Antitrust Probe of Archer-Daniels
Puts Spotlight On Chairman Andrea’s
Vast Political Influence

JILL ABRAMSON & PHIL KUNTZ
Wall Street Journal 11jul1995

[More on ethanol]

If money really does buy friendship in Washington, nobody’s reservoir of political loyalty should run deeper than Dwayne Andreas’s.

Now, with the government launching a criminal price-fixing investigation that touches his company, Archer-Daniels-Midland Co., the 77-year-old Archer-Daniels chairman will be testing his many political friendships.

For more than two decades, Mr. Andreas has reigned as the prince of political influence, bestowing millions of dollars on both political parties and an array of Republican and Democratic candidates. He counts among his stalwart political allies President Clinton and Sen. Robert Dole. Mr. Andreas has been an important voice as Congress reshapes a host of farm programs.

How the government’s investigation will affect Mr. Andreas’s standing in Washington is uncertain. Even while continuing his financial support for the Democratic Party, Mr. Andreas was a visible supporter of his old friend, Mr. Dole. There was little sign that either the Clinton administration or Sen. Dole was moving away from Andreas.

One area where the investigation’s fall-out will almost surely be felt is Archer-Daniels clout in Congress, where Mr. Andreas himself recently testified on agriculture issues. The investigation hits at a time when key parts of the farm bill are being hammered out and is likely to diminish Archer-Daniel’s influence over its final contours.

In addition, Mr. Andreas’s past generosity could become a source of political embarrassment to an array of political figures as the government considers criminal antitrust charges against the Decatur, IL company and other makers of food additives and corn-derived sweeteners.

Archer-Daniels’s troubles come at a particularly awkward moment for the Clinton administration and for Sen. Dole, who have both recently gone to bat for the giant agribusiness company. Indeed, just as news of the investigation broke, the Treasury Department was preparing to expand an existing 54-cent-a-gallon tax subsidy for ethanol, the corn-derived fuel additive; although the expanded tax break was sought principally by Atlantic Richfield Co., it would be a huge windfall for Archer-Daniels, which produces about half of all ethanol in the U.S. The Treasury action, which was to come in a regulation, has been expected since late June and is still pending.

Last year the Clinton administration went to even greater lengths for Archer-Daniels. Largely because of White House prodding, the Environmental Protection Agency [EPA] issued a rule -- later rejected by a federal court -- mandating that roughly one-tenth of all gasoline sold in the U.S. contain ethanol. This action came shortly after Mr. Andreas served as co-chairman of a fund-raising dinner for the Democratic Party and donated $100,000. Both the White House and Mr. Andreas have denied any connection between the two events. Last week the federal appeals court in Washington rejected an administration request for a rehearing on the matter. White House officials declined to comment yesterday.

Sen. Dole’s promotion of the ethanol industry has been even more energetic, and his ties to Mr. Andreas are more personal. The two met some 20 years ago in Bal Harbour, FL. Mr. Dole and his wife, Elizabeth, own an apartment in a complex owned by Mr. Andreas. (Mrs. Dole purchased the apartment from Mr. Andreas in 1982 for $150,000. Archer-Daniels board member and Democratic lawyer Robert Strauss also owns a unit in the same complex.

Archer-Daniels officials didn’t respond to messages left at the company’s headquarters yesterday.

Very Generous to Doles

Mr. Andreas has been exceedingly generous to the Doles over the years. Archer-Daniels or his nonprofit Andreas Foundation has contributed to Mr. Dole’s charitable foundation, which supports disability causes, in each year from 1988 until at least 1993. After Elizabeth Dole became head of the American Red Cross in 1990, the Andreas Foundation donated $1 million to the organization, records show. Mr. Andreas and his foundation also gave a total of $100,000 to the Better American Foundation, another Dole nonprofit group, which the senator decided to shut down this year to quell criticism that it was designed to further his political career.

Along with family members and other Archer-Daniels executives, Mr. Andreas has contributed tens of thousands of dollars to Mr. Dole’s political campaigns and to his political action committee.

In the Senate, Mr. Dole has been the chief promoter of the ethanol subsidy. The 54-cent-a-gallon subsidy, combined with an additional 10-cent-a-gallon subsidy for small producers (which Archer-Daniels doesn’t qualify for), means total federal subsidies for ethanol currently cost the federal Treasury an estimated $770 million in revenue annually.

Dole Advocate for Ethanol

As recently as June 12, Sen. Dole swung into action for ethanol. Along with Iowa’s GOP Sen. Charles Grassley, he wrote President Clinton to lambaste the EPA for ignoring “the fundamental question regarding the implementation of the [reformulated gasoline] program generally and ethanol’s ability to complete effectively in that program specifically.”

While Archer-Daniels is a major beneficiary of the tax break, Mr. Dole has argued that his efforts for ethanol have much more to do with promoting Kansas farmers than Mr. Andreas. “Sen. Dole si a longtime supporter of this clean-burning, all-American grain, jobs for our nation’s Farm Belt and energy self sufficiency,” a Dole spokesman said yesterday. “It’s obvious that Sen. Dole’s record on ethanol has absolutely nothing to do with campaign contributions.”

Archer-Daniels and Mr. Andreas have legislative interests that stretch beyond the ethanol program. He has been a zealous promoter of trade with Mexico and recently wrote the House appropriations subcommittee on foreign operations to protest cuts in programs affecting tropical rain forests, where Archer-Daniels hopes to cultivate new sources of food. Through allied trade organizations in Washington, Archer-Daniels is opposing cuts in agricultural export subsidies, among other things.

‘Both Sides Of The Fence’

The sentiment among some agribusiness lobbyists and farm policy analysts is that the cloud over Archer-Daniels and the other companies will weaken their political leverage just as congressional subcommittees begin taking up the key sections of the 1995 farm bill.

“There’s a lot of animosity toward Mr. Andreas and his playing both sides of the fence” with campaign contributions, says one industry analyst. “Here’s a company that has been benefiting from ethanol subsidies and sugar subsidies, and now it looks as if they may have benefited from price fixing. I think it’s going to bode badly for them and the entire [corn sweetener] industry.”

“We don’t expect there to be any effect on the legislative process, says Deborah Schwartz, spokeswoman for the Corn Refiners Association.

With such wide-ranging interests, it isn’t surprising that the head of the self-described “Supermarket to the World,” has tried to remain in the good graces of just about anyone in wielding power in Washington . Since 1979, Mr. Andreas, his family, Archer-Daniels and its PAC have contributed $1.7 million to the national Democratic Party and its congressional candidates and $2.3 million to the Republicans, according to Common Cause and the Center for Responsive Politics. He was a charter member of President Bush’s Team 100, a group of $100,000 donors. In 1992, Archer-Daniels’s contributions helped elect Mr. Clinton. Between 1987-1993, Mr. Andreas gave $70,000 to Gopac, the PAC that House Speaker Newt Gingrich of Georgia used to run. Just since November, his donations have included $120,000 to the GOP and $80,000 to the Democrats.

‘Pragmatic Giver’

“He is the epitome of the pragmatic giver,” observes Ellen Miller, director of the Center for Responsive Politics, a nonpartisan group that tracks political contributions.

There is no indication that Archer-Daniels’s political contributions are part of the current government inquiry; and a Justice Department official declines to comment. But in the past, Mr. Andreas’s donations have gotten him into hot water.

After giving greatly Sen. Hubert Humphrey’s 1968 presidential campaign, Mr. Andreas secretly gave President Nixon’s 1972 re-election campaign $25,000, some of which was eventually traced to Watergate burglars. He denied knowing how the money was used. Watergate prosecution files also show that Mr. Andreas delivered $100,000 in $100 bills to Mr. Nixon’s secretary, Mary Rose Woods; the money remained unspent in a White House safe for months until Mr. Nixon ordered it returned.

Most of Mr. Andreas’s and ADM’s large contributions were made legally to the political parties outside the limits of the federal elections laws. But in 1993, he and his wife were fined $8,000 by the Federal Election Commission for exceeding the $25,000 annual limit on federal campaign contributions.

Staff writers Timothy Noah and Bruce Ingersoll contributed to this article.
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