Did anybody listen to "This American Life" (PBI) this afternoon ?

[creativelcro]

They ran a 1 hr piece on the price fixing scandal by ADM in the early 90's. How the whole thing was discovered, who was the FBI informant and why he did it... I'm wondering the percentage of big corporations that have something like this going and it is just hidden...

This is a summary of what the ADM biz was:
http://www.purdue.edu/UNS/html4ever/9906.Connor.lysine.html
"Perhaps the best-known price-fixing scandal in American business involved Archer Daniels Midland, which was prosecuted in 1996 for illegally fixing the prices of lysine and citric acid. "The lysine price-fixing episode was one of the largest, best-documented and most important prosecutions in modern times under the Sherman Act of 1890," Connor says. "The lysine cartel was striking in its comprehensive, multinational dimensions."

Lysine is used as a nutritional additive in livestock feed. During the time of the conspiracy, ADM produced 54 percent of the nation's lysine, and ADM and three Asian companies together produced 95 percent of the world's feed-grade lysine. Annual sales of lysine were as high as $330 million in the United States, and $600 million worldwide.

In October 1996, ADM pleaded guilty to fixing the price of lysine from 1992 to 1996. The Justice Department fined ADM $70 million (plus an additional $30 million for citric acid price fixing).

"Hog and poultry farmers, as well as feed companies, that bought animal feeds containing lysine were harmed by both the higher price of animal feed and lost farm sales," Connor says.

A typical hog producer in the Eastern Corn Belt who bought 100 tons of lysine-enriched feed per year would have bought three tons of lysine. At this rate, the producer would have spent about $7,200 for lysine in 1994, which was an overcharge of approximately $3,600.

But this wasn't the only damage to farmers, Connor says. The artificially inflated lysine prices caused an increase in the price of pork, so consumers purchased less pork. "By my rough estimate, farm revenues from hog sales declined by $15 million to $20 million during the conspiracy," Connor says. He calculates that the producers and feed companies were overcharged a total of $65 million to $140 million during 1992 1995.

Farmers have traditionally been wary of the financial maneuverings of companies, such as ADM, that buy their commodities and sell food products. "There's a suspicion of middlemen, and episodes such as this perpetuate the stereotype," Connor says.
"

[Nlighten1]

1. This same company advertises on NPR...

quite often...