William Smithburg has had much to explain in recent years, notably how his Quaker Oats Co. bought the Snapple drink line for $1.7 billion and unloaded it as a dismal failure for $300 million.
But Quaker’s retired chairman surely never figured he’d be stuck in a chilly federal court, explaining a $90 personal expenditure for Bulls tickets, as well as a seating chart for the Chicago Stadium.
Mike Espy, the former agriculture secretary and a onetime rising political star, shook his head as Smithburg testified last week and explained where his four seats ($45 apiece) were back in the early 1990s: section 22, “16 or 17 rows back from the floor,” the former Quaker chief explained to a judge and jury.
Two of those tickets were requested by Espy the day before a big Bulls finals playoff game against Phoenix in 1993. It is one of many reasons Espy has spent the last two weeks in the same courtroom, the defendant in the criminal action United States of America v. Alphonso Michael Espy.
For sure, Smithburg and most Americans know about Independent Counsel Kenneth Starr and what the White House reflexively terms his four-year, $40 million investigation. We have paid less attention to the handiwork of Independent Counsel Donald Smaltz and his four-year, $20 million investigation into Espy.
In some ways, the nattily attired Los Angeles attorney with his own Website (www.oic.gov) has had a far more successful record than most independent counsels, gaining a dozen convictions of individuals and corporations which include poultry giant Tyson Foods. The Arkansas firm with close ties to President Clinton pleaded guilty to giving Espy more than $12,000 in illegal gratuities, paying a $4 million fine and $2 million to the Smaltz investigation.
In addition, Smaltz has nailed a big Washington consultant, a major crop insurer, Smith Barney, Inc. and Robert Mondavi Corp., among others. Smith Barney paid a $1 million fine, in part due to its “unlawfully supplementing the salary” of Espy via a gift of a Super Bowl ticket, while Mondavi paid $120,000 for “a gift of wine valued at $187 and dinner for Secretary Espy and his girlfriend valued at $207.”
Of course, one also can look at Smaltz’s handiwork, and the $20 million spent so far, and wonder if it would withstand a cost-benefit analysis. A good many local prosecutors, who tend to have limited budgets, might take a pass on the allegations he has pursued.
Moreover, he has blown some cases, having defendants either acquitted or seen their convictions overturned. And, remember, Espy, then a mere 40, admitted being “careless” in managing his personal affairs and resigned amid White House pressure in October 1994, as the allegations (which included gratuities for a girlfriend) surfaced. One might argue that a man touted as a future senator or governor of Mississippi has paid a sufficient price.
Smaltz’s efforts could be marshaled as arguments by both defenders and critics of the whole system of independent counsels, each armed with virtually unlimited resources in money and time–certainly more resources than an Espy. He estimated to me that his legal bills are around $1 million, explaining why he actually had a legal defense fundraiser one evening last week.
But the Smaltz investigations are, at minimum, an impressive window onto the often incestuous relationship between federal agencies and those they regulate, as well as evidence of the sense of entitlement that some politicians and government officials possess. Whether you think Espy should be in the dock, something smells.
The investigations also are a reminder of the media’s short attention span. Now that Espy is no longer the hot African-American politician with a fancy title, he is worthy of scant attention. Not even The Washington Post or The Wall Street Journal (whose reporting played a role in the Espy investigation and naming of an independent counsel) has been spending much, if any, time at the trial, with no more than two other reporters there when I attended last week.
The 18 jurors and alternates (all black but two) who labor in the courtroom of District Judge Ricardo Urbina, a former track and field All-American, far outnumber the spectators each day.
It is fortunate the room is so chilly that a defense lawyer’s mother at one point declared, “Boy, you could bring ice cream in here and it wouldn’t thaw.”
Smaltz’s Bataan March of Witnesses is insufficient to keep one awake.
Smithburg, witness No. 26, was part of an underwhelming stretch in which the prosecution attempted to underscore an insidious, symbiotic relationship between Espy and companies which he oversaw. It would seem that Espy, at minimum, was too willing to accept what he may have assumed were the perks of power.
For sure, there is no evidence of his putting in the fix for companies which may have passed goodies to him. Unfortunately for him, the relevant statutes in this case, including the moth-eaten Meat Inspection Act, do not need proof of a favor returned by the regulator.
C. Manly Malpus, president of the Grocery Manufacturers Association, testified about how his trade group picked up the tab for three separate, small dinners in Washington attended by Espy. Only much later, after questions were raised about Espy’s practices, did Espy send a personal check of $143.32 for his share.
One dinner involved lobbyist Malpus, Espy and Smithburg on June 3, 1993 at the University Club in Washington. Smithburg was serving a two-year term as chairman of the association’s board and Malpus, who runs it day-to-day, thought that he should meet Espy, the new agriculture secretary.
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Espy was an “up and coming, innovative new member of the Cabinet,” testified Smithburg. Having dinner seemed a good idea, even if it was not any big deal to the Chicago executive.
By the accounts of Malpus and Smithburg, the dinner seemed rather benign and brief, with Smithburg’s corporate jet set to depart for Chicago at 9 p.m. “I remember specifically talking about the secretary’s desire to make the department more efficient,” Smithburg said.
There was some general discussion of the food business, world markets, Quaker’s huge success with Gatorade and, inevitably, about the product’s spokesman, Michael Jordan.
Nearly a $6 billion a year enterprise, Quaker does not have the frequent dealings with the Agriculture Department as does a Tyson. By Smithburg’s account, about only three percent of its business entailed Agriculture Department oversight, notably its Wolf brand chili, Van Camp’s pork and beans and Celeste frozen pizza (mostly for the pepperoni it uses).
But the government has tried, at times groped, to link the largess bestowed on Espy and his potential impact on the patrons. Thus, the jury was treated to a wearying discourse from a regional supervisor of the Agriculture Department, discussing his jurisdiction over the Newport, Tenn., plant where the pork and beans were made.
Similarly, they have tried, like used-car salesmen disguised as especially humorless prosecutors, to place the optimum value on everything Espy encountered, to accentuate his alleged misdeeds. It’s as if the $35,000 in gifts they formally claim he and girlfriend accepted is not sufficient.
Thus, they tried to get Smithburg to put a “market value” on his $45 playoff tickets, assuming he had walked onto Madison Street and hawked them. And they itemized virtually every element of a two-day birthday party Tyson held for its boss and attended by Espy, ranging from the $30,000 paid to B.B. King to entertain and the $225 for some chef to give cooking lessons.
As for Smithburg, he at least was reunited with his former executive assistant, Patricia Hayes, who was hauled into court (Witness No. 27) to testify about the phone call from an Espy aide, requesting the Bulls tickets.
Were the two tickets, which Espy paid for more than a year later as an inquiry was under way, meant to influence Espy? No, said Smithburg.
But was Espy’s position of power one of the reasons the tickets were provided?
“That was one of many facts,” Smithburg said.
United States of America v. Alphonso Michael Espy continues Monday.