Indicted Agricultural Co-op Has Big Role in State Politics

SACRAMENTO —  Sun-Diamond Growers, indicted this week for allegedly making illegal gifts and contributions to political figures, is a major force in California elections and has backed Gov. Pete Wilson’s campaigns for more than a decade.

The giant agricultural cooperative and its officers have contributed more than $200,000 to Wilson’s state and federal political campaigns since 1989, records show. Moreover, the firm was instrumental in helping him win a U.S. Senate seat in 1982 and the governorship eight years later.

Shortly after Wilson was elected governor, Sun-Diamond contributed $28,350 to his inauguration committee, documents show. And the former president of the growers group and its lobbyist have served as advisors to Wilson’s campaigns.

Neither Wilson nor any other California politician has been implicated in the federal grand jury indictment.

The governor’s press secretary, Sean Walsh, said that Sun-Diamond is simply one of many agricultural firms that have contributed to Wilson’s campaigns over the years. “The governor throughout his entire career has clearly understood the importance of our No. 1 industry in the state,” Walsh said. “It should be no surprise to anyone that Sun-Diamond or any other agricultural groups would wish to see Pete Wilson as their senator or governor.”

The indictment charges that Sun-Diamond made illegal gifts to former U.S. Agriculture Secretary Mike Espy and improper corporate donations to Espy’s brother’s congressional campaign.

The nine-count indictment grew out of a two-year investigation by independent counsel Donald C. Smaltz. Espy resigned from his federal agriculture post in 1994 after allegations that he had improperly accepted tickets to sporting events and other gifts from individuals regulated by his department.

James H. Lake, formerly Sun-Diamond’s Washington lobbyist, pleaded guilty in October to routing $5,000 in illegal corporate contributions to Henry Espy. Lake was an informal advisor to Wilson’s recent, unsuccessful presidential campaign.

This week’s indictment of Sun-Diamond charges that the cooperative, through an unnamed representative, financed an expensive trip to Greece for the agriculture secretary and a female friend.

The representative has been identified by others as Richard Douglas, a former Sun-Diamond executive and Mike Espy’s college roommate.

Sun-Diamond and Douglas could not be reached for comment Friday, but both previously have strongly denied any impropriety. In a written statement, Douglas’ attorney, John Dowd, said the gifts from Douglas to Mike Espy were out of friendship and not an attempt to influence the U.S. Department of Agriculture.

Douglas resigned from Sun-Diamond in February, where he had been an executive for more than a decade.

In April, The Times reported that he was under investigation for lobbying he had done for a former client, BKK Corp., which has been fighting to open a 190-million-ton landfill near Santa Clarita.

Douglas and the cooperative have played a significant role in state and federal politics.

In 1982, support from Sun-Diamond and other Central Valley agricultural interests helped boost the senatorial campaign of Wilson, who was then mayor of San Diego and working hard to boost his standing in other regions.

Marty Wilson, a longtime political advisor to the governor, recalled that the then-president of Sun-Diamond Growers, Frank Light, was one of several agricultural leaders who joined forces to back Pete Wilson in his successful run for the U.S. Senate.

But the advisor said he could not recall large-scale contributions from the cooperative conglomerate, which includes Sun-Maid, Sunsweet and Diamond Walnut Growers.

However, records show that since 1989, Sun-Diamond and its member groups have contributed heavily to Wilson’s campaigns--a total of $236,000, including a $100,000 loan, to his two runs for governor, according to the firm’s campaign contribution statements on file with the secretary of state.

Douglas was an informal advisor to Wilson’s gubernatorial campaigns, press secretary Walsh said.

On a single afternoon in November 1993, at a luncheon with Wilson arranged by Douglas, the cooperative made a $25,000 contribution to Wilson’s reelection campaign.

“Pete has had a personal relationship with the leadership of Sun-Diamond for over a decade,” Douglas said a few months later. “We want to see him remain at the helm of the ship.”

In 1995, Douglas personally contributed $1,000 to Wilson’s presidential campaign committee.

Unlike federal law, which prohibits corporate contributions and limits individual donations, there are no similar limits on political giving under California law.

Although Pleasanton-based Sun-Diamond has no registered lobbyist in Sacramento and rarely lobbies the Legislature directly, the firm belongs to the Agricultural Council of California, a trade organization that lobbies on behalf of cooperatives as a group.

The cooperative does have a strong stake in decisions made by regulators--both in Sacramento and Washington. In California, it focuses on issues such as overseas trade and crop restrictions, said one veteran legislative aide.

Douglas himself has a reputation of being “very well politically connected,” said one top-level Republican state official. “There are a handful of major people in agriculture in California, and Sun-Diamond is one of them. . . . Like a lot of big corporations, they are not partisan.”

Federal and state records do show broad support for incumbents of both parties, largely through political action committee contributions to U.S. Sen. Dianne Feinstein.

The cooperative and its subsidiaries also have contributed more than $300,000 to state candidates. Included in the total are thousands of dollars in in-kind help to candidates--food for lunches and banquets.

The high-placed GOP official, who asked not to be identified, credits Sun-Diamond as being “very influential in selecting who would be the [state] agriculture secretary.”

Agricultural interests are credited with the appointment of Henry Voss to the top state post in 1989 under then-Gov. George Deukmejian. He was reappointed to the job two years later by Wilson.

Voss resigned under fire last year after the revelation that he had failed to disclose more than $420,000 in outside income from several agribusinesses he regulated, including Del Monte, Tri Valley Growers and Sun-Diamond.

Neither Sun-Diamond nor Douglas “played a significant role” in the appointment of his replacement, Ann M. Veneman, said press secretary Walsh.

Like the cooperative itself, Douglas’ influence was not just with Republicans in the executive branch. In 1993, Sun-Diamond made a $2,000 “sponsorship fee” for a legislative trip to Washington. The contribution allowed Douglas to shadow state lawmakers as they made the rounds of top Clinton administration officials. He attended a meeting with Environmental Protection Agency Administrator Carol M. Browner and talked to her about the use of suspected cancer-causing pesticides on raisins and other processed foods.

After the meeting, Browner’s staff complained about the presence of Douglas and other special interest representatives at a session intended for lawmakers.

Times staff writers Virginia Ellis and Carl Ingram contributed to this article.