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  •   U.S. Seeks Probe of Secretary Espy

    By Pierre Thomas and Toni Locy
    Washington Post Staff Writers
    Wednesday, August 10, 1994; Page A01

    The Justice Department has asked an appellate panel to appoint an independent counsel to investigate whether Agriculture Secretary Mike Espy illegally accepted gifts from the country's largest poultry producer and to determine if his relationship with the company affected oversight of the chicken industry.

    "There are reasonable grounds to believe that further investigation is warranted," Attorney General Janet Reno wrote in a petition to the U.S. Court of Appeals for the District of Columbia Circuit outlining the department's concerns about Espy's dealings with the Arkansas-based Tyson Foods Inc. She noted a preliminary probe by the department also found other instances in which Espy allegedly accepted gifts from "organizations and individuals with business pending before the Department of Agriculture."

    Espy, through his attorneys, yesterday denied the allegations. "All of Secretary Espy's official and personal travel and entertainment expenses have been properly accounted for and reimbursed. Secretary Espy has never misused his office in any way. There has been no misconduct in this case at all," the statement from the Steptoe & Johnson law firm said.

    Reno's request comes on the heels of the surprise appointment last week of a new Whitewater independent counsel and represents another potential legal battle for the Clinton administration. Officials yesterday described Reno's request as an expected development. It brings another top official under law enforcement scrutiny and threatens to touch off more partisan criticism of the Clinton administration's ethical standards.

    The probe also involves an Arkansas company with political ties to Clinton since his earliest days in public office. Owned by Clinton supporter Donald Tyson, the Springdale, Ark., firm surfaced earlier this year during controversy over Hillary Rodham Clinton's remarkable profits in cattle futures trading. She made a $99,000 profit in the high-risk investment by relying for advice on longtime friend James Blair, a Tyson lawyer.

    Reno's request will be decided by the same three-judge panel that last week abruptly replaced Whitewater special counsel Robert B. Fiske Jr. with Republican Kenneth W. Starr, touching off a storm of Democratic criticism. The panel, headed by federal judge David Sentelle, an ally of Sen. Jesse Helms (R-N.C.), has not said when it would act on Reno's request in the Espy matter.

    Although the probe has been somewhat limited thus far, the FBI may be asked to do more extensive interviews at Agriculture and to subpoena documents and computer files to track Espy's actions on poultry regulations, officials said.

    The Espy investigation was started in April by the Justice Department's public integrity section following a referral from the Agriculture Department's inspector general. The probe had been prompted by a March Wall Street Journal article detailing gifts Espy allegedly accepted from Tyson.

    At issue is the 1907 Meat Inspection Act, which bars Agriculture Department employees from accepting "anything of value" from members of the industry they regulate.

    The investigation shows Espy "accepted gifts from Tyson Foods in the course of two separate trips, one to Arkansas in May 1993 and one in Texas in January 1994," Reno wrote. "In total, the gifts amount to at least several hundred dollars in value." The gifts Espy allegedly accepted were tickets to a Dallas Cowboys football game and a trip on a Tyson corporate jet, law enforcement sources have said.

    The most serious criminal allegation is that Espy took the football ticket from Tyson Foods while his department was considering more stringent regulations on poultry contamination, the sources said. The FBI has also been investigating whether high-ranking department officials slowed or halted the tougher poultry guidelines as a result of the gifts. The FBI has investigated allegations Espy requested and received tickets to Chicago Bulls basketball game from the Chicago-based Quaker Oats. Espy was given at least one ticket from Quaker Oats Chief Executive Officer William D. Smithburg valued at $45, a Quaker Oats spokesman said.

    In outlining the case, Reno told the court the other law in question is the general gratuity code that "requires proof that a gift was given for or because of official acts.

    "No evidence has been developed during the investigation that Secretary Espy accepted the gifts as a reward for, or in expectation of, his performance of official acts," Reno wrote. However, under the recently passed Independent Counsel Act, Justice may not decline to seek such an appointment "unless there is clear and convincing evidence that the person lacked such a state of mind."

    Espy has taken credit for increasing and improving enforcement of the department's "zero tolerance" contamination policy on meat.

    Department officials say Espy began work on stringent chicken contamination guidelines in March -- before the Wall Street Journal article first raised questions about his relationship with Tyson Foods.

    The guidelines were completed and published in the Federal Register July 11.

    The Espy investigation was caught up in the passage of the independent counsel law.

    Jo Ann Harris, the head of Justice's criminal division, decided that it would create an impression of bias if the department closed its investigation days before the new law went into effect.

    © Copyright 1994 The Washington Post Company

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