The competitor is our friend, the customer is our enemy

[Robert Weissman <rob@essential.org>]

When you hear politicians blather about free markets, point them to
Chicago, where three former executives of Archer Daniels Midland (ADM) are
in federal court this week to face criminal charges of destroying markets. 

The three former ADM executives, Michael Andreas (son of Chairman Dwayne),
Terrance Wilson and Mark Whitacre have been charged with meeting with
competitors to fix the prices and sales volume of the feed additive
lysine. 

A fourth executive, Kazutoshi Yamada, of the Ajinomoto Company, was also
charged in the conspiracy to fix prices. But Yamada will not appear at the
trial in Chicago to face the charges. When asked why Yamada is not being
extradited, federal officials reply with a limp "no comment." 

ADM and a number of other companies have already admitted their
criminality and paid tens of millions of dollars in fines. 

The price-fixing fits well with chairman Dwayne's philosophy on markets.
As he put it to his son Michael -- "The competitor is our friend and the
customer is our enemy." 

"There isn't one grain of anything in the world that is sold in a free
market," Dwayne told a reporter from Mother Jones in 1995. "Not one! The
only place you see a free market is in the speeches of politicians. People
who are not from the Midwest do not understand that this is a socialist
country." 

The extent of the price-fixing was laid out earlier this year by federal
prosecutors in a little noticed pre-trial proffer filed in Chicago. 

The document quotes extensively from video and audio tapes made by former
ADM executive turned FBI mole turned convict Whitacre. (Whitacre was
convicted earlier this year of stealing millions of dollars from ADM, even
though he claimed that the money was off-the-books compensation.) 

The proffer is startling in its scope. It contains within its 57 pages
perhaps the most concentrated proof of corporate criminality ever
assembled by a federal agency. 

The document, which was compiled by the Justice Department's James
Griffin, argues that the agreement to fix prices was hammered out at a
series of meetings, beginning with a meeting in Mexico City on June 23,
1992. 

The proffer contains large excerpts from tape recordings made by Whitacre
when he was a mole for the FBI. The excerpts are riddled with expletives. 

According to Griffin's proffer, the government will prove at trial that at
the Mexico City meeting, Wilson told other lysine producers "we are not
cowboys, we should be trust(ing) and (have) competitive friendliness."
Wilson points out that low lysine prices were benefitting the customers
rather than the manufacturers. 

After the Mexico City meeting, the companies agreed to raise the U.S.
price of lysine without reaching an agreement on holding down volume. As a
result, the price of lysine increased throughout the summer. 

Another meeting was held in Paris in October 1992. After the Mexico City
and Paris meetings, the price of lysine increased in some places, but not
everywhere. The companies blamed each other for this, they began to bicker
and prices dropped. 

A third meeting was held in Decatur, Illinois -- home to ADM -- on April
30, 1993. 

Prior to the Decatur meeting, Andreas and Whitacre had several strategy
sessions, all of which were taped. 

Wilson and Andreas contended that ADM's sole promise to the other
producers in 1992 was to lower its lysine volume only if the producers
were able to maintain the higher lysine prices they had agreed to. 

During one such conversation, Andreas advised Whitacre: "You could just
say to [Yanamoto, a Japanese competitor] look, these prices are so shitty
... and you guys are so disorganized that I don't know what kind of shit
you're managing." 

At a March 10, 1994 meeting in Hawaii, the producers complained about each
others' cheating on the fixed prices. Wilson laid out his price-fixing
philosophy: 

"We are gonna get manipulated by these God damn buyers. . .They can be
smarter than us if we let them be smarter ... They are not your friend.
They are not my friend. And we gotta have 'em. Thank God we gotta have
'em, but they are not my friends. You are my friends. I wanna be closer to
your than I am to any customer 'cause you can make us ... money." 

The competitor is our friend, and the customer is our enemy. 

God Bless America.

Russell Mokhiber is editor of the Washington-D.C. based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.

(c) Russell Mokhiber and Robert Weissman

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