New Pact Means Usda Will Watch Archer Daniels

Archer Daniels Midland Co. signed an agreement with the U.S. Department of Agriculture that will allow it to continue doing business with the government, under closer supervision, after pleading guilty to price fixing charges, the Agriculture Department said.

The USDA also announced the suspension of three former ADM executives, who face similar price fixing charges, from participating in government contracts.

The actions do not affect the Decatur, Illinois-based company’s contracts with USDA, which last year were worth $83.5 million, or 0.6 percent of the company’s 1996 sales of $13.3 billion.

USDA was considering penalties that could have barred ADM from federal contracts for up to three years.

ADM shares were down 50 cents at $21.37-1/2 after the announcement. ADM spokeswoman Karla Miller had no immediate comment.

The settlement comes after ADM in October pleaded guilty to charges it fixed prices on lysine, a component of animal feed, and paid a record $100 million fine. Under a five-point “compliance agreement” ADM must establish a corporate code of conduct, develop antitrust guidelines, distribute guidelines to sales employees, certify that ethics guidelines will be obeyed, and conduct ethics and antitrust training seminars annually. “Although ADM didn’t violate any USDA regulations, we are implementing this agreement to fully protect the public interest,” said Grant Buntrock, chief of the USDA’s Farm Service Agency, which administer contracts to supply food for government feeding programs.

“ADM approached us to determine what would be needed for ADM to demonstrate its present responsibility to continue doing business with the government, and this agreement followed,” Buntrock said.

The action has no effect on another government program valuable to ADM, a tax break for ethanol worth $3.6 billion over the next five years. ADM, which accounts for 40 percent of the ethanol manufactured in the United States, is the biggest beneficiary of the tax break. The tax break goes to refiners who use ethanol made from corn as an octane booster in gasoline.

Under the agreement, ADM will continue to supply such foodstuffs as wheat flour, soybean meal and oil, and cottonseed oil for the Food for Peace and other assistance programs operated by the USDA.

Some stocks that moved substantially or traded heavily Friday:

NYSE

PaineWebber Group, up $3.62-1/2 at $31.37-1/2.

BusinessWeek reported that BankAmerica may be looking to acquire the New York-based brokerage firm.

Dayton Hudson, up $1.25 at $38.12-1/2, Dillard Department Stores, down 12-1/2 cents at $30.50 and J.C. Penney, unchanged at $48.25

Minneapolis-based Dayton Hudson plans to sell its Mervyn’s stores in Florida and Georgia, sell or close about 10 Mervyn’s in other markets and renovate Marshall Field’s downtown Milwaukee store. Dillard Department Stores will buy 10 of the 18 Florida stores and J.C. Penney has agreed to purchase three of the seven Georgia locations.

Avemco, up $5.12-1/2 at $24.50.

HCC Insurance Holdings agreed to acquire Avemco in a 1-for-1 stock swap. Avemco underwrites specialty property and casualty insurance products, mainly for aviation. Houston-based HCC is an international specialty insurance group.

NASDAQ

Ascend Communications, up $6.12-1/2 at $75.

Several investment firms upgraded their assessment of the networking technology concern, which late Thursday beat analysts expectations with its fourth-quarter earnings report. Ascend, based in Alameda, Calif., was upgraded by Cowen & Co. and Smith Barney, the Dow Jones News Service reported. Robertson, Stephens & Co. raised its earnings estimates.