ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, August 29, 1996 TAG: 9608290062
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: ASSOCIATED PRESS
The spotlight of a federal investigation turns to giant grain processor Archer Daniels Midland Co. after its smaller competitors in the market for the livestock feed supplement lysine agreed to plead guilty to price fixing.
Antitrust experts said the Justice Department has a strong case against the company based on video and audio tapes of meetings where price-fixing was allegedly discussed, and testimony from at least four participants in those meetings.
ADM, the self-described ``supermarket to the world,'' is seeking a plea bargain in the Justice Department's continuing criminal investigation, according to lawyers familiar with the case who spoke on the condition of anonymity. No charges have been filed against the Decatur, Ill.-based company, and company spokesman Roy Erickson declined comment Wednesday.
The latest developments will let prosecutors dictate whether to settle or go to trial, predicted Steve Ross, a former Justice Department antitrust lawyer. ``They come down hard on the people who don't cooperate,'' said Ross, now a law professor at the University of Illinois. ``Even if ADM does plead guilty, they probably won't get as good a deal as the other companies.''
Justice Department officials declined comment Wednesday.
The lysine price-fixing case presents a rare opportunity for the government's antitrust watchdogs after several setbacks. They lost a high-profile price-fixing case against industrial diamond suppliers General Electric and South Africa's De Beers Centenary AG. Investigations of software company Microsoft Corp. and brokerages on the Nasdaq Stock Market were settled on terms less than what they sought.
That probably made prosecutors act more cautiously in the lysine case, which has been under investigation for about four years.
``They have videotapes, audio tapes, all this evidence. I think they may have sharpened their case even more,'' Ross said, suggesting the guilty pleas mean that prosecutors are unlikely to be gun-shy about going after ADM.
Five defendants agreed to plead guilty and one agreed to plead no contest Tuesday to the first charges brought in the investigation. They were accused of conspiring to fix prices and divide up worldwide sales of lysine, a supplement used to foster growth in swine and poultry.
Japan's Ajinomoto Co. Inc. and Kyowa Hakko Kogyo Co. Ltd. agreed to pay fines of at least $10 million each, although a federal judge could order higher fines at sentencing. The judge will determine the fine against Sewon America Inc. of New Jersey, a subsidiary of Sewon Co. Ltd. of Seoul, South Korea.
Former Ajinomoto executive Kanji Mimoto and Sewon America President Jhom Su Kim agreed to pay fines of $75,000 each, and former Kyowa Hakko executive Masaru Yamamoto agreed to pay a $50,000 fine.
Federal agents raided ADM headquarters last summer. Company executives learned that Mark E. Whitacre, head of the BioProducts division, had worked undercover for more than two years for the FBI.
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