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UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
INDEPENDENT COUNSEL DIVISION

 

In re ALPHONSO MICHAEL (MIKE) ESPY    NO- 94-2

APPLICATION TO THE COURT PURSUANT TO 28 U.S.C. 592(e)(1)
FOR THE APPOINTMENT OF AN INDEPENDENT COUNSEL

   In accordance with the Independent Counsel Reauthorization Act of 1994 ("the Act"), I hereby apply for the appointment of an Independent Counsel to investigate whether any violations of federal criminal law were committed by Secretary of Agriculture Alphonso Michael (Mike) Espy, and to determine whether prosecution is warranted.

   Background. On March 17, 1994, there was a press report that Tyson Foods, Inc., a major poultry processing corporation headquartered in Arkansas, was receiving lenient treatment from the Department of Agriculture on a number of pending regulatory issues. The article also described a number of alleged gratuities received by Secretary Espy. Based on the article, the Department of Agriculture Office of Inspector General conducted an inquiry into the alleged gratuities, and subsequently, on April 19, 1994, referred to the Department of Justice allegations that Secretary Espy may have violated 21 U.S.C. 622, the anti-gratuity provision of the Meat Inspection Act, by accepting gifts from Tyson Foods.

   At the time of the Department's receipt of these allegations, the Independent Counsel Act had not yet been reauthorized, following its lapse in December 1992. The Department's Public Integrity Section investigated the allegations. I have reviewed the investigative findings in light of the strictures and procedures of the Act, as signed into law an June 30, 1994, and I conclude, within the meaning of the Act, that "there are reasonable grounds to believe that further investigation is warranted" of allegations that Secretary Espy violated a federal criminal law other than a Class B or C misdemeanor or an infraction1.28 U. S. C. 592 (9) (1) (A) .

   Gifts Accepted by Secretary Espy. Investigation developed evidence that Secretary Espy accepted gifts from Tyson Foods in the course of two separate trips, one to Arkansas in may 1993 and one to Texas in January 1994. The gifts fall into the categories of entertainment, transportation, lodging and meals. In total, the gifts amount to at least several hundred dollars in value.

   In addition to the alleged gifts from Tyson Foods, the Department's investigation also included preliminary reviews of other instances in which Secretary Espy allegedly received gifts from organizations and individuals with business pending before the Department of Agriculture.

   1. The Act permits the Department to take up to 30 days before commencing a preliminary investigation, 28 U.S.C. 591(d)(2), and to conduct a preliminary investigation for up to 90 additional days before determining whether the appointment of an Independent Counsel is required, id 592(a)(1). However, the Act does not require the Department to wait until the and of the 90-day preliminary investigation period before seeking the appointment of an Independent Counsel. In this case, based upon the current status of the Department's investigation, the Department has concluded that the matter requires "further investigation," within the meaning of the Act, by an Independent Counsel.

    Applicable Statutes. The facts established by the Department's investigation represent potential violations by Secretary Espy of 21 U.S.C. 622 and 18 U.S.C. 201(c).

   Title 21, United States Code, Section 622 is a strict anti-gratuity statute which prohibits any Department of Agriculture employee or officer with responsibilities under the Meat Inspection Act from accepting any gift from any person engaged in commerce, without regard to the intent of the donor or the donee. Subsequent judicial interpretation of this law, and a Memorandum of Understanding reached between the Department of Justice and the Department of Agriculture in July 1976, have limited somewhat the broad sweep of the law. It is now clear that a gift does not violate the statute if it is motivated by a personal or family relationship, or if it is trivial in value, such as soft drinks, coffee, pencils and coffee cups. However, the acceptance of non-trivial gifts of entertainment, transportation, lodging and meals by a Department of Agriculture official who has responsibilities under the Meat Inspection Act, from an entity that is subject to regulation by the Department of Agriculture, falls within the purview of the statute.

   The other statute at issue is Title 18, United States Code, Section 201(c), the general gratuity statute. Section 201 requires proof that a gift was given for or because of official acts. No evidence has been developed during the investigation suggesting that Secretary Espy accepted the gifts as a reward for, or in expectation of, his performance of official acts. However, under the Independent Counsel Act, the Department of Justice may not decline to seek the appointment of an independent counsel on the ground of a lack of evidence of the requisite state of mind "unless there is clear and convincing evidence that the person lacked such state of mind." 28 U.S.C. 592(a)(2)(B)(ii).

   Strictures of the Act. In order to ensure that prosecutive decisions are made without any possible appearance of conflict of interest, the Act places significant constraints on the Department's ability to exercise its customary prosecutorial discretion when investigating a person under the Act. The Department must apply for the appointment of an Independent Counsel whenever information in the Department's possession presents a potential violation of federal criminal law other than a Class B or Class C misdemeanor or an infraction, and "there are reasonable grounds to believe that further investigation is warranted." 28 U.S.C. 592(c). The Act removes from the Department the power to use traditional investigative tools such as the grand jury to further develop the facts. 28 U.S.C. 592(a)(2)(A). It should be left to the Independent Counsel to exercise prosecutorial discretion and to determine whether additional investigation and/or prosecution is warranted in this matter.

   Attorney General's Finding. In light of the strictures and procedures of the Act, I hereby apply for the appointment of an Independent Counsel because I conclude, under the Act, that "there are reasonable grounds to believe that further investigation is warranted" of allegations that Secretary Espy violated a federal criminal law other than a Class B or C misdemeanor or an infraction. 28 U.S.C. 592(c)(1)(A).

   The Department of Justice is in possession of investigative materials and relevant documentation which it will make available to the Independent Counsel.

   Recommended Jurisdiction. Pursuant to 28 U.S.C. 593 (b)(3), I recommend and request that the Special Division of the Court grant the Independent Counsel jurisdiction to investigate Secretary Espy's possible violation of federal criminal laws such as 21 U.S.C. 622 and 18 U.S.C. 201, by accepting gifts from organizations or individuals regulated by the Department of Agriculture, and to determine whether prosecution is warranted. The Independent Counsel should be given all the power, authority and obligations outlined in 28 U.S.C. 594. In this connection, I have appended hereto a recommended statement of the scope of prosecutorial jurisdiction for the Independent Counsel.

Respectfully submitted

 

 

Janet Reno

Attorney General of the United States

RECOMMENDED STATEMENT OF JURISDICTION OF INDEPENDENT COUNSEL

   The Independent Counsel shall have jurisdiction and authority to investigate to the maximum extent authorized by the Independent Counsel Reauthorization Act of 1994 whether Alphonso Michael (Mike) Espy, Secretary of Agriculture, has committed a violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, relating in any way to the acceptance of gifts by him from organizations or individuals with business pending before the Department of Agriculture.

   The Independent Counsel shall have jurisdiction and authority to investigate other allegations or evidence of violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, by any organization or individual developed during the Independent Counsel's investigation referred to above, and connected with or arising out of that investigation.

   The Independent Counsel shall have jurisdiction and authority to investigate any violation of 18 U.S.C. 1826, or any obstruction of the due administration of justice, or any material false testimony or statement in violation of federal criminal law, in connection with any investigation of the matters described above.

   The Independent Counsel shall have jurisdiction and authority to seek indictments and to prosecute any organizations or individuals involved in any of the matters described above, who are reasonably believed to have committed a violation of any federal criminal law arising out of such matters, including organizations or individuals who have engaged in an unlawful conspiracy or who have aided or abetted any federal offense.

   The Independent Counsel shall have all the powers and authority provided by the Independent Counsel Reauthorization Act of 1994.

 

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ORDER OF APPOINTMENT

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Division for the Purpose of Appointing Independent Counsels Ethics in Government Act of 1978, As Amended

In re: In re Alphonso Michael (Mike) Espy            Division No. 94-2

Order Appointing Independent Counsel

Before: SENTELLE, Presiding, and BUTZNER and SNEED, Senior Circuit Judges.

Upon consideration of the application of the Attorney General pursuant to 28 U. S. C. 592 (1) (A) for the appointment of an independent counsel with authority to exercise all the power, authority and obligations set forth in 28 U.S.C. 594, to investigate whether Alphonso Michael (Mike) Espy, Secretary of Agriculture, has committed a violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, relating in any way to the acceptance of gifts by him from organizations or individuals with business pending before the Department of Agriculture; it is

ORDERED by the Court in accordance with the authority vested in it by 28 U.S.C. 593(b) that Donald C. Smaltz Esquire, of the Pennsylvania and California bars, with offices at Smaltz & Anderson, 333 South Grand Ave., Suite 3580, Los Angeles, California 90071, be and is hereby appointed Independent Counsel with full power, independent authority, and jurisdiction to investigate to the maximum extent authorized by the Independent Counsel Reauthorization Act of 1994 whether Alphonso Michael (Mike) Espy, Secretary of Agriculture, has committed a violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, relating in any way to the acceptance of gifts by him from organizations or individuals with business pending before the Department of Agriculture.

The Independent Counsel shall have jurisdiction and authority to investigate other allegations or evidence of violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, by any organization or individual developed during the Independent Counsel's investigation referred to above and connected with or arising out of that investigation.

The Independent Counsel shall have jurisdiction and authority to investigate any violation of 28 U.S.C. 1826 or any obstruction of the due administration of justice, or any material false testimony or statement in violation of federal criminal law, in connection with any investigation of the matters described above.

The Independent Counsel shall have jurisdiction and authority to seek indictments and to prosecute any organizations or individuals involved in any of the matters described above, who are reasonably believed to have committed a violation of any federal criminal law arising out of such matters, including organizations or individuals who have engaged in an unlawful conspiracy or who have aided or abetted any federal offense.

The Independent Counsel shall have all the powers and authority provided by the Independent Counsel 'Reauthorization Act of 1994. It is

FURTHER ORDERED by the Court that the independent Counsel as authorized by 28 U.S.C. 594, shall have prosecutorial jurisdiction to fully investigate and prosecute the subject matter with respect to which the Attorney General requested the appointment of independent counsel, as hereinbefore set forth, and all matters and individuals whose acts may be related to that subject matter, inclusive of authority to investigate and prosecute federal crimes (other than those classified as Class B or C misdemeanors or infractions) that may arise out of the above described matter, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.

It further appearing to the Court in light of the Attorney General's motion heretofore made for the authorization of the disclosure of her application for this appointment pursuant to 28 U.S.C. 592(e) and of the ongoing public proceedings and interest in this matter, that it is in the best interests of justice for the identity and prosecutorial jurisdiction of the Independent Counsel to be disclosed,

IT IS SO ORDERED.

Per Curiam

For the Court

Ron Garvin, Clerk

 

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