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June 26, 1998

FOR IMMEDIATE RELEASE

Donald C. Smaltz, Independent Counsel In re Espy, announced that a District of Columbia jury today convicted Tyson Foods, Inc. Director of Governmental Affairs, ARCHIBALD R. SCHAFFER, III, and its principal lobbyist, JACK L. WILLIAMS.

Of the three counts submitted to the jury charging SCHAFFER, he was convicted of two: giving in excess of $8,500 of illegal gifts to former Secretary of Agriculture Mike Espy under the Meat Inspection Act (21 U.S.C. 622), and the Gratuities Statute (18 U.S.C. 201(c)). SCHAFFER was acquitted of one gratuity count. Of the four counts submitted to the jury, WILLIAMS was convicted on two: one count of lying to agents of the Inspector General's office of the USDA; and one count of lying to agents of the FBI (18 U.S.C. 1001) to conceal his knowledge of illegal gratuities furnished Secretary Espy by Tyson Foods. WILLIAMS was acquitted of two counts charging that he gave gratuities to Espy. Violations of the Meat Inspection Act (21 U.S.C. 622) carry a maximum term of imprisonment of three years with a mandatory one year minimum and a maximum $250,000 fine. The Gratuities Statute (18 U.S.C. 201) provides for a two year maximum term of imprisonment and a maximum fine of $250,000. The False Statement Statute carries a five year maximum term of imprisonment and a maximum fine of $250,000.

    Mr. Smaltz stated:

    I want to thank the jury for its time, attention, and full and impartial consideration of all of the evidence. I also wish to acknowledge and thank the trial team -- Bob Ray, Barry Coburn, Adrienne Baron, and Wil Frentzen, who with the able assistance of the federal agents from the Office of Inspector General-USDA and the FBI -- did a terrific job in investigating and presenting this case to the jury.

    The gravamen of this investigation from its inception, has been unlawful gift-giving by prohibited corporate sources to a sitting member of the Cabinet. The criminal and civil laws and USDA regulations have long prohibited regulators from accepting, and the regulated from giving, things of value.

    The defense asked the jury to send a message to the American public by their verdict that: (1) they shouldn't be held responsible for giving gratuities to Secretary Espy because they were merely senior employees of Tyson Foods taking orders from Chairman Don Tyson; (2) it was legal to give the Secretary of Agriculture gratuities to try and influence his decisions on matters worth millions of dollars to Tyson Foods; and (3) in an outrageous attack of federal law enforcement, the defense, without any basis, attacked the Special Agents of the FBI and the USDA Inspector General who conducted the investigation by asking the jury to acquit the defendants of lying to federal agents because the agents, in accordance with agency policies, do not tape their interviews.

    The jury's guilty verdict clearly and unequivocally rejected the defense arguments and eloquently tells the American public that business and their employees will not be allowed to use their wealth to give illegal gratuities to federal officials who are regulating their companies, and that lying to federal agents will not be tolerated.

    The jury's verdict is a clear reminder to company employees that they are responsible for their actions and the defense of -- I was just following orders -- will not be tolerated as an excuse for illegal conduct.

    Schaffer was a senior official of Tyson Foods and Williams was a long time consultant, both were experienced in political and regulatory issues and regulations and knew that their conduct was illegal. They willingly participated and then intentionally concealed their activities and lied to federal agents.

    The Meat Inspection Act forbids individuals dealing with USDA employees involved in meat inspection from giving any thing of value to them with the intent to influence official actions. During pre-trial proceedings, the defendants contended that the Meat Inspection Act did not apply to Secretary of Agriculture Mike Espy. The Court of Appeals for the District of Columbia Circuit recently held, in United States v. Espy, 1998 WL 312146 (D.C. Cir., June 16, 1998), that the Meat Inspection Act applies to the Secretary of Agriculture and stated: "a corrupt Secretary, who supervises all Agriculture Department employees, obviously could cause an even greater deleterious effect on meat" than a corrupt meat inspector.

    Conduct such as carried out by Tyson Foods, Schaffer and Williams must continue to invite outrage, never passivity from those who are regulated, the public, and our lawmakers.

    Our government is a government of all the people, and for all the people -- not just the privileged few who seek to buy their way into regulatory grace by unlawful gratuities.

The defendants will be sentenced at 10:00 a.m. on September 10, 1998 by U.S. District Judge James Robertson who presided at trial.

On March 21, 1997, a jury convicted Williams in the District of Columbia on the two false statements counts in this Indictment. Subsequently, on June 11, 1997, the trial judge, Judge Robertson, granted Williams’ motion for a new trial.

On January 12, 1998 Tyson Foods was sentenced to (1) pay $6 million to the United States Treasury -- $4 million in criminal fines and $2 million toward the Office of Independent Counsel’s cost of investigation; (2) adhere to a comprehensive Corporate Compliance Agreement; (3) cooperate fully with the Office of Independent Counsel’s ongoing investigation and prosecutions of Secretary Espy and this case; and (4) four years probation.

 

Former Secretary of Agriculture Alphonso Michael Espy was charged in a 39 count indictment filed on August 27, 1997. The trial is currently scheduled to commence on October 1, 1998, before U.S. District Judge Ricardo M. Urbina.

The Independent Counsel's investigation is ongoing.

 

 

CONTACT: Theodore S. Greenberg

(703) 706-0010, ext. 101

 

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