Wider Espy Inquiry Reportedly Denied : Cabinet: Smaltz’s job is to investigate gratuities for ex-agriculture secretary. Democrats say he sought information on Tyson Foods’ ties to Clinton.

Atty. Gen. Janet Reno has denied permission to independent counsel Donald C. Smaltz to formally widen his investigation of former Agriculture Secretary Mike Espy, government sources said Tuesday.

Smaltz, a high-profile Los Angeles lawyer chosen by the courts to investigate gratuities Espy received from Tyson Foods, has been under attack by Democrats for conducting interviews on the Arkansas poultry firm’s longtime friendship with President Clinton.

Reno’s decision is significant not only because it is expected to rein in Smaltz, but also because it may set a precedent in limiting the scope of independent counsel investigations.

It comes at a time when critics of the independent-counsel law have been citing Smaltz’s actions as proof that such prosecutors are being permitted to go on fishing expeditions. It also represents a victory for Tyson Foods, whose executives have accused Smaltz of conducting “a witch hunt.”

White House Counsel Abner J. Mikva said some broad inquiries can be “just nonsense,” but he insisted that he has not conferred with Reno or other Justice officials about his views. Former White House Counsel Lloyd N. Cutler also has joined the criticism.

Smaltz said through a spokesman that he had “no comment on any communications or contacts with the Justice Department.” By law, a court-appointed special counsel must apply for permission to the attorney general to expand his legal mandate, which mainly dealt with allegations against Espy but gave him some leeway to look into other criminal activities he encountered. There is no appeal process. All documents are under court seal.

Exactly how Smaltz sought to broaden his inquiry could not be learned. However, one legal source speculated that he wanted to expand beyond the 1993-1994 period when Espy served in Clinton’s Cabinet so he could investigate Tyson’s earlier relationship with Clinton as governor of Arkansas.

At the time of Reno’s action, Smaltz already had questioned some witnesses about allegations by a former Tyson pilot who claimed that he carried envelopes filled with $100 bills to representatives of then-Gov. Clinton.

Tyson officials dismissed the pilot as a disgruntled former employee, and several other people reportedly said they knew nothing about such events. Smaltz, however, commented to Time magazine that the pilot’s account “has a ring of truth to it.”

Other former Tyson employees have said they were asked by FBI agents assigned to Smaltz if company Chairman Don Tyson’s son or any other executives ever used or sold drugs, or whether Tyson representatives ever bribed Mexican officials.

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Some said they were asked few if any questions about Espy. Although Reno and other Justice Department officials declined to comment, Mikva said Tuesday: “I really think that this notion that a special prosecutor should have an unlimited mandate to investigate everything from the beginning of time through the lives of everyone alive plus 21 years is just nonsense.”

Smaltz was appointed by a federal appeals court panel in September. Espy’s resignation, effective at the end of December, did not affect his inquiry.

Times staff writers Ronald J. Ostrow and John M. Broder contributed to this story.