Here's a little history about ADM, the biggest welfare receipient in the country and the largest ethanol producer. Buy ethanol knowing your money and tax dollar are going to these sorry, rotten SOB's. Notice what they have to say about their customers. Really nice people!:-(
Price fixing
A telling comment was made in the early 1990s by James Randall, who was ADM's president at the time:
"We have a saying in our company: "Our competitors are our friends. Our customers are the enemy" [10].
This non-competitive approach is also illustrated by CEO Allen Andreas' warm praise of Cargill's takeover of Continental Grain:
"The Cargill-Continental combination will bring new efficiencies to that business that previously did not exist. I see the combination as being a positive step forward in terms of improving the standards of living of people around the world by providing more efficient low-cost food and nutritious feeding materials and adding to the value of farmers' crops" [11].
In 1996, ADM pleaded guilty to price-fixing in the international markets for lysine (an amino acid used as an animal feed additive) and citric acid (a food additive), and paid a record US$100m fine, in one of the biggest scandals ever to rock the corporate world.
ADM was found to have conspired with its competitors - Ajinimoto and Kyowa Hakko Kogyo of Japan, and Sewon Corporation and Cheil Jedung of Korea - to fix prices to eliminate competition and allocate sales volumes between the companies. According to admissions from an Ajinimoto executive, executives from the five companies met in hotels around the world to discuss prices and production volumes; they knew this was illegal, and tried to cover up by claiming the meetings were, for example, on environmental issues and animal rights [12].
ADM's $100m fine was part of a settlement with the US Justice Department, in which the company also agreed to co-operate with the further federal investigations. In return, ADM got [13]:
• immunity from prosecution for chairman and CEO Dwayne Andreas, and his right-hand man James Randall (who made the comment above on customers being the enemy);
• no criminal charges against the company for price-fixing in high-fructose corn (maize) syrup (ADM's most important product, in a market worth $3bn, compared to the $650m lysine market);
• no further investigation into allegations that ADM stole trade secrets.
Other executives were not immune from prosecution. In 1998, three company executives were also found individually guilty for the lysine price-fixing: Michael Andreas (ADM's vice-chairman, and son of Dwayne Andreas), Terrance Wilson (group vice president in charge of corn refining) and Mark Whitacre (head of the bioproducts division, who for 3 years worked for the FBI as a 'mole', taping conversations and gathering evidence). Andreas and Wilson were each given two-year prison sentences, and ordered to pay a $350,000 fine; Whitacre was given 30 months, on top of nine years for embezzling the company whilst he was acting as a mole.
So far ADM has paid out over $120m in US civil cases to its customers and shareholders, and has been fined C$16m (US$11.3m) for price-fixing in the lysine and citric acid markets, in Canada's largest ever competition case [14], and fined eur 47.3m for lysine by the European Commission [15].
A federal grand jury in the Northern District of California is still investigating ADM in relation to lysine, citric acid and high fructose corn syrup. The European Commission has ongoing legal proceedings against ADM over citric acid and sodium gluconate. Mexico is investigating over citric acid, and Brazil over lysine. ADM is also facing many antitrust suits in the USA and Canada, mostly class actions by its direct and indirect customers: 31 suits over high fructose corn syrup; 3 over lysine; 3 over citric acid; 4 over both high fructose corn syrup and citric acid; 6 over high fructose corn syrup, citric acid and lysine; and 12 over monosodium glutamate and other flavour enhancers [16].
ADM has suffered from the scandal mainly through the loss of investor confidence: shareholders ceased to trust the management, and didn't know which of the company's earnings were from legitimate and sustainable activities, and which illegal.
Back to Top Other corporate crimes
USA - WORKER SAFETY: ADM was fined $650,000 by the Occupational Safety and Health Administration in 2000, for safety violations relating to confined space procedures, at its railcar repair plant at Decatur, Illinois. Four workers died and were been hospitalised between 1993 and 1998. Describing the facility as an accident waiting to happen, OSHA had originally proposed a $1.6m fine, but reduced this when ADM agreed to change its procedures. The most serious violations involved 20 wilful violations (ie "committed with an intentional disregard of or plain indifference to") a requirement to use retrieval lifelines for workers entering confined spaces. Other issues included lack of monitoring, failure to inform the emergency services of hazards, inadequate storage of dangerous materials and lack of respiratory protection. ADM had previously been fined $690,500 by OSHA in 1996 over confined space procedures, and had agreed to make improvements [17].
USA - POLLUTION: in 2000 ADM agreed to pay fines of $1.5m to the Department of Justice and $1.1m to the State of Illinois over persistent exceedance of its pollution permits at one of its Illinois processing plants, between 1998 and 2000. In 1998, the State of Illinois filed a civil action against ADM over a major release of denatured ethanol at one of its distribution sites. In 2000, the federal Environmental Protection Agency issued a Notice of Violation on another ADM site, for emissions violations and for failing to obtain proper permits for equipment [18].
BRAZIL - POLLUTION: in 2000, ADM was fined US$5.6m by Brazil's federal environmental authorities, for the discharge of indust