Mark Whitacre

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Mark E. Whitacre
Born May 1, 1957 (1957-05-01) (age 51)
Morrow, Ohio
Penalty >10 yr. in federal prison camp (but served ca. 8 & 1/2 yrs. for good behavior)[1]
Occupation Currently COO & President of Operations, of a California biotechnology company, Cypress Systems, Inc.[2]
Spouse Married in 1979 to his high school sweetheart, Ginger (Gilbert) Whitacre[3][4]
Children Three adult children[4]

Mark E Whitacre (born May 1, 1957) was the President of Archer Daniels Midland's BioProducts Division from 1989 to 1995.[3] He came to public attention in 1995 when it became known that he had been acting as an informant for the Federal Bureau of Investigation (FBI), which was investigating Archer Daniels Midland ("ADM") for price fixing.[5] With Whitacre, the FBI had the highest-level executive ever in U.S. history to turn undercover cooperating witness.[4] He subsequently came under investigation for embezzling money from ADM[6], and was convicted for his role in the price-fixing case and plead guilty to fraud. As a result, Whitacre spent over eight years in federal prison.[7] More than ten years later (April 6, 2008), the former FBI supervisor of the price fixing case, Dean Paisley, with backing from other FBI agents and a former prosecutor, went public with praise about Whitacre. "Had it not been for the fraud conviction," Paisley said, "he would be a national hero. Well, he is a national hero." [8] "Without him, the biggest antitrust case we've ever had would not have been", Paisley added.[8]

Contents

[edit] ADM price-fixing conspiracy

[edit] History

In 1992, the FBI was brought in to investigate a possible case of corporate espionage against ADM. The espionage case later was found to be groundless, but during their investigation, Mark Whitacre told an FBI agent that he and other ADM executives were involved in a multinational conspiracy to control the price of lysine.[9] Over the next three years, Whitacre worked closely with FBI agents to collect information and record conversations with both ADM executives and their competitors.[4] ADM ultimately settled federal charges for more than US$100 million and paid hundreds of millions of dollars more ($400 million alone on the high fructose corn syrup class action case) to plaintiffs and customers.[9][10][11][12]

It was initially Whitacre’s wife, an elementary school teacher, who forced Whitacre to become a whistleblower in 1992 by threatening to go to the FBI herself if he would not have informed the authorities of ADM’s illegal price-fixing activities.[13] During the price-fixing investigation, Whitacre confessed to his FBI handlers that he had been involved with corporate kickbacks and money laundering at ADM.[13] He was eventually convicted of embezzling $9 million, much of which occurred while he was working with the FBI.[14][6] His technique involved setting up a bogus offshore company, having it send ADM a fictitious invoice, and then paying off the bill under his own signature.[13]

Whitacre's testimony led to internal conflict in the U.S. Department of Justice.[4] His FBI handlers argued for lenient treatment in exchange for his crucial role in uncovering the conspiracy, while the Department of Justice grew impatient with his increasingly uncooperative behavior.[4] U.S. prosecutors eventually charged Whitacre with wire fraud, tax fraud, and money laundering.[14]

[edit] Sentencing

He received a sentence of ten and a half years in federal prison, three times more than that of his co-conspirators.[7][15][16]

Several reporters, the author of Rats in the Grain, and some Department of Justice officials disagreed with the harsh ten-year sentence of Whitacre.[1][4][7][13] Kurt Eichenwald, formerly of the New York Times and author of The Informant was one of the harshest reporters regarding Whitacre[17][18], but he also concluded that Whitacre’s sentence was excessive.[13] James Lieber, who authored Rats in the Grain, painted a much different picture about Whitacre than Eichenwald, portraying Whitacre as an American hero who was overpowered by ADM’s vast political clout.[4][16][19] Dean Paisley, formerly 25 years with the FBI including his role as the FBI supervisor of the ADM case, has supported a Whitacre Pardon for several years[1][4], which is more in line with Lieber's conclusions than Eichenwald's.

Whitacre served approximately eight and a half years in a federal prison camp for fraud, price-fixing, and tax evasion.[14][1] Several current and former FBI and Department of Justice officials continue to support Whitacre and are attempting to obtain Presidential clemency or a Presidential pardon in return for his substantial assistance with one of the largest price-fixing cases in history.[1][4] Whitacre, a Cornell Ph.D., is currently the COO & President, Technology and Business Development, of a California biotechnology company.[1]

Whitacre was convicted for tax evasion and fraud and sent to prison in 1998.[14][4] According to the updated paperback version of "Rats in the Grain",[4] Whitacre was a model inmate and earned several more advanced degrees while he was incarcerated in addition to his extensive Ph.D. level education. Furthermore, Whitacre was a mentor to many individuals in prison and assisted numerous young men in completing their GEDs and college degrees.[4] His wife and three children visited him every weekend during his entire eight and a half years sentence.[1][4][13]

[edit] Differing accounts

[edit] Kurt Eichenwald

The Informant was written by Kurt Eichenwald, a New York Times reporter. Eichenwald portrayed Whitacre as a complex figure who was simultaneously working very hard for the FBI as one of the best and most effective undercover cooperating witnesses the U.S. Government ever had, but also working even harder for himself by committing a $9 million greed-induced white-collar fraud during the same period of time Whitacre was working for the FBI.[13] Eichenwald reported that Whitacre lied extensively to the FBI in his failed attempt to save himself, these deceptions made the FBI investigation much more difficult, and Whitacre was suffering from manic-depression, also known as bipolar disorder, according to two doctors who treated Whitacre for several years.[13] The Informant also focused on Whitacre's meltdown and bizarre behavior which occurred from the pressures of working for the FBI from 1992 to 1995.[20] [21] According to Eichenwald, Whitacre told stories, prior to working for the FBI, of being an orphan, in which he was not. However, he and his wife adopted two of their three children.[13] Furthermore, Whitacre was scammed by a group in Nigeria in one of their advance fee frauds.[13] Eichenwald hinted that Whitacre's losses in the Nigerian scam may have been the initial reason behind Whitacre's fraud activity at ADM, but Lieber disagreed with this possibility in his book, Rats in the Grain.[4][13] Worst of all, according to Eichenwald, Whitacre told stories to the media about how the FBI agents tried to force him to destroy some of the tapes (a story that he later recanted)[13]. Eichenwald goes into great detail about Whitacre's bizarre behavior and how he "cracked under pressure", then became extremely manic, stopped sleeping during many nights, was reported to be riding horses numerous times after midnight, and was seen using a gas leaf blower on his driveway during a thunderstorm after midnight in 1994.[13] Whitacre attempted suicide a few months later.[13] Kurt Eichenwald concluded that Whitacre's sentence was unjust because of Whitacre's mental instability at the time and the FBI would not have had a high-level executive such as Whitacre as a cooperating witness to begin with if it was not for Whitacre's manic-depressive or bipolar tendencies.[22] Eichenwald, two prosecutors, an FBI agent, and Mark Whitacre [during his incarceration] conducted an extensive radio interview with National Public Radio (NPR) on September 15, 2000 about the ADM case. [23] 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.[22]

Eichenwald's account of Whitacre has been called into question by the Peoria Star[17] following the disclosure in August 2007 that he had paid his sources on another story.[24]

[edit] James B. Lieber

The other book, Rats In The Grain, by lawyer James B. Lieber, focused more on ADM's price-fixing trial and painted a much different picture about Whitacre than Eichenwald.[4] Lieber portrayed Whitacre as an American hero who was overpowered by ADM’s vast political clout.[19] James Lieber presented abundant evidence to build a solid case that the U.S. Department of Justice often subjugated itself to ADM's political power and well-connected attorneys in the prosecution of informant Mark Whitacre for fraud and tax evasion.[19][25] Lieber reported that Whitacre was the highest-level executive ever to turn whistleblower in U.S. history, and that Whitacre never attempted any type of fraud during all of his years of employment prior to ADM.[4] Lieber concluded that Whitacre's criminal activity and bizarre behavior were a direct result from the pressures which were placed on Whitacre by the FBI, and that Whitacre's manic-depression became more problematic as a result of working undercover for the FBI.[4] Lieber also pointed out that the FBI had much information indicating that ADM former Chairman Dwayne Andreas and former President James Randall knew about crimes going on throughout the company. Yet, the FBI was not allowed to question them – ADM's former highest ranking executives. Lieber emphasized, and Eichenwald appeared to ignore, that in 1996, “Mr. Dwayne Andreas told the Washington Post he had known about Whitacre's frauds for three years”.[26] However, Whitacre was only fired and turned into the federal authorities after ADM learned 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, asked Lieber? “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,” wrote Lieber.[4][25] Lieber concluded that fraud was widespread and an accepted practice at ADM during the 1990s.[7] ADM has been under new management for several years.[4] Based on the fact that other executives committed frauds at ADM [i.e., financial fraud by a former treasurer and also technology thefts by others] and based on the fact that ADM continued to support them, Lieber concluded that ADM would have not turned Whitacre into the authorities if he had not been a mole for the FBI.[6] Furthermore, Lieber posed the question of where will the government obtain the next Mark Whitacre after potential whistleblowers observe how Whitacre was treated?[4] Like Eichenwald, Lieber also concluded that Whitacre’s lengthy prison sentence was excessive and unjust when one takes into account Whitacre's unprecedented cooperation with a much larger criminal case and his mental instability at the time.[22][25] Lieber stated that Whitacre should not have received any prison sentence in return for his "multiple years of unprecedented cooperation" on a much larger case.[4]

[edit] Dean Paisley

More recent information (March, 2008) illustrated that the Former FBI Supervisor of the ADM case, Dean Paisley, concluded in several pardon support letters which were sent to the White House that "Whitacre’s fraud case was minuscule as compared to the ADM case Whitacre cooperated with”.[1][4][27] This statement was more in line with Lieber’s conclusion than Eichenwald’s. Paisley further stated that Whitacre should receive a Presidential pardon for his “substantial assistance to the U.S. Government and the sacrifices he made because of the case”.[1] Paisley had been attempting to obtain clemency (a reduced sentence) for Whitacre with the help of other former and current FBI agents and prosecutor who were involved with Whitacre’s case.[4] Paisley has now redirected that energy into obtaining a full Presidential pardon for Whitacre.[1] Paisley added, in several pardon/clemency support letters, that most of the erratic behavior and financial frauds occurred during the same period of time Whitacre was working for the FBI and were a direct result of the pressures placed upon him, in his opinion.[1] Paisley worked 25 years with the FBI and has spent a lot of his retirement time attempting to obtain clemency or a pardon for Whitacre. He stated Whitacre's sentence was a miscarriage of justice and Paisley is passionate about the U.S. government rewarding Whitacre in some fashion.[1]

In early March of 2008, Dean Paisley joined Whitacre in Washington, D.C. where they jointly met with government lawyers in order to present strong support for Executive Clemency by all three FBI agents, including Brian Shepard who maintained day-to-day contact with Mark Whitacre during the case, and one of the former prosecutors whom worked on the original case.[2][27] Dean Paisley stated, "Such strong pardon support from several current and former Department of Justice officials is unprecedented."[27] "Had it not been for the fraud conviction," Paisley said, "he would be a national hero. Well, he is a national hero", Paisley added.[8]

[edit] Biography

[edit] Early years

Mark Whitacre was born on May 1, 1957 and grew up in a middle class family in southern Ohio. He was the 1975 senior class president at the Little Miami High School which is located in a very small town, north of Cincinnati, called Morrow.[3] He was a good student in high school but excelled when he went to college both at Ohio State University and Cornell University.[3][4]

[edit] Education

Dr. Whitacre's extensive college education includes several college degrees.[4] Always being in biotech, his flagship degree is a Ph.D. from the Ivy League Cornell University in Ithaca, New York (1983) with a major in Nutritional Biochemistry (minors: Biochemistry and International Nutrition). At Cornell, Whitacre studied under one of the world-renowned selenium experts, Dr. G.F. Combs, Jr., in order to conduct his Ph.D. dissertation research on the biochemical role of selenium in the pancreas.[3] Whitacre completed his Ph.D. at Cornell in two years.[4] Furthermore, he holds B.S. and Master's degrees (M.S.) from the Ohio State University where he graduated in 1979 "Cum Laude" and "With Distinction" in an honor's combined program earning both degrees simultaneously within four years.[4] He was one of a few students at Ohio State University enrolled in this special honor's program.[4] Dr. Whitacre's education also includes two law degrees [both the J.D. (Juris Doctor) and LLM] from Northwestern California University in Sacramento, California. Whitacre continued to study after Cornell University by correspondence in order to obtain a Master of Business Administration (MBA) degree from Kensington University.[4] In addition, during his incarceration, Whitacre earned two more Ph.D.'s, one in Psychology and the other in Business, by correspondence from the same university.[4]

[edit] Career

Mark Whitacre is an executive with almost two decades of management experience which include positions as CEO/President.[3][4] Most of Whitacre's executive experience was obtained at Fortune 500 companies [i.e., ADM, Degussa, and Ralston Purina] prior to heading entrepreneurial companies.[3] Whitacre became the President of the BioProducts Division for ADM).[13] ADM has $36 billion in annual revenues. Whitacre was responsible for the BioProducts Division from its inception and it became one of the largest fermentation complexes in the world in less than six years.[3] Hired by ADM in 1989 at the age of 32, Whitacre was the youngest Divisional President in the history of the company.[4] Shortly thereafter, in 1992 at the age of 35, he also became a Corporate Vice President of ADM and an Officer of the company.[4][13] Furthermore, he was considered the leading candidate to become the next company president according to a 1995 front cover Fortune Magazine article.[3] Furthermore, his experience is international in scope having lived approximately four years in Europe, and fluent in the German language. Whitacre was also responsible for businesses in S.E. Asia for two large international companies, and traveled to Asia dozens of times conducting business activities.[3][4] In 2006, Mark Whitacre joined a California biotechnology company, Cypress Systems, as their COO & President, Technology and Business Development.[1] In March of 2008, Whitacre was promoted to the company's Chief Operating Officer (COO) and President of Operations.[2][27]

[edit] Family

Mark Whitacre married Ginger Gilbert, his high school sweetheart, in 1979. The Whitacres adopted two children aged five and seven in 1985, months before their biological son was born, in order for the two siblings to be able to stay in the same family.[4][28]

[edit] Upcoming movie

A Warner Brothers' feature film is currently being filmed about Whitacre. The Informant is directed by Steven Soderbergh and produced by Jennifer Fox, with Matt Damon playing the role of Mark Whitacre.[15] The script for the movie was written by Scott Z. Burns, based upon Kurt Eichenwald’s book, The Informant. Most of filming will be done in Moweaqua, Illinois with the local town and home of ADM Decatur being used also.[29]

[edit] Pardon support from FBI agents and Chuck Colson

Whitacre has numerous supporters who continue to lobby for a Presidential Pardon [Clemency].[1][4] According to letters filed to Pardon Attorney at Department of Justice and to President George W. Bush, this position is also strongly supported by Mr. Dean Paisley, the former Springfield, Illinois FBI supervisor in charge of the ADM case-who wrote numerous letters to the White House in support of Whitacre.[1] There is some evidence that then-Chairman of ADM, Dwayne Andreas, exerted undue political influence at the time on focusing the case away from the company and toward Mark Whitacre, according to Lieber who also wrote several pardon letters in support of Whitacre to the Department of Justice and the White House.[4] Dwayne Andreas was a friend of several former U.S. presidents. A more recent letter to the Pardon Attorney at the Department of Justice from Mr. Dean Paisley [formerly with the FBI for 25 years] illustrated some concern that ADM executives may be influencing the decision-through ADM's tremendous political clout-whether Whitacre's pardon is granted or not.[1] ADM has donated millions of dollars to both political parties.[4]

Whitacre's clemency petition is supported by other FBI agents involved with Whitacre's case in addition to Dean Paisley, by a former Attorney General of the United States, and surprisingly by one of the former Chicago Asst. U.S. Attorneys who prosecuted Whitacre.[1] Two of the Canadian Dept. of Justice's prosecutors also wrote to the Attorney General and Pardon Attorney at the Department of Justice in support of a pardon. Furthermore, several Senators and Congressmen, Cornell University and Ohio State University Professors, Baseball Hall of Famer Harmon Killebrew, and numerous top executives of corporations have written the White House in support of clemency.[1] One of the most active in supporting clemency for Whitacre, according to the official letters filed on Whitacre's behalf, is Chuck Colson, former Special White House Counsel under President Richard Nixon. Colson is the Founder and Chairman of Prison Fellowship Ministries and has taken a strong interest in Whitacre's case. He has personally taken Whitacre's case to the White House.[1] Whitacre's clemency petition is unprecedented because of the strong support from the very people who indicted him. Mr. Dean Paisley stated in some pardon letters that he visited Whitacre during his incarceration "to say thank you to Whitacre for his substantial assistance to the U.S. Government".[1] Although Whitacre has been released, Mr. Paisley continues (as of March, 2008) to be in contact with the White House Counsel's Office regarding Whitacre's pardon.[1][2][27]

Numerous plaintiff lawyers, who lead the Class Action lawsuits against ADM for price-fixing, have supported Whitacre with several letters to the White House in support of a pardon.[1] It was stated "they absolutely had no case without Whitacre and he should have been commended for his sacrifices on such an historical case". ADM paid hundreds of millions of dollars ($400 million alone in the High Fructrose Corn Syrup case) to the plaintiffs who ADM defrauded during their price-fixing schemes in order to settle the Class Action lawsuits.[11] In addition, ADM, the other lysine and citric acid producers, and the European vitamin producers paid more than $1 billion in criminal fines to the U.S. Government because of price-fixing.[13]

[edit] Current position

Whitacre joined a California biotechnology company in 2006 as the company's COO & President, Technology & Business Development.[1] One of Cypress' flagship products is selenium and therefore, the new position takes Whitacre back to his original roots at Cornell University where he researched the biochemical role of selenium in the prevention of diseases. Most of Cypress' research focuses on a variety of cancers. In March of 2008, Whitacre was promoted to the company's Chief Operating Officer (COO) and President of Operations.[2][27]

[edit] References

  1. ^ a b c d e f g h i j k l m n o p q r s t u v w (2007) Whitacre's Clemency File. U.S. Department of Justice's Pardon Attorney Office and Office of White House Counsel. [1]
  2. ^ a b c d e Ackerman, Ruthie (2008, March 27). Whitacre’s Star Rises Again. Forbes. [2]
  3. ^ a b c d e f g h i j Henkoff, Ronald (1995, September 4). My Life as a Mole for the FBI. Fortune Magazine. [3]
  4. ^ a b c d e f g h i j k l m n o p q r s t u v w x y z aa ab ac ad ae af ag ah ai aj ak al am Lieber, James B. (2000). Rats in the Grain. Four Walls Eight Windows, Inc.. ISBN 1-56858-142-4. 
  5. ^ Greenwald, John (1995, July 24). Harvest of Subpoenas. Time Magazine. [4]
  6. ^ a b c Editorial Staff (1996, September 19). ADM's Lawsuit Could Hurt Company. Associated Press Wire Service. [5]
  7. ^ a b c d Mokhiber, R. and Weissman, R. (2000, August 8). Review: Rats in the Grain. CommonDreams.org NewsCenter. [6]
  8. ^ a b c Cain, Tim (2008, April 6). Behind the inside man: Mark Whitacre, talks about 'The Informant,' his time in prison and moving forward. Decatur Herald and Review. [7]
  9. ^ a b Wilson, J.K. (2000, December 21). Price-Fixer to the World. Bankrate.com. [8]
  10. ^ Greenwald, John (1996, October 28). The fix was in at ADM. Time Magazine. [9]
  11. ^ a b KaplanFox (2004, July 19). Archer Daniels Settles Suit Accusing it of Price Fixing. KaplanFox Law Firm Press Release. [10]
  12. ^ Editorial Staff (2004, June 18). Sweetner Settlement for ADM. FoodNavigator. [11]
  13. ^ a b c d e f g h i j k l m n o p q Eichenwald, Kurt (2000). The Informant. Broadway Books, Inc.. ISBN 9-78076790-327-1. [12]
  14. ^ a b c d Department of Justice (1997, October 10). Former ADM Executive Pleads Guilty to Fraud. Department of Justice Press Release. [13]
  15. ^ a b Editorial Staff (2005, June 18). The Informant, the Movie. Hollywood.com. [14]
  16. ^ a b Krebs, A.V. (2000, August 16). Review of Rats in the Grain. The AgriBusiness Examiner (Issue # 85). [15]
  17. ^ a b Guebert, Alan (2007, August 21). Justice comes late for key players in ADM scandal. Peoria Journal Star. [16]
  18. ^ Krebs, A.V. (2002, April 1). Rats in the Grain author Lieber revisits ADM case. The AgriBusiness Examiner (Issue # 152). [17]
  19. ^ a b c Levins, R.A. (2001, November 5). Book Review of Rats in the Grain. Choices: The Magazine of Food, Farm and Resource Issues. [18]
  20. ^ France, Mike (2000, September 25). Pulp Nonfiction at Archer Daniels. Business Week. [19]
  21. ^ Stresing, D. (2000, October 24). Book review: The Informant. BookPage.com. [20]
  22. ^ a b c Webber, Susan (2000, September 25). Tale of the Tapes. Aurora Advisors Newsletter. [21]
  23. ^ Glass, Ira (2000, September 15). The Fix is In. National Public Radio Interview. [22]
  24. ^ Calderone, Michael (2007, August 10). Kurt Eichenwald resigns from Portfolio. The New York Observer. [23]
  25. ^ a b c Whitaker, L. (2000, October 30). Supermarket for Scandal. The Pennsylvania Gazette. [24]
  26. ^ Mokhiber, R. and Weissman, R. (2000, August 8). Winking at Corporate Fraud. AlterNet.org. [25]
  27. ^ a b c d e f Staff writers (2008, March 25). Mark Whitacre, Ph.D. Promoted at Cypress Systems, Inc. and a Warner Bros. Movie to be Filmed About Him. News Blaze. [26]
  28. ^ Mark Whitacre
  29. ^ Cain, Tim (2008, March 19). Don't expect 'Informant' hobnobbing. Decatur Herald and Review. [27]

[edit] External links

  • National Public Radio, a RealAudio broadcast from This American Life: we hear from New York Times reporter Kurt Eichenwald, whose book The Informant outlines how a shadowy cabal of men in suits actually sat down together around a table and set worldwide food prices (leading to the largest antitrust fine in U.S. history)."