ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, October 15, 1996 TAG: 9610150114
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: NEW RIVER VALLEY
DATELINE: DECATUR, ILL.
SOURCE: Associated Press
MEMO: NOTE: Shorter version ran in Metro edition.
ARCHER DANIELS MIDLAND CO. will plead guilty to charges of price-fixing and pay the largest fines ever for a criminal antitrust case. Still unresolved: scores of lawsuits and the fate of two executives targeted by the probe.
Archer Daniels Midland Co., whose products go into everything from shampoo to soft drinks, said Monday it will plead guilty to two charges and pay $100 million to settle a federal price-fixing case.
The fines are the largest ever for a criminal antitrust case, but shouldn't harm the bottom line of the $6 billion company, analysts said.
The agreement announced by ADM, which calls itself ``supermarket to the world,'' is a significant step to end a scandal that has rocked the agricultural products industry worldwide.
However, several clouds still hang over the giant grain- and soybean-processing conglomerate, including the fate of two executives targeted in the investigation and scores of civil lawsuits.
In addition, fireworks are expected from disgruntled shareholders coming to Decatur for the company's annual meeting Thursday.
ADM said it agreed to plead guilty to charges of ``anticompetitive conduct'' in markets for two corn-derived products: citric acid, used in soft drinks and detergents, and lysine, a feed additive used to make hogs and chickens bigger and leaner.
The company agreed to pay fines of $70 million in the lysine case and $30 million in the citric acid case, although a judge still must decide whether to accept the proposed settlement, ADM's statement said.
ADM said the agreement ``brings to a close all Department of Justice investigations of alleged misconduct by ADM,'' including a similar probe involving the high-fructose corn syrup used to sweeten soft drinks and other foods.
ADM's statement did not mention executives Terrence Wilson and Michael Andreas, who had been told they could be indicted in the price-fixing cases. Lawyers for both men did not return telephone calls seeking comment.
In Washington, D.C., a Justice Department official who spoke on condition of anonymity said the criminal investigation against Wilson and Andreas is continuing.
Scott Lassar, the federal prosecutor in Chicago heading the lysine case, said he could not comment until after a Justice Department news conference today in Washington. A court hearing in the case also was scheduled today in Chicago, Lassar said.
ADM attorney Roy Erickson did not return a telephone message, and a reporter seeking to interview him was turned away at the company's Decatur headquarters.
ADM stock closed up more than $1 at $21.75 per share Monday on the New York Stock Exchange.
Paying $100 million would not hurt ADM, which has as much as $2 billion in cash reserves, said analyst Richard Elam of Everen Securities Inc.
``Shareholders have been reassured now that the size of fines and the nature of the penalty isn't going to overwhelm the company,'' Elam said.
The investigation became public in June 1995, when FBI agents raided ADM's headquarters and company officials learned that Mark Whitacre, then head of ADM's BioProducts division, had been working undercover for the FBI.
Whitacre has said he secretly recorded meetings at which Wilson and Andreas fixed prices for lysine with ADM's competitors.
ADM fired Whitacre after the probe became public knowledge, saying he embezzled millions of dollars. The company is suing him for $30 million for fraud and breach of contract; Whitacre says the money was part of an under-the-table bonus scheme common for top ADM officials.
Whitacre declined to comment.
Three of ADM's competitors and a top executive from each firm already have agreed to plead guilty or no contest in the lysine price-fixing case. All six are scheduled to appear in federal court in Chicago on Friday.
ADM shareholders also filed scores of lawsuits alleging mismanagement has harmed the company's net worth, and several customers also sued over the alleged price-fixing, seeking millions of dollars.
ADM has agreed to pay more than $90 million to settle some of those suits, although judges still must sign off on most of those settlements.
LENGTH: Medium: 82 lines ILLUSTRATION: GRAPHIC: (headshot) Andreas. color.by CNB