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Ethanol Subsidies for ADM & Other Corporate Kleptomaniacs Will Not Solve Energy Crisis

THE
AGRIBUSINESS
EXAMINER
September 30, 2004, Issue #373
Monitoring Corporate Agribusiness
>From a Public Interest Perspective

EDITOR\PUBLISHER; A.V. Krebs
E-MAIL: avkrebs@earthlink.net
WEB SITE: http://www.ea1.com/CARP/
TO RECEIVE: Send name and address


COMMENTARY: ELECTION YEAR 2004 TABOO ISSUE --- ETHANOL

NICHOLAS E. HOLLIS, AGRIBUSINESS COUNCIL: Behind the glare of
electioneering, terror alerts and Iraq, gas prices and their link with
corn-based additive, ethanol, remains the shrouded, "sleeper" issue this
year. Neither campaign appears willing to touch this connection and the
media appears complicit as well. Ethanol is the taboo issue in 2004 ---
despite the fact its proposed mandated expansion has been a key factor in
stalling massive legislative packages dealing witht the Nation's energy and
transportation programs. Why the silence?

Before offering a slant on this question, it is important to note that
pro-ethanol forces have been actively courting Wall Street in the
legislative vacuum - seeking huge new financial investment needed for an
expansion they believe is preordained. Despite widespread skepticism and
uncertainly over the wisdom and economic viability of corn-based ethanol
within the ag sector itself, an August newsletter on project finance from
Chadbourne & Parke LLP --- a law firm ---hypes ethanol as an "industry in a
period of extraordinary growth".

Little attention is given to ADM's controlling position within ethanol, the
industry's shaky dependence on a complex, multi-tiered subsidy regime, or
the basic volatility of commodity prices. With razor thin operating margins,
ethanol production is a highly speculative, dangerous business. This year
has witnessed ethanol plant closures, explosions, tanker sinkings, and an
unprecedented rise of community activism, lawsuits and petitions reflecting
growing concerns over ethanol. New ethanol facility construction is facing
rising opposition and spooked investors around the country (and Canada) ---
from eastern Oregon to Wisconsin and Michigan.

Nonetheless, ethanol's star seems to rise --- driven by an artificial demand
of rigged markets, and the partial phase-out of ethanol's major oxygenate
competitor, MTBE. This may be loosening as fear of shortages and higher
blended gas prices has led some states to adopt waivers on forced ethanol
use. Motorists and state officials may be wising up on the great scam,
particularly in California and New England.

Of course, this is not the picture ADM --- ethanol's major producer,
transporter and beneficiary wants its legal/financial mouthpieces to convey.
Ethanol has not emerged as the "renewable energy" of choice - or won over
the energy
establishment - which recognizes the necessity of developing newer forms of
cleaning-burning, alternative fuels. In a recent special report on Energy
Trends and Alternative Energy produced by ExxonMobil, the company questioned
the economics of ethanol and announced it "would not pursue investments in
ethanol" --- instead concentrating on making conventional fuels more
efficient and focus on hydrogen's potential for emission-free vehicles for
the future.

Ethanol's boosters, led primarily by ADM, go to great lengths to screen the
public's knowledge of the facts behind this taxpayer-funded rip-off.
Justifications for the subsidy are draped in histrionics, flawed research
and/or demogogic appeals to patriotism (i.e. "No American soldiers should
die for foreign oil") --- Who would
disagree with that --- but who looks behind the statement to discover its
falsehoods?

ADM's de facto monopoly in ethanol and its subjugating influence across wide
swaths of our agro-food system has been accomplished stealthily over decades
and is currently enforced by several largely hidden (but interlocking)
realities:
(1) political contributions and placement of ADM-approved toadies at all
levels of
government, particularly USDA and Congress,
(2) a large phalanx of controlled trade associations, commodity groups, and
related foundations at national, state and local levels and
(3) controlling influence in important media sectors through stock ownership
of newspapers, advertising and holding companies.

Let's illustrate the last point --- Have you been watching the public
destruction of Conrad Black, erstwhile chairman of Hollinger International,
and a member of British House of Lords? Hollinger, which controlled, among
other assets, The Chicago Sun Times, The London Daily Telegraph and dozens
of smaller newspapers, began imploding shortly after ADM's chairman emeritus
Dwayne O. Andreas and another longtime ADM director, Robert Strauss,
resigned their board seats at Hollinger in early 2003.

Other ADM directors and toadies, including former Ambassador Richard Burt
and former Illinois governor James Thompson, continued serving on
Hollinger's board and helped spark an internal investigation, brought in a
former SEC chairman for window dressing and dumped Black amid a swirl of
nasty allegations. Having orchestrated Black's ouster, by exposing audits
and other internal revelations of indefensible corporate greed, it would
appear the "Pot
(Andreas) can call the kettle (Black)" and get away unscathed --- while
simultaneously riding the public's post-Enron indignation.

Clearly, the story has been fanned into a mini-media frenzy, led with a
steady drumbeat of front page coverage in the New York Times (articles
principally authored by reporter Geraldine Fabrikant). But it is curiously
selective coverage.

Anyone who remembers the ADM pricefixing scandal and how it unfolded will
recall the bizarre, laserbeam focus on Dr. Mark Whitacre, a top ADM
executive, who decided to expose criminal activity inside the agribusiness
behometh and wore a wire for the FBI for three years, providing the
government the best
documented, antitrust case in history.

However, once Whitacre had been exposed as the "mole" by a crooked lawyer
(June 1995) he quickly found himself targetted by both ADM and the
government-- and based on evidence supplied by ADM --- was convicted of
embezzlement of corporate funds. At the time, he stated (and demonstrated)
the funds in question had been quietly approved by his superior as an
"executive bonus" for his pricefixing.

Meanwhile, ADM chairman Dwayne Andreas paid $100 million of shareholders'
funds and negotiated complete immunity from even being questioned on his
role in the scandal. Whitacre is still in prison today ----and as Conrad
Black is discovering --- 86 year old Dwayne is still in the wings and
calling the shots.

Perhaps it was just a coincidence, but during the Republican Convention in
New York City, on successive days (September 1-2), The New York Times
carried major front page stories, and an editorial entitled "Corporate
Kleptocracy" featuring Hollinger revelations.

Strange because the "news" was recycled from reports provided by an obscure
internal group from the Hollinger board --- juicy and more damaging to
Black,
but not much different from the November 2003 stories. No where was the old
maestro's name even mentioned. Dwayne Andreas still enjoys immunity! And as
the old man of the "greatest generation" hurls his manipulated thunderbolts,
drawn from an inside straight, not a few lesser figures, who adorned his
board lists, and behaved like marionettes for years on countless profit,
non-profit and foundations alike --- such as Bob Strauss, Bob Dole, Dan
Glickman, Sam Brownback, Richard Perle, Brian Mulroney, Andrew Young and
others shiver with dread --- reminding themselves that "silence is golden" .

As media moguls swirl like vultures around Hollinger's prime assets,
including the Chicago Sun-Times, (still on the auction blocks) - they know
no subject or reputation is safe. Ethanol will remain unmentioned.

Conrad Black's head may be on the proverbial pike outside the city gates
today, but whose head will be out there tomorrow?

Corruptio optimi pessima --- (Corruption of the best is the worst of all) [
September 16, 2004 ]