Official Said Ambitious, ‘Not A Crook’

Federal prosecutors told a U.S. District Court jury Monday that Post Falls insurance executive John J. Hemmingson conspired to use illegal campaign contributions to gain favor with former Agriculture Secretary Mike Espy.

The government charges Hemmingson, and a co-worker, Gary A. Black of Great Falls, Mont., made $46,000 in illegal contributions to Henry Espy, Mike Espy’s brother. Henry Espy ran up a significant debt in an unsuccessful 1993 bid for U.S. Congress.

If convicted, Hemmingson, the former chairman and chief executive officer of Overland Park, Kan.-based Crop Growers Corp., faces 40 years in prison and a $1 million fine.

Hemmingson and Black sat silently as special prosecutor Joe Savage rolled out a 6-foot chart naming two dozen people who wrote Henry Espy $1,000 checks. Savage said Crop Growers paid back the contributors, breaking federal campaign laws.

To cover his tracks, Hemmingson had the company’s books falsified by recording the contributions as legal fees, travel advances and computer purchases, Savage said.

The prosecutor said Hemmingson, who also keeps a suite at the Spokane Club, used the contributions to help ensure passage of crop insurance reform legislation that was financially beneficial to Crop Growers.

“Mr. Hemmingson was the engine behind this illegal scheme,” Savage said from the courthouse where the trials of former Teamsters President Jimmy Hoffa and various Watergate figures were once held.

Bill Mauzy, Hemmingson’s Minneapolis-based lawyer, countered by saying the great flood of 1993, not Hemmingson, pushed Congress toward passage of the crop insurance reform legislation.

“Mr. Hemmingson was not Noah,” Mauzy said in a booming voice to a nearly empty courtroom. “He did not have the vision of the flood coming so he could gather contributors together two by two and one by one.”

Mauzy depicted Hemmingson as a self-made man who overcame smalltown Montana roots and alcoholism to create a multimillion-dollar company.

Mauzy said Hemmingson was an aggressive entrepreneur who acted in the company’s best interest. Crop Growers, Mauzy said, did 15 to 20 percent of its business in Mississippi, where Henry Espy was running to succeed his brother in Congress.

“He was an ambitious man, yes, but not a crook,” Mauzy said.

Officials said the case, the latest in a series of legal battles for Hemmingson, should last at least a week.

In a related trial, a jury in U.S. District Court in New Orleans in December found Hemmingson guilty of laundering $20,000 in illegal contributions and moving money across state lines to Henry Espy’s campaign war chest. Sentencing for that conviction has been scheduled for March 5.

Hemmingson and Black resigned from Crop Growers in March 1996, but remain among the company’s largest shareholders.

Last week, the company pleaded no contest to charges it made $46,000 in illegal contributions to Henry Espy’s campaign and agreed to pay a $2 million fine.

Crop Growers is the nation’s second largest provider of federal multiperil crop insurance, with nearly $400 million in assets and 450 employees. It continues to operate a regional center in Coeur d’Alene.

The trail is the latest in a series of investigations into influence peddling during Mike Espy’s term in the Clinton cabinet. Espy resigned in Dec. 31, 1994, amid allegations that he took gifts from other companies regulated by the Agriculture Department. He denies all claims.

, DataTimes