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INTERVIEW: Mark Whitacre - Lysine Cartel Whistleblower on Price Fixing and Rebuilding his Life after Prison
Source: Feedinfo News Service
(dated 13/01/2009)

13 Jan, 2009 - In the mid 1990s, Mark Whitacre stunned the feed additive industry when he broke an unwritten code of silence and exposed a global price-fixing cartel among the world's largest lysine producers. His under-cover work for the FBI over a period of three years led to his employer ADM and other lysine producers being fined hundreds of millions of dollars. Two of ADM's top executives were also jailed as a result of the investigation.

However, in a controversial twist, Mr Whitacre was forced to serve more than eight years in prison for his part in the price-fixing scam and for the embezzlement of millions of dollars from the US agribusiness giant.

Now, almost three years after his release, the 51-year-old has spoken openly to Feedinfo News Service about his spectacular fall, the effect prison had on him and his family and his views on price fixing. He tells how feed companies that won damages as a direct result of his actions helped support his family while he was in jail. He also discusses his current role in the food and feed industry and the campaign by supporters to earn him a Presidential Pardon.

FEEDINFO:  What is your role today in the food and feed industry?

MARK WHITACRE: I am employed at Cypress Systems, Inc — a Fresno, California based biotech company. I was hired in 2006 as the President of Business Development, and was promoted in March, 2008, to COO & President of Operations of the company. 

We are a nutraceutical company mostly involved with minerals that are produced by using yeast fermentation such as zinc, chromium and selenium.

Our major markets are in global supplement and food industries, but we do also sell high-selenium yeast into the feed industry in the USA.  Selenium is considered to be one of the major antioxidants at the cellular level because of it active role in the enzyme, glutathionine peroxidise. 

Our major focus centres around cancer research since many cancers are caused by free radicals.  Selenium is the only nutrient that has a FDA qualified health claim for cancer prevention. 

Being involved with selenium is back to my original roots since I studied at Cornell University for my PhD from 1980-1983 researching the biochemical role of selenium in pancreas cells.

FI:  What you are doing today is clearly of potential benefit to mankind and in stark contrast to the apparent pursuit of money and power which previously motivated you. Is this a fair comment?

MW:  I would say this is a very fair comment.  I most certainly lost my way when I was at ADM in my early and mid-30s, and I lost my moral compass. I am now age 51. I had plenty of time to reflect while in federal prison for eight and a half years from age 41 to age 49.

Mark Whitacre
(Photograph: Jacob Willis/Bauman Photographers)

I made a decision in prison that I had to improve myself.  I owed that especially to my wife and children and to all of the other supporters.  My wife and children placed their lives on hold while I was in prison.  Ginger, my wife, moved to each prison location, and visited me every weekend, every Friday, Saturday and Sunday for eight and a half years.  Those are the three days which visits are allowed in federal prisons.  Therefore, my family basically went to prison with me.  They sacrificed more than anyone can imagine.

I made some horrific decisions and broke some serious federal laws. In fact, ego and greed were behind many of these poorly made decisions. Others have said that ultimately the corporate culture of ADM played a primary role in my decision making at the time. Also, not true. These were decisions of my own making. When trying to win so hard that truth and ethics do not matter anymore, then one is in a bad place in his or her life. That is exactly where I was in the early and mid-1990s.  I cannot explain how I lost my way, but I did.

"I made some horrific decisions and broke some serious federal laws"

 - Mark Whitacre, on his illegal activities while working for ADM during the early 1990s

Luckily, for me, people can also be forgiven by friends and family, and be welcomed back into the business world and society with support from the very people who imprisoned them - in my case FBI agents and federal prosecutors.  The United States was built on second chances. This is exactly what I received: a second chance.  But first, one has to admit to their mistakes and take responsibility for their actions.  I had plenty of time in prison for reflection, to heal and not blame others for what I did wrong.

I became a whistleblower and an informant because my wife insisted I come forward and report what I knew. Though she did not understand exactly what price fixing was, she knew from me that it was illegal. In November 1992, two hours before the FBI first visited my home, Ginger forced my hand. She decided firmly that she would tell the FBI what she knew, even if I couldn’t. She was the sole reason I opened up to the FBI that night. Ginger is the real whistleblower of this case, not I.

Had I simply learned from her bravery and honesty, the next decade could have been very different. But along the way, I made mistakes, huge ones. On March 4, 1998, I stood before Judge Harold Baker and pleaded guilty to all counts and waived my rights to a fraud trial. Despite any good deeds derived from my years as an FBI informant, I could not escape the fact that I had still made some very damaging decisions. I received a nine-year sentence that day. Many people, including the FBI agents, have said the sentence was way too long. But the courts decided my fate and I served my sentence.

FI:  How much contact do you have today with former colleagues and customers from the feed industry?

MW: I have a lot of contact with people in the feed industry, especially with long-term friends within that industry.  These friends and the feed industry as a whole really stuck with me through the whole ordeal.  What is most remarkable is that the feed industry supported my family financially while I was in prison. They assisted my wife - who is an elementary school teacher - financially and helped put my children through college. 

Most of the funds that assisted my family came from the feed industry’s settlements on class action law suits from the lysine and vitamin price fixing cases.  These companies and law firms shared the settlements with my family since I was the only one who came forward in the Lysine price fixing case.  It was really remarkable and was a life line for my family.  We will never forget that tremendous support.

FI:  In your experience, does the feed industry forgive and forget?

MW:  They may not forget, but they most certainly forgive, as you can see from my previous answer in showing all of their remarkable support. It is a tremendous industry and I am glad to be part of it.

FI: Do you feel you are trusted today in our industry?  

MW:  The support from both the feed and food industries has been so overwhelming, even while in prison.  Therefore, I feel that I am trusted within both industries.  They would not have supported my family financially if I was not trusted by them.  I was very fortunate to have that support when you consider all of the mistakes that I made in the case.  After such chaos that I caused, one rebuilds credibility one day at a time.

"The support from both the feed and food industries has been so overwhelming, even while in prison...I feel that I am trusted within both industries."

    - Mark Whitacre

FI: China's government has defended in a New York court four Chinese vitamin manufacturers that acted together to boost prices. The Chinese ministry is asserting sovereign immunity in its defence. In light of what you went through, how do you feel about this?

MW: I really do not want to comment on a recent, on-going price fixing case.  I am willing to talk about the price fixing case from the 1990s, but not an ongoing case.
FI:  One controversial school of thought in the feed industry maintains that anti-trust behaviour can be positive in certain circumstances. Supporters would argue that it ensures price stability and encourages necessary long-term investment.    Would you share this view?

MW:  I do not share this view.  But more importantly, no matter what view you have, price fixing is a criminal act. People go to prison for it, in addition to companies paying $100s of millions in fines to their governments in the USA, Canada, and Europe, as well as civil settlements to their customer base also amounting in the $100s of millions. 

Price fixing is not worth it.  The short-term gain is not worth the long-term consequence.  I can tell you this fact from first-hand experience.  I lost almost two decades of my life with the price fixing case either working undercover for the FBI for three years, then fighting my case for another three years, and then prison for almost nine years.  My life was in limbo from 1992 until my prison release in 2006.  And that directly affected my family’s life where their lives were in limbo too.  The bottom line is that breaking federal laws is not worth the short term gain.  

"...a significant increase in price of lysine did cost the producers millions of dollars extra in the 1990s and that was a time when retail poultry prices were very low."

    - Mark Whitacre on the direct effects of the lysine price fixing cartel in that period

FI:  Was price fixing negative for the feed industry at that time, given that the additional cost to a ton of feed was negligible when lysine prices were artificially raised ?

: Yes, it was negative.  For example, large poultry producers purchase millions of dollars worth of lysine each year, and in some cases tens of millions for the largest producers.  Therefore, a significant increase in the price of lysine did cost producers millions of dollars extra in the 1990s -  and that was a time when retail poultry prices were very low.

The inflated lysine prices put much financial pressure on the feed and poultry industries to lower their overall production costs.  In some cases, the price fixing settlements that were received were what kept many feed and poultry producers alive during the 1990s in the USA.  Some companies were going through very tough financial times then.

FI:  Today it appears to be common practice to offer protection to whistleblowers in anti-trust cases. Did you get adequate protection? Do you feel you were in any way a scapegoat?

MW:  I have become very good friends with several former and current FBI agents who I worked with from 1992-1995.  Even more so today, than back then.  We recently filmed a one hour documentary on my case  called “Undercover”.  The three FBI agents (two of them now retired) also were filmed for the documentary and they were all very supportive. 

I have learned that whistleblower protection laws have improved greatly since the mid-1990s - partly due to my case. Many feel that the outcome would have been much different if my case happened today rather than in the 1990s.

"After such chaos that I caused, one rebuilds credibility one day at a time."

    - Mark Whitacre

FI:  What was life like in prison?  How did you pass your time?  What are the key changes it brought about in you as a person?

MW: It is hard for most people to imagine what eight and a half years in federal prison is like. Measuring one’s life in prison years is like living in slow motion and not just for me, but for my wife and children. In a sense, we all went to prison.

I watched my children grow-up in prison camp visiting rooms for almost a decade. I entered prison just before turning 41 and was released in December 2006, aged 49. Our youngest son was six years old when I started wearing a wire for the FBI; he was 12 when I went to prison, and 21 years old and a junior in college when I was released. I am very fortunate that my family stuck with me those many years. Ginger visited me in prison every weekend and every holiday. She is a saint, and the true hero of this case.  She is the one who forced me to tell the FBI in the first place.

Telling you about life in prison is not meant to make you feel sorry for me or to make you think that I hold any anger or hostility toward ADM. My own self-destructive actions were the cause - not ADM.  During my time in prison, I had a lot of time to think and to reflect. My aim was to leave prison better not bitter and the only way toward that goal was to focus on the letters that differentiates these two words "I," not the three letters, "ADM." 
FI: How did the campaign to earn you a Presidential Pardon begin and who is behind it? How long will it be before the outcome is known and what would a successful result mean to you?

MW: The pardon process was initiated by some of my supporters in the Department of Justice and the FBI. It was not initiated by me.  They gave me the paperwork to prepare and they attached many supporting letters to it.  They continue to visit and petition government lawyers and White House Counsel. 

Actually, for several months now, the media in the United States and especially the FBI agents responsible for investigating the Lysine price fixing case, have used the word hero to describe my actions as a whistleblower. I want to make it very clear that I was certainly not a hero in the Lysine price fixing case.

"I want to make it very clear that I was certainly not a hero in the Lysine price fixing case."

    - Mark Whitacre

Even more surprising is the support for Executive Clemency (Presidential Pardon) stems from unlikely sources - several former and active FBI agents (Dean Paisley, Brian Shepard, and Bob Herndon), a former US prosecutor, two Canadian prosecutors, and a retired Judge. They have worked tirelessly on numerous pardon letters that were written to the U.S. Department of Justice’s Office of the Pardon Attorney and to the President of the United States, some as recent as December, 2008. Dean Paisley, who was the FBI Supervisor of the Lysine cartel case, even made a presentation to government lawyers in Washington, D.C. in support of a pardon on March 6, 2008.

For my wife and me, the tremendous support is even more important than a pardon itself. I appreciate the executive clemency support and the public comments from some of the former FBI agents. 

Pardons take years and years in the United States and we do not expect any immediate result.  It is a long-term process where the support continues to grow.  Like I said, the FBI and prosecutor support is even more important to my family and than a pardon itself.

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