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Tyson Foods Will Pay $6 Million In Penalties Firm Admits Making Illegal Gifts To Ex-Ag Secretary Mike Espy

Tue., Dec. 30, 1997

World poultry giant Tyson Foods agreed Monday to pay $6 million in penalties after pleading guilty to making illegal gifts to former Agriculture Secretary Mike Espy, including tickets to President Clinton’s first inaugural dinner.

Under the plea agreement with independent counsel Donald Smaltz, Tyson will not be barred from making millions of dollars worth of sales to the military or to school lunch programs.

The Arkansas-based company admitted to making more than $12,000 in gifts to Espy, the newly appointed agriculture secretary, during 1993, including four tickets worth $6,000 to Clinton’s inaugural dinner.

At the time, the department was considering several regulations of interest to Tyson, including an emergency rule requiring safe handling instructions on all raw meat and chicken packages.

Espy, 44, has been indicted as a result of the investigation, which forced him to resign three years ago. He has denied any wrongdoing.

Gifts from Tyson prompted an internal Agriculture Department investigation and subsequent investigation by Smaltz. The investigation also led to the trial and conviction of SunDiamond Growers of California, another agribusiness giant, and a guilty plea and fine for Crop Growers Corp., a leading crop insurance firm.

“Our government is a government of all the people and not just the privileged few who seek to buy their way into regulatory grace,” Smaltz said in a statement.

The other Tyson gifts were travel, lodging and entertainment for Espy and his girlfriend, Patricia Dempsey, to attend a company party in Russellville, Ark., and the Dallas CowboysGreen Bay Packers football playoff game, and a Tyson Foundation scholarship worth $1,200 for Dempsey.

Tyson, based in Springdale, Ark., had sales of $6.5 billion in 1996. Though known for chicken, the company is in the pork and seafood business as well. It is also a leading U.S. maker of tortillas.

“Tyson looks forward to having this long, costly distracting matter concluded,” the company said.

The $6 million penalty includes a $4 million fine and $2 million to help cover the cost of the investigation.

The agreement must be approved by U.S. District Judge Ricardo M. Urbina, who scheduled sentencing for Jan. 14. The senior chairman of the company, Don Tyson, entered the plea to the one-count criminal charge on behalf of the firm.

Tyson and his son, John, vice chairman of Tyson Foods, had been granted immunity in exchange for their grand jury testimony. Smaltz has been investigating Archie Schaffer, the company’s senior spokesman. The firm’s Washington lobbyist, Jack Williams, has been indicted after an earlier conviction was thrown out. He is scheduled for trial Feb. 2.


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