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CAFCA Complains About "Good Character" of US Co.

CAFCA Complains About "Good Character" of US Corporate Criminal

9 October 2000

Mr Stephen Dawe, Secretary

Overseas Investment Commission

Box 2498


Wellington

ARCHER DANIELS MIDLAND: LACK OF GOOD CHARACTER

Dear Mr Dawe,

OIC Decision Number 200020006 (12/7/00) approves the purchase of the Canterbury Malting Company Ltd. by the International Malting Company Ltd. IMC is 40% owned by Archer Daniels Midland Company, of the US.

“The Commission is further advised that the persons who exercise control over the applicant are of good character…”. We beg to differ.

Archer Daniels Midland (ADM), and some of the persons who exercise control over it, has been at the centre of the biggest criminal antitrust case brought against a company, and its highest level executives, by American authorities. It is a current, ongoing case, not old history. The prosecution was successfully brought, not by local, state or specialist environmental or commercial law agencies. No, it was brought by the FBI, using all the modus operandi (covert surveillance, secret witnesses wired for sound and film, etc, etc) that it would use for any other major criminal activity.

Here is how it was described by Janet Reno, US Attorney General:

“Archer Daniels Midland has agreed to plead guilty and pay a $(US)100 million criminal fine, the largest criminal antitrust fine ever, for its role in two international criminal conspiracies to fix the price of lysine, a feed additive used to ensure the proper growth of livestock, and citric acid, a flavor additive and preservative found in soft drinks, processed foods, detergents and other products. Because of these illegal actions, feed companies, poultry and swine producers, and ultimately America’s farmers, paid millions more to buy the lysine additive. Also, manufacturers of soft drinks, processed foods, detergents and other materials, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for these products” (“Rats In The Grain”, p38).

The matter didn’t end there – Michael Andreas, Executive Vice President, and son of ADM’s CEO, was sent to prison for two years, as was another senior executive. The whistleblowing executive got nine years (because he was embezzling the company, as well as being involved in the conspiracy and informing for the FBI).

But that still wasn’t the end of it. As recently as September 2000, a prosecution appeal against the length of the prison sentences was upheld. Andreas, who had been expected to succeed his father, had one year added to his sentence; the other executive got an additional nine months.

The trial featured an extensive list of eyebrow raising allegations by the whistleblower about how ADM does business. And, in June 2000, the European Union fined ADM and four Asian companies $US105 million for price fixing (on top of a $C16 million fine for ADM, in 1998, for price fixing in Canada).

These are not “technical” offences, but serious criminal matters, “international criminal conspiracies”, in the words of the highest law officer in the US. The US authorities certainly thought it was a big enough crime to levy “the largest criminal antitrust fine ever” (to quote the Attorney General again), and imprison senior executives (and then get those prison terms lengthened). The ADM price fixing conspiracy is so notorious in the US that it is the subject of a brand new book – “Rats In The Grain: The Dirty Tricks and Trials of Archer Daniels Midland, The ‘Supermarket to the World’”, by James B. Lieber.

As corroboration, we enclose a 1998 report from the New York Times; a 1999 Washington Post article; an extract from a 1999 issue of the Agribusiness Examiner; June and September 2000 reports from the Wall Street Journal; and a publisher’s synopsis of “Rats In The Grain”. There is more, should you request it, plus plenty available on line. We would recommend a read of the book.

The question arises – when this international criminal conspiracy case was so extensively reported in major US media, why did the OIC certify ADM and the persons controlling it as “being of good character” and thus approved for investment in New Zealand? We look forward to your explanation.

Even more, we look forward to you withdrawing that approval for ADM, in light of the large body of recent and current evidence against it.

Please reply promptly.

Yours sincerely,

Murray Horton Secretary/Organiser

CAFCA Campaign Against Foreign Control of Aotearoa PO Box 2258, Christchurch email: cafca@chch.planet.org.nz


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