Ex-Lobbyist for Sun-Diamond Is Indicted

The former chief Washington lobbyist for Sun-Diamond Growers of California has been indicted by a federal grand jury on charges that he gave more than $10,000 in illegal gifts to Mike Espy, the Clinton administration’s first secretary of agriculture.

The charges against Richard Douglas were announced Wednesday by Independent Counsel Donald C. Smaltz, who is moving toward seeking an indictment of Espy himself.

The 19-count indictment of Douglas, which Smaltz said was returned late Tuesday by a grand jury in San Francisco, came three weeks after Sun-Diamond was convicted in federal court of giving more than $5,900 in meals, transportation, luggage and other gratuities to Espy, all through the hands of Douglas.

Sun-Diamond, the giant agricultural cooperative, was also convicted of making illegal campaign contributions to Espy’s brother, Henry, in his unsuccessful race for Congress in 1994. Douglas is also charged with concealing that illegal corporate donation and of making false statements to FBI agents during the investigation.

Washington attorney John M. Dowd, representing Douglas, called the charges “frivolous and without merit.” Dowd said the indictment is based on “meals and other nominal things of value [exchanged] between two successful black men who have been close friends for 26 years.”

Attorneys for Sun-Diamond made similar arguments during the company’s recent trial.

Douglas, 48, and Espy, 42, first met as students at Howard University in Washington in the early 1970s, Dowd noted. Douglas, an Agriculture Department official in the Ronald Reagan administration, was a vice president of Sun-Diamond at the time of the alleged offenses in 1993 and ‘94, while Espy, a former Mississippi congressman, was a member of Clinton’s Cabinet.

Prosecutors are expected to press Douglas to enter into a plea agreement and provide testimony against Espy, much as James H. Lake, another prominent Washington lobbyist who had worked closely with Douglas on behalf of Sun-Diamond, agreed last year to plead guilty to campaign fraud.

Reid Weingarten, Espy’s attorney, said he views the Douglas indictment as “another attempt to coerce someone into saying negative things about Mike Espy.” Espy resigned from office two years ago after Smaltz’s investigation had begun.

The indictment says the illegal gratuities given to Espy include air fare, limousine services and tickets to professional basketball games and tennis tournaments. Douglas is also charged with wire fraud and false statements on a mortgage loan application, an alleged offense discovered by prosecutors that was unrelated to their case.

Smaltz’s inquiry into the Douglas-Espy relationship followed disclosures by The Times about favors provided to Espy and the close relationship between the two men.

Dowd charged that Smaltz is threatening to try Douglas in San Francisco rather than in the predominantly black District of Columbia, where he lives, “for reasons which appear racially motivated.”

If convicted on all counts, Douglas could face a maximum possible sentence of more than 60 years in prison and fines exceeding $3 million.