Clinton Ties to Tyson Scion Still Drawing Critics' Fire : Politics: Some allege Arkansan got special treatment from Agriculture, Commerce departments. He denies it.

TIMES STAFF WRITER

He is an unlikely looking millionaire kingmaker--a balding, impish man whose trademark khaki work uniform belies his wealth and power.

Still, Donald Tyson, who succeeded in building his father's small poultry business into a multimillion-dollar food-processing empire, has been widely portrayed as a driving force behind the political ascendancy of Bill Clinton.

Indeed, during the 1992 presidential campaign, Texas billionaire and independent candidate Ross Perot dubbed then-Gov. Clinton "chicken man" because of his close relationship to Tyson and to Arkansas' poultry industry.

And Clinton himself drew attention to the association when he acknowledged to a campaign audience that he had sacrificed the environment in Arkansas to create more jobs for the state's poultry farms.

Now the alliance between these two men has become a cause celebre once again. Critics of the President contend that a relationship that benefited both men during their days together in Arkansas still provides mutual rewards today.

The Agriculture Department's failure to impose tougher standards on Tyson Foods Inc. and other poultry processors has prompted widespread criticism--as well as a Justice Department inquiry. And the Commerce Department has been accused of rewriting regulations to benefit Tyson Foods' fishing interests in the Pacific Northwest.

Furthermore Tyson--acting through his lawyer, James Blair--is now said by critics to have played a role in Hillary Rodham Clinton's recently disclosed commodities trading profits during the late 1970s.

These allegations remain unproven--and some stories circulating about Tyson and Clinton are plainly false--but they demonstrate the way in which the President continues to be dogged by questions over favored relationships with his old friends in Arkansas.

While such accusations can haunt any President, they have been particularly troublesome for Clinton--in part because he pledged that his White House would be free from the cronyism of presidencies past. In addition, the inherently close-knit nature of Arkansas' political and financial elite seems to fuel the suspicions of Clinton's critics.

Tyson, a liberal Democrat, freely acknowledges that he considers the President an old friend and that he has generously supported Clinton's political career with campaign contributions and other assistance over the years. But he staunchly denies that the relationship has ever gone beyond that of patron and public servant.

"When you do business in Arkansas, you need to know who the people who are running the government are," Tyson said in an interview. "We never got anything we didn't deserve because of who we are--a business leader in this state."

Tyson made it clear he was not amused by a steady drumbeat of unflattering news reports questioning the motives behind his friendship with Clinton.

His aides point to many fictitious stories that have found their way into the press in recent months--reports that Hillary Clinton once served on the Tyson Foods Board of Directors, that Tyson slept at the White House on the night of the President's inauguration, that Tyson hosted a dinner for the Clintons at an exclusive restaurant in Washington.

"I am quickly growing weary of the insinuations and allegations that the company bearing my family name is in some insidious way benefiting as a result of the fact that the former governor of Arkansas now resides at 1600 Pennsylvania Ave. in Washington," Tyson recently wrote to several newspaper editors.

Likewise, Administration officials have been quick to deny the allegations. White House aide John Podesta scoffed at the idea of favoritism toward Tyson, and Agriculture Department officials have condemned as "faulty" suggestions that the Tyson-Clinton connection has in any way influenced the government's poultry inspections.

Yet if their relationship is nothing more than one of mutual admiration, it would run counter to local Arkansas lore.

Larry G. Patterson, an Arkansas state trooper and former bodyguard to Clinton, says he remembers that the then-governor once told him if Tyson rendered a favor, the poultry scion would always expect a favor in return. "There is a dark side to Don Tyson," Patterson recalled Clinton saying.

Nor is there any doubt among locals here that Tyson has played an important role in Clinton's political success. The evidence includes $18,500 in campaign contributions from Tyson Foods executives to Clinton's 1992 campaign, as well as generous contributions to other Administration officials.

Stanley Greenwood, a local Republican businessman, said he remembers encountering Tyson, Blair and another man in a local restaurant in the early 1980s. Even then, he said, they were plotting to get Clinton elected President.

"The person who put Bill Clinton in the White House is Don Tyson," Greenwood said.

No doubt Tyson's reputation as a high-energy, risk-taking agribusinessman is responsible for generating such intense interest in his relationship with the President.

At 64, Tyson lives an oddly hybrid daily existence that combines the rustic simplicity of country life with a swirl of sophisticated international business deals and a standard of personal luxury unknown to most residents in Arkansas' chicken-producing region.

Garbed in Tyson Foods' standard-issue khaki uniform with "Don" embroidered over the breast pocket, he spends his workdays in an exceptionally elegant corporate office that is a replica of the White House Oval Office he first visited during the Jimmy Carter Administration. Tyson still visits his old friends at the local pool hall, even though he clearly prefers deep-sea fishing on his 63-foot yacht.

Local Democratic politics first brought Tyson and Clinton together in the early 1970s, when the future President was a young teacher at the University of Arkansas Law School in Fayetteville. That was shortly after Tyson's parents were killed in a car crash, leaving him the family business.

It was about that same time that Clinton made friends with Blair, now Tyson Foods' general counsel and the man who helped Hillary Clinton make a $100,000 profit in commodities trading on an investment of just $1,000.

But the Tyson-Clinton relationship has not been without its ups and downs.

Although Clinton had Tyson's support when he first became governor in 1979, the two men had a falling out shortly thereafter over one of the hottest local issues of the day: truck weights. In 1980, Tyson supported Clinton's successful GOP opponent, Frank White, because the Democrat had opposed the poultry industry's campaign to raise the legal truck weight in the state to 80,000 pounds.

White was unable to keep his promise to raise truck weights, however. But in 1983, after being returned to the governor's mansion without Tyson's support, Clinton signed a bill raising the limit to 80,000 pounds.

While Clinton was governor of Arkansas, Tyson Foods flourished. Like other poultry processors, it enjoyed a variety of state tax advantages, such as the "enterprise zone" tax credits enacted into law by Clinton.

Environmentalists charge that Clinton stood idly by as runoff from Tyson Foods' poultry operations contaminated the region's streams and rivers.

Indeed, when Clinton sought to put more environmentalists on the state pollution control commission in 1991, Tyson objected loudly and the matter ended in a compromise.

Nevertheless, Tom McKinney, leader of the local Sierra Club, praises Tyson Foods for supporting efforts to eliminate pollution from chicken litter and other remnants of the poultry industry. In addition, records of the state Department of Pollution Control and Ecology show that the Clinton Administration frequently held Tyson Foods accountable for violations.

Always a matter of gossip in Arkansas, the Tyson-Clinton alliance has drawn even more intense scrutiny since the governor became President.

Most recently, the U.S. Agriculture Department has been accused of singling out the beef industry for stepped-up inspections while going easy on the poultry processors. The complaints came primarily from meat producers, who at the time were being blamed for an outbreak of food poisoning in the Northwest.

One former Agriculture Department official, H. Russell Cross, told The Times earlier this year that Agriculture Secretary Mike Espy acted in 1993 to delay the development of a tougher standard for fecal contamination of poultry. Meanwhile, Espy created the appearance of a conflict of interest by visiting Tyson Foods headquarters here and attending a Dallas Cowboys football game in the company of Don Tyson.

Top Justice Department officials recently ordered an FBI probe of Espy's actions. But Espy told the FBI that he had reimbursed Tyson Foods for his lodging, transportation and football game ticket, and Justice Department officials seem inclined to drop the matter.

In addition, Agriculture Department officials noted that Espy in March promulgated a tougher standard for poultry inspections. Just last year, 14 of Tyson Foods' 66 plants were targeted for unannounced reviews, and stringent enforcement measures were imposed at two of them.

Likewise, the Commerce Department has been accused of acting at Tyson's behest in the 1993 allocation of the multimillion-dollar Pacific whiting catch. Tyson Foods had an interest in the decision because it owns Seattle-based Arctic Alaska Fisheries Corp.

Arctic Alaska's competitors charged that Tyson Foods was responsible for persuading the Commerce Department to allocate 70% of the catch to factory trawlers and only 30% to shore-based processing plants, reversing the recommendation of regional authorities. At the time, it was assumed this decision benefited Arctic Alaska's factory trawler fleet.

"That is a bald-faced lie, and the people who are spreading it know it's a lie," said Tyson Foods public relations spokesman Archie Schaffer III. "We did not benefit from that decision."

He said the decision actually harmed Tyson Foods because Arctic Alaska runs a shore-based processing plant as well as factory trawlers. He said Arctic Alaska was unprepared for the last-minute reversal and did not have enough trawlers in the area to take advantage of the higher allocation.

Meanwhile, Hillary Clinton's successful commodities trades are an issue closer to home for Tyson.

Veteran commodities traders in the Springdale area were upset when they read in the newspapers several months ago that while trading without sufficient cash in her account, she made a $100,000 profit. These folks grew even more suspicious when it was learned that she had the help of Tyson's lawyer, Blair, and Robert (Red) Bone, a good friend and former employee of Tyson Foods.

Bone, who at the time of Hillary Clinton's trades was running the Springdale office of a Chicago-based brokerage, Refco Inc., was known as a broker who protected favored customers from losses by allocating successful trades to their accounts. At about the same time that the then-governor's wife was making a big profit in 1979, the rest of Bone's customers were on the verge of losing their shirts in a sinking cattle market.

Just as James B. McDougal tried to enrich the Clintons by making them partners in the Whitewater Development Corp., critics charge, Tyson--acting through Blair and Bone--had assisted Hillary Clinton in making her successful trades.

"Don Tyson must have guaranteed her trades," said Greenwood, one of the traders who lost money.

Bone and Tyson go way back. Bone got his start in commodities by doing hedge trading for Tyson Foods. In 1972, when Bone and Tyson were charged by the government with illegally trying to corner the egg market, Bone took the blame and left Tyson Foods to become a full-time commodities broker.

Yet the two men are still friends, and Tyson even loaned Bone money--accepting a huge diamond ring as collateral--when the trader lost his job with Refco after the cattle futures market went bust in 1979.

Like others, Blair lost millions of dollars trading cattle futures with Bone in 1979. But unlike any of the other losing traders, he was reimbursed by Refco. Admittedly jealous of Blair's good fortune, Greenwood and other disgruntled traders see it as further evidence that Tyson's friends--including Hillary Clinton--were being protected from risk by Bone.

Blair strongly rejects these charges--calling Greenwood "a liar." Speaking for the First Lady, Podesta said: "I don't think there is any evidence of that; it's pulled out of whole cloth." Bone could not be reached for comment.

Tyson rebuts the charges by noting that neither he nor his company ever traded cattle futures. In addition, he said, he didn't meet Hillary Clinton until the mid-1980s and was unaware of her commodities trading until it came to light five months ago.

Where Greenwood and others see the outline of a conspiracy involving Tyson, Bone, Blair and Hillary Clinton, their defenders see nothing more than sheer coincidence. After all, they note, this is rural Arkansas, where it seems everyone knows everyone else--especially the Clintons and Don Tyson.

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