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

The United States Court of Appeals for the District of Columbia Circuit yesterday reversed the trial court for the second time and reinstated the jury verdict of guilty against Archibald R. Schaffer, III. Schaffer was convicted in June 1998 of giving gratuities to former Secretary of Agriculture Alphonso Michael Espy to influence him in the performance of his duties under the Meat Inspection Act. Schaffer is the Director of Media, Public and Governmental Affairs for Tyson Foods, Inc., the world's largest poultry processor.

On June 26, 1998, a jury in the United States District Court for the District of Columbia found Schaffer guilty of giving illegal gifts to then-Secretary of Agriculture Espy in violation of the bribery provision of the Meat Inspection Act (21 U.S.C. ' 622) and the Gratuities Statute (18 U.S.C. ' 201(c)). Schaffer's co-defendant at trial, Jack Williams, a lobbyist for Tyson Foods, was found guilty of two counts of lying to federal investigators in violation of 18 U.S.C. ' 1001. On September 21, 1998, District Court Judge James Robertson reversed both counts against Schaffer and entered judgments of acquittal, concluding that no rational jury could have found him guilty on the basis of the evidence presented.

The government appealed the judgment of acquittal to the United States Court of Appeals for the District of Columbia Circuit which, in July 1999, reversed the District Court's decision as to the Meat Inspection Act count and affirmed the decision as to the gratuity count. The Court of Appeals opinion exhaustively reviewed the trial evidence and determined that it was sufficient to prove beyond a reasonable doubt that during early 1993 Schaffer secured Secretary Espy's attendance at a lavish weekend-long birthday party hosted by Tyson Foods in Russellville, Arkansas, with the intent to induce the Secretary to influence some future act with respect to two issues of importance to Tyson Foods then pending before Secretary Espy. Schaffer's actions included providing transportation to Espy and his girlfriend on a private Tyson Foods jet and providing the couple with food, entertainment, and lodging at a Tyson complex. The government's evidence included Schaffer's concealment of these gifts by lying to USDA staff and special agents of the FBI and by providing for Espy an official reason to be in Arkansas.

In finding the evidence sufficient and overturning the trial court in this first appeal, the Court of Appeals stated:

. . . the independent counsel prosecuted the case under a theory that . . . Espy's attendance at the party was secured with the intent to induce the Secretary to propose, take, or shy away from some future act with respect to either zero tolerance or safe handling labels, or alternatively in the hope that, when those particular issues moved to the regulatory forefront, the Secretary would listen hard to, and hopefully be swayed by, the Tyson Foods' proposals, suggestions, and/or concerns. . . . [T]he independent counsel has presented sufficient evidence to establish the requisite link.

The Court of Appeals reinstated the verdict and sent the matter back to the trial court with directions to sentence Schaffer. On October 13, 1999, Schaffer filed a motion for a new trial (his third such motion), claiming newly discovered evidence. Schaffer asserted that if he had been able to call former Secretary Espy as a witness at his trial, he would have been acquitted. On December 3, 1999, after a hearing at which Espy testified, Judge Robertson granted Schaffer's motion for a new trial. On the same day, the government filed its notice of appeal and shortly thereafter moved for expedited resolution of the appeal in the Circuit.

In yesterday's opinion, the Court of Appeals reversed Judge Robertson=s ruling that Schaffer was entitled to a new trial based on Anewly discovered evidence.@ It found that Schaffer was not diligent in his efforts to procure the

Espy evidence before trial and that Espy=s testimony would not have resulted in an acquittal. The court stated:

As is evident from Espy's testimony during the evidentiary hearing on the motion for a new trial, his testimony at a new trial would do little to undermine the independent counsel's case. Espy testified that he believed that the Arkansas Poultry Federation function was a legitimate event, that his primary reason for traveling to Arkansas the weekend of the Tyson birthday party was to attend the APF function, and that he was aware of no attempt to influence his exercise of his official duties during the course of the weekend. Nothing in that testimony bears on Schaffer's intent in helping to arrange for Espy's attendance at these functions. The jury, for example, could fully accept Espy's statement that he believed the meeting was a legitimate event and still "reasonably infer that the [APF] meeting, while legitimate, had nevertheless been set up to provide Espy with official cover.

The Circuit Court has again remanded the case to the District Court for sentencing of Schaffer.

Independent Counsel Smaltz stated:

I am of course pleased with the Circuit Court's decision. It is now two years since Schaffer was convicted by a jury and the trial court has still not sentenced Schaffer. I hope the trial court promptly sentences Schaffer so we can now conclude this matter.

On December 29, 1997, Tyson Foods, Schaffer=s employer, pleaded guilty to giving approximately $12,000 in gifts to Secretary Espy for and because of official acts performed and to be performed by Secretary Espy, in violation of 18 U.S.C. ' 201(c)(1)(A). 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 prosecution of Secretary Espy and this case; and (4) four years of probation.

Former Secretary of Agriculture Alphonso Michael Espy was acquitted by a jury of 30 counts on December 2, 1998.

This office's investigation has been concluded. It is in the process of handling various appellate matters, awaiting the sentencing of Schaffer, and drafting its final report.