Efforts by Archer Daniels Midland (ADM) to block the use of conversations secretly recorded by former ADM executive Mark Whitacre have once again failed as the US Supreme Court acting without comment turned away an appeal by the "Supermarkup to the World" and its former president, James R. Randall.
The tapes, which have been sought in a civil price-fixing suit against ADM by plaintiffs who claimed the company also conspired to fix the price of high fructose corn syrup, were used to win convictions against two ADM officials for their role in a conspiracy to fix the prices of citric acid and feed additive lysine. Nearly 200 tapes were requested by plaintiffs in the subpoena at issue before the Supreme Court.
A US district judge in Peoria, Illinois, ruled that the plaintiffs could obtain the tapes made by Whitacre with the cooperation of the FBI of face-to-face conversations, but not the recordings of telephone conversations. The Seventh US Circuit Court of Appeals in June said the plaintiffs could have all of the tapes.
ADM and Randall argued in their high court appeal (Randall vs. Dellwood Farms) that use of the tapes in the civil lawsuit ran afoul of a federal wiretap law. Randall, who curiously was not involved in any antitrust violations, said he feared that "some of the recordings contain embarrassing statements by him on unrelated matters."
After pleading guilty in 1996 to conspiring to fix prices for lysine and citric acid ADM paid $100 million in fines while Whitacre and ADM executives, Michael D. Andreas and Terrance W. Wilson, were convicted in 1998 for their roles in the scandal and each fined $350,000 and are currently serving three-year and two-year, nine-month prison sentences.
Whitacre was already serving a nine-year prison term for allegedly embezzling nearly $9 million from the company and funneling the money into bank accounts in Switzerland and elsewhere.
In what critics are calling "outrageous," "bad trade policy," and "an unconstitutional infringement on the President's foreign-affairs power," US Senate Majority Leader Trent Lott is seeking to give Chiquita Brands International Inc. a veto over any settlement in the contentious banana trade war.
By inserting language into a Senate appropriations bill that would, in effect, block the US trade representative from settling the long-running trans-Atlantic banana war without first getting approval from Chiquita, the Mississippi Republican is attempting to give a US company extraordinary foreign-policy power.
As the Wall Street Journal's Helene Cooper recently reported, some of the measure's proponents are annoyed that White House officials have dragged their feet on issuing an updated list of European products to hit with punitive tariffs in the banana war, after being ordered to do so by Congress last spring.
Lott's Chiquita maneuver, she notes, came a week after Sen. Robert Byrd (D-W.V.) put a provision in a spending bill handing over to US steel companies duties collected from their foreign rivals, imposed to fight dumping practices. The Byrd provision passed in the House; Senate approval is likely, aides say. Lott seeks to put the banana provision in a big end-of-session spending bill; if successful, that would about ensure enactment.
Lott's provision would mean the European Union would be negotiating with Chiquita an end to the banana trade war. "This is pretty outrageous," Gary Hufbauer, a trade economist with the Institute for International Economics told Cooper. "This basically changes the whole nature of the system."
House Ways and Means Chairman Bill Archer (R-Texas) and Senate Finance Committee Chairman William Roth (R-Delaware) have written letters to their colleagues complaining about the Lott maneuver.
"This proposal constitutes, at best, bad trade policy and, at worst, is an unconstitutional infringement on the President's foreign-affairs power," Roth wrote. "It is bad trade policy because it takes control over a trade dispute out of the hands of the President and puts it in the hands of one segment of the domestic industry that is not fully representative of the broader interests of that industry."
Lott, according to Senate GOP staffers, is merely trying to ensure Chiquita doesn't end up with a bad deal.
For the past seven years Chiquita Brands International has been opposed to the EU's existing regime, which favors EU banana traders. Chiquita, prefers a system that would base how much a company can import on the size of its market share before the EU created the current regime in 1993. At the time, Chiquita's share was twice the size of its current level. Dole Foods has now drawn ahead of Chiquita in market shares.
Although the US doesn't grow bananas, the Clinton Administration has been fighting for the rights of Dole and Chiquita to trade with the EU.
Clearly the US bias towards Chiquita stems from the fact that there are no US jobs here at stake here, that there is no danger of a further imbalance of trade, and there is no economic damage about to befall the US. It is simply a case of Clinton & Co. seeking to protect the financial interests of Chiquita's Carl H. Lindner as opposed to the interests of thousands of small banana farmers in the Eastern Caribbean and in Jamaica. Chiquita employs most of its 45,000 workers in Honduras and Guatemala.
As Michael Weiskoff reported in Time magazine, "You wouldn't know how grateful Lindner was by checking records at the Federal Election Commission; he gave the Democratic National Committee only $15,000 in the final 15 months of the [1996] campaign. Instead, D.N.C. officials instructed Lindner to give directly to state-party coffers, which are subject to far less public scrutiny than federal-election accounts. On April 12, 1996, the day after [then US Trade Representative Mickey] Kantor asked the WTO to examine Chiquita's grievance, Lindner and his top executives began funneling more than $500,000 to about two dozen states from Florida to California, campaign officials told Time."
Until its StarLink genetically engineered corn, approved only for livestock feed, began to make national and worldwide headlines by turning up in consumer corn products, its creator and designer Aventis SA, despite being one of the world's largest pharmaceuticals and agrichemical companies, had received little public attention.
But as the Des Moines Register's business writer S.P. Dinnen detailed in a November 5 profile the French-based company has a famous (infamous?) corporate pedigree.
Actually Aventis, which sells its technology in the United States through Aventis CropScience, of Research Triangle Park, N.C., is a new company, the product of the December 1999 merger between old-time European manufacturing giants Rhone Poulenc SA and Hoechst A.G.
Rhone Poulenc was founded in 1858 as an apothecary shop in Paris. By the early 1900s the company had developed a synthetic drug to combat previously untreatable syphilis. Hoecsht also traces its roots to the mid-19th century, when it started making chemicals in Germany. In 1925, it joined with drugmaker Bayer A.G. and chemical manufacturer BASF to become part of I.G. Farbenindustrie A.G.
As Dinnen points out in his profile, I.G. Farben, as that company was known, was broken up by Allied forces after World War II because of its involvement in producing gases used in Hitler's death camps. Its "gases" were also the forerunners of the modern-day chemical poisons used in agriculture known more commonly as the euphemistically corporate-dubbed "pesticides."
Neither Hoecsht, Bayer nor BASF were held responsible for I.G. Farben's wartime activities. The three were allowed to maintain their businesses.
After it merged with Rhone Poulenc, Hoechst was Germany's largest drugmaker. About 75% of Aventis' $17 billion in 1999 sales came from its drugs business. The rest was from its agrichemicals sector, based in Lyon, France. Aventis CropScience's popular farm products include Balance and Puma herbicides and the Regent brand of pesticide.
To better concentrate on pharmaceuticals, Dinnen reports, Aventis SA is considering a spinoff of its farm chemicals business, including Aventis CropScience. But Aventis SA spokesman John Abrams said no decision is imminent.
"We are looking at our life sciences strategy and giving ourselves the next 12 to 18 months to see what makes sense," he said.
Predicting that the costs of recovering this year's genetically-engineered contaminated StarLink corn will be "significantly below" $1 billion, Aventis CropScience says it is "assessing the degree of shared responsibility of the different actors" in the agricultural and food business "as well as insurance coverage for such costs."
Aventis CropScience has admitted that not all farmers signed contracts indicating they understood that the corn was to be kept out of the marketing stream for food. StarLink corn was only approved for use in animal feed or for industrial processes; however, it has been found in recent months in a variety of consumer corn products StarLink contains a new form of Bacillus thuringiensis (Bt) that differs from other types of Bt corn.
Aventis has asked the Environmental Protection Agency to temporarily approve StarLink for food use to prevent further recalls of corn products and prevent disruptions among grain handlers and food processors.
"The flap over StarLink," Dinnen notes, "appears to have had little impact on Aventis SA. Its American Depository Shares, traded on the New York Stock Exchange, are up 22% for the year. Since early October, when the StarLink controversy began to mushroom, its shares have fallen about 9%.
Johannah Walton, a securities analyst in London with Lehman Brothers, sees little threat to Aventis SA from StarLink. "There may be some element of StarLink" in a recent weakening of Aventis SA shares, said Walton. But she said it's more likely related to whether Aventis SA will jettison Aventis CropScience.
"I don't think it's a material issue," said Ted Semegran, an agribusiness industry analyst in New York. He called StarLink more an emotional issue than a practical concern, adding that the three-year-old StarLink's problems were "not a big deal" to a company as large as Aventis.
Kuwait's government-run petroleum company, which is the largest single shareholder of Aventis, declined to comment to Dinnen on whether Aventis could be harmed by StarLink backlash.
Ralph Nader has called for legislation to require labels on all genetically altered products, and a reevaluation of public policy towards genetically altered life forms. Polling has shown that about 90% of the public supports labeling on genetically-engineered foods.
"Consumers have a right to know what they are buying when they go to the supermarket, and farmers have a right to know what they are planting in their fields," Nader told reporters recently after a Des Moines, Iowa, pre-election rally.
"Farmers were not even informed that StarLink had not been approved for human consumption until Aventis began contacting them in an attempt to insure that the corn was not mixed with shipments bound for use in food produced for humans. We need to devolve power from corporate agribusiness to the farmers and consumers who should rightfully control food production in this country."
Nader said that the recent taco shell recall provides an example of the potential dangers of genetically altered crops to consumers, some of whom could expect to suffer allergic reactions to the modified corn, and demanded that President Clinton not give into calls from Aventis and other food industry companies to have StarLink exempted from the current regulatory guidelines.
"Such a move would only reward the biotech industry for its malfeasance," Nader said.
"Genetic engineering of food has far outrun the science that must be its first governing discipline. Many unknowns attend the insertion of genes across species, from ecological risks to food allergies," Nader said. "We need a dramatic shift away from the industry-dominated laissez-faire non-regulation of GMOs." Nader has specifically proposed:
(ogonek) Halting release of genetically altered plants into the environment until comprehensive, independent studies are performed as to environmental and food safety risks under a regulatory framework.
(ogonek) Exempting life forms from the purview of patent laws in order to allow broader research and safety testing opportunities by academia and government.
(ogonek) Placing liability for harm on the owners or licensees of biotechnology patent rights in the event of damages caused by environmental release.
(ogonek) Labeling food containing any genetically altered ingredients.
A.V. Krebs operates the Corporate Agribusiness Research Project, P.O.Box 2201, Everett, Washington 98203; email avkrebs@earthlink.net; www.ea1.com/CARP/. He also was Committee Cordinator of the Family Farmers National Alliance for Nader/LaDuke.