DONALD C. SMALTZ, SBN: 37312
Theodore S. Greenberg, D.C. Bar No. 227348
Deputy Independent Counsel
Wil Frentzen, La. Bar No. 24421
Associate Independent Counsel
901 Market Street, Suite 320
San Francisco, CA 94103
Attorneys for the
UNITED STATES OF AMERICA
UNITED STATES DISTRICT COURT
No. CR 96-348 (TEH)
Violation: 18 U.S.C. 1001
UNITED STATES OF AMERICA,
THE INDEPENDENT COUNSEL CHARGES:
At times material to this Information:
1. Defendant RICHARD DOUGLAS was the Senior Vice President for Corporate Affairs for Sun-Diamond Growers of California, a California agricultural cooperative corporation. Sun-Diamond was owned by five member cooperatives (collectively referred to hereinafter as "Sun-Diamond"). The five member cooperatives were: Sun-Maid Growers of California; Diamond Walnut Growers, Inc. of California (hereinafter "Diamond Walnut"); Sunsweet Growers, Inc.; Valley Fig Growers; and Hazelnut Growers of Oregon. Each member cooperative was the largest producer of commodities in its respective industry.
2. Defendant RICHARD DOUGLAS was, on behalf of Sun-Diamond, in charge of and responsible for, among other things, communicating with the Secretary of Agriculture and decision makers at the Department of Agriculture.
3. On or about December 23, 1992, the President-Elect advised Congressman Alphonso Michael Espy that he would nominate him to be the Secretary of Agriculture. Mr. Espy served as Secretary of Agriculture from January 22, 1993, until the effective date of his resignation therefrom on December 31, 1994. As Secretary of Agriculture, Espy was in charge of the USDA.
A. FALSE STATEMENT
4. Beginning on or about April 19, 1994, the Federal Bureau of
Investigation ("FBI"), at the request of the Department of Justice, conducted an
investigation into possible violations of criminal law by Secretary of Agriculture
Alphonso Michael Espy (hereafter Secretary of Agriculture Espy), including whether
individuals or companies, regulated by USDA, doing business with and having matters
pending before USDA gave, offered or promised Secretary Espy things of value.
5. In this regard, it was material to the FBI to learn about anything of value that the defendant, RICHARD DOUGLAS, gave to Secretary Espy or for his benefit, individually or on behalf of his employer Sun-Diamond.
6. On or about June 6, 1994, in the Northern District of California, in a matter within the jurisdiction of the FBI, an agency of the United States, defendant RICHARD DOUGLAS knowingly and willfully did make material false statements and representations by stating to a Special Agent of the FBI that:
Things of Value Given to Secretary of Agriculture Espy
7. From in or about January 1993, through in or about June 1994, the defendant RICHARD DOUGLAS, individually and on behalf of and for the benefit of Sun-Diamond, had interests, issues, questions and matters pending before the Secretary of Agriculture and the USDA, at the time that he and Sun-Diamond did knowingly, directly and indirectly, give, offer and promise things of value, and the benefit thereof, to Alphonso Michael Espy after he was selected to serve and while serving as the Secretary of Agriculture, in part for friendship and for and because of official acts performed and to be performed by Secretary of Agriculture Espy, to wit the defendant:
8. Purchased Hartmann luggage at a cost of $2,427 and gave luggage to Secretary of Agriculture Espy on or about March 14, 1993.
9. On or about September 11 and 12, 1993, gave tickets, limousine services, and meals in the approximate amount of $4,590 for Secretary of Agriculture Espy and the Secretary's girlfriend, to attend the U.S. Open Tennis Tournament in New York. 10. From on or about January 5, 1993, through in or about May, 1994, spent approximately $665 to purchase and provide meals to Secretary of Agriculture Espy.
11. Upon defendant's submission of a reimbursement request, Sun-Diamond reimbursed defendant for all of the money he spent on the above-referenced items.
12. Diamond Walnut was a member of the International Nut Council (INC). The President of Diamond Walnut was a member of the INC Executive Committee. The President of INC, a former Sun-Diamond consultant, sought help from RICHARD DOUGLAS in arranging for Secretary of Agriculture Espy to attend and speak at the IX World Tree Nut Congress in Athens, Greece. The defendant RICHARD DOUGLAS, as Sun-Diamond's Senior Vice President, arranged for Secretary of Agriculture Espy to speak at the World Nut Congress.
13. On or about May 13, 1993, defendant RICHARD DOUGLAS gave Secretary of Agriculture Espy's girlfriend approximately $3,100 in cash so that she could accompany Secretary Espy to the World Tree Nut Congress in Athens, Greece. On or about July 30, 1993 the INC reimbursed Douglas $3,100.
14. On or about April 1, 1994 the defendant caused a minimum of $7,000 in contributions to be made to the Congressional campaign debt retirement account of Secretary Espy's brother, Henry.
Sun-Diamond Matters Involving
15. At times relevant to this Information Sun-Diamond and RICHARD DOUGLAS had pending before USDA and Secretary of Agriculture Espy the following matters:
16. In 1992, the Environmental Protection Agency had announced plans to promulgate a rule which would phase out and ultimately ban the use of methyl bromide in the United States. This proposed rule included, among other things, a prohibition on the use of methyl bromide as a fumigant on commodities that were exported by Sun-Diamond's member cooperatives to other countries.
17. In 1993 and 1994, Sun-Diamond, and particularly member cooperative Diamond Walnut, were concerned that the loss of methyl bromide and lack of a viable alternative for methyl bromide would hurt their ability, among other things, to sell their products.
18. Defendant RICHARD DOUGLAS, on behalf of Sun-Diamond, sought the assistance of the Department of Agriculture, in part and among other things, to:
(a) have the Department of Agriculture increase its funding for research for alternatives to methyl bromide in the event that use of methyl bromide was restricted or prohibited; and (b) persuade the Environmental Protection Agency to delay promulgating the regulation, to phase out and eliminate the use of methyl bromide, and to mitigate the adverse effects of any such regulation.
19. USDA administered a grant program designed to increase export sales of certain U.S. agricultural commodities abroad, including prunes, raisins, and walnuts. This program was and is known as the Market Promotion Program ("MPP"). 20. MPP was an issue that was a matter for consideration by the Secretary of Agriculture, and, during May 1994, Secretary of Agriculture Espy considered and authorized the disbursement of MPP funds to trade organizations. Sun-Diamond cooperatives participated in three of these trade organizations: (a) Diamond Walnut Growers received 100% of the funds dedicated for brand name walnuts; (b) Sunsweet Growers received 52% of the funds dedicated for brand name prunes; and (c) Sun-Maid Growers received 32% of the funds dedicated for brand name raisins.
21. Beginning in or about August 1993, USDA was required to develop regulations which gave small-sized entities preference in obtaining certain MPP funds. USDA was considering whether to include cooperatives in the definition of a small-sized entity. If USDA did not consider cooperatives to be small-sized entities, this would result in some Sun-Diamond member cooperatives losing or receiving less MPP money.
22. Defendant RICHARD DOUGLAS solicited Secretary of Agriculture Espy, among other things, to: (a) approve 1994 MPP funding for the raisin industry which included the California raisin trade organization and Sun-Maid Raisins, and (b) continue to study the issue with a view to giving cooperatives the preferences due small-sized entities.
Additional Sun-Diamond Issues Pending
23. Pesticide Issues
24. School Lunch Program
25. Teamsters Strike of Member Cooperative Diamond Walnut
B. FALSE STATEMENT
26. At the same June 6, 1994 FBI interview set forth above in Paragraph 6, defendant RICHARD DOUGLAS knowingly and willfully did make a material false statement and representation by stating to a Special Agent of the FBI that he had obtained tickets to the June 1993 Chicago Bulls-Phoenix Suns championship game in Chicago for himself and Secretary of Agriculture Espy at no cost from a friend of his who was a professional basketball player, when, in truth and in fact, as defendant RICHARD DOUGLAS well knew, Secretary of Agriculture Michael Espy had obtained the tickets from the Chief Executive Officer of Quaker Oats.
(All in violation of 18 U.S.C. 1001)
DONALD C. SMALTZ
Theodore S. Greenberg
Deputy Independent Counsel
Associate Independent Counsel
Dated: March 16, 1998
The documents in this index have been electronically