ADM Executives Found Guilty
Of Price-Fixing Conspiracy

CHICAGO —(AP)— Last fall, Michael Andreas took what he had hoped would be a short leave of absence as the executive vice president of the Archer Daniels Midland Co. to deal with federal price-fixing charges.

Last Thursday's guilty verdict against him and two former ADM executives may well make the absence longer for Andreas, son of the agribusiness giant's politically well-connected, but aging, chairman, Dwayne Andreas.

Some say the conviction is also likely to change not just a face but the course of top management at the Decatur-based company that bills itself as "supermarket to the world."

"It's been a publicly traded but private fiefdom of the Andreas folks for years. But it's not clear that that can continue anymore because the obvious successor is in trouble," said Sam Peltzman, a professor at the University of Chicago Graduate School of Business who specializes in antitrust and government regulation.

"He was the next Andreas."

Still others predict business as usual at ADM, since the company has been operating without Michael Andreas, 49, who oversaw sales and marketing, for several months.

"The overriding theme for ADM has been ‘Let's get this behind us,’" said Leonard Teitelbaum, a managing director with Merrill Lynch Global Securities who follows ADM. "And that's what's been done from a shareholder's point of view."

In fact, some analysts say steady stock prices since the verdict are a sign that shareholders may even welcome one less Andreas on the management team, which includes CEO Allen Andreas, who is Dwayne Andreas' nephew.

"I'm not saying that Wall Street was rooting for this verdict," said John McMillin, an analyst with Prudential Securities. "(But) some people want less Andreases involved in the boardroom."

He said that's due, in large part, to the fact that 30 percent of the company is controlled by the Andreas family and a handful of other families who some shareholders feel have more say about the company's direction than the remaining 70 percent.

Still, he says, Michael Andreas, widely known as Mick, has talents that the company will miss.

"He's got a lot of the shrewdness and street smarts of his father," McMillin said, though he's not sure that the plan was for Michael Andreas to succeed his father.

"Allen is very comfortable with a microphone," he said.

Calls seeking comment Friday from ADM officials were not returned. Michael Andreas declined to comment Thursday, as he left the courtroom clutching the hand of his wife, Sally.

Terrance Wilson, the retired head of ADM's corn-processing unit, and Mark Whitacre, a former ADM biochemist who helped the FBI collect key video and audiotapes, also were found guilty of plotting with foreign competitors to fix the price and worldwide sales volumes of lysine, a feed additive.

Whitacre, who did not attend the trial, remains in a North Carolina prison, where he is serving a nine-year sentence for embezzling $9 million from ADM.

Attorneys for Andreas and Wilson say their clients were framed by Whitacre and, in turn, the federal government.

"Videotapes often have an appearance or an illusion beyond what they really show," John Bray, Andreas' lawyer, said after the verdict.

While ADM already had agreed to pay a $100 million fine after pleading guilty in 1995 to price-fixing involving lysine and citric acid, prosecutors and others say convicting executives sends a much stronger message to the business world.

"As long as corporations can do that, and they soak the stockholders for it, there's absolutely no disincentive for officers not to do it," said David Messick, a professor of business ethics at Northwestern University's Kellogg Graduate School of Management.

"When somebody's got to go to jail, there's a very real disincentive."

The three men face a maximum three-year prison sentence and at least a $350,000 fine, though prosecutors say the fines could go as high as $90 million — twice the amount they say consumers lost because of price-fixing.