Archer Daniels-Midland

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Group.png Archer Daniels-Midland  
(Multinational corporation, Big AgricultureSourcewatch WebsiteRdf-entity.pngRdf-icon.png
Archer Daniels Midland logo.png
Formation1902
HeadquartersChicago, Illinois
InterestsCorn syrup, High fructose corn syrup, Ethanol, Bioenergy, Food
American multinational food processing and commodities trading corporation

The Archer-Daniels-Midland Company, commonly known as ADM, is an American multinational food processing and commodities trading corporation founded in 1902 and headquartered in Chicago, Illinois. The company operates more than 270 plants and 420 crop procurement facilities worldwide, where cereal grains and oilseeds are processed into products used in food, beverage, nutraceutical, industrial, and animal feed markets worldwide. The company also provides agricultural storage and transportation services.

“The competitor is our friend and the customer is our enemy....There isn't one grain of anything in the world that is sold in a free market. Not one! The only place you see a free market is in the speeches of politicians. People who are not in the Midwest do not understand that this is a socialist country."”
Dwayne Andreas (1995)  [1]
Then chairman of Archer Daniels-Midland

Products

Products include oils and meal from soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed, Palm kernel and DAG oil, as well as corn germ, corn gluten feed pellets, syrup, starch, glucose, dextrose, crystalline dextrose, high fructose corn syrup sweeteners, chocolate, ethanol, and wheat flour. End uses are consumption by people, livestock, and additives for fuel.

Corporate controlled food supply

In early 2009, corporations like ADM, Monsanto, Sodexo and Tyson Foods wrote and sponsored "food safety" bills which, according to critics; hand control and policing of food to factory farms and corporations. They point out that bills impose industrial, anti-farming "standards" to independent farms. Also, that they subject those who do not use chemicals and fertilizers to severe penalties, which apply even to producers growing food for their own consumption. The Food Safety Modernization Act of 2009: HR 875 [2] was introduced by Rosa DeLauro, whose husband (Stanley Greenburg) works for Monsanto. According to critics, the bill includes criminalization of seed banking, prison terms and confiscatory fines for farmers; 24 hour GPS tracking of their animals and warrentless government entry.[3], [4]

Long known as a food and ingredients company, it has also invested in fuel production. ADM nearly doubled capital spending in its 2007 budget to an estimated $1.12 billion. The increase is planned for bioenergy projects, focusing on bioethanol and biodiesel.[5]

Corporate practices

Sherman Antitrust Law violation

In 1920 the US Department of Justice brought suit against the National Linseed Oil Trust for violating the Sherman Antitrust Act. Several co-defendants were named, including the Archer-Daniels Manufacturing Company. The suit alleged all of these companies were acting in collusion to raise prices, citing a spike in linseed oil costs between 1916 and 1918, when the price rose from $.50 per gallon to $1.80.[6]

Price fixing

In 1993, the company was the subject of a lysine price-fixing investigation by the U.S. Justice Department. Senior ADM executives were indicted on criminal charges for engaging in price-fixing within the international lysine market. Three of ADM's top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time.[7] Mark Whitacre, FBI informant and whistleblower of the lysine price-fixing conspiracy, would also find himself in legal trouble for embezzling money from ADM during his time as an informant for the FBI. In addition, according to ADM's 2005 annual report, a settlement was reached under which ADM paid $400 million in 2005 to settle a class action antitrust suit.[8]

The Informant is a nonfiction thriller book [9] that documents the mid-1990s lysine price-fixing conspiracy case and the involvement of ADM executive Mark Whitacre. The book was adapted into the 2009 film The Informant!.

Tax dodging

A noteworthy case of transfer mispricing came to light in 2011 in Argentina involving the world's four largest grain traders: ADM, Bunge, Cargill and LDC. Argentina's revenue and customs service began an investigation into the four companies when prices for agricultural commodities spiked in 2008 and yet very little profit for the four companies had been reported to the office. As a result of the investigation, it was alleged that the companies had submitted false declarations of sales and routed profits through tax havens or through their headquarters. In some cases, they were said to have used phantom firms to buy grain and had inflated costs in Argentina in order to reduce the recorded profits earned in the country.[10] According to the country's revenue and customs service, the outstanding taxes amounted to almost US$1 billion.[11] The companies involved have denied the allegations. To date, the Argentinian tax authorities have not replied to the Swiss NGO Public Eye’s request regarding the current state of the case.[12] In its 2018 annual report to the US Securities and Exchange Commission (SEC), Bunge mentioned provisions which suggest that the case is still ongoing: "[A]s of December 31, 2018, Bunge's Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,276 million Argentine pesos (approximately $34 million), plus applicable interest on the outstanding amount of approximately 4,246 million Argentine pesos (approximately $113 million[13])."[14]

Corruption

The Swiss NGO Public Eye elaborated on a corruption case involving grain giant ADM.[15] An ADM subsidiary pleaded guilty and agreed to pay criminal fines in excess of USD 17 million in 2013 to resolve charges that it had paid bribes, via vendors, to Ukrainian government officials in order to obtain value-added tax refunds.[16] In a parallel action, the grain trader consented to a judgment that ordered ADM to pay close to US$37 million in "disgorgement and pre-judgement interest", which brought the total amount of penalties to more than US$54 million.[16]

Violation of the Foreign Corrupt Practices Act

On December 20, 2013, the SEC announced that it had charged ADM for failing to prevent illicit payments (bribes) made by its foreign subsidiaries to Ukrainian government officials in violation of the FCPA. ADM agreed to pay more than $36 million to settle the SEC's charges.[17]

Agricultural subsidies

The company lobbies for agricultural subsidies and price supports including sugar and ethanol. According to a 1995 report by the libertarian think tank Cato Institute, "ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its bioethanol operation costs taxpayers $30."[18]

Sonny Perdue landsale

In 2021, an investigation by the Washington Post found that ADM had sold land to incoming Secretary of Agriculture Sonny Perdue in 2017 at a fraction of its estimated value. Ethics lawyers had legal and ethics concerns about the sale, questioning whether it amounted to bribery. According to the Post, ADM "sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture."[19]



References

  1. https://www.motherjones.com/politics/1995/07/dwaynes-world/
  2. Text of H.R. 875: Food Safety Modernization Act of 2009, govtrack.us, accessed March 2009
  3. Linn Cohen-Cole Goodbye farmers markets, CSAs, and roadside stands, Oped News, March 2009
  4. Lydia Scott HR 875 The food police, criminalizing organic farming and the backyard gardener, and violation of the 10th amendment, Campaign for Liberty, March 2009
  5. Fusaro, Dave (March 26, 2007). "ADM’s big bet on fuel". Food Processing . Retrieved June 6, 2007.
  6. "Sues to dissolve Trust", New York Times. July 1, 1920. Retrieved 7/26/2015.
  7. https://web.archive.org/web/20070930041515/http://www.pbs.org/newshour/bb/business/october96/adm_10-15.html
  8. https://web.archive.org/web/20090121191816/http://www.adm.com/en-US/investors/shareholder_reports/Pages/default.aspx
  9. https://web.archive.org/web/20081006125306/http://www.auroraadvisors.com/articles/2000-09_dailydeal.html
  10. https://www.theguardian.com/business/2011/jun/01/argentina-accuses-grain-traders-tax-evasion
  11. https://www.bloomberg.com/news/articles/2013-03-25/grain-exporters-owe-argentina-951-million-in-taxes |access-date=1 August 2019}}
  12. https://www.publiceye.ch/fileadmin/doc/Agrarrohstoffe/2019_PublicEye_Agricultural-Commodity-Traders-in-Switzerland_Report.pdf
  13. https://www.cnbc.com/2018/08/31/argentinas-peso-has-fallen-108percent-against-the-dollar-so-far-this-year.html
  14. https://last10k.com/sec-filings/bg
  15. https://www.publiceye.ch/fileadmin/doc/Agrarrohstoffe/2019_PublicEye_Agricultural-Commodity-Traders-in-Switzerland_Report.pdf
  16. a b https://www.justice.gov/opa/pr/adm-subsidiary-pleads-guilty-conspiracy-violate-foreign-corrupt-practices-act
  17. https://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540535139#.Urbo_7QtqCl
  18. Bovard, James (September 26, 1995). "Archer Daniels Midland: A Case Study In Corporate Welfare" Archived July 11, 2007, at the Wayback Machine.. Cato Policy Analysis No. 241. Cato Institute. Retrieved July 24, 2013.
  19. https://www.washingtonpost.com/climate-environment/interactive/2021/sonny-perdue-adm-land-deal/