When Good Leaders Lose Their Way (Online Exclusive)

When you go to work today, imagine having a tape recorder attached to your body, a second device in your briefcase, and a third one in a special notebook, knowing that you will be secretly taping your supervisors, coworkers, and in some cases, your friends. Now imagine doing that every day for three years. 

That is exactly what I did from 1992 to 1995, when I was an informant for the FBI in the largest price-fixing scandal (at the time) in U.S. history. Even today, I still hold the distinction of being the highest-ranked Fortune 500 executive to become an FBI whistleblower.

The American Dream …
I was informing on Archer Daniels Midland (ADM). At that time, ADM was the 56th largest company on the Fortune 500 and one of the largest food additive companies in the world.

I started at ADM in 1989 when I was 32, as President of the BioProducts Division, and was the youngest divisional president in the history of ADM. Within three years (1992), I was promoted to corporate vice president and a corporate officer of the company. 

From the outside looking in, I had everything. I was living the American Dream—the best the world had to offer. I lived in a huge home, which had an eight-car garage filled with eight cars, and indoor horse riding stables for my children. I also had access to ADM’s many corporate jets. But there was still a huge void in my heart at the time, and success was not filling it.

… Turned into a Nightmare
My future at ADM was bright. Why did I turn on my own company to become an FBI informant? The answer to that question is not an easy one. The reason I turned against ADM is because of my wife, Ginger. I met Ginger in the school band in 1970 when she was in seventh grade and I was in eighth grade. We went to a junior high school dance together. We then became a couple in high school and we were the homecoming Queen and King in 1975, my senior year. We have always been inseparable and are still married after nearly 34 years.

In 1992, Ginger noticed big changes in me. Eighty-hour work weeks consumed me. She could sense that I was not happy. I was very greedy, and materialism became my focus. With my base salary and stock options combined, my total compensation was in the seven figures. Much of my compensation was in stock options, where there was much incentive to increase company earnings in order to drive the stock price upwards as fast as possible. However, no matter how much I earned, it was never enough. Although I was not there for Ginger, she had a strength to draw on—her faith.

On Nov. 5, 1992, Ginger started digging deeper into our conversations. She asked several direct questions. That is when I finally told her about the illegal activity at ADM. I explained how we were getting together with our competitors and fixing the prices of several key ingredients. Some of the top management of ADM had basically formed an international cartel that was stealing hundreds of millions of dollars from our own customers. 

I want to emphasize that ADM was not a bad company and virtually all of their 30,000 employees went to work each day doing the right thing morally and ethically. However, some of the very top executives at ADM in the early 1990s, including myself, were conducting illegal activity, and we tainted both the company and the town of Decatur, Ill., with our greed.  

Ginger did not like what she had heard and said I should turn myself into the FBI. I told her I could go to prison and that we would lose our home, our cars, and our lifestyle. She said that she would rather be homeless than live in a home paid for by illegal activity. She put her foot down firmly saying, “Either turn yourself into the FBI or I will do it for you.” And she meant it!

An hour later I found myself confessing to an FBI agent about my role in one of the largest white collar crimes in U.S. history. It was Ginger who was the true whistleblower of the ADM case, not me. If it was not for a 34-year-old, stay-at-home mom raising three young children at the time, the largest price-fixing scheme in U.S. history would never have been exposed.

Think about it for a minute. What would you have done in this situation? Would you have taken the path that I was planning to take, which was to look the other way and continue to move up the corporate ladder with all the perks and financial security? Or would have you taken the path that my wife demanded? Confess my part in a serious crime and lose everything?

--- PAGE BREAK ---

Fast Track to the Top
After finishing high school in 1975, I attended Ohio State University (OSU). During my second year at OSU, I was offered an Honor’s Combined Program, which had me starting my Master’s Degree. In 1979, after finishing my MS degree at OSU with the honors cum laude and with distinction, I received a full scholarship to Cornell University. I majored in Nutritional Biochemistry with minors in Biochemistry and International Nutrition. I finished my Ph.D. December 1982 and graduated in May 1983. 

After graduating from Cornell University in my mid-20s, I told myself, “Boy, I am a really smart guy and I can make millions of dollars with this intellect.” I became hyper-ambitious and could not wait to enter the ranks of corporate America. 

I accepted a position at Ralston Purina in St. Louis, Mo., and within two years was offered a position by a multibillion company, Degussa Chemicals (now known as Evonik). Within two years, Degussa moved me to their world headquarters near Frankfurt, Germany, to obtain four years of international experience. At age 31, I returned to Degussa USA in New Jersey, fluent in German and was promoted to vice president of a key division. In 1989, while working for Degussa, I was involved with a joint venture with Archer Daniels Midland. Over the next year, I became friends with several of the top executives at ADM and was ultimately offered a position as a Divisional President.

Going Undercover
After confessing my role in the international price-fixing scheme to the FBI, I agreed to work undercover for them. Working undercover was an extremely stressful life. For example, I acted like a loyal executive, building the company during the day, and tearing it down during the evenings when I met with the FBI to turn over the tapes and debrief them. I would record my supervisors and coworkers during the day, and then meet the FBI at various hotels during the evenings, often from 6 p.m. to midnight.

After confessing my role in the international price-fixing scheme to the FBI, I agreed to work undercover for them. Working undercover was an extremely stressful life. For example, I acted like a loyal executive, building the company during the day, and tearing it down during the evenings when I met with the FBI to turn over the tapes and debrief them. I would record my supervisors and coworkers during the day, and then meet the FBI at various hotels during the evenings, often from 6 p.m. to midnight.

The illegal price-fixing meetings were conducted all around the world, from Paris, Mexico City, and Vancouver to Hong Kong, Singapore, Zurich, and more. Following us around the world was a modest green lamp that looked like it was purchased at a yard sale. The green lamp, created by a special technical group of the FBI, contained a hidden video camera. Although I made audiotapes of the meetings with the three recorders that I obtained from the FBI, the federal prosecutors wanted videotapes too. The prosecutors not only wanted the jury to hear what was going on, they wanted them to see the illegal scheme unfolding. Therefore, I would tell the FBI where and when the meetings would be held, and the FBI would make sure that the green lamp was placed strategically in the room prior to the meeting.

It is a good thing that all of the co-conspirators were men. A woman would have immediately noticed that this green lamp did not match the five-star décor of some of the finest hotels, such as the Four Seasons in Chicago. But this is very telling about greed. We had several men in a room stealing hundreds of millions of dollars, and it was as if they had blinders on. They did not even notice what was going on only a few feet from them. 

Another unique situation occurred in Tokyo. The FBI did not want the recording equipment passing through customs at the Tokyo Narita Airport because the FBI thought that the Japanese government may try to protect the Japanese companies if they knew they were under a U.S. federal investigation. Several of the co-conspirator companies were headquartered in Japan. Therefore, for this meeting in Japan, I had a very small handheld tape recorder that was purchased at Radio Shack. The challenge was that this specific recorder used micro-cassette tapes with only 45 minutes on each side. Our price fixing meetings lasted at least three hours so I was constantly looking at my watch and every 45 minutes running to the restroom in order to isolate myself in a stall where I could quickly turn the tape over to a new, fresh side. I was the only one running to the restroom like clockwork. No one noticed! 

Three Paradigms of White Collar Crimes
I believe that three paradigms exist in white collar cases, no matter if it’s ADM, Tyco, WorldCom, or Enron. They are the following:

1. Long term vs short term
2. Individual vs community
3. Greed vs purpose

A couple other top executives (my supervisors) at ADM and I were very focused on the short term, when we should have been focused on the long term. We were too focused on three months down the road because that is when earnings were reported each quarter and when we had the chance to increase shareholder value and our own stock options.

We were also too focused on ourselves (individuals) instead of the community around us, which included our customers whom we were stealing from.

Certainly our focus was too much on greed, and not enough focus on having purpose.

--- PAGE BREAK ---

Decisions Made in Isolation
After two years of wearing the wire, I was spent. I did not know if I worked for the FBI or for ADM. I was totally confused and spiraling out of control, almost like a nervous breakdown. Once during a horrific thunderstorm, I took a leaf blower to our driveway at 3 a.m. I was dressed in my shirt and tie. Ginger heard the noise from the bedroom window and came out to the driveway. 

She yelled to me, “You need to come back into the house. You need to come back to your family. More than anything, you need to have God in your life.” “Who needs God?” I retorted. “I am going to be the next president of the 56th largest company in America.”

She looked more confused than I have ever seen her. Like she has said on several TV interviews over the years, “Divorce was never an option, but murder was.” This was one of those moments. She said, “I am proud of what you are doing, the fact that you are working with the FBI, but you are not going to be president of ADM. You need to get that fact through your mind. You will not be able to stay at ADM after they learn you are the mole. You are bringing the top executives above you down; they are likely to go to jail. You will be fired once they learn what you’ve done. You need to realize that fact.”

She left me in the driveway, and I knew she was right. I could not imagine living without that position and income. It was as though I was addicted to success. I was obsessed with material things. I began to think how I was going to protect my family financially once I was fired, knowing that it could take years to get back on my feet. Whistleblowers were not popular in the 1990s.

I concluded I would steal my own severance pay, and decided upon $9.5 million. I, along with three other executives, had stolen money from ADM a couple years earlier when the four of us had lost money in a bad investment in Nigeria. Therefore, I knew the bogus invoice method worked. But what would happen if ADM learned of my plot to steal this amount of money? If they accused me, I thought that I had the perfect answer. How can you prosecute me for stealing $9.5 million when you are stealing hundreds of millions of dollars each year in the price-fixing scheme? And you are forcing me to be a part of this illegal price-fixing scheme!  Therefore, I felt I was immune from any legal action, and I decided to submit several bogus invoices to ADM, until I accumulated $9.5 million, which was meant to be my family’s financial security when I would be fired at a future date for being a whistleblower.

Whistleblower Exposed
In return for wearing a wire and cooperating with the FBI, I had received full immunity from any criminal case as long as I did not break any other laws that the FBI was not already aware of. As soon as ADM learned that I was the FBI informant in June 1995, they immediately contacted the FBI and the media and notified them that I was no white knight. I had stolen $9.5 million. Obviously, I lost the immunity agreement for those very poor decisions.

The four agents with whom I worked for almost three years had every reason to reject me, but amazingly, they still supported me. They worked behind the scenes to help me get a remarkable plea deal, by arguing the following with the prosecutors:

• Mark Whitacre is the highest-ranked executive in U.S. history to become a whistleblower. If we prosecute him, how will the FBI ever get another whistleblower to come forward?
• Mark made some very poor decisions, but he made those decisions when his mental stability was at its worst.
• When FBI agents go undercover, they are trained for years to do that kind of work, and they also get the full benefit of having mental health counseling to help them deal with the double life. Mark received absolutely no training or counseling.

After the prosecutors heard from the agents and my lawyer, they agreed to a three-year plea deal. But there was more. The deal would have included a sentencing hearing where the agents were planning to make the same arguments to the federal judge that they presented to the prosecutors. In the end, my lawyer felt that I could possibly get as low as a six-month prison sentence, and a maximum of three years. He called Ginger and me to his Chicago office to review the details of “the deal of a lifetime.”

There, I proved I was still my own worst enemy. I rejected the deal and fired my attorney. I hired new attorneys and started preparing for trial. One year later, I received a 10.5 year sentence instead of a much shorter sentence by not accepting the plea deal a year earlier. The decisions that I made in total isolation were coming back to haunt me. How would I ever survive a decade in prison? How would my family survive this ordeal?

Lost All Hope
There is no parole in the federal judicial system. Defendants may receive a 15% reduction from their sentence for good behavior, but parole was eliminated in the mid-1980s. That meant I was going to have to spend eight years and eight months in federal prison.

My biggest fear was the impact on my family. I had already missed so much of their lives. I was going to prison at age 41 and would be released at 49. When I was undercover, I had the early morning and late night routine with the FBI, combined with working all day at ADM. I rarely saw my children. My youngest, Alex, was six when I went undercover, 12 when I went to prison, and 21 years old when I was released. Tanya was a freshman in college, and Bill was only four months from his high school graduation when I entered prison in March 1998. My selfishness and pride had robbed my family of the stability and security a father should provide to them. 

--- PAGE BREAK ---

A sobering statistic: Married persons who are incarcerated five years or longer have a 99% divorce rate. And what would my family do to support themselves financially? Ginger had not worked for over a decade, and we had lost everything in the ADM scandal: the house, the cars, the stock, and our savings. I wondered if I would ever be employed as a convicted felon. And on top of these family concerns, I wondered if the four FBI agents would ever forgive me for deceiving them. 

In the months before entering prison, I did not want to live and doubted that I deserved to. I knew my life insurance policy would grant a death benefit if I took my own life, so believing there was no other solution, I attempted suicide twice, which landed me in the hospital, spiraling deeper into depression and bipolar disorder.

A Second Chance
Several months before entering prison, a man named Ian Howes, who was a member of the Christian Business Men’s Connection (CBMC) in Chapel Hill, N.C., reached out to me and became a friend when I really needed one. And shortly after entering prison, Chuck Colson, President Richard Nixon's “hatchet man” and founder of Prison Fellowship, reached out to me.  Chuck became one of my mentors in prison. Both Ian and Chuck planted a seed that gave me hope—hope that I could find purpose in my life even in prison. Chuck had survived a prison sentence years earlier, so it was helpful to know someone who not only survived the ordeal, but thrived during it.

First, my marriage thrived. You will recall that 99% of those incarcerated five years or longer get divorced, and I was incarcerated almost double that time. My family moved to each prison location and came every Friday, Saturday, Sunday, and holidays for nearly nine years. The total amount of time that my wife and children sat in prison visiting rooms added up to three years and eight months. My family went to prison with me.

Second, how my family survived financially while I was in prison is a miracle. In August 1998, Ken Adams, an attorney from a prestigious law firm in Washington, D.C., contacted Ginger to inform her that several food and beverage companies, which had won hundreds of millions of dollars in class action suits against ADM, wanted to assist our family financially while I was in prison. They set up a trust fund that allowed Ginger to go back to college to finish her teaching degree. The trust fund also assisted with our children’s college education, house payments, and other expenses during my nearly nine-year prison sentence. 

Thirdly, I was fortunate to obtain a job in the biotech industry. Even with an Ivy League Ph.D. in nutritional biochemistry, I would be coming out of prison a convicted felon and 49 years old. At 8 a.m. on Dec. 21, 2006, I was released from prison. On the following day, I was hired by Cypress Systems, Inc. Cypress is a biotech company dedicated to NCI-funded cancer prevention clinical trials using the mineral selenium, a powerful antioxidant which is a cofactor in the enzyme glutathione peroxidase.

During the past few years, I have also become very active in CBMC, presenting my testimony at annual mayors’ prayer breakfast events around the country. And more recently, I have become a CBMC Marketplace Ambassador, where I am able to give back to the business community, as Ian Howes did for me 15 years earlier. I present my story of redemption and second chances at business events around the country (I was the guest speaker at the Chicago Section IFT meeting this past January).

Fourthly, how would those four FBI agents ever forgive me? Although I betrayed the FBI agents, shortly after I entered prison, some of the agents started visiting me. All four of the FBI agents have become some of my strongest supporters (as seen by their recent TV interviews on my website www.markwhitacre.com). I regularly conduct training sessions for the FBI about the use of informants, and in 2011, I was the guest speaker at the FBI Academy in Quantico, Va.

Serving Others
I was once obsessed with climbing the corporate ladder and possessed by greed. Now I find great joy in serving others. While in prison, I taught inmates how to read, conducted GED classes, and helped several inmates (who could not write) prepare letters to their family members. I learned for the first time, starting at age 41, how rewarding it is to serve others. I present my story often to inmates inside many of America’s prisons in order to give inmates hope. My wife and I are currently assisting several couples prepare for their loved ones to enter prison, and also assisting several couples as their loved ones are soon to be released back into society.  

No one is above the law, no matter how successful, no matter how wealthy, and no matter how educated. At one time in my life, and at a very young age, I had the world within easy reach. But poor, unethical decisions changed my life forever. My hope is to guard you from the same fate with my story.

Nine years in prison was like 50 years of real life. Prison is life in slow motion—no text messages, no emails, no cell phones, and hours and hours of free time each and every day. I had plenty of time to reflect on where I went wrong and below are the lessons that I learned and a list of things I wish I had done differently, preventive measures that I wish I would have adopted back in the early 1990s.

• Work-life balance. My life was all about work, and I lost my balance with my family and my community. My whole focus became how quickly I moved up the corporate ladder and how much money I made. It is important to maintain the proper work-life balance. 
• Know your value system. It is important to know your value system and what you would do if you are confronted with unethical or illegal behavior. We all will be faced with a fork in the road in our business careers. I wish I had not made impulse reactions when I was confronted with this fork in the road. That mistake cost me close to a decade in prison. Reflect on all of your critical decisions and know your value system as you make them. 
• Compliance and ethics program is a must. It is important to have a compliance program in your firm and to use it, and not just sitting idle in a file cabinet. 
• Purpose vs shareholder value. I feel strongly that we need to shift some of our attention away from shareholder value and focus also on purpose. I feel that many companies are already doing this. 
• Ethical fitness. It is important to have ethics training on a regular basis within your company. Like physical exercise, ethical fitness is not a passive exercise. 
• It is important to always do the right thing. No exceptions! 
• Accountability. Have other mentors (or supervisors) hold you accountable, and also hold accountable those who are working for you.  
• Isolation is dangerous. I made many critical decisions in isolation during my time at ADM from 1989 to 1995. I am living proof that isolation is dangerous. Bounce all critical ideas off other executives whom you respect.  
• Always think long term. The short-term gains were certainly not worth the long-term consequences of our poor decisions at ADM. Four of us went to federal prison.
• Live your life as though the green lamp is always with you. I did all the right things when the green lamp was with me. It was when the green lamp was not with me that I made some horrific decisions that cost my family and me.

I wish very often that I was able to have a do-over in life. I would do many things very differently. But I know that I am very blessed to have a second chance. FT