PRESS RELEASE

Donald C. Smaltz, Independent Counsel In Re Espy, announced:

   Today, Sun-Diamond Growers of California, Inc. was sentenced to pay a criminal fine of $1.5 million and placed on five years of probation. The sentence was imposed by The Honorable Ricardo M. Urbina, United States District Judge for the District of Columbia, who presided over the jury trial. Sun-Diamond was convicted on September 24, 1996 of giving approximately $6,000 in illegal gratuities to former Secretary of Agriculture Mike Espy and of making illegal corporate campaign contributions in the amount of $4,000 to the unsuccessful congressional campaign of Secretary Espy's brother, Henry Espy.

   Judge Urbina, because the gratuities were given to a member of the President's Cabinet, increased the penalty over the usual Sentencing Guidelines' recommendation, noting that the Secretary of Agriculture is tenth in line to the Presidency, and the decisions of the Secretary of Agriculture have a great effect on the lives not only of Americans, but also on people all around the world.

   At the trial of Sun-Diamond, the government proved that the gratuities and illegal campaign contributions in violation of 18 U.S.C. § 201(c) (illegal gratuities), §§ 1343 and 1346 (wire fraud), and 2 U.S.C. §§ 441b(a) and 441f (illegal campaign contributions) were provided from Sun-Diamond through Richard Douglas, Sun-Diamond's Senior Vice President of Corporate Affairs, who occupied a "high-level" position. The Court also found that Sun-Diamond and its officers willfully ignored and failed to adequately investigate the public allegations appearing in the press of possible wrongdoing between Douglas and Espy. Judge Urbina found it particularly significant that Sun-Diamond's Board of Directors was briefed regularly on Douglas' relationship and interaction with Secretary Espy while Douglas was providing gratuities to Espy.

   In its probationary order, Judge Urbina required Sun-Diamond, for a period of five years, to:

1. Submit quarterly reports to the Probation Office of its expenditures concerning federal employees, including candidates for federal office, federal contracts, or efforts concerning federal law or policy;

2. Submit a plan to the Court within six months concerning how Sun-Diamond will detect and prevent further criminal conduct;

3. Submit quarterly reports to the Court regarding the program to detect and prevent further criminal conduct; and

4. Submit to reasonable, regular announced and/or unannounced visits by probation officers, or their experts, to monitor the company's compliance with its program, all costs of which are to be paid by Sun-Diamond.

   The $1.5 million fine must be paid by May 23, 1997, Judge Urbina ruled.

   Independent Counsel Smaltz stated:

  Judge Urbina's well-reasoned and significant sentence demonstrates that this court is well-aware that these types of gratuities to a member of the President's Cabinet can and do have a corruptive effect on our government. Gifts to the head of a government agency from a business entity that is regulated by that agency have a pernicious effect upon the official, the agency, and the public's trust in its government officials.

   Previously, in a prosecution brought by this Office, Crop Growers Corporation, the second-largest private seller of multi-peril crop insurance, which is regulated by the USDA, was fined $2 million for illegal corporate campaign contributions in the amount of $46,000 to Secretary Espy's brother, Henry Espy.