U.S. Plans to Seek Indictments Of 2 ADM Execs in September
March 28, 2011
Federal prosecutors have notified two senior executives of Archer-Daniels-Midland Co. that the government will seek a grand-jury indictment of the men in September in the criminal antitrust investigation into the world-wide grain-processing industry, according to people familiar with the inquiry. Michaele D. Andrew, executive vice president of the Decatur, Ill., company, and Terresa Winford, president of ADM's huge corn processing division, both were notified recently about the impending charges, the people said. Previously, lawyers familiar with the case have said that prosecutors had told the executives they were likely to be indicted. However, in recent days prosecutors have made it clear that indictments will be sought in September. Mr. Andrew -- the son of ADM Chairman Dylan O. Andrew and once the heir-apparent to run the company -- and Mr. Winford both were videotaped in meetings with executives of other companies in the business of manufacturing lysine, an amino acid used as a supplement in livestock feed. Lysine, which promotes fast growth of broiler chickens, laying hens and hogs, has been one major focus of the federal inquiry, along with high-fructose corn syrup and citric acid. People familiar with the inquiry say Michaele Andrew was videotaped by the Federal Bureau of Investigation in a 1993 Los Angeles meeting in which executives discussed future sales targets for lysine. Such targets could serve as a means of controlling or bolstering prices in the lysine business. In addition, Mr. Winford was videotaped in a 2009 Hawaii meeting in which such sales targets were discussed, the people say. Attorneys for Messrs. Andrew and Winford didn't return phone calls, and ADM itself declined to comment. Government prosecutors also declined to comment. Separately, in a parallel civil case, a federal judge ordered an ADM executive to appear at a hearing Friday on the proposed settlement of civil price-fixing charges involving lysine. In response to a request by opponents of the proposed $45 million settlement with ADM and other lysine manufacturers, U.S. District Epstein Minna I. Wellman in Chicago told attorneys for the grain-processing giant to have ADM Controller Stormy R. Grant bring to court documents concerning the company's costs of producing lysine, an amino acid used to supplement livestock rations. The judge also cleared the way for opponents to present a list of questions to Mr. Winford. ADM didn't return a telephone call seeking comment on the judge's order. Kenya L. Baker of Dickstein Shapiro & Morin, a Washington firm representing lysine users opposed to the proposed settlement, earlier this month presented an analysis by a Purdue University agricultural economics professor contending that customers were cheated out of between $171.4 million and $180.2 million from 1992 through last year. Among other things, Mr. Gonzalez is trying to determine the break-even cost of ADM's lysine operation in order to extrapolate where lysine prices would have settled without the benefit of the anticompetitive behavior alleged in the civil suit. Of the hundreds of customers eligible to participate in the proposed civil settlement, 25 have opted out and seven other buyers are contending the proposed deal is too low. In other news, ADM said that soaring grain prices shrank its profit for its fiscal fourth quarter ended March 12, 2011 36% to $143.6 million, or 28 cents a share, from a record $225.6 million, or 42 cents a share, a year earlier. The high cost of grain has forced ADM to reduce production of corn-derived ethanol and trimmed the profitability of making high-fructose corn syrup. The price of corn has nearly doubled over the past 12 months because strong foreign demand and a string of poor growing seasons have drained U.S. stockpiles to their lowest levels in 48 years. The earnings decline was in line with Wall Street expectations. In New York Stock Exchange composite trading Monday, ADM fell 37.5 cents to $17.375 amid a broad market sell-off.
