Former Clinton Ag Secretary
Fined For Illegal Spending

WASHINGTON —(AP)— Former Clinton administration Agriculture Secretary Mike Espy paid a $50,000 penalty for improperly using leftover money from his congressional campaign accounts to pay legal bills stemming from his troubles in the Cabinet.

Espy is awaiting trial on charges of taking $35,000 in gratuities from companies regulated by the Agriculture Department. To help defray his legal costs, Espy paid $50,244 to the Washington law firm of Steptoe and Johnson in 1995 and 1996.

Although a member of Congress may use campaign money for legal expenses, the Federal Election Commission ruled in a decision released Friday that Espy could not do so as agriculture secretary.

The campaign finance laws in question, according to the FEC, do not include Cabinet officials in the definition of those holding a "federal office" who can use campaign funds for legal fees. The laws generally prohibit personal use of campaign funds.

Espy argued that the money was spent only for legal fees that related directly to his House service or congressional campaigns, part of a total of more than $300,000 in bills.

But when the FEC sought documents to prove that connection, Espy's lawyers refused, citing attorney-client privilege because of the ongoing investigation by independent counsel Donald Smaltz.

The FEC found that the legal services were only provided to defend Espy's duties as a Cabinet official, a post he held from early 1993 until December 1994. Steptoe and Johnson was retained in July 1994.

In addition, the FEC said that "use of campaign funds was not even contemplated until after the services were rendered" and that the campaign itself was never billed by the law firm.

With Smaltz's investigation also looking into use of the campaign funds, Espy agreed to pay civil penalties of $10,000 and an additional $40,000 out of his remaining campaign accounts.

Trial of Espy's criminal case has been delayed while a federal appeals court considers whether to reinstate four charges that were dismissed by a lower court. Three of the counts involve whether Espy can be charged under the 1907 Meat Inspection Act intended to prevent corruption by rank-and-file workers.