“company hauls, stores, mills or distills, according to his biographer, one out of every four kernels of corn grown in America. That golden harvest enables Andreas to give millions of dollars to politicians and their favorite causes. He does so, he says,”
Dwayne & Inez Andreas: # 3 Decatur, Ill Donated $348,950 since 1993 Both Parties They gave $254,500 in soft money to the Democrats, and $30,000 to the GOP. They also gave $22,950 to 25 candidates, nearly all Republican. IN A GAME WITHOUT RULES POLITICAL INSIDER WILL WIN: (1-25-95) Washington - Dwayne Adreas, 76, Is a jockey-sized multi-millionaire who Decatur, Ill, company hauls, stores, mills or distills, according to his biographer, one out of every four kernels of corn grown in America That golden harvest enables Andreas to give millions of dollars to politicians and their favorite causes. He does so, he says, out of a sense of good corporate citizenship In the 50 years that he and his giant Archer Daniels Midland Co. have been spreading his largess around Washington, many good things have happened to them. Critical decisions about export policy, regulatory mandates, taxes, subsidies and loan guarantees, by going his way, have pumped his company’s success and, in turn, created more money to spread around the capital. In 1994 ADM churned $11.4 billion in revenue. The benefits Andreas and his company have reaped from Washington touch every American who drives a car or drinks a Coke. At lease some of those benefits have hurt the average American in the pocketbook. The juxtaposition of cash flowing into the political arena and benefits flowing out is one of the things about politics that most troubles citizens and feeds their deep cynicism about both government and big business. Direct connections between political giving and business benefits, the quid pro quo, are rarely provable. People give big money. Politicians do things that wind up helping those people and their businesses. There’s rarely direct conversation that strikes “a deal”; unusually there’s not even an acknowledging wink, or nod. The money comes in, the decisions go out, forming a filmy and subtle fabric that shields the transaction from potential exposure, leaving citizens, investigators and reformers only to speculate about the motivation on either side. The confusing factor is that the actions that benefit people like Andreas sometimes may have been exactly the right public policy, or it may have been exactly what the politician would have done without Andrea’s money in the bank. Certainly, every politician and public official who has made a decision that has swelled ADM’s fortunes has a ready alternative explanation based in what he or she claims is sound economic or public policy. So this is a story about how the game is played at its highest level. It is a game in which the players make up the rules; a tale without a conclusion; a morality play with no moral to draw except that that’s the way it works. The ethanol connection: Andreas, son of a Mennonite grain elevator owner in Lisbon, Iowa, became the king of ethanol in the late 1970s while trying to dispose of corn syrup wastes. Andreas distilled the byproducts into ethanol and sold some to liquor-makers but had lots left over. During the 1978 Persian Gulf oil crisis, he convinced President Carter that using ADM’s ethanol as a lead-free octane booster in gasoline would promote energy independence and cleaner air. There was only one problem: Ethanol cost twice as much to produce as gasoline. It still does. How could ethanol be made competitive? By subsidizing ethanol with an exemption from the federal highway tax on gasoline, suggested Sen. Bob Dole in a bill he introduced in 1978. The waiver, worth 54 cents a gallon of ethanol, has cost the Highway Trust Fund more than $4.6 billion in lost revenue, according to the Department of Transportation. The trust fund pays to maintain the federal highway system. Andreas, who declined to be interviewed for this research, has said ADM makes little profit on ethanol. On the other hand, ADM makes a lot on corn-based sweeteners produced by the same plants. And ADM owns 60 percent of the nation’s ethanol plant capacity. Thanks to Andreas, who sold Coke and Pepsi on corn syrup sweeteners, those sweeteners are overtaking natural sugar in the food and beverage world. Corn-based sweeteners can be priced below cane sugar thanks to another form of federal subsidy: thigh quotas on imported sugar. Quotas hike U.S. natural sugar prices to about 23 cents a pound compared to a world price of about 15 cents. ADM dominates the corn sweetener market with a 30 percent share that’s growing, according to David Nelson, an analyst at NatWest Securities Corp. in New York. Because ADM can sell either ethanol or corn sweetener, depending on which market is stronger, it’s low-cost producer of both. ADM has great interest in anything that affects ethanol, including both competition from foreign producers and regulation by the US government. Thus, of necessity, Andrea’s and ADM’s interests are bipartisan. He has made direct contributions or given money to pet charities and political organizations of Dole, the Senate majority leader, and House Speaker Newt Gingrich. He’s also contributed to the Democratic Party and to President Clinton. Whatever winds of change may blow with Republicans in control of Congress. Andreas is likely to continue reaping hundreds of millions from Washington in what his critics call corporate welfare. He’s “the shrewdest guy I’ve ever met at playing both sides,” marveled Democratic political analyst Bob Beckel. Among others who have been helped by Andreas: Presidents Bush and Carter, several key farm state senators, the late House Speaker “Tip” O’Neill and the late Vice President Hubert Humphrey. Carter and Strauss In October 1980, with his re-election in doubt, President Carter took steps to block imports of cheap Brazilian ethanol. A protective tariff, brokered by Carter’s campaign chairman, Robert Strauss, was ordered October 7 over the protests of Carter’s treasury secretary and trade representative. On Oct. 29, a week before election day, Andreas announced plans to open a new ethanol plant in Des Moines. He dropped the proposal after Carter lost. In the election’s aftermath Strauss joined ADM’s board. A year later, when Carter tired of his Georgia peanut business, Andreas bought him out for $1.2 million. In October 1992, President Bush was trailing in his re-election campaign, just as Carter was 12 years before. Bush earned the gratitude of Andreas and Midwestern corn farmers by ordering the EPA to change its rules to permit the sale of ethanol as a gasoline additive in reformulated gasoline. Andrea’s had given more than $1 million to the Republican Party war chest. But he also contributed $90,000 to the Democratic National Committee through nine ADM subsidiaries, election reports show. President Clinton, who repealed Bush’s EPA break for ethanol, has made decisions that pleased Andreas and corn farmers, such as an EPA rule that ethanol receive 30 percent of the additive market in cleaner gasoline blends. Resistant Clinton administration officials who opposed to move were squelched. Secretary of Transportation Federico Pena, for example, worried in a letter to the White House last February that promoting further use of ethanol would cost the Highway Trust Fund up to $1 billion a year. An aide retracted to Pena’s position a few days later, saying Pena’s autopen had signed a letter that Pena had not read. Federal Highway Administrator Rodney Slater shared Pen’s worry, he told a House subcommittee in April. Slater recanted five days later - after 15 congressional friends of ADM protested to the White House. Andrea’s presence was felt only once in Washington while Clinton’s proposed ethanol mandate was pending. Andreas contributed $100,000 to a Democratic Party fund-raiser that Clinton headlined in late June. Strauss co-chaired the event, which raised $3.5 million. There is no evidence that Andreas’ generosity has ever been directly repaid with a vote, which would be illegal. More to the point, specific votes are not what Andreas and other lobbyists really seek. They want long-term personal friendships with politicians that evolve into attentive trust. An episode involving then-House Speaker O’Neill illustrates the problem of clarifying the rules of the game. O’Neill and Andreas often vacationed together at the Sea View Hotel in Bal Harbour, Fla., north of Miami Beach, where O’Neill owned a place and Andreas owns an ocean-front penthouse and a guest apartment. Andreas also regularly contributed $25,000 to the O’Neill Fund for Ireland, IRS records show, and nearly as much to Boston College’s Top O’Neill Jr. Scholarship Fund. In 1983, O’Neill and his wife, Millie, received honorary degrees from nearby Barry University in Miami Shores. If fact, Andreas’ wife Inez - a graduate of Barry, chairman of its board of trustees, and with her husband, Barry’s biggest contributor - had selected the O’Neills for the honor. Speaker O’Neill responded with a promise to “see what we can do” for Barry, according to participants. Five months later, in the small print of a catch-up House appropriation, a $5 million outlay for a computer center at Barry lurked. Law-makers rejected it, however, as “too obviously a pork barrel thing, put in for the speaker,” according to retired Rep. William Lehman, D-Fla., then the congressman from Miami Shores. A year later, Lehman managed to steer $4 million to Barry via another appropriation. “The only person who lobbied me was Tip”, recalled Lehman, who later earned an honorary degree from Barry, too. The Sea View Connection Access to Washington’s power elite rarely is a problem, due to a unique Andreas asset: Beneath his Sea View penthouse in Bal Harbour, the doles own one of the 33 units. Howard Baker, the former Republican Senate leader and White House chief of staff; Strauss, Washington’s foremost card-carrying Democratic lobbyists; and veteran Washington news commentator David Brinkley have also been residents. The O’Neills wintered there as much as possible, and Thomas E. Dewey, the late New York governor, died in his Sea View unit, the late Vice President Humphrey and his wife Muriel, were Andreas’ frequent guests. Sea View apartments rarely come on the open market, so fair market values are difficult to establish. A painstaking investigation by the New York Times determined that the Doles’ unit was bought quietly from an in-law of Andreas in 1982 for $150,000, about $40,000 less than it might have fetched. ` Elizabeth Dole and her brother bought the unit, according to the deed, and they and Andreas have insisted the price was fair. Bipartisan giving: Andreas may be the least sentimental contributor in American politics. He poured $75,000 into Humphrey’s 1972 presidential campaign, then turned around and delivered $25,000 cash to Humphrey’s arch-rival, Richard Nixon. He’s been a major giver since 1948, when he delivered $1,000 cash to Humphrey’s first Senate campaign. It was a shocking sum, a former Humphrey aide recalled, in an era when “anybody who gave 50 bucks to a senatorial candidate felt he had a right to sit in his lap.” Andrea’s did better. He traveled the world with Humphrey and became by many accounts his closest friend. And the relationship had unpublicized mutual benefits, according to Andreas’ biographer, the late E.J. Kahn: Andreas paid for the souvenir pins and tie clips that Humphrey loved to pass out - and Andreas got to pitch world leaders on ADM’s commodities. Andreas, while manager of Humphrey’s blind trust, fortified it with ADM stock, according to Kahn. At the same time, Humphrey helped get ADM’s soybeans into Kennedy administration’s Food for Peace program. Through the years, from Humphrey to Gingrich, from soybeans to corn sweeteners to ethanol, from Democratic reign to Republican, Andreas has kept on giving and kept on getting what he needs. That’s how the game is played. And that’s how it will keep being played, as long as the players get to make up their own rules. Andreas has contributed to the Doles: Senator says businessman’s ethanol is good for Kansas. When Sen. Bob Dole’s wife, Elizabeth, took command of the American Red Cross four years ago, Dwayne Andreas sent along a $500,000 donation to the cause. Another $500,000 would follow the next year. Elizabeth Dole, who had promised to deliver major, new corporate donors for the agency, fulfilled her pledge. Finding legal ways to give large contributions to politicians helps Andreas stand out in Washington. That’s because federal limits on conventional campaign contributions - $1,000 from individuals and $5,000 from political action committees - are so low. “Five thousand dollars gets you nothing,” former Rep. Mike Synar, D-Okla., explained recently. “There’s so much money out there, at the $5,000 level, that giving to that limit doesn’t have any meaning.” But contributors like Andreas who find ways to give beyond the FEC’s limits, Synar added, are likely to find an old rule still holds: “The more you give, the better the opportunity to make your case.” One favored way around the limits for Andreas has been to make contributions to lawmakers’ favorite charities. Charitable contributions offer three special benefits: They’re tax deductible, perceived as virtuous, and likely to touch a politician in an important hard-to-reach place: the ego. In addition to the Red Cross donation, the Andreas Foundation has contributed $275,000 to the Dole Foundation, IRS records show. Sen Dole, severely wounded in War World II, created the foundation to aid disabled Americans. Andreas, his family and company political action committees also poured at least $87,000 into Dole’s past Senate and presidential campaigns, according to Federal Election Commission records. Dole, who says he’s pro-ethanol because it benefits Kansas farmers, has: 1) Pressed for import tariffs in 1980 and 1984 that closed US markets to cheaper to produce Brazilian ethanol. 2) Urged the Agriculture Department to sell surplus corn to ethanol makers at below-market prices. That action, worth $29 million to Andreas’ company, Archer Daniels Midland, was taken when low gasoline prices and high corn prices threatened the ethanol industry in 1986. 3) Fought off free-marketers in two Reagan administrations who tried to end ethanol’s tax break,. 4) Won from House and Senate conferees a continuation of ethanol’s tax exemption through the year 2000. 5) Tweaked Senate Republicans in ADM’s favor to produce the 51-50 vote last August endorsing Clinton’s ethanol mandate. Dole also has sat on two Senate committees with jurisdiction over sugar subsidies and been an active defender of them. Dole’s spokesman, Clarkson Hine, responded to questions about Dole’s help to ADM by issuing a prepared statement. “Every action Senator Dole has taken in support of ethanol is grounded in sound public policy and has enjoyed bipartisan backing,’ it said, in part. “As a national leader on agriculture policy, Senator Dole knows that ethanol is important to America and the farm economy of America’s heartland.” While promising to reconsider all forms of farm subsidies in a Jan. 8 CNN interview, Dole appeared to exempt ethanol’s Highway Trust Fund tax break. Dole argued, as Andreas does, that oil companies are its real beneficiaries. Nonetheless, big charitable contributions such as that to the Red Cross disturb political reformers like Fred Wertheimer, retiring president of Common Cause, the Washington-based public interest group. “Doing substantial financial favors for elected officials creates an atmosphere of expectation that elected officials will respond to the donors,” Wertheimer cautioned in a recent interview. ____________________________________________________ 10-18-96 - Wichita Eagle Beacon, by Matt Kelley - Associated Press Dwayne Andreas has agreed to share his chief executive’s title at Archer-Daniels-Midland Co. with his nephew and two other top executives in the fallout from a price-fixing scandal that has cost ADM nearly $200 million. The latest shakeup, announced Thursday, followed ADM’s Oct. 15 guilty plea to two felony price-fixing charges. ADM agreed to pay a record $100 million fine and cooperate with continuing investigations of price-fixing for three products, including high-fructose corn syrup. One top company official retired, and another executive - Andreas’ son Michael - is on leave after being told they could be indicted for their individual roles in the scheme. The company also has agreed to pay more than $90 million to settle civil lawsuits stemming from the probe. Andreas, who has run the self-proclaimed “supermarket to the world” with an iron hand for a quarter-century, will share the office of chief executive with three others. They are his nephew, ADM vice president Allen Andreas; ADM president James Randall; and processing division president Charles Bayless. Dwayne Andreas will continue to be the sole chairman of the company. The announcement may not signal much change in the way Decatur, Ill. based ADM is run, said analyst Leonard Titlebaum of Merrill Lynch. “Dwayne Andreas has been, and will continue to be, the one who sets strategy for the company.,” Titlebaum said. Shareholders have been increasingly critical of Andreas’ leadership in the wake of the price fixing scandal, accusing the 78 year-old chairman of putting profits and personal gain ahead of ethics. A proposal to create a majority of independent members of ADM’s board of directors got 42 percent of the vote at ADM’s Oct. 17 annual meeting. The changes do not address the concerns behind that proposal, said Peter Collins of the Florida State Board of Administration, which co-sponsored the shareholder measure. “Our beef with them has never been with the structure of management; it’s been with the structure of the board,” Collins said. “Our feeling all along has been that if you have a good, independent board of directors...then you would have good management. __________________________________________________- 10-24-96 - Wichita Eagle Beacon, by Marilyn Geewax - Cox News Service If you walk into a grocery store, pick up a 12-pack of soda pop and leave without paying, you will be arrested for stealing about $4 worth of merchandise. But if you were to rip off the makers of soda pop by, say $100 million, you could continue on your way. To get away with crime in America, it’s best to do it on a really grand scale, the way executives at Archer Daniels Midland Co. of Decautur, Ill., have done it for years The global grain-processing company had long proclaimed itself the “Supermarket to the World.” But last week, it became apparent a more apt nickname might be “Super-racket to the World.” The company, which has annual sales of $13.3 billion, admitted it colluded with world competitors to fix prices for the livestock feed supplement lysine, as well as for citric acid, used in soft drinks, foods and detergents. ADM agreed to pay $100 million in fines to end the price fixing case brought by the Justice Department after a four year investigation. Analysts say the fine probably equaled the ill-gotten profits from the scheme. The settlement was not large enought to seriously harm the company, but is was significant; the largest previous fine leveled in a price-fixing case was $15 million. ADM agreed to pay so much because its guilt was so clear. For years an informant had been secretly taping ADM managers meeting with competitors to set prices. Also, two of the company’s international competitors recently pleaded guilty and are cooperating with the U.S. government’s investigation. So between the tapes and the confessions of co-conspirators, ADM was concerned. The quickest way out was to admit guilt and stick stockholders with the fine. But if there was a crime, where are the criminals? Who are the people on those tapes and why aren’t they behind bars? The Justice Department says it is still investigating Terrace Wilson, an ADM division chief who is retiring, and Michael Andreas, ADM vice chairman and son of the company’s politically influential chairman, Dwayne Adnreas. Michael Andreas is now of a leave of absence. Federal officals consider him and wilson to be “available for prosecution,” said Gary Spratling, deputy assistant attorney general. The government eventually may indict Andreas and Wilson. But wouldn’t such an elaborate price scam involve more than just two people? Shouldn’t a whole gang be indicted? At ADM, the prices didn’t fix themselves. Individuals decided to break the law by setting prices in ways that hurt farmers and munafuctures. Meanwhile, the senior executives themselves enjoyed fat salaries. ADM certainly is not the only company in which executives have unfairly enriched themselves at the expense of others. Here in Atlanta, former employees of Eastern Airlines are still bitter about corporate raider Frank Lorenzo’s plunder of their company’s assets to keep his holding company, Texas Air, afloat. If Eastern had been robbed by the Crips or the Bloods, the police would have investigated. But because Eastern’s assets were siphoned off by its corporate parent, no one could call 911. Yet workers, shareholders and customers surely lost out. The Justice Department, the Securities and Exchange Commission, state attorneys general and the FBI should make a much greater effort to stop white-collare crime by collaring the criminals, not nicking the innocent pension funds that happen to own some stock. We will have no effective deterrent to corporate crime until executives face the risk of jail time. (Marilyn Geewax is a member of the Atlanta Constitution’s editorial board)
Side Bar: Cargill was one of the major players in the Hemp For Victory 1942 War Campaign. Cargill profited millions. This is documented in the Historical Archives of this website. Research listed by year.
"Mr. Nice Guy" and the "Corporate Citizen"
In CN 10.10 it was noted how "...prominent GOP supporter Dwayne Andreas of Archer Daniels Midland... donated $100,000 to Bill Clinton's inaugural in 1993." It was also noted how Archer-Daniels-Midland (ADM) funds the ultra-boring yet oh-so-educational Jim Lehrer Newshour on PBS.
Not seen to my knowledge on the "public" television "news" program has been major coverage of what's been going on for several decades with Dwayne Andreas, Michael Andreas, ADM, and others. (If PBS won't do it, Conspiracy Nation will.)
According to several articles in the New Federalist (7/29/96), ADM and friends are quite a story. Here are excerpts from the articles:
In 1878, John W. Daniels began selling flaxseed to produce linseed oil and in 1902 formed Daniels Linseed Company in Minneapolis. George A. Archer, another experienced flaxseed crusher, joined the company in 1903. In 1923, the company bought Midland Products and adopted the name Archer Daniels Midland (ADM).
Dwayne Andreas, born in Decatur, Illinois in 1918, joined his father's R.P. Andreas firm in the mid-1930s. In 1936, the Andreas family changed the name of the firm to the Honeymead Company. In 1945, [Dwayne Andreas] sold 60 percent of the family's Honeymead to Cargill [another food giant].
From 1946 through 1952, Dwayne Andreas worked for Cargill, learning how to hedge and speculate [a.k.a. rob farmers] in commodities. In 1945, Dwayne Andreas met Hubert Humphrey. Andreas contributed $1,000 to Humphrey's first senatorial campaign in 1948. Humphrey and Andreas became intimate. Humphrey was godfather to Andreas's son. In 1977, Humphrey, then on the Senate Agriculture Committee, wrote legislation to establish government supports for sugar, which saved Andreas from huge losses. In the 1980s, Andreas funded a Hubert Humphrey Room at the Anti-Defamation League's new headquarters at U.N. Plaza in New York City. While Humphrey lived, Andreas and Humphrey took 85 trips together.
New Federalist has recently reported on the connections between 1948 GOP presidential candidate and governor of New York Tom Dewey and Republican Party judge-fixer Roy Cohn. According to a July 14, 1996 cover story in the magazine section of the Sunday Washington Post, Dewey, working during the 1950s as Andreas's lawyer, set up the Andreas Foundation, to spread Andreas's influence through charitable and political contributions. Andreas provided the funds, and Dewey decided where to distribute the foundation's largesse. "Give money to both sides [Democratic and Republican]. And give to the people your friends ask you to give to," is how the Post described the foundation's policy.
What did Andreas get in return? For one thing, when Dewey became the governor of New York, he saw to it that ADM was awarded a lucrative contract to provide soy-based food products to the state's prison system.
Over the decades, working "both sides of the fence" also netted ADM a change in the Food for Peace legislation of the 1960s to allow that federal program to sell processed food (from ADM and other cartel companies), and action by Richard Nixon to open China's wheat markets to ADM-supplied grain, to mention only a few of the good turns done for ADM.
In 1974, ADM entered into a price-fixing scheme that overcharged the U.S. government $19 million in sales of soy-fortified food to the Food for Peace program. ADM was convicted. In 1976, the company pleaded no contest to federal charges that it had systematically short-weighted and misgraded federally subsidized grain that was being shipped abroad.
In 1984, Andreas met Mikhail Gorbachov for the first time. In 1990, Andreas contributed $1 million to create a Gorbachov Institute in the United States and Russia.
Andreas was always close, as a result of his friendship with Hubert Humphrey, to the organized crime-linked Anti-Defamation League of the B'nai B'rith. During the 1980s, Andreas was persuaded by another major grain trader, Burton Joseph, of the Minneapolis-based S.I. Joseph Company, to contribute $1 million to the ADL. Andreas made the payments in amounts of $50,000 to $100,000 per year.
In 1995, the U.S. Justice Department launched an investigation into fraud and anti-competitive price-fixing in ADM's handling and marketing of corn sweeteners and lysine -- a livestock feed supplement.
Key personnel connected with ADM are: Howard Buffett, vice president of ADM and son of Warren Buffett; Robert Strauss, George Bush's ambassador to Russia, 1991-1993; Brian Mulroney, former prime minister of Canada; Michael Andreas, son of Dwayne Andreas and heir-apparent to the empire.
Dwayne Andreas sits on the Hollinger International Advisory Board, headed by Lady Margaret Thatcher, Henry Kissinger, and Lord Peter Carrington. Also on the Hollinger board are Evelyn de Rothschild, Giovanni Agnelli of FIAT, and former Fed chief Paul Volcker. (For a related story, see CN 10.02, "The Soybean Cases and Judicial Bribery" by Sherman H. Skolnick.)