, in 1996, "ADM CEO, Mr. Dwayne Andreas, told The Washington Post that he had known about Whitacre's frauds for three years” and speculates that Whitacre was fired and turned over to the Federal authorities only after ADM learned he had been working as an FBI mole. If he knew about Whitacre's embezzlement for three years, Lieber asks, why didn't Andreas fire Whitacre immediately? Lieber surmises: “There were only two logical explanations for Andreas' behavior: either he did not think the funds were stolen (in other words, they were approved) or he didn't care."(Lieber,[page needed]) Based on the fact that other ADM executives committed crimes such as financial fraud by a former treasurer and technology thefts by others, Lieber concludes that fraud was well-known and widespread at ADM during the 1990s.[15] Lieber suggests that ADM would have not turned Whitacre over to the authorities if he had not been a mole for the FBI.[14]

Like Eichenwald, Lieber concludes that Whitacre's lengthy prison sentence was excessive and unjust when one takes into account Whitacre's cooperation in the much larger price-fixing case.[20][24]

Lieber also poses this question: "Where will the government obtain the next Mark Whitacre after potential whistleblowers observe how Whitacre was treated?" (Lieber,[page needed])[25]

Clemency or pardon support

Even though presidential pardons are known to require decades after an ex-offender's prison release, appeals for Whitacre's full pardon or clemency to the White House are supported by several current and former justice department officials: Dean Paisley, a retired 25-year veteran and former FBI supervisor on the price-fixing case; two other FBI agents involved with the case; a former Attorney General of the United States; one of the former Asst. U.S. Attorneys who prosecuted Whitacre; two prosecutors from the Canadian Department of Justice; several Senators and Congressmen; Cornell University and Ohio State University professors; Major League Baseball Hall of Famer Harmon Killebrew; and numerous top executives of corporations.[2][8][22][26]

In 2008, more than ten years after the original conviction, Paisley and two other FBI agents went public with praise for Whitacre. Paisley concluded that "Whitacre's fraud case was minuscule as compared to the ADM case Whitacre cooperated with.”[2][7][8][27] "Had it not been for the fraud conviction," Paisley said, "he would be a national hero. Well, he is a national hero."[7][26][27][28] Paisley added, "Without him, the biggest antitrust case we've ever had would not have been."[7][27][28] On August 4, 2009, in a Discovery Channel documentary, Undercover: Operation Harvest King, several FBI agents stated that "Whitacre got a raw deal."[29] In addition, official letters from the FBI in support of a Whitacre pardon were published in Floyd Perry's September 2009 book, Mark Whitacre: Against All Odds.[30]

Feature film

The Informant! is a Warner Bros. feature film released on September 18, 2009. Produced by Jennifer Fox and directed by Steven Soderbergh, the dark comedy/drama film stars Matt Damon as Whitacre.[31] The screenplay by Scott Z. Burns is based on Kurt Eichenwald's book, The Informant, with most of the filming done in Central Illinois (Moweaqua and Decatur).[32]

See also

  • Antitrust

References

Footnotes

  1. ^ a b c "Former ADM Executive Pleads Guilty to Fraud" (Press release). United States Department of Justice. 1997-10-10. http://www.usdoj.gov/opa/pr/1997/October97/425crm.html. Retrieved 2009-09-20. 
  2. ^ a b c d "Lysine Cartel Whistleblower on Price Fixing and Rebuilding his Life after Prison", FEED INFO NEWS SERVICE (Global Data Systems, Inc.), 2009-01-13, http://www.feedinfo.com/console/PageViewer.aspx?page=1202114&public=yes 
  3. ^ a b Ackerman 2008
  4. ^ About Us, Cypress Systems Inc., http://www.selenoexcell.com/aboutus.html, retrieved 2009-09-27 
  5. ^ a b c d e f g Henkoff, Ronald; Jaynes, Madeline (1995-09-04). "So Who Is This Mark Whitacre, And Why Is He Saying These Things About Adm?". CNN. http://money.cnn.com/magazines/fortune/fortune_archive/1995/09/04/205874/index.htm. 
  6. ^ a b c Lieber 2000,[page needed]
  7. ^ a b c d Muirhead 2008
  8. ^ a b c Send2Press NewsWire (2008-03-25), Mark Whitacre, Ph.D. Promoted at Cypress Systems, Inc. and a Warner Bros. Movie to be Filmed About Him, News Blaze, http://newsblaze.com/story/2008032422530100001.sp/newsblaze/SENDPRES/Send2Press.html 
  9. ^ a b Wilson, J.K. (2000-12-21), Price-Fixer to the World, Bankrate, http://www.bankrate.com/brm/news/investing/20001221c.asp?prodtype=grn, retrieved 2009-09-20 
  10. ^ CPR (2009-09-18), "The Fix Is In", Chicago Public Radio: pp. [1] 
  11. ^ Greenwald, Donnelly & McWhirter 1996
  12. ^ [<dead link> 2009-09-20 "Archer Daniels Settles Suit Accusing it of Price Fixing"] (Press release). Kaplan Fox & Kilsheimer LLP. 2004-07-19. <dead link> 2009-09-20. 
  13. ^ Sweetener settlement for ADM, Decision News Media, 2004-06-18, http://www.foodnavigator-usa.com/Financial-Industry/Sweetener-settlement-for-ADM, retrieved 2009-09-20 
  14. ^ a b Lubbock Avalanche 1996
  15. ^ a b c Mokhiber, Russell; Weissman,, Robert (2000-08-08), "Rats in the Grain", Common Dreams NewsCenter, http://www.commondreams.org/views/080800-101.htm, retrieved 2009-09-20 [2]
  16. ^ Krebs, A.V. (2000-08-16), "Must reading", The Progressive Populist (Ampersand Publishing Co.), http://www.populist.com/00.16.krebs.html 
  17. ^ a b (Eichenwald 2000,[page needed])
  18. ^ Eichenwald 2000,[page needed]
  19. ^ a b (Eichenwald 2000,[page needed])
  20. ^ a b Webber, Susan (2000-09-25), Tale of the Tapes, Aurora Advisors Newsletter, http://www.auroraadvisors.com/articles/2000-09_dailydeal.html 
  21. ^ a b Glass 2000
  22. ^ a b Guebert 2007
  23. ^ Calderone 2007
  24. ^ Whitaker, Leslie (2000-10-30), "Supermarket for Scandal", The Pennsylvania Gazette, http://www.upenn.edu/gazette/1100/1100books.html 
  25. ^ (Cain 2008)
  26. ^ a b England 2009
  27. ^ a b c Cain, Tim (2008-04-06), "Behind the inside man: Mark Whitacre, talks about 'The Informant', his time in prison and moving forward", Decatur Herald and Review [3]
  28. ^ a b Sidhu, Roopam (2008-07-23), Fresno company linked to Matt Damon movie, CBS TV 47 Fresno [4]
  29. ^ Discovery Channel 2009
  30. ^ Perry, Floyd (2009), Mark Whitacre Against All Odds, XLIBRIS, Inc., ISBN 978-1-4415-4133-8 [5]
  31. ^ The Informant! (2009), Hollywood.com, LLC, 2005-06-18, http://www.hollywood.com/movie/The_Informant/3464215 
  32. ^ (Cain 2008)

Bibliography

Coverage in the news media

External links


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