ADM sold property worth millions to Perdue’s company for $250,000

In February 2017, weeks after then-President Donald Trump selected Sonny Perdue to be U.S. agriculture secretary, Perdue’s company bought a small grain plant in South Carolina from Archer-Daniels-Midland, one of the biggest agricultural corporations in America.

An examination of public records by the Washington Post has found the multinational ADM sold the property at a small fraction of its estimated value.

The former governor of Georgia did not disclose the deal — there was no legal requirement to do so. Perdue has not respond to requests for comment on the real estate deal.

Jackie Anderson, a spokeswoman for Chicago-based ADM, denied the company sold the property at a discount, saying 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. 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 spent millions of dollars lobbying the U.S. government during the Trump presidency.

“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, which has facilities in Cedar Rapids, 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 Washington Post, who analyzed the value based on state records and drone footage of the property.

Months after Perdue took over the USDA, his family trust sold AGrowStar to a group of investors along with all its real estate for an undisclosed amount.

According to Brown, AGrowStar’s former president, AGrowStar sold for about $12 million.

‘It was an extremely low price’

For the grain storage at the Estill facility, 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 Washington Post.

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.

The sale of AGrowStar was never reflected in Perdue’s disclosures to be confirmed as ag secretary 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 as officials are not required to detail their companies’ transactions or any business deals completed before their confirmations.

The sale of Perdue’s company also was 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.

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.”

In ADM’s account, 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.

A few months later, at a grain and feed meeting in Charleston, S.C., the offer got better — “ … It was two, two and a half million,” Brown recalled.

In the fall of 2016, 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.”

On Dec. 30, 2016, three weeks before Perdue was nominated, ADM and AGrowStar signed a purchase agreement.

ADM’s Anderson provided a redacted copy that is signed by Perdue, listed as “sole member” of AGrowStar, and an ADM executive.

At that time, there already was public speculation that Perdue could be the nominee.