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Whitacre brought that high intensity to ADM, where he arrived in 1989 after jobs as a researcher at Ralston Purina and a manager at Degussa, a German-owned chemical firm. He organized and ran ADM's fast-growing biochemical-products division. Under Whitacre's supervision the company began making the feed additive lysine in 1991; it now controls half the worldwide market. That made Whitacre a favorite of ADM chairman Dwayne Andreas and a likely successor to company president James Randall, 71. "He was very proud and excited about his work at ADM," says Combs, who kept in touch with his former student. "Everything he had to say was positive."
But as early as his first year at ADM, Whitacre told FORTUNE in a first-person account published last week, he began hearing from other managers that price fixing was an accepted practice at the com pany. His concern grew in February 1992, when Randall and vice chairman Michael ("Mick") Andreas, the son of the chairman, told Whitacre to begin working with Terrance Wilson, the president of the corn-processing division. Wilson, they said, would instruct him "about how ADM does business.'' But colleagues had warned Whitacre to be wary of Wilson because he was said to be involved in the price-fixing game.
Wilson and Whitacre were soon discussing the price of lysine in talks with representatives of ADM's two biggest rivals in the field, the Japanese companies Ajinomoto and Kyowa Hakko. The Japanese were in a jam because prices had plunged from about $1.30 per lb. before ADM entered the market to about 60 cents per lb. When the group gathered at a Nikko Hotel conference room in Mexico City, Wilson stated that the price drop had created an unacceptable situation: buyers of lysine were getting a $200 million break at the expense of ADM and the Japanese producers. "The competitor is our friend, and the customer is our enemy," Whitacre quotes Wilson as saying, a statement that Whitacre came to recognize as one of ADM's unofficial mantras.
No price-fixing deals were cut at the Mexico session. But a series of odd, unrelated events rapidly transformed Whitacre into an FBI informer. Whitacre told FORTUNE that the FBI showed up at ADM's door at the behest of Dwayne Andreas, but not in search of price fixing. The agency was called in because Andreas suspected that a saboteur was contaminating batches of lysine in ADM's fermenting process. Whitacre says agents soon questioned him about the problem and that he was instructed by Mick Andreas to lie about a few details, including which phone line he used to conduct business from home. The younger Andreas apparently wanted to be sure Whitacre could continue to discuss lysine prices undetected.