The Serious Story Behind 'The Informant'

The Informant opened in theaters on Friday. Although the movie is sometimes played for laughs, the real story was no laughing matter. It's based on a late-1990s case against the conglomerate Archer Daniels Midland. Executives there were accused of orchestrating a worldwide conspiracy to fix prices. Host Liane Hansen speaks to investigative writer Kurt Eichenwald, whose book, The Informant: A True Story, is the subject of the new movie starring Matt Damon.

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LIANE HANSEN, host:

"The Informant" opened in theaters on Friday. Although the movie is sometimes played for laughs, the real story was no laughing matter. It's based on a late-1990s case against the conglomerate Archer Daniels Midland. Executives there were accused of orchestrating a worldwide conspiracy to fix prices.

Corruption and greed are no strangers to parts of corporate America. Last week, President Obama pledged to crackdown on the financial industry.

President BARACK OBAMA: We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.

HANSEN: Kurt Eichenwald is an investigative writer. The new movie is based on his book, "The Informant: A True Story." And he joins us from the studios of Cake Mix Recording in Dallas, Texas. Welcome to the program.

Mr. KURT EICHENWALD (Author, "The Informant: A True Story"): Glad to be here.

HANSEN: First of all, what do you think of the president's declaration about quick kills and bloated bonuses and going after them? Do you think he can or is it wishful thinking?

Mr. EICHENWALD: As much as I respect the idea, it's wishful thinking. I mean, I was at The New York Times for almost 20 years. I wrote about corporate fraud virtually the entire time. And when I first started I thought it would last about 18 months. Each fraud led into another, led into another and, you know, as long as you have a system where you can make money if you lie, people will lie.

HANSEN: During the years you were with The New York Times, you covered a lot of corporate scandals. I mean Enron for one, Worldcom, Columbia HCA Health Care and Archer Daniels Midland. Do you think these are aberrations or are they indicative of a larger culture of corruption and fraud?

Mr. EICHENWALD: Both. And I know that sounds strange. Corporate fraud is not usually begun by here's a bad guy in a company who does bad things. Usually where these cases arise are companies that the market has very high expectations for and ultimately have problems with their financials.

I mean, think of every company you just listed. At some point or another, they were the darlings of Wall Street. Then they hit a bump. And within the company there's this mindset of, well, this is a bump in the road; we'll just paper it over. When it proves not to be a bump in the road but a chasm in the road, the paper becomes lumber...

(Soundbite of laughter)

Mr. EICHENWALD: ...and it gets wider and wider and wider, until you have a massive fraud.

HANSEN: But is it always just a matter of papering over the books, cooking the books? Or, I mean, how much is greed involved?

Mr. EICHENWALD: You know, I know everybody thinks it's - I mean Madoff, people like that, that's clearly greed. Insider trading cases, those are greed. The ones that are much more complex are the corporate fraud cases. Sometimes they're less greed than they are arrogance.

A lot of these people believe that it's absolutely impossible for them to fail. I mean there is - or that they deserve a lot of money. I mean the concept isn't I want more, it's money is the scorecard. Obviously there is greed encapsulated in that. But it's not been the major driving factor that I've seen, and certainly in the corporate cases.

HANSEN: Do you think it's getting worse or has this always been happening? I mean, you know, Teapot Dome Scandal. You know, Standard Oil monopoly, that kind of thing.

Mr. EICHENWALD: If we look back on those, those scandals are kind of cute.

(Soundbite of laughter)

Mr. EICHENWALD: It's getting dramatically worse. And the reason it's getting dramatically worse is we've had a massive run-up since the early 1980s in stock prices. The world is becoming more and more involved, the general public through 401(k)s and mutual funds are becoming more and more involved in the stock market.

Even at its pace right now, where things are a little bit slower, it's become astronomically bigger. There are essentially more companies, more public companies and the desire to be part of the high flyers contributes to a greater amount of fraud.

Bernie Madoff could not have done what he did if he had to go slowly because, you know, if there weren't all these people looking to invest. And so, those kinds of Ponzi schemes, modern day, go into the billions which wouldn't have happened in the past. Not even Ponzi schemes went that high.

HANSEN: Yeah? Can I ask you something about the movie? The Archer Daniels Midland Scandal destroyed careers. It ruined reputations. It damaged the FBI. Several people were sent to prison. Why is the movie being marketed as a comedy?

Mr. EICHENWALD: This is a little bit hard to explain. If you read the book, the story is serious. And the story contained in the movie is serious. But universally, people will tell me when reading the book that they laughed out loud. That there are events - you know, I don't want to give things away - but there are events that are so ludicrous that you can't do anything but laugh out loud. And so, the instinct that people have in going towards this is that it's some very funny material.

Now, the book is a thriller/comedic drama. The movie is a comedic thriller/drama. They're not that far apart. I can tell you one thing: there is absolutely nothing in that movie that isn't in the book. And so, it is the true story.

HANSEN: Kurt Eichenwald is the author of "The Informant: A True Story." The film based on his book opened on Friday. Thank you very much.

Mr. EICHENWALD: Thanks for having me.

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