Washington - A judge ordered Tyson Foods Inc to pay $6 million in fines and penalties for giving airplane rides, pro football tickets and other gifts to former Agriculture Secretary Mike Espy.
U.S. Judge Ricardo Urbina approved a plea agreement in which Tyson, the largest poultry company in the United States, promised to a pay a $4 million fine plus $2 million toward the cost of the lengthy investigation by independent counsel Donald Smaltz.
Tyson Foods, which sells large amounts of poultry and food to the Defense Department and the U.S. Agriculture Department for school lunch programs, was also sentenced to four years' probation.
The plea agreement allows the Arkansas-based company to continue doing business with the federal government, provided Tyson Foods undertakes an extensive compliance program.
"While the USDA found that cause for debarment of Tyson Foods from procurement and non- procurement programs exists, the USDA determined that the terms and conditions of the compliance agreement provide adequate assurance that Tyson Foods' future dealings with the federal government will be conducted with the high integrity the federal government expects of its business partners," Smaltz said in a statement.
The Arkansas-based company pleaded guilty on Dec. 29 to a criminal charge of giving illegal gifts to Espy in 1993 and 1994.
Tyson admitted giving Espy and his girlfriend tickets and transportation to a Dallas Cowboys playoff game, valued at $2,271. The company also said it spent $2,556 to fly the couple to Arkansas for a lavish birthday party for top Tyson executives.
In the plea agreement, Tyson also said it gave Espy four tickets to the 1993 presidential inaugural dinner valued at $6,000, plus a $1,200 scholarship to Espy's girlfriend.
At the time the gifts were given, Tyson had several matters pending before the U.S. Agriculture Department, including rules for safe handling instructions to be placed on raw meat and poultry labels.
The plea agreement did not include the investigation of former Tyson lobbyist Jack Williams and executive Archie Schaffer, both of whom received target letters from the independent counsel last summer.
Espy is expected to go on trial March 30 on charges of accepting some $35,000 in gifts from companies regulated by USDA. But the most serious charge for violating a federal meat inspection law was thrown out by a judge last month, meaning Espy will not face mandatory jail time if convicted of the other charges.
As part of Tyson Foods' probation with U.S. government contracts, the company promised to hire an outside expert to evaluate the company's reporting structure and controls, to have its board of directors' review all contracts for lobbying at USDA, and to create a corporate code of conduct.
The court ordered Tyson Foods to submit a detailed a plan for its compliance program within 30 days.
If the case had gone to trial, Tyson Foods could have faced a maximum fine of $500,000 for a conviction, Smaltz said.
Smaltz said the fine was based in part on the calculation that Tyson Foods saved between $2.4 million and $4.9 million in costs related to the USDA's safe handling instructions on poultry packages.
The court's approval Monday of the plea agreement boosted to more than $10.5 million the amount of criminal fines, civil penalties and damages that Smaltz has obtained in prosecutions related to the Espy probe.
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