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  •   Ex-Agriculture Secretary Indicted

    By Toni Locy
    Washington Post Staff Writer
    Thursday, August 28, 1997; Page A01

    Former agriculture secretary Mike Espy was indicted yesterday on charges that he openly and aggressively solicited $35,458 worth of gifts from companies he was supposed to be regulating, virtually from the day President Clinton picked him for the job.

    Espy, 43, who served as agriculture secretary from January 1993 until December 1994, was charged with accepting illegal gratuities for himself, his girlfriend and his relatives, and with violating the Meat Inspection Act of 1907, which prohibits Agriculture Department employees from taking anything of value from companies they are supposed to regulate.

    In the 39-count indictment, the grand jury said Espy carried out the scheme by committing mail and wire fraud, and by lying to the department's inspector general, the FBI and the White House when he was questioned about his activities. He also was accused of tampering with a witness by ordering a low-level employee to alter travel itineraries that had been requested by the inspector general.

    The grand jury said Espy accepted a variety of gifts, from luggage, crystal bowls and artwork to meals, airfare and tickets to sporting events. He allegedly accepted the gifts without reporting them, as required, on annual federal financial disclosure forms, and allegedly tried to cover up his acceptance of the gratuities.

    "The evidence suggests that by nature of the value of the things he took, he had his hand out all the time," independent counsel Donald C. Smaltz said in an interview.

    Attorney Reid H. Weingarten, who represents Espy, scoffed at the charges. "Never has so much been made of so little," he said. "In an effort to justify three years and countless millions spent on this investigation, the special prosecutor has stretched criminal statutes beyond recognition and taken trivial, personal and entirely benign activities and attempted to distort them into criminal acts. These efforts will ultimately prove unavailing, and we look forward to going to court and restoring Mike Espy's good name."

    Espy's indictment is the climax of a nearly three-year investigation by Smaltz, who has overseen several criminal and civil prosecutions against companies and officials involved in providing the gifts. So far, three corporations and four individuals have been convicted in the investigation, which has focused mainly on offenses involving gifts to Espy and contributions to the unsuccessful congressional campaign of Espy's brother, Henry. There also have been some acquittals and charges have been dismissed against Henry Espy. More than $4.5 million in criminal fines and civil settlements have been agreed to by various companies.

    According to the indictment, Espy accepted gifts from Sun-Diamond Growers of California; Tyson Foods Inc. of Arkansas; Oglethorpe Power Corp. of Georgia; Smith Barney Inc., the New York investment firm; the EOP Group Inc., a political and business consultant in Washington; Quaker Oats Co. of Chicago; and Fernbank Inc., a private nonprofit organization that runs a museum in Atlanta.

    Tyson Foods said in a statement, "The secretary never was asked by Tyson for any special treatment, and none was ever offered or received. We deplore the independent counsel's apparent view that acts of common hospitality -- consisting of a couple of meals and a football game -- can rise to the level of criminal conduct in the absence of any attempt by our company to exploit its non-existent special relationship with Mr. Espy."

    The grand jury found that Espy tried to cover his tracks by paying back the companies that had paid his way to various events. The grand jury also concluded that the timing of his reimbursements was suspicious, coming days after published reports about his conduct or the appointment of the independent counsel to investigate his acceptance of the gifts.

    "Public service is a public trust," the grand jury said in its indictment of Espy, adding that as agriculture secretary, a Cabinet-level position, Espy owed the public "honest services" that were "free from dishonesty, deceit, official misconduct, willful omission and fraud."

    The public, the grand jury said, had "the right to not have a secretary of agriculture use government assets and expend public funds for his personal benefit."

    On Jan. 5, 1993, President-elect Clinton announced that Espy, a Democratic congressman from Mississippi, was his choice to run the Agriculture Department. Soon after that, the grand jury said, Espy engaged in a pattern of corruption that touched on virtually every aspect of his job.

    The grand jury said Espy attempted to cover up his acceptance of the gifts by lying about his real reason for traveling to various cities or ordering his staff to set up unnecessary meetings as a cover for the true reason for the trips.

    For example, the indictment said, Espy lied about a May 1993 trip to Russellville, Ark., saying he was going to make a speech. Actually, the grand jury said, he attended the 40th birthday bash for John Tyson of Tyson Foods Inc. On another occasion, he had his staff arrange for a January 1994 meeting with an Agriculture Department official in Texas, and he attended an NFL playoff game between the Dallas Cowboys and Green Bay Packers. He also allegedly caused his staff to set up meetings in Atlanta so he could justify going there for the Super Bowl in January 1994.

    The grand jury said Espy also duped the Agriculture Department into covering $6,200 in lease payments on a Jeep Cherokee. Espy allegedly told the department he would rather use the Jeep and forgo the use of an official government vehicle in Washington. The Jeep, however, stayed in Mississippi and was used for personal business, the grand jury said. In April 1993, Espy also requested and used an Agriculture Department limousine and driver in Washington, the indictment said.

    In March 1994, after published reports about his alleged conduct, Espy shifted gears, the grand jury said, and began trying to reimburse companies for some of the gifts. The day after the Wall Street Journal published a story, Espy paid $68 to Tyson Foods for the ticket to the Cowboys-Packers game he attended in January 1994.

    The grand jury said Espy also repaid $90 to Quaker Oats for tickets to a Chicago Bulls-Phoenix Suns NBA championship game in 1993 a day after newspapers reported about it. In a letter to the company, Espy said his failure to pay for the tickets was "an oversight," according to the grand jury.

    Espy also allegedly made reimbursements the day after he was interviewed by the FBI. According to the indictment, he paid $69 to the Arkansas Poultry Federation for lodging in May 1993 in connection with the Tyson Foods executive's birthday party.

    Within days of the Sept. 9, 1994, appointment of Smaltz as independent counsel, the grand jury said, Espy paid $700 to a trustee of the Fernbank Museum for four tickets to the 1994 Super Bowl, and $6,204 to the Agriculture Department for his personal use of the Jeep that he had asked the department to lease for him.

    When confronted by investigators, Espy allegedly lied. The grand jury said he lied to the agents of the Agriculture Department's inspector general when he said he had to accept a seat on the Tyson Foods corporate jet in May 1993 to make it back to Washington in time to have dinner with the president because there were no commercial flights available. There were, and Espy allegedly knew it because he told his staff to cancel the commercial flight reservations he had so he could fly on the corporate jet.

    Espy allegedly lied to the FBI, as well, telling agents that his friend, Richard Douglas, a former high-level official of Sun-Diamond Growers, had provided tickets to the NBA championship playoffs in Chicago in 1993. The grand jury said Espy knew that was not true because he had ordered a staff member to solicit the tickets from the chairman of Quaker Oats.

    In 1994, as the White House was conducting an internal investigation into the allegations against Espy, the agriculture secretary allegedly lied to Leon E. Panetta, then the president's chief of staff. The grand jury said that Espy told Panetta, "There's nothing else out there," knowing that there were more instances in which he had accepted gifts.

    According to the most recent figures released by the General Accounting Office, Smaltz's investigation had cost $8,672,212 as of Sept. 30, 1996.

    Special correspondent Anne Farris contributed to this report.

    © Copyright 1997 The Washington Post Company

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