ESPY GAINS CORRUPTION CASE VICTORY.

Byline: Neil A. Lewis The New York Times

After only two days of deliberation, a federal jury acquitted Mike Espy, the former agriculture secretary, of corruption charges Wednesday, ending an independent prosecutor's four-year investigation of Espy's acceptance of sports tickets and other favors from companies he was supposed to regulate.

``It's cost a lot, it's been tough but I knew from day one that I would stand here before you completely exonerated,'' Espy, a former congressman and once a rising star in the Democratic Party, told reporters outside the courthouse. The jury took barely 10 hours to reject 30 counts brought by Donald Smaltz, an independent prosecutor. The trial judge had earlier dismissed eight other counts.

Even as he savored his swift and thorough redemption, Espy made it clear he was among the critics who point to each such verdicts as a judgment of the independent counsel law under which he was prosecuted.

Congress is expected to hold hearings early next year on whether to renew the law, which expires in June. There is little expectation that it will be extended as many public officials in both parties, wearied by high-profile investigations from Iran-Contra to Whitewater, seem opposed to the law.

Espy made it plain that when Congress holds hearings, he hoped his ordeal would seal the law's fate. ``I would like to be the first witness,'' he said.

Espy likened Smaltz, who spent more than $17 million investigating him over a four-year period, to a ``schoolyard bully.''

Both Espy and Smaltz, in comments to reporters after the verdict, neatly crystallized the debate over the wisdom and effectiveness of the Ethics in Government Act, the post-Watergate law that provides for independent counsels to investigate allegations of wrongdoing against senior administration officials.

The independent prosecutor, Espy said, was ``someone with all the money, all the power, very little supervision, no timetable and able to unleash powerful hordes of prosecutors on you and your family,'' summarizing the arguments that will be heard in Congress from the law's opponents.

After Espy and his jubilant family departed, Smaltz appeared and first told reporters that he accepted the verdict.

Continues to argue

But then, in his prepared statement, Smaltz appeared to continue to argue the case he had just lost, saying: ``A public official's acceptance of gratuities goes to the heart of the credibility in the performance of his duties. When a public official accepts gratuities, it calls the impartial execution of his judgment into question when he has matters before him that affect the gratuity givers.''

William Noakes, an associate independent counsel, said that with the conclusion of the Espy trial, Smaltz's office has only a few matters remaining and will close up shop soon.

Smaltz took the opportunity to offer a both a valedictory and a defense of his work, saying his office had achieved more than a dozen convictions and garnered some $11 million in fines and criminal penalties, mostly from companies that were charged with giving illegal gratuities to Espy.

``If our investigation and prosecutions dissuade corporations from giving gifts to their regulators, and the regulators from accepting gifts from those who are regulated, I believe that the costs we have incurred are worth the price,'' Smaltz said.

He also said that despite the acquittal, there was value in prosecuting Espy because it would discourage other officials from behaving the same way. ``The actual indictment of a public official may in fact be as great a deterrent as a conviction of that official,'' he said.

Target of critics

Throughout his tenure, Smaltz had been the target of critics who complained that he personified the problems with the independent counsel law, that he was excessively ambitious and eager to expand his jurisdiction beyond his original mandate. At times, he faced even more criticism than Kenneth Starr, the independent counsel for Whitewater matters who has told Congress that President Clinton may have committed impeachable offenses.

A few weeks after his appointment in September 1994, Smaltz stunned many in official Washington when he subpoenaed flight logs and notes of pilots working for Tyson's Foods, a large poultry and food processor based in Arkansas whose owner, Don Tyson, has been a longtime patron of Clinton. He was trying to find out whether Tyson had arranged for cash bribes to be ferried to Clinton when he was governor of Arkansas.

When lawyers from Tyson's protested that none of the matters was within Smaltz's jurisdiction, a federal judge agreed and ordered Smaltz to stop.

Smaltz also suffered a setback when a federal judge threw out charges he had brought against Henry Espy, Espy's brother, saying they were unrelated to the prosecutor's mandate.

But Smaltz has had successes as well. His two most notable victories were having Tyson's Foods agree to pay $6 million after pleading guilty to making illegal gifts to Espy. He also got Sun Diamond Growers, a California cooperative for growers of nuts, raisins and other dried fruits to pay a $1.5 million fine for illegally condoning gifts to Espy by its lobbyist.

Crime to give

But a federal appeals court in Washington overturned the conviction of Sun Diamond and the case is on appeal to the U.S. Supreme Court, one of the remaining items of business for Smaltz's office. The case involves the meaning of the unlawful gratuity statute, which makes it a crime to give, offer or promise ``anything of value'' to a public official ``because of any official act performed or to be performed.''

Smaltz had argued that the law was violated any time a gift was motivated by the recipient's official position.

But in overturning the conviction in March, the Court of Appeals for the District of Columbia Circuit said the gift had to be motivated not only by the recipient's position, but by some official act, either a reward for a past act, or an inducement for a future one.

Espy was charged with violating the same statute, receiving an illegal gratuity. In presenting 70 witnesses over nearly two months, Smaltz portrayed Espy as eager to ask companies he regulated for hard-to-get tickets to sporting events, including the U.S. Open tennis tournament, and games played by the Dallas Cowboys football team and the Chicago Bulls basketball team.

Espy was not charged with bribery but, under the gratuity law, with taking about $34,000 worth of tickets and other favors like luggage. Espy did not take the stand and presented no witnesses in his defense, resting his case after the prosecution presented the 70 witnesses.

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Photo

Photo: (color) Espy