PRESS RELEASE

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

   In the case brought by this Office entitled United States v. Sun-Diamond Growers of California, the jury today returned a verdict finding Sun-Diamond Growers guilty of eight counts of the nine count Indictment. The jury found Sun-Diamond guilty of providing illegal gratuities to former Secretary of Agriculture Mike Espy (Count One); engaging in a scheme to make illegal corporate campaign contributions (Counts Three and Four); and of violating the Federal campaign contribution laws (Counts Five through Nine).

   Sun-Diamond could be sentenced to a maximum fine of $3,000,000. Judge Ricardo M. Urbina, who presided over the trial, has set a sentencing date for December 10, 1996 at 9:00 a.m.

Mr. Smaltz stated: I want to thank the jury for its time, attention, and full and impartial consideration of all of the evidence. The jury was attentive throughout, and diligent in its deliberations. I am very pleased with the jury's verdict.

This verdict demonstrates that the jury was not in the least bit fooled by Sun-Diamond's denial that it wilfully and repeatedly violated the federal criminal laws.

The trial evidence revealed a pervasive and persistent pattern of Sun-Diamond's efforts to purchase favorable consideration from the USDA by showering Secretary Espy with a wide variety of gifts -- countless meals in fancy restaurants, a crystal bowl, a 5-piece set of luggage, a $9,000 tennis weekend in New York City.

Sun-Diamond's claims to this jury -- that it didn't know of some of the expenses, and the other expenses were authorized only because its Senior Vice President, Douglas, and Secretary Espy were friends -- were flatly rejected by this jury.

Similarly, Sun-Diamond's claims that it was framed by its chief outside lobbyist, James Lake -- to whom Sun-Diamond paid a quarter of a million dollars per year -- and that it never knowingly gave $5,000 in 1994 to retire the campaign debt of Henry Espy, Secretary Espy's brother, were also Sun-Diamond fiction which this jury promptly rejected.

In making their claims, Sun-Diamond management:

1. Demonstrated the very height of corporate arrogance by repeatedly and wilfully violating the law precluding gifts to government officials who regulate Sun-Diamond; and

2. Breached its fiduciary duties to its 4,500 farmer members in wilfully ignoring Sun-Diamond's by-laws and committing criminal acts.

In September 1994, The Los Angeles Times ran a lengthy story on the Espy/Douglas relationship which clearly served to put all of Sun-Diamond's officers and directors on notice of the fact that criminal conduct may have occurred. Sun-Diamond management's response was to ignore the article; not make any investigation; and then deny to its members, deny to the public, deny to our investigators, and deny to this jury that it had done anything wrong. That denial did not fool this jury. The jury has spoken and we move on from here.

   This is the first completed trial arising from this investigation. Previously, James H. Lake, a former Sun-Diamond lobbyist, pleaded guilty to participating in a scheme at the request of Richard Douglas, to circumvent the Federal campaign contribution laws to make illegal contributions to the failed campaign of Mike Espy's brother, Henry Espy. Mr. Lake has not been sentenced.

   Four additional cases have been filed and are awaiting trial. These are: United States v. Five M Farming Enterprises, Brook Keith Mitchell, Sr., and Brook Keith Mitchell, Jr. (D.D.C.) - Scheduled trial date: October 21, 1996; United States v. Henry William Espy, Jr., Alvarez T. Ferrouillet, Jr., Ferrouillet & Ferrouillet, Municipal Healthcare Cooperative, Incorporated, and John J. Hemmingson (E.D. LA.) - Scheduled trial date: November 4, 1996; United States v. Crop Growers Corporation, John J. Hemmingson, and Gary A. Black (D.D.C.) - Scheduled trial date: January 23, 1997; and United States v. Jack L. Williams (D.D.C.) - A case indicted on: September 17, 1996. Arraignment will be on September 27, 1996 and a trial date will be set at that time.