www.motherjones.com/news/special_reports/1995/07/carney.html
RSS MOTHER JONES BY E-MAIL Sign Up Dwayne's World News: Dwayne Andreas has made a fortune with the help of politicians from Hubert Humphrey to Bob Dole. But, he says, their talk of "free markets" is just wind.
It is a colossal expanse of steel and concrete that alters both landscape and sky with its giant gray boxes spewing out clouds of steam. This is the place where corn, wheat, and soybeans from the American breadbasket are brought to be manufactured into the "food products" that go into everything from Campbell's Soups to La Choy Chinese dinners. In the middle of the complex, in a building behind a bronze statue of Ronald Reagan, down the hall from the world's largest private commodity trading floor, Dwayne Orville Andreas runs the world. "Tell me," Andreas says to his number two man, who has just returned from a tour of the company's plants in Eastern Europe, "what do they do for us in Bulgaria? This type of brashness typifies Andreas and his company, whether the issue is possible price-fixing in Bulgaria or influence-peddling in Washington. For no other US company is so reliant on politicians and governments to butter its bread. From the postwar food-aid programs that opened new markets in the Third World to the subsidies for corn, sugar, and ethanol that are now under attack as "corporate welfare," ADM's bottom line has always been interwoven with public policy. To reinforce this relationship, Andreas has contributed impressively to the campaigns of politicians, from Richard Nixon and Hubert Humphrey to Bill Clinton and Bob Dole. Standing just 5-foot-4 and raised a Mennonite, Andreas is a 77-year-old grandfather who, out of the context of his corporate empire, could easily be mistaken for a man of much more modest standing and concerns. This image vanishes, however, when he starts issuing opinions. Sitting behind a lunch of soy burgers, soy taco meat, and soy cheese dessert, Andreas announces that global capitalism is a delusion. "There isn't one grain of anything in the world that is sold in a free market. 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." It might seem odd that a man with personal assets well into nine figures would be so quick to hoist the red flag of socialism over the American heartland. Agriculture is the last industry where the US government so routinely sets prices and determines production levels, a complex arena in which doing business often has more to do with influencing legislation than with responding to supply and demand.
"How is the government going to run without people like us? We make 35 percent of the bread in this country, and that much of the margarine, and cooking oil, and all the other things." For all this, though, ADM still functions like an overgrown mom-and-pop outfit. Vice President Howard Buffett (son of investment guru Warren Buffett) seems to be treated like family--he's called "Howie" around the boardroom. When I spoke with Andreas and two of his sons, they were all clearly uncomfortable dealing with a reporter. Michael Andreas said, only half-jokingly, "I never knew what a reporter looked like." In addition to the executives' devotion to anonymity, the company markets no products under its own name, so ADM is familiar to most people only through the ads it runs on shows like "The MacNeil/Lehrer NewsHour." But ADM products are present in literally thousands of items found in supermarkets, liquor stores, even gas stations. In addition to milling much of the country's flour and manufacturing margarines and oils for such big-name brands as Crisco and Mazola, ADM processes ingredients found in such products as Nabisco Cheese Nips, Life cereal, and Reese's Peanut Butter Cups. ADM's protein enhancers are common in pet foods, and its texturized vegetable protein is the stuff burritos and meatless burgers are made of. If you look at the side of a can of Coca-Cola you will see that ADM corn sweetener is the second ingredient listed, after water. If you tank up on gasohol, the odds are 60 percent that the ethanol in the blend is made by ADM. And if you decide to get tanked on martinis, you will find that ADM is also the nation's largest producer of the grain alcohol used to make gin, vodka, and liqueurs. "Did somebody dream there is some way that the government doesn't need us?" "What in the hell would they do with the farm program without us?" For all ADM's size, the question now is not whether the government can survive without ADM but whether ADM can survive without the government. Three subsidies that the company relies on are now being targeted by watchdogs ranging from Ralph Nader to the libertarian Cato Institute. The first subsidy is the Agriculture Department's corn-price support program. Despite ADM's close association with corn, this is the least important subsidy to the company. In the short run, ADM might actually benefit if this program is cut back since it might reduce the price the company pays for raw corn. But over time, the lack of a government regulation could lead to wild price fluctuations that would make long-term planning difficult for the company. Of more benefit to ADM is the Agriculture Department's sugar program. Its concern is to keep sugar prices high to prevent Coke and all the other ADM customers that replaced cane sugar with corn sweeteners from switching back. "The sugar program acts as an umbrella for them," says Tom Hammer, president of the Sweetener Users Association. The third subsidy that ADM depends on is the 54-cent-per-gallon tax credit the federal government allows to refiners of the corn-derived ethanol used in auto fuel. No other subsidy in the federal government's box of goodies is so concentrated in the hands of a single company. Robert Shapiro, author of a corporate welfare report for the Progressive Policy Institute, describes ADM's federally supported journey this way: "ADM begins by buying the corn at subsidized prices. Then it uses the corn to make corn sweeteners, which are subsidized by the sugar program. Then it uses the remainder for the big subsidy, which is ethanol." The grease--or perhaps oleo--that helps keep these kinds of programs going is the money Andreas, his family, his company, and his company's subsidiaries provide politicians who have influence over agricultural policy. In the nonpresidential 1994 election, the company and its people gave $656,768 in soft money and another $224,170 in contributions to individual candidates. More recently, Speaker Newt Gingrich's GOPAC received at least $70,000 from Andreas.
mandate that 30 percent of the gasoline sold in the nation's most polluted cities contain ethanol products by 1996--and receiving a $100,000 check at essentially the same time. Phil Gramm has not shown up on ADM's radar screen yet, but the company has begun to show up on his.
Although he eventually announced that he would support the oil companies against the mandate, he made a point of stating that there was really no good way to vote. ADM's ultimate presidential candidate, though, is Bob Dole, who has long been one of ethanol's biggest champions. He promoted the 54-cent subsidy and helped keep it from applying to methanol as well. In 1980 he sponsored a tariff on imported alcohol fuels. During the 1990 Clean Air Act debate and the 1992 national energy strategy debate, he pushed pro-ethanol amendments. Andreas contributes to Dole's foundation for helping the disabled and frequently vacations with him, sometimes providing his own airplane for the trips. In 1982, Andreas helped expedite Dole's purchase of a condominium in the Sea View Hotel in Bal Harbour, Fla. Sea View is managed by an Andreas-owned company, and Andreas also has a condo in the building. Other past and present Sea View tenants include former Tennessee Senator Howard Baker, the late House Speaker Tip O'Neill, television journalist David Brinkley, and ADM board member and Washington superlawyer Robert Strauss. In a recently released deposition, Richard Nixon's secretary, Rose Mary Woods, recalled a 1972 personal visit from Andreas in which he deli...
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