Crop Growers Corp. and its Coeur d’Alene chief executive are the target of a federal investigation into whether illegal contributions were made to the congressional campaign of a relative of former Secretary of Agriculture Mike Espy.
The Great Falls, Mont.-based company announced Monday that it was being investigated, sending its stock price down 32 percent Monday.
The federal investigation centers on contributions allegedly made to Henry Espy’s 1993 campaign in a congressional primary election in Mississippi.
Henry Espy is the brother of the former agriculture secretary, who resigned Dec. 31, 1994, amid investigations that he accepted gifts from companies that the USDA regulated.
Targets of the probe include John Hemmingson, chairman and chief executive of Crop Growers, who works at the company’s national marketing office in downtown Coeur d’Alene; and Gary Black, executive vice president at the company’s Great Falls headquarters.
Crop Growers said it has formed a special committee of outside directors to review the matter.
“We’ve weathered storms before, we’ll weather this one,” said general counsel Kristin Juras.
Juras said the company has provided documents and testimony to subpoenas from an independent counsel appointed to investigate matters relating to Mike Espy. The company, she said, will have no public response until after the investigation is closed or charges are filed.
On Wall Street, investors fled Crop Growers stock, which dropped $4 Monday to $8.50 per share, with more than 1 million shares traded.
With 500 employees and 12 regional offices, Crop Growers is one of the nation’s largest servicers of crop insurance.
The company markets and services federally backed multi-peril crop insurance written by its subsidiaries in Kansas and North Dakota and by third-party providers such as Fireman’s Fund Insurance Co. and CNA Insurance Co.
Crop Growers recently restored the former Masonic Temple building, 524 Sherman Ave., for its national marketing office. About 30 people work at the site, Juras said.
The next closest Crop Growers’ office is in Prossor, Wash.