Espy-Douglas Ethics Probe a Cloud Over Dual Successes : Politics: Old school pals fantasized about power--and achieved it. Now they’re under fire in an era of sensitivity.
WASHINGTON — As schoolmates at Howard University in the 1970s, Mike Espy and his friend Richard Douglas sometimes sat up deep into the night in their dormitory, drinking beer and fantasizing about a day when they would become powerful figures on the national scene.
Two decades later, still close friends, they have succeeded beyond their wildest dreams.
Espy entered politics and in 1986 became the first African American elected to Congress from Mississippi since Reconstruction. In 1993, President Clinton named him secretary of agriculture, the first black ever to hold that Cabinet post.
Douglas, meantime, became the first African American to earn a doctorate in agriculture from the University of Maryland, served in the Agriculture Department under President Ronald Reagan and today is senior vice president for corporate affairs for Sun Diamond Growers of Pleasanton, Calif., a large raisin, prune, walnut, fig and hazelnut producer.
It is, in some ways, a vintage Washington success story: talent, charm and energy yielding power, position and the perquisites that go with them.
As their careers have soared, however, Espy and Douglas have become part of an FBI inquiry--the sort that is becoming all too familiar in a time of heightened sensitivity over matters of ethical conduct.
The FBI is conducting a wide-ranging investigation into whether Espy may have improperly accepted gifts, favors and travel expenses from a variety of private agribusiness firms that receive funding from, and are regulated by, the Agriculture Department, including his friend Douglas and Sun Diamond.
Acting on the basis of preliminary FBI findings, Atty. Gen. Janet Reno has asked a three-judge panel of the federal Circuit Court of Appeals to appoint a special prosecutor to take over the case. A decision is expected soon.
Espy and Douglas deny any wrongdoing. According to Agriculture Department spokeswoman Ali Webb, Espy views Douglas only as “an old friend” who happens to work for an agricultural firm.
Espy, who declined requests for an interview, contends the allegations stem from unhappiness over changes he is attempting to bring to the department.
Some of the allegations--that Espy improperly used a corporate jet, accepted free tickets to professional basketball and football games and fraternized too much with individuals who deal with the government--may seem like minor transgressions, if that.
But they represent one of the most important ethics issues in present-day Washington. At a time when even arcane and obscure programs and policy decisions can mean millions of dollars in profits or costs to a business or industry, the existence of close relationships between decision-makers and potential beneficiaries can raise concern about the objectivity and fairness of the process.
The President himself helped to create the climate by promising during his campaign to “limit the influence of lobbyists” in his Administration.
Government investigators are exploring allegations raised by some Agriculture Department officials, as well as others, that Douglas and Sun Diamond may have traded on their special access to Espy and, in turn, that the secretary has tried to protect a controversial federal program that funds overseas promotion of U.S. agricultural products--including those of Sun Diamond.
The program in question is the department’s Marketing Promotion Program, which Douglas was instrumental in devising and Espy has supported in the face of stiff opposition from urban members of Congress and Administration budget-cutters. Over the last decade, Sun Diamond’s cooperatives have benefited from more than $35 million in federal spending from the MPP.
In addition, Douglas is credited by some officials with helping to persuade Espy to hire Kim Schnoor, a former Sun Diamond lobbyist, as his chief domestic adviser. And some Agriculture Department appointees have questioned the propriety of a $24,000, three-month Agriculture Department contract awarded to Douglas’ longtime female companion, Patricia Kearney.
Espy also has been a vocal defender of the use of methyl bromide, an ozone-depleting chemical favored as a fumigant by California’s dried-fruit and nut industry. He has acknowledged his role in persuading the Environmental Protection Agency to delay the elimination of the chemical as a fumigant until 2001.
Agriculture Department officials and others say investigators also are looking at a 40th birthday party for Espy that Douglas co-hosted and helped pay for at a Georgetown restaurant, a trip to Greece arranged by Douglas where the secretary addressed the International Nut Council, and numerous New York Knicks basketball games Espy apparently attended as Douglas’ guest.
As a Cabinet officer, Espy is prohibited from accepting “anything of value” from anyone whose business interests are in any way affected by his department, though the regulations make some exceptions for purely personal gifts from longtime friends.
Douglas is known to have told investigators that he and other friends of Espy paid for the birthday party entirely from personal funds to avoid running afoul of ethics laws. He said he kicked in $500 himself and even cleared the arrangements with the Agriculture Department’s ethics officer, James Michael Kelly.
During the trip to Greece in May, 1993, Douglas and Espy dined together with their girlfriends and Schnoor. But their friends insist that while Douglas picked up the tab for himself and the two girlfriends, Schnoor wrote a personal check to cover the cost of dinners for Espy and herself.
As for the Knicks games, Douglas reportedly told investigators that the tickets were left for the two men by Greg Anthony, a Knicks guard who Douglas claims “is like a son to me” and who idolizes Espy.
Originally, the FBI investigation began in response to information received from the Agriculture Department’s inspector general that the secretary had flown aboard a corporate jet and accepted lodging and football tickets from Tyson Foods Inc., the Arkansas-based poultry giant with ties to Clinton. The information was referred to the public integrity section of the Justice Department’s criminal division, and the FBI was ordered to investigate. As the probe progressed, it broadened to include other matters, including Espy’s receipt of Chicago Bulls tickets from an executive of the Quaker Oats Co. and his ties with Douglas.
Douglas, who also declined a request for an on-the-record interview, has told friends that he and Sun Diamond actually have been less successful in pursuing federal aid under Espy than they were under his GOP predecessors. He has complained that Espy’s prominence has created a political hornet’s nest for him: Fellow Republicans view him as disloyal for aiding Espy; Democrats are jealous of his access to the secretary.
Likewise, friends of the two men insist Douglas has been especially sensitive to possible conflicts posed by his relationship with Espy, and they suggest that some of the controversy springs from the unusual prominence of Espy and Douglas as two African Americans in a field dominated by whites.
In addition, they say allegations involving Douglas are being fueled by the Teamsters Union, which has been involved in a three-year labor dispute at Sun Diamond.
There is no question that Douglas enjoys unusual entree to Espy and his closest advisers. Their parallel careers as advocates for agricultural interests have been intertwined for nearly a decade--with benefits for both.
“These guys are like brothers,” said James Lake, a veteran Washington lobbyist who is close to Douglas and active in GOP circles and California agriculture groups.
In 1986, when Espy, an attorney reared in a middle-class home in Mississippi, won a seat in Congress, he became an effective proponent for catfish farmers in his poor district and won reelection twice.
Douglas, one of six children raised in Washington by a mother who cleaned houses for a living, deliberately chose to make his mark, friends say, in areas where there were few blacks: agriculture and the Republican Party.
Douglas advised and contributed to Espy’s historic first congressional campaign and then helped show his friend the ropes in Washington. On four occasions, Sun Diamond gave then-Rep. Espy an all-expenses-paid trip to California and a $2,000 honorarium for attending meetings and making speeches.
Clinton’s nomination of Espy as agriculture secretary marked a shared triumph for the longtime friends.
Douglas, 46, has been portrayed by Agriculture Department officials as a frequent visitor to Espy’s second-floor office and a shadow adviser to Espy, along with former California Rep. Tony Coelho, now an investment banker who handles the Sun Diamond pension portfolio.
Espy, 40, acknowledges that Douglas recommended Schnoor, a former Coelho aide who has also lobbied for Sun Diamond as an employee of Lake’s firm. He also admits that Douglas lobbied him formally at least three times on issues crucial to Sun Diamond.
Douglas is said to be particularly sensitive about criticism within the department of the contract that the Agriculture Department’s Food and Nutrition Service gave to Kearney, his longtime girlfriend, to help develop a strategic plan for improving the nutritional standards in the school meal programs.
Kearney’s defenders note that she was well-qualified for the assignment. She is a former chief of staff to Clayton K. Yeutter, George Bush’s first agriculture secretary. She earned a degree in nutrition from Harvard University and a master’s from Tufts University. Agriculture Department spokesman Neil Flieger insisted neither Espy nor Douglas helped her win the contract and she “was invaluable in helping the department” and worked two extra months without additional pay.
Sandy McBride, communications manager for Sun Diamond, dismissed the close relationship between the secretary and Douglas as an accident of fate.
“That they were college (friends) is a piece of past history,” McBride said. “Richard has a very professional responsibility. He is very careful to keep the two things separate. . . . “
Times staff writers Elizabeth Shogren, Ronald J. Ostrow and Dwight Morris contributed to this story.
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