The land was worth millions. A Big Ag corporation sold it to Sonny Perdue’s company for $250,000.
Story by Desmond Butler
Graphics by John Muyskens
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June 29, 2021 https://www.washingtonpost.com/climate-environment/interactive/2021/sonny-perdue-adm-land-deal/ It was a curious time for Sonny Perdue to close a real estate deal.
In February 2017, weeks after President Donald Trump selected him to be agriculture secretary, Perdue’s company bought a small grain plant in South Carolina from one of the biggest agricultural corporations in America.
Had anyone noticed, it would have prompted questions ahead of his confirmation, a period when most nominees lay low and avoid potential controversy. The former governor of Georgia did not disclose the deal — there was no legal requirement to do so.
An examination of public records by The Washington Post has found that the agricultural company, Archer-Daniels-Midland (ADM), sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture.
Perdue did not respond to repeated requests for comment on the real estate deal. Jackie Anderson, a spokeswoman for Chicago-based ADM, denied that the company sold the property at a discount, saying that ADM began negotiations with Perdue’s former company, AGrowStar, in 2015 — well before Trump was elected — and could not find another buyer.
“This was nothing more than a business decision to sell a significantly underperforming asset,” she said.
Danny Brown, the former president of AGrowStar, confirmed negotiations began in late 2015. But Brown said ADM wanted $4 million for the plant — 16 times what Perdue’s company ultimately paid for it.
The timing of the sale just as Perdue was about to become the most powerful man in U.S. agriculture raises legal and ethics concerns, from the narrow question of whether the secretary followed federal financial disclosure requirements to whether the transaction could have been an attempt to influence an incoming government official, in violation of bribery statutes, ethics lawyers say.
“This stinks to high heaven,” said Julie O’Sullivan, a Georgetown University law professor and former federal prosecutor. “It deserves a prosecutor’s attention,” she added. “Only a prosecutor with the powers of the grand jury can find out, in fact, whether there was a quid pro quo that existed at the time of the deal.”
Public officials are barred from accepting anything of value if the benefit is given “with intent to influence.” ADM, which spent millions of dollars lobbying the U.S. government during the Trump presidency, certainly had many interests before the USDA during Perdue’s tenure.
“We did not receive any special favors from Mr. Perdue during his administration,” Anderson said, “and it is unfair and inaccurate to imply that we did.”
ADM sold the plant in Estill, S.C., to Perdue’s then-company, AGrowStar, for $250,000 — a fraction of what county and independent appraisers say it is worth. Six years earlier, ADM had paid more than $5.5 million for the same land, a figure that closely matches assessments by independent experts contacted by The Post, who analyzed the value based on state records and drone footage of the property.
Months after Perdue took over the U.S. Department of Agriculture, his family trust sold AGrowStar to a group of investors along with all of its real estate for an undisclosed amount. According to Brown, AGrowStar sold for about $12 million.
The real estate sales illustrate the limits of the financial disclosure rules intended to reveal potential conflicts of interest before confirmation. Officials are not required to detail their companies’ transactions or any business deals completed before their confirmations.
The sale of Perdue’s company was also obscured by complex financial moves that appear to have evaded at least the spirit of an agreement Perdue made with the U.S. Office of Government Ethics, according to Walter Shaub, who led the agency at the time.
“This may be a matter for the FBI to investigate, frankly,” he said.
Weeks after the lucrative deal with ADM, Perdue pledged that if confirmed he would uphold the highest ethical standards.
“For the American taxpayers, our customers, I will prioritize customer service every day,” he told senators at his confirmation hearing. “They expect and have every right to demand that we conduct the people’s business efficiently, effectively, and with the utmost integrity.”
While ADM asserts that the property was sold at fair market value, the commercial appraiser for Hampton County’s tax assessment office is skeptical.
“I would question the sale,” Robert Bates said. “It was an extremely low price to be paid for that facility.” The heart of Estill
By the time Perdue’s company bought the Estill plant, its operations were so diminished hardly anyone noticed it went for a pittance.
The grain elevators, storage bins and oil processing machinery still loom over Estill. From the heart of the town, the rusting tops of the storage bins and the stained sides of the grain elevator are a reminder of better days, when the plant employed dozens of workers and could process more than 11 million bushels of soybeans a year into vegetable oil. The owners expanded the grain storage over time to 3 million bushels, an asset that remains today. Wheat, corn and soy would come and go along the train tracks that ran right to the grain elevator.
But by the end of the 1990s, amid changes in grain markets, the owners became overextended and eventually declared bankruptcy. The threat of closure, which would have devastated Estill, prompted the South Carolina Farm Bureau to join a group of investors to buy the plant and rename it Carolina Soya. The effort was not a success, and by 2010 they were looking for a buyer.
Paul Hankey managed the plant for 26 years, and he put his soul into it, he said in an interview at his home in Estill. When the plant went up for sale, there were two interested parties: the chicken company, Perdue Farms, which is unrelated to Sonny Perdue, and ADM. Hankey was pushing the investors to go with Perdue Farms, which would have kept the oil processing facility open and taken advantage of the leftover meal from the soy beans to feed chickens.
But the investors made a deal with ADM, a giant in the food processing market globally that had $64 billion in revenue last year and once billed itself as “supermarket to the world.”
The company has a history of manipulating markets. In the late ’90s, three ADM executives were convicted in a global price-fixing scheme and sentenced to prison terms. ADM was fined $100 million — the largest antitrust fine in U.S. history at the time.
Hankey recalled that the initial signed deal was for $10 million, but after a troubling assessment, ADM paid $5,525,854.70 in December 2010, according to a deed. Hankey said that the potential liability from fire or accidents with the aging facility would have given potential buyers pause — and would still.
Yet Hankey had suspicions about ADM’s motives in Estill, and he turned out to be right. ADM shut down the processing business. Some 30 people lost their jobs in a town where more than a third of the population lives below the poverty line, according to an estimate by the U.S. Census Bureau.
“It had a huge impact on the town,” Hankey said.
The sale also affected the wider region. Because it processed so much soy, the plant was a regional buyer in the market. That was a lot of capacity for local growers, who could sell to Carolina Soya instead of shipping it to big traders like Cargill or ADM.
When the Estill plant closed, local soy prices fell. That meant ADM, one of the biggest players in soy processing, could purchase beans at a lower cost.
“They bought the market,” Hankey said.
In ADM’s account, the decision to sell to AGrowStar went like this: The grain market was deteriorating, the plant was bleeding money, and the company wanted to offload underperforming assets. It put the property on the market in 2015.
ADM approached Brown, the AGrowStar president, at a grain elevator conference in December of that year with an offer of $4 million. “I said, ‘No way guys,’" Brown recalled.
A few months later, at a grain and feed meeting in Charleston, S.C., the offer got better. “At that point they had come down and it was two, two-and-a-half million,” Brown said. At a third meeting in May, on a golf course in Georgia, ADM told Brown to “make us an offer.”
“’We want out, our board wants out, and we want to get gone,’ ” ADM told Brown.
In the fall of 2016, when Perdue was working as an agriculture adviser for the Trump campaign, an ADM executive told Brown: “ ‘I got you a deal you can’t refuse,’ ’’ Brown recalled. The offer had slipped to $250,000.
“So me and Sonny looked at it,” Brown said. Even if they couldn’t turn a profit down the road, he told Perdue: “I think we can get our money back by selling scrap iron or the motors or the conveyors or the boiler.”
Brown said that the Estill property was hard for ADM to sell, because it was old and hard to run profitably. "It had nothing to do with the secretary of agriculture, the governor of Georgia or a sweetheart deal,” Brown said.
On Dec. 30, 2016, three weeks before Perdue was nominated, ADM and AGrowStar signed a purchase agreement. Anderson provided a redacted copy that is signed by Perdue, listed as “sole member” of AGrowStar, and an ADM executive.
At that time, there was already public speculation that Perdue could be the nominee — including hints from Perdue himself. In an interview with the Wall Street Journal published on Dec. 1, 2016, Perdue said that days earlier, he had met with Trump, who asked about his “skill sets.”
As soon as AGrowStar bought the facility, Brown said, Perdue Farms offered to buy it for itself. “We could have sold it and doubled, tripled, quadrupled our money right then," he said. But the deal with ADM included a clause that AGrowStar could not sell it for a number of years.
“We could not compete, we could not crank up the processing, we could not sell that facility,” Brown said.
Hankey, the former plant manager, when told of Brown’s account, said that ADM’s efforts to close the soy bean processing and to keep it closed was unfair to Estill, a town that badly needed the jobs and the revenue.
“It makes me mad,” he said. An appraiser contacted by The Post confirmed that the equipment on-site was probably worth more than $250,000, calling the deal “a no-risk proposition.”
Indeed, Brown said that he stayed on at AGrowStar after the Perdue family sold the company. The new owners stripped equipment from the Estill plant, including a huge boiler. “On a scale of one to 10, that boiler was a 10. It was a boiler that would go on the Titanic,” he said. And the boiler alone sold for double what AGrowStar had paid in early 2017 for the entire property in Estill. “We ended up getting, I don’t know, $500,000 for that boiler,” he said.
The property’s 3 million-bushel capacity was also worth substantially more than the quarter-million dollars that AGrowStar paid for it. For the grain storage, a very conservative commercial estimate of value would be $1 per bushel, or $3 million dollars, according to one of two independent appraisers contacted by The Post. They both spoke on the condition of anonymity because they did not want to jeopardize their work.
One of the appraisers assessed the property at $5.7 million based on state and county records and drone footage of the property taken by The Post. A second nationally known agricultural appraiser reviewed that assessment and agreed with its conclusions.
A third appraisal came from Hampton County, which pegged the property at almost $2.4 million in 2018, after the Purdue purchase, based on the replacement value of the assets. According to Brown, AGrowStar tried to appeal that valuation, but was denied.
“Replacement value isn’t any good if no one wants it,” he said.
ADM said that the three appraisers’ accounts might reflect current value, rather than value at the time of the sale. But Hampton County also appraised the property at $2.9 million in 2016 — the year before the sale. It’s plausible that the company could have struggled to find a buyer and been happy to offload the property. What’s not plausible is that a company as steeped in the ways of Washington would have closed a deal with the incoming agriculture secretary without seeing the risk of controversy.
Unless nobody noticed.
‘3 minutes, 1 tax bill, $100,000 for Sonny Perdue’
It was this kind of insider dealing that Trump was referring to when he promised to “drain the swamp” in Washington. But Perdue’s track record was no secret.
When he was elected governor of Georgia in 2003, Perdue came into office with a bevy of potential conflicts of interest. The barrel-chested politician was a walk-on football player at the University of Georgia, a veterinarian and a U.S. Air Force captain, but he spent much of his life — and made much of his fortune — in grain trading and real estate. The executive-turned-governor was twice found to have violated state ethics laws. He refused to put his assets in a blind trust and once dismissed the suggestion in a debate.
“I am a small-business owner. I’m in the agribusiness,” Perdue said during his 2006 reelection campaign. “That’s about as blind a trust as you can get. We trust in the Lord for rain and many other things.”
In 2005, it was the state legislature that helped Perdue’s business pursuits.
The governor had purchased some 20 acres of land near Walt Disney World in Florida for $2 million and faced a hefty tax bill. The following year, the Georgia legislature approved a bill allowing state residents to avoid taxes on property sold in Georgia if they bought similar land in another state. It made the changes retroactive to land deals from the previous year.
According to the Atlanta Journal-Constitution, the provision was slipped into the bill at the last minute by a Republican legislator, Rep. Larry O’Neal, who had worked on land deals for the Perdue family as a lawyer. “For those of you who are still awake,” O’Neal joked as he introduced the amendment near midnight. Immediately afterward, the bill went to a vote.
It seemed tailor-made for Perdue: he had sold family property in Georgia months before the purchase in Florida. He signed the bill into law three days before tax day and saved himself an estimated $100,000 in taxes. When it came to light, the Atlanta paper ran a story headlined: “3 minutes, 1 tax bill, $100,000 for Sonny Perdue.”
It took Perdue and the U.S. Office of Government Ethics several weeks to negotiate a deal to untangle the potential conflicts of interests in his agribusinesses.
U.S. law requires senior officials to detail their assets before confirmation, remove conflicts, and file reports annually on their personal holdings so officials can certify that they have stuck to their agreements. They are required to report major transactions, but only after they are sworn in. The only way ethics officers or lawmakers might have learned about Perdue’s ADM deal independently would have been by word of mouth, by looking at deeds in Hampton County — or if Perdue had disclosed it. He was not required to on his forms and did not otherwise inform the committee, according to two staff members for the Senate Agriculture Committee, who spoke on the condition of anonymity because they were not authorized to discuss the issue.
Negotiations with the government ethics office dragged on until March 7. Most of Perdue’s holdings were held in two trusts, including one called the Perdue Family Wealth Preservation Trust. He promised that within 90 days of his confirmation, he would move most of his holdings into two new trusts that would be irrevocably out of his control and would not benefit him or his wife. In trust law, “irrevocable” means that the trust cannot be changed once it is signed. In this case, Perdue could make his children trustees and beneficiaries, but neither he nor the new trustees could shift that benefit and control back, according to the agreement. Filings showed Perdue’s holdings in his initial filing were between about $11.3 million and $47 million. The wide gap reflects the disclosure rules that list the value of each asset within a range. Perdue was confirmed as agriculture secretary on April 24, 2017, with 11 senators voting against him. At some point afterward, Perdue did create an irrevocable trust, for which he and his wife were neither trustees nor beneficiaries, according to a USDA official, who spoke on the condition of anonymity because they were not authorized to discuss a specific ethics filing. And in Perdue’s 2018 required annual disclosure, the first since he took office, the two trusts were no longer listed as assets. His total assets had fallen to a range of between about $2.2 million and $5.1 million.
But then, without public explanation, most of the assets were back in a trust on his 2019 disclosure and his total assets had shot up to a range of about $11.9 million and $47.9 million.
“I just I don’t understand how you can be extremely rich in 2017, much less rich in 2018 and then all of a sudden to be rich again in 2019,” said Shaub, who led the Office of Government Ethics in 2017 and signed off on Perdue’s forms.
But the sale of AGrowStar was never reflected in Perdue’s disclosures because by the time it was sold, it was part of a trust no longer controlled by the secretary. It did not have to be disclosed.
After the sale of Perdue’s agribusinesses, the new trustees created a third set of trusts, returned all the assets to it and gave back the control and benefits to Perdue, according to the USDA official.
According to a former Perdue communications aide, who was not authorized to speak on the record by their current employer and spoke on the condition of anonymity, “Secretary Perdue complied with his ethics agreement and followed the advice of ethics officers at USDA.”
Officials could do nothing to stop it, said the USDA official. Shaub doesn’t agree. The changes in the trusts should have been reported to the U.S. Senate, Shaub said, because it diverged from the terms of Perdue’s original agreement. According to Perdue’s government ethics filings, that notification never happened.
“It was like a bait and switch,” said Shaub, an Obama appointee who left the agency in June 2017. He did not see Perdue’s subsequent filings until asked to look at them by The Post.
Richard Painter, a chief ethics lawyer in President George W. Bush’s administration and later a staunch critic of the Trump administration, says the shuffling of the trusts may be legal under U.S. trust law, but, "It’s just fundamentally dishonest.”
What happened after the agreement, according to the USDA officials’ explanation, contradicts the letter Perdue signed and could amount to a violation of false statement statutes, Painter said.
“To say you have an irrevocable trust means you’re saying that you no longer own the asset and you never will,” he said. “I don’t know the extent of the exposure and whether he committed a crime, but I think he has serious issues."
The shifting assets also effectively obscured the sale of AGrowStar, a transaction that might have attracted more scrutiny to the Estill land deal. Because the company was effectively off the books when it was sold in 2018, Perdue did not have to detail it. Had the company been part of his holdings that year, he would have had to file a transaction report, including a sales price listed within a range, according to Shaub.
AGrowStar’s website, however, did note the sale.
Shaub and Painter said that the complex shuffling of trusts combined with the land deal and the subsequent sale of AGrowStar needs to be investigated.
The USDA’s inspector general and the House Oversight Committee should probe the transactions, Shaub said.
One of the open questions is how much money the Perdue family made from the land in Estill. According to Brown, he and Perdue boosted the value of AGrowStar before it was sold. In the course of the 10 months under Perdue’s ownership, the company used the rail line to the Estill plant to transport more grain and made the operation more efficient.
According to the deeds, AGrowStar bought the property for $250,000 and it was listed as changing hands months later at $524,000. But the Perdue family didn’t just sell the land, they sold the whole company for about $12 million, Brown said.
The AGrowStar transactions were first flagged to The Post by the government watchdog Accountable.US, which is calling for Perdue to be investigated.
The group’s president, Kyle Herrig, called the deal "the definition of corruption.”
“Perdue must be held accountable for putting his own interests — and those of one of the most powerful corporations he oversaw — ahead of consumers, family farmers and rural America,” he said.
Perdue, who is 74, has been in the running to head Georgia’s higher-education system.
ADM is no stranger to the ways of Washington. It employs a powerful team of in-house lobbyists, spending $1.7 million on those efforts in 2017, a figure that rose sharply the following year.
The Perdue years were good ones for ADM, which hit many targets among the top issues listed on its lobbying forms.
For one, the USDA changed food safety rules that had been in place for more than a half-century. In 2019, Perdue’s agency took steps to loosen regulations of pork production by reducing inspectors at slaughterhouses and eliminating the cap on “line speed” — the rate at which pigs are slaughtered, which had been 1,106 hogs per hour, or 18 hogs per minute.
A boost to the meat industry is a boost to the grain industry, since more pigs means more grain. The company was expanding its global animal feed business with a major acquisition of Neovia in 2019 that made it one of the largest players in the world.
When Thailand instituted a ban in 2019 on glyphosate, the active ingredient in the weed killer Roundup, ADM helped the USDA get the decision reversed by providing political intelligence on the Thai government, according to emails obtained by an advocacy group, the Center for Biological Diversity. Roundup is made by Bayer, but it is critical to ADM, which sells grains modified for resistance to glyphosate.
Vietnam also banned the chemical, prompting Perdue himself to warn Hanoi: “We are disappointed in Vietnam’s decision to ban glyphosate, a move that will have devastating impacts on global agricultural production."
Vietnam later postponed its ban.
But the biggest win for ADM came in the form of subsidies and tax breaks. In 2019, U.S. farmers and Big Ag were pressuring the Trump administration to boost the biofuels industry. ADM is one of the largest U.S. producers of ethanol, made from corn, and of biodiesel made from vegetable oil.
The administration was caught in the middle of a perennial battle between corn growers and energy companies. U.S. regulations require oil refiners to blend a set amount of ethanol fuel made from corn into gasoline. More ethanol means less petroleum gas and vice versa. With oil prices low, U.S. gas producers were hurting, so the administration allowed many refiners to waive the ethanol requirements. Corn farmers, who were also suffering from a lack of demand, were growing increasingly angry, and the 2020 election was looming.
Inside the Trump administration, Environmental Protection Agency chief Andrew Wheeler, who had been a coal industry lawyer before his appointment, was backing the oil refiners. But the corn growers and ethanol producers, including ADM, had Perdue in their corner.
In August, Trump asked Perdue and Wheeler to come up with measures to boost demand for biofuels. Perdue traveled to Decatur, Ill., to attend the Illinois Farm Progress Show, where he told an audience that Trump would soon announce a plan.
Later, speaking from the “ADM stage,” Perdue dramatically took a call from Trump, who briefed the farmers on his trade policy and asked them to stick with him. “I hope you like me even better now than you did in ’16,” he said, eliciting a mixture of applause and boos.
In September 2019, Trump announced a deal to add hundreds of millions of gallons of ethanol to the U.S. gas supply. According to Bloomberg News, the deal was brokered at the White House by U.S. senators — and a representative of ADM.
Later that year, ADM checked off a top lobbying goal when Congress passed a biodiesel tax credit that amounted to $1 per gallon subsidy retroactive to 2017. In early 2020, at the onset of the coronavirus crisis, Perdue announced a $100 million subsidy of biofuels, including ethanol and biodiesel.
The subsidies and tax credit helped. On Jan. 29, 2020, ADM trumpeted quarterly earnings of $504 million.
More than half of that profit — $270 million — came from the biodiesel tax credit.
Alice Crites contributed to this report.
About this story
The Post created a 3-D model of the AGrowStar facility from drone footage using a process called photogrammetry. The Post used Open Drone Map, an open-source software tool, to process thousands of images from a series of flights over the property and output a model. The Post used Blender to clean the model, customize the lighting and render images. Further cleaning to remove digital artifacts in the rendered image was performed in Photoshop. Aerial imagery for the map of Estill is from the USDA Farm Service Agency’s National Agricultural Imagery Program and taken in 2017.
Project and story editing by Trish Wilson. Graphics editing by Monica Ulmanu. Video editing by Tom LeGro. Design and development by Tyler Remmel. Copy editing by Karen Funfgeld. Photo editing and research by Olivier Laurent.
Headshot of Desmond Butler
Desmond Butler is an investigative reporter on The Washington Post's climate and environment team. He previously reported for the Associated Press in Washington, Istanbul and New York. His work has spotlighted unscrupulous military contractors, disinformation campaigns and nuclear smuggling. He also served as AP's chief correspondent in Turkey. https://www.washingtonpost.com/climate-environment/interactive/2021/sonny-perdue-adm-land-deal/