Mark Whitacre & The ADM Pricing Scandal
$1 Billion
Vol XCIII, No. 311
1992-1995
Alternative 1
Ethical Implications & Stakeholders
What You Should Know
- should have turned himself in to the FBI for embezzlement
- could have asked for a plea / more lenient sentence
- desperate financial status
- could persuade senior executives to stop unethical behavior
Relevant Facts
Ethical Issues
- education
- climbling the corporate ladder
- ADM Fraud
- What is price fixing?
- Whitacre's involvement
What they did wrong & who was affected
- corporate culture
- companies using ADM's products and end consumers fell victim to price fixing
- employees who knew about the price fixing couldn't be prosecuted for their separate frauds
- lost investments on a scam charged back to company hurting innocent coworkers
- Whitacre went behind other unethical coworkers backs to help the FBI
- given kickbacks up to $11 billion and stored them in off-shore accounts
- embezzled $9 million when he knew he would lose his job
- actions affected family and children
Live your life as the green lamp is always following you around
Why Act Unethically?
Alternative 2
Fraud Triangle and Whitacre's 3 Reasons
What is the most ethical decision?
- Whitacre should have reported ADM for creating fake companies to evade taxes from the get go
- wouldn't have had to go undercover for 3 years for the FBI
- wouldn't have gone to prison
- IRS would have collected correct amount of taxes
- DRAWBACK: the bigger fraud (price fixing) may never have been uncovered
- Although SEC may have performed a thorough invesitgation and discovered the price fixing
- MOST ETHICAL ALTERNATIVE
- Fraud Triangle
- Perceived Financial Need
- Opportunity
- Rationalization
- Whitacre's 3 Reason's to Act Unethically
- short-term vs. long-term
- individual vs. community
- loyalty vs. ethical behavior
- Consequences