Mark Whitacre was an unlikely informant. A graduate of an Ivy League university, he was a high-level executive at food-processing giant Archer Daniels Midland in the 1990s. He earned millions, and his mansion in Illinois had stables and an eight-car garage. He had lots of reasons to keep quiet. But at the insistence of his wife, Ginger, he blew the whistle on the biggest price-fixing scandal in U.S. history.
For three years, Whitacre wore a wire for the FBI. Known as the "Supermarket to the World," ADM eventually pled guilty to rigging the prices of citric acid and lysine, an additive in animal feed. It paid $100 million (all currency in U.S. dollars) in fines, and several executives went to jail.
Among them was Whitacre, who stole $9.5 million from ADM to try to help his family. Even so, many people consider him a hero. His story inspired a 2009 movie (The Informant!) and FBI agents he assisted are pushing to get him a presidential pardon. Whitacre still believes blowing the whistle was the right thing to do, because it helped consumers.
"I don't regret what happened," says Whitacre, who is now 60. Since his release 12 years ago, he's worked for a California biotech company. He regrets stealing but says he did it because he feared he'd never get another job. "Corporate whistle-blowers were absolutely hated," he says. To get hired again, "you're better off as the felon."
Years later, Whitacre's case is still discussed at the FBI. As price-fixing scandals generate headlines around the world, it illustrates why whistle-blowers are law enforcement's best shot at cracking down on cartels. But it's very hard to get people to risk their livelihoods and step forward unless there is a financial reward.
Here in Canada, we could definitely use more snitches. A bread price-fixing scheme revealed last fall allegedly played out for more than 14 years among grocery retailers. Consumers were also outraged to learn that Loblaws and its parent, George Weston Ltd., secured an immunity deal with the Competition Bureau after voluntarily fessing up about the conspiracy and casting shade on rivals such as Sobeys, Metro, Walmart Canada and Giant Tiger. (The allegations have not been proven in court, and some of the companies have denied breaking the law.)
How did the scheme last so long, and why is an entire company being shielded from prosecution? The bureau's immunity program allows it to offer protection to the first party to disclose an offence. It says the program gives companies an incentive to self-report and is one of its most effective tools to combat cartels.
The bureau also has a whistle-blower program for individuals that dates back to 1999. It is not very encouraging to snitches. The bureau can offer them anonymity, yet it may also require them to testify in court. Employers are not allowed to harass, discipline or dismiss them, but the bureau does not offer any financial rewards for coming forward.
The results have been feeble. In recent years, the number of times the bureau has granted immunity has exceeded the number of search warrants it has executed. As for whistle-blowers, none—zero—contacted the bureau in its 2016–2017 and 2015–2016 fiscal years. Statistics for prior years don't exist. A spokeswoman says the bureau has received information through the program, but she couldn't say how many successful decisions resulted.
The bureau plans to tweak its immunity program this year. Among the proposed changes, it wants to interview witnesses under oath and videotape those chats. As for the corporate immunity deals, it no longer plans to provide blanket protection to all of a company's directors, officers and staff. But businesses will still be able to seek cover if they're the first to squeal.
What's needed are real incentives for ordinary people to report crimes. Other countries pay for tips, and they get a lot more of them. The United Kingdom's Competition and Markets Authority began offering rewards of up to £100,000 for whistle-blowers last year and recorded a 30% increase in tips.
Ottawa should follow suit. Perhaps the bureau would be more successful if it focused on supporting the next Mark Whitacre rather than providing cover to corporations. "Fraud and white-collar crime are going to be here 50 years from now and 100 years from now," Whitacre says. But paying snitches might at least help the bureau catch more perps.