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Tape-recorded conversations between a former Archer-Daniels-Midland Co. executive and his colleagues can be used in a civil trial to show that the company engaged in an illegal price fixing scheme because they were made under “color of law,” a panel for the 7th U.S. Circuit Court of Appeals ruled Monday. Central to the holding apparently was the fact that the tapes, made by convicted felon-informant Mark E. Whitacre, were to be turned over to the FBI in the course of its legitimate criminal investigation into price fixing allegations against ADM and not to be used by Whitacre for any illegal purposes. Dellwood Farms, et al. v. Archer Daniels Midland Co., et al., No. 99-2032. “It was not as if Whitacre were going to use the recordings to blackmail (now former ADM President James) Randall or extort money from ADM,” read the opinion written by Chief Judge Richard Posner. “He was going to give them to the FBI for use in evidence, a clearly lawful purpose.” The court allowed the plaintiffs access to the tapes prior to the trial but allowed U.S. District Judge Michael Mihm to place them under a protective order. Randall opposed the subpoena allowing the tapes to be released because some of the conversations contain embarrassing statements. “I’m confident that Judge Mihm will conclude that Mr. Randall’s private conversations as they relate to his observations on people and events unconnected to the anti-trust charges made by the plaintiffs are irrelevant and will enter the appropriate protective order,” said Jeffrey Cole, the attorney who represents Randall. Whitacre became a federal informant after going to the FBI with an offer to make the tapes as a way to deflect attention to his own illegal activities within the company. His whistleblower status would later be tarnished when he was convicted and sentenced to federal prison for swindling $9 million from the company. Randall and ADM challenged the civil subpoena of Dellwood Farms, Inc. and four other plaintiff companies that sought the tapes of phone and oral conversations from the U.S. Department of Justice. The department did not object to releasing the tapes to the civil plaintiffs. Randall was never implicated in any wrongdoing. However, the Decatur, Ill.-based agricultural giant that he formerly managed pleaded guilty in 1996 to a federal charge of price fixing. And ADM paid a $100 million penalty, the largest ever in a criminal case brought by federal officials. Whitacre, the former chief of ADM’s bioproducts division, and two other top company executives were convicted in 1998 of conspiring with competitors in Japan and Korea to fix the world market in lysine, a soybean-based feed additive following a jury trial in federal court in Chicago. Whitacre was sentenced to two-and-a-half years in prison, while Michael Andreas, the company’s executive vice president, and Terrance Wilson, the retired head of its corn division, were sentenced to two years in prison. Several civil antitrust lawsuits stemmed from the criminal investigation, including the one filed by Dellwood Farms and the other plaintiffs that was the subject of the 7th Circuit’s opinion. By granting the subpoena for the plaintiffs to have the tapes, the 7th Circuit’s opinion stated, Mihm, of the Central District of Illinois, correctly followed controlling precedent from a previous 7th Circuit decision. That earlier controlling case held that interception of oral communications violates the Fourth Amendment only when done by the government. The circuit’s three-judge panel also found that Title III of the federal Criminal Code, which regulates electronic surveillance of oral and wire communications, does not restrict the usage of tapes to only criminal or civil cases initiated by the government; moreover, under Title III, a person can tape their own conversations without the other party knowing about it. Explained the court: Under Title III, a key provision states that a person acting “under the color of law” can lawfully record their own conversations; while another section states even if a person is not acting under the color of law they can legally tape their own conversations as long as the recordings are not used for illegal purposes. “When the FBI agreed to Whitacre’s suggestion that he make the recordings in order to gather evidence of price fixing, the FBI made him a government informant, and in then making the recordings in that role he was acting under color of law,” the opinion said. Michael J. Freed, of Much, Shelist, Freed, Denenberg, Ament & Rubenstein in Chicago, and Gregory K. Arenson, of Kaplan, Kilsheimer & Fox in New York City, represented the plaintiffs. Steven R. Kuney and Paul Mogin, of Williams and Connolly in Washington, D.C., represented ADM Co.

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