According to the massive indictment against him, Michael Espy accepted $35, 000 worth of gifts from companies he was regulating--gifts that included free Super Bowl tickets, a new set of luggage, limo rides, a pass to the U.S. Open, and a Waterford crystal bowl. Prosecutors claim he also tried to "cover up and disguise" his illegal activities by lying to investigators.

To the city's growing industry of ethics cops and watchdog groups, the case of The United States of America v. Alphonso Michael Espy has become a watershed event--a monument to the complex web of regulations constructed in the wake of Watergate to eradicate even the most picayune corruption. "It's proof that the new ethics laws work and are taken seriously," enthuses Bob Schiff of Ralph Nader's Public Citizen. Gary Ruskin of the Congressional Accountability Project adds: "It's a highpoint in whether or not we have the rule of law in the United States."

Yet, what really makes this case so important is its unimportance, its sheer triviality. Unlike in Abscam or Teapot Dome, there is little, if any, evidence that the man at the center of this scandal ever committed true, old- fashioned bribery: taking money in exchange for favors. Instead, Espy could be facing more than 100 years in prison for the appearance of impropriety, for simply taking gifts. To prove this, Donald Smaltz, the independent prosecutor, has spent more than three years and $11.9 million in taxpayers' money. He has trampled over witnesses who never even knew Espy, subpoenaed documents dating back to Jimmy Carter's term in office, and convicted a slew of low-level lobbyists and aides.

The irony is that, before Smaltz stepped in, the democratic system had exacted its own eloquent justice without the blunt instrument of the independent counsel or the new ethics laws. As they used to say, the system worked: The Wall Street Journal ferreted out the scandal, Republicans threatened hearings, and public pressure mounted on President Clinton to do something or face retribution at the polls. On October 3, 1994, he did, accepting Espy's resignation. The result was that a man once touted to become the first elected black governor of Mississippi slinked back home disgraced, his career, for all intents and purposes, over. Espy's fate is testimony to the lingering power of one of the most effective and traditional forms of punishment: social opprobrium.

But in the new America, where all politics is litigated, this is not enough. The Espy case shows the extent to which watchdog groups, the press, and ordinary Americans have blurred the distinction between real corruption and faux corruption, between creeps and criminals, between law and morality. Whereas the old ethics system meted out a complex array of punishments, from humiliation all the way to incarceration, the new laws have reduced everything to an either/or standard--to guilt or innocence, jail time or exoneration. And, perhaps most dangerously, they have enabled politicians to use the law not as a means of justice but as a means of destroying one another.

Nowhere is this devolution and this degradation clearer than in the use, and misuse, of the independent prosecutor. And nowhere is the criminalization of American politics more in evidence than in the work of Donald Smaltz. In a single stroke, the 60-year-old prosecutor has redefined corruption in a way that would turn most lawmakers into lawbreakers overnight.

In 1994, a stranger cornered Yvonne McDaniel, a 54-year-old widow, outside her home in San Francisco and handed her a small, white envelope. Inside was a subpoena ordering her to appear before a D.C. grand jury investigating Michael Espy. Though she had only read about Espy in the papers and had never heard of Donald Smaltz, the man who had sent her the subpoena, she did what she thought any good citizen would do: she boarded a plane for the capital. In Washington, she says, Smaltz's attorneys interrogated her for hours--but not about gratuities to the former Agriculture secretary. Instead, they wanted to know whether she had seen anybody use drugs during cruises she had once taken with her friend, Don Tyson, the senior chairman of Tyson Foods, who had allegedly given Espy NFL playoff tickets; and whether, during those trips, there had been any prostitution or homosexual activity on board. "It was like they were just fishing for anything," she recalls. "They only asked me at the very end if I had ever met Michael Espy, and I said no."

Since grand jury testimony is sealed, it is impossible to verify McDaniel's account. But witnesses from around the country--and even Smaltz's own investigators--recount similar stories. Together they present not only a portrait of a prosecutor running amok, but also a case study in how the independent counsel--once intended to insulate the law from politics--has pushed the law deeper and more dangerously into politics and into the private lives of Americans. While ordinary prosecutors are forced to juggle cases, to stay within a budget, and to report to superiors, independent counsels have virtually no boundaries, save their imaginations.

When Smaltz was appointed on September 9, 1994, he predicted he'd wrap up his investigation in no more than a year. After all, the main details of the case had already been outlined in The Wall Street Journal; and, unlike Iran- Contra, there had been no massive shredding of documents or attempt by the White House to cover up anything. Shortly after his pronouncement, however, Smaltz moved his burgeoning team of more than 30 lawyers and investigators and assistants from their windowless basement office near the Capitol into more spacious quarters in Alexandria, Virginia. He also opened up branch offices in states across the country, including California, Mississippi, and Louisiana. Rather than simply build his case against Espy, Smaltz tried to build multiple cases against individuals who were only tangentially, if at all, involved in the matter at hand. These included Espy's brother, Henry, a small-town mayor who had never worked for Mike and who nearly went bankrupt fending off charges that he had made false statements to a local bank-- charges that were eventually thrown out of court before they even made it to a jury. Smaltz also began to hunt for new crimes, for something more than " just a handful of football tickets," as one of his former aides puts it.

In Fayetteville, Arkansas, near the home of President Clinton, Smaltz, a longtime Republican, set his broadest scope on Don Tyson, the chicken magnate and presidential patron whose company had lavished Espy with gifts. A former federal prosecutor of white-collar crimes with a penchant for leather jackets and Harley Davidsons, Smaltz concocted an ingenious scheme to find informants: he subpoenaed the names of more than 2,000 Tyson workers who had filed injury claims against the company. Some of the complaints dated as far back as 1990, three years before Clinton or Espy had even taken office.

Armed with a list of disgruntled employees, Smaltz's agents fanned out across the state. Just before Thanksgiving in 1994, two FBI agents showed up on the doorstep of Dorothy Carter, a 60-year-old chicken packer who had injured her elbow on the job. According to her sworn affidavit and The Washington Post, agents hammered her with questions about whether Tyson had ever given meat inspectors free chickens or cleaned their cars. Then they asked if she had ever socialized with members of Tyson's family. And then, when she said that she had seen them occasionally, they asked if she knew how Don Tyson's brother, who reputedly choked to death in the late 1980s, had really died. "I got the impression ... they were simply trying to dig up anything they could find," says Carter.

Some agents complained personally to Smaltz about the breadth of the probe. But the investigation only seemed to widen. Just before Christmas, three FBI agents tracked down Ken Gates, a pilot who last flew for Tyson Foods 16 years ago--when Espy was fresh out of college. Though he said he didn't know anything about illegal gratuities, they returned a few weeks later with a subpoena ordering him to appear before a grand jury in Washington. (As with Yvonne McDaniel, the government reimbursed him for his airfare, at taxpayers' expense.) Smaltz, wearing his trademark Archibald Cox bow tie, interrogated Gates personally. But, according to Gates, he didn't ask any questions about Espy or the U.S. Department of Agriculture. Instead, he asked Gates whether Tyson Foods had ever bribed any foreign officials.

Only a few weeks old, the search began to draw fierce criticism from Tyson officials. But Smaltz believed that he had finally found something bigger than football tickets or crystal bowls--something that would justify his mushrooming investigation. During three days of interrogation, Joseph Henrickson, a former Tyson pilot, told agents that during the 1980s he had flown envelopes stuffed with $100 bills from Tyson's headquarters in northwest Arkansas to Little Rock. The money, he believed, was subsequently delivered to then-Governor Bill Clinton. It was an astonishing allegation. And Smaltz was so enraptured by it that days later he broke ordinary rules of confidentiality concerning uncorroborated testimony and breathlessly told Time magazine that the charges had "a ring of truth."

The outburst unleashed speculation in the press that the president might be implicated and sent investigators swarming once again. In Indianapolis, two agents surrounded a stunned Haskell Blake, Henrickson's former coworker. He called the allegations "a bunch of crap"--an assessment Henrickson's other colleagues apparently shared. "The investigation was getting totally out of control," concedes one agent who was working on the case at the time. "We were wasting taxpayers' dollars looking for x, y, and z, while all the Espy stuff was just sitting there."

Indeed, by the new year, only four months after his appointment, everyone, it seemed, was trying to restrain Smaltz. Justice Department officials lectured him about exceeding his authority; Espy's lawyers accused him of violating the Constitution; and, according to Time, Whitewater Independent Prosecutor Kenneth M. Starr warned him to stay on his own turf. By the spring of 1995, the complaints reverberated as far as San Francisco, where agents from one of Smaltz's branch offices were investigating Richard Douglas, a Sun- Diamond Growers executive who had allegedly given Espy U.S. Open tickets and limo rides. Despite the seemingly low stakes involved, Smaltz subpoenaed all of Douglas's phone charges since 1987--more than six years before Espy became Agriculture secretary; he also subpoenaed Douglas's passports dating back to 1978 as well as his federal and state income tax returns.

The well-respected, if obscure, Los Angeles attorney seemed to relish his newfound powers. On the back of his office door, Smaltz posted in huge block letters one of Plato's laws: "The servants of the nation are to render their services without any taking of presents ... the disobedient shall, if convicted, die without ceremony." He handed out watches to his staff emblazoned with the independent counsel seal, his name, and the words "In re Michael Espy." During a heated conference call with his attorneys, the former Army airborne paratrooper dropped down and did 20 pushups while still barking into the receiver. "He's the kind of guy that if he were after you, and you cut off both his legs and both his arms, he'd keep coming," says George Newhouse, an assistant U.S. attorney in Los Angeles who has worked with Smaltz. "He's unstoppable."

Finally, one judge tried. In a highly unusual move against an independent prosecutor, Chief District Court Judge John Garrett Penn spent three weeks in June secretly quashing several portions of Smaltz's subpoenas, saying they were so broad as to be unreasonable. Yet, Smaltz forged on unfazed, even after two of his top prosecutors abruptly resigned over his conduct. In a stunning response to a defense attorney's petition, Michael Shaheen, the Justice Department's internal watchdog, confessed: "Your letter did provide information that might, with respect to an ordinary criminal case, cause this Office to initiate an inquiry into possible prosecutorial misconduct. However, as you are aware, an Independent Counsel bears a special relationship to the Department of Justice...." Indeed, no independent counsel has ever been removed from office. "He's the judge, the jury and the executioner," complained GOP Congressman Jay Dickey of Arkansas. "We need somebody to rein him in."

During a rare interview, Smaltz says that he is merely doing his job, and that his critics are trivializing his record. "Anyone who prosecutes an opposing party is going to suffer their slings and arrows," he says, as the sounds of light jazz waft up from behind his desk. "Whatever criticism there was early on, I think we've vindicated ourselves." Indeed, unlike Starr, Smaltz has indicted his main quarry and convicted more than ten others. He has also recouped most of the taxpayers' money in fines, including, most recently, $6 million from Tyson Foods for giving Espy $12,000 in illegal gratuities. Sitting down under a colonial banner that says "Don't Tread On Me, " Smaltz dons his pince-nez and points to the statute that specifically authorizes him to investigate not just Espy but "all matters related to that subject matter." "The fact is," he says, "this is Congress's commandment."

What is so frightening is that Smaltz is largely right. By unburdening prosecutors from traditional supervision, reformers thought that they would insulate investigations from the political connections that corrupted the Justice Department during Watergate. But, since its creation in 1978, the law has engendered its own kind of corruption. "It has anointed kings," says former New Hampshire Senator Warren Rudman, "in a land that doesn't believe in kings." Or, as Smaltz puts it: "I'm sort of like a little attorney general in a mini-kingdom."

Just how imperious are they? Since 1990, eight independent counsels have spent more than $80 million; one probe, begun nearly eight years ago to investigate corruption in the Reagan administration's Department of Housing and Urban Development, is still going on. According to a government audit in 1992, five of the nine independent counsels did not even comply with one of the few laws constraining them--accurately reporting their expenditures. Under what the auditor described as a "serious internal control weakness," costs spiraled during the Iran-Contra probe to more than $47 million. Even Smaltz, who has been relatively frugal by comparison, is accused of forcing staff to do personal chores around his house in a potential violation of the law. (Smaltz says that his staff was there to help guard the house from being bugged when a new cleaning service came.)

Yet money (and even occasional corruption) is not the real problem. Most Americans are willing to spend thousands, even millions of dollars, to put thugs, embezzlers, and truly venal politicians behind bars. The problem is proportionality. While the new ethics laws have criminalized more trivial offenses, the independent counsel law has removed the most important check on any prosecution: discretion. Whereas most prosecutors must discriminate between cases--to decide, say, whether to spend their time and money pursuing people who drive over the speed limit or mug old ladies--independent counsels have only one case, and nearly all the time and the money they need to pursue it. There is little incentive to stop investigating. And, as the investigation racks up costs, the pressure inevitably mounts to convict.

"This is not just expensive," says Joseph diGenova, who worked in the Reagan Justice Department and is a former independent prosecutor. "It's dangerous." For it often means lowering the threshold of what constitutes a prosecutable offense or finding new crimes. In the Espy case, Smaltz's lawyers went to such lengths to convict a lobbyist for perjury they failed to disclose that one of their main FBI witnesses had once committed perjury himself. The lobbyist's conviction was later overturned, and the case is being tried again. This time, Smaltz has also charged the lobbyist with improperly inviting an Agriculture official to attend a University of Arkansas basketball game. The value of the ticket: $13.

As the threshold of real corruption drops, there is also a frantic effort to inflate indictments, to make the new kind of political crimes seem much worse than they really are. In the Espy case, the indictment is truly epic: 39 counts and 51 pages. Smaltz uses the law like a mirror: distorting, bending, and refracting the alleged conduct until it seems heinous. In one instance, he charges Espy for a single gratuity under five separate statutes; in another, he jacks up the value of the gratuities by including $6,000 for four tickets to one of Clinton's inaugural dinners--even though Espy, as the president's Agriculture secretary, could have probably obtained the tickets for free.

More disturbingly, Smaltz radically reinterprets statutes to make them fit the case. When it was first revealed in the press that Espy had taken free gratuities, for example, he sent reimbursements to the companies through the mail. Rather than regard this as exculpatory evidence, however, Smaltz used this to charge him with an additional five counts under the Mail Fraud Act, which prohibits the use of the U.S. Postal Service for criminal deeds. In pretrial motions, a judge also dismissed three counts brought by Smaltz under the Meat Inspection Act--a law written in the era of Upton Sinclair to prevent the bribery of meat inspectors. The law, the judge noted dryly, had never applied to Cabinet secretaries who do not normally spend their days inspecting sirloin. "None of this should be criminal," explains Stan Brand, a former counsel to the U.S. House of Representatives and a veteran of corruption cases. "I'm not saying that Espy didn't do anything wrong. He took gifts; he should be forced out of his job, perhaps pay a fine. But should he go to jail? That's a quantum leap from where we are in the law."

Indeed, in his most audacious act, Smaltz has remade the law so that it will never impede prosecutors of similar cases again. While still pursuing Espy, Smaltz quietly indicted the Sun-Diamond Growers of California, an agriculture cooperative that had allegedly plied Espy with more than $9,000 worth of gifts. Smaltz based his case on the gratuity statute, which prohibits presents to public officials "for or because of any official act performed or to be performed by such public officials." In 1974, in United States v. Brewster, the U.S. Court of Appeals for the D.C. Circuit made it expressly clear what this means: there must be proof that "the gratuity was produced because of the official act," and, as the Supreme Court has noted, " with knowledge that the donor was paying him compensation for an official act. " In the Sun-Diamond case, though, there was one tiny problem: there was no evidence that the presents were given to Espy as compensation for any official act or that Espy did any favors in return. And so Smaltz offered a novel construction of the law. Under the statute, he argued, there did not in fact need to be anything like a quid pro quo--as long as there was the potential for one. In a single stroke, he uncoupled the quid from the quo. Remarkably, Judge Ricardo M. Urbina--the same judge presiding now in the Espy trial--agreed. "The crime does not require any exchange of promises between the public official and those alleged to have given him things of value," he instructed the jury. "It is sufficient if the motivating factor for the payment is just to keep the official happy or to create a better relationship in general with the official." In short, criminal intent is not necessary, for the gift is in itself criminal.

As he sits in his office, sipping coffee, Smaltz says that this is the only way to make the law viable--to ensure "that the regulated cannot buy their way into regulatory grace." And, to a certain extent, Smaltz is right: the detachment of the quid from the quo reflects the realities of influence peddling. These days, influence is rarely peddled in a direct exchange of a gift for a favor. Instead, the peddlers prefer to dispense gifts now in return for unspecified favors in the future. It seeks to make the favor-giver indebted to the gift-giver; this indebtedness takes time and is accomplished by a process that might be called strategic schmoozing. Or, in a word, cronyism. There is no doubt that Espy is a crony; the trouble is he is not precisely a criminal. And, in making all forms of cronyism a crime, the Smaltz Standard allows none of the nuances of the older forms of political justice--the kind of justice that takes place outside the courtroom, the very kind that expelled Espy from Washington.

Under the Smaltz Standard, there was little question what would happen to Sun-Diamond: the jury convicted, and the court fined the company $1.5 million. The verdict, which now faces an appeal, received only passing mention in the press. But it is more important than any other corruption verdict in recent history, and it is the key to the Espy case. "We do not charge a quid pro quo, " Smaltz boasted to reporters after indicting the former Agriculture secretary. "We don't have to under the gratuity statute. A quid pro quo is not required." After hearing Smaltz's astonishing claim, Washington's myriad ethics consultants understood what few others in the country had noticed. " This opens up the door," says Ruskin of the Congressional Accountability Project. During oral arguments on the Sun-Diamond appeal last month, at least one judge seemed to grasp just how much. While Smaltz's lead counsel, Ted Greenberg, was making his novel argument, Judge David Tatel suddenly interrupted him and asked incredulously:

So if an old friend of mine from law school who's a partner in a firm and has a pending case before this court takes me to a baseball game, as we've done for years, that's an illegal gratuity?

Mr. Greenberg: It may well be, yes.

Judge Tatel: You're serious?

Mr. Greenberg: If you have a case, if Sun-Diamond's lawyer takes you to the game tomorrow, takes you to the Redskins game on Sunday while you have this case pending before you, that's a gratuity.

If the judges agree with Smaltz and Greenberg--their ruling is expected early this year--then they are not the only ones suddenly vulnerable to prosecution: most politicians in Washington will become criminals overnight. The threshold for illegal gratuities will be reduced to a mere trifle: a cup of coffee or a slice of cheesecake. It is the latest and most dramatic chapter in the criminalization of politics, and it caps a two-decade-long effort by watchdog groups, prosecutors, and the press to push the law deeper into politics, where shame and the electoral process once sufficed.

As Suzanne Garment observes in Scandal: The Culture of Mistrust in American Politics, there has been an explosion of rules and regulations to purify politics since Watergate, most of them so arcane and bureaucratic that only the authors can understand them. The latest example is the gift-ban rule, which prohibits House members from accepting any presents; but, to cope with the unruliness of life, the rule comes with pages of exemptions, including exemptions to the exemptions: a congressman can literally eat finger food at a reception if it is on the end of a toothpick but not on a plate (the assumption being that the indulgence is incidental), or drink a beer while standing up and mingling but not while sitting down--unless pregnant or handicapped (again, the assumption being that the indulgence is impromptu).

Intended to remove even the whiff of wrongdoing, these rules have only created new opportunities for it. They have given prosecutors and ethics committees hundreds of new crimes to pursue. Which, in turn, has created a population explosion of prosecutors to pursue them. In a little more than three decades, according to Garment, the number of assistant U.S. attorneys has grown from 657 to roughly 3,000. The careers of prosecutors, like those of independent counsels, are now made by destroying those of public officials. In 1970, before Watergate, federal prosecutors indicted only 45 federal, state, and local officials. By 1980, the annual number had jumped to 442; by 1983, to over 1,000--more than 20 times the original rate. "It's insane," says Brand. "The whole political process will soon be criminalized."

Many corruption cases, of course, are sensible, indeed vital. Watergate and Abscam are the most obvious examples. But there are lesser-known cases, too: most recently, the ongoing investigation of former Detroit Congresswoman Barbara-Rose Collins for allegedly stealing funds from a scholarship program intended for needy inner-city kids. But the fact is that cases like these--in which grave malfeasance is investigated or proved--are rarities. As Peter W. Morgan and Glenn H. Reynolds note in their new book, The Appearance of Impropriety: How the Ethics Wars Have Undermined American Government, Business, and Society, most cases against public officials today focus on the appearance of crimes rather than actual crimes. In so doing, they invert the very notion upon which the Founders predicated American democracy: that we are not angels, and that mere laws cannot make us so. Whereas the Founders created a constitutional order designed to restrain our baser instincts-- through elections, the press, and the separation of powers--the new, dehumanizing laws try to transform fallible lawmakers into perfectly infallible ones. And because this is all but impossible (what do you do if someone buys you a beer on your birthday?), it has instead transformed every politician into a potential criminal.

Ironically, the very victims of this system, the Espys of the world, are the ones who most exploit it. Though lawmakers may have once written these rules reluctantly to purge their sins, they now use them gleefully to purge one another. In 1989, Newt Gingrich manipulated the Ethics Committee to oust Democratic Speaker Jim Wright; five years later, when Gingrich became Speaker, Democrats filed more than 70 ethics complaints against him. In the Espy case, Republicans who once derided the independent prosecutor now embrace Smaltz as a conquering hero; Democrats, who cheered the independent counsel probes of the Reagan and Bush administrations, now deride Smaltz as a "rogue" and a " zealot." Last month, Democratic Congressman Tom Lantos, a Holocaust survivor, went so far as to compare Smaltz to the former U.N. Secretary-General and Nazi Kurt Waldheim. In 1987, Espy, then a Mississippi congressman, cheerfully voted for the reauthorization of the independent counsel statute. "It's like the old tribal tradition: if one of your guys is killed, then you have to kill another in order to let his soul go to heaven," explains Congressman Brian Bilbray, a Republican from California. "It would be more civilized to have the Ethics Committee just issue pistols and have them walk ten paces and turn and fire. God knows it would be a whole lot neater." Faster, too.

These days, even reporters have become complicitous in the process. Like those of prosecutors and politicians, the careers of many journalists depend on the myriad laws that police public officials. With more than 300,000 regulations on the books, any journalist today can "uncover," "expose," or " unearth" an ethics violation--a politician who ate sushi with a lobbyist or misfiled an FEC report. In the new ethical order, we are all Woodwards and Bernsteins. (And they are all Liddys and Haldemans.) Except that the new rules have removed the most judicious elements of journalism: shades of gray, nuances, distinctions. Expand the province of muck, and you will have more and more muckraking. At the same time, the new laws leave some of the most serious kinds of muck untouched. Not a single paper investigated Smaltz's $35, 000 figure to see if it was accurate. "The independent counsel," explains Bob Woodward of The Washington Post, "can have an unhealthy effect on what reporters decide to scrutinize."

The consequence is more than imperial prosecutors and endless scandal; it is the gradual erosion of decency and democracy. Polls show that the majority of Americans believe Washington is more corrupt today than before the post- Watergate rules were passed. We have defined political deviancy down. By making everything a crime, we have, in effect, made nothing a crime; and we have certainly painted a picture of American politics that is guaranteed to produce a disaffected American citizenry.

In relinquishing our ethical judgments to judges and juries, moreover, we have done the one thing that we never intended: let the morally corrupt off the hook. The law, when not being used as a weapon, has become a shield for political miscreants. Former Attorney General Edwin Meese used a rare decision by an independent prosecutor not to indict to claim he was not guilty of any impropriety at all. When Vice President Al Gore was accused of making fundraising calls from the White House, he uttered his infamous line: there was "no controlling legal authority." It was the perfect mantra for this climate in which legalism does the work of moralism. And after Janet Reno decided not to appoint an independent prosecutor to investigate the case, a frustrated Orrin Hatch, chairman of the Senate Judiciary Committee, cried out, this is not just "a narrow legal question.... It is a broad ethical question." Yet, like the press and Republicans, he then fell mute. By using the law to castigate politicians, we have surrendered our vocabulary of outrage, and confessed a lack of confidence in our prerogatives as citizens to register our displeasure at the polls. As a result, even before Donald Smaltz rode into town on his Harley, the fate of Alphonso Michael Espy had been reduced to two preposterous extremes: he will spend his middle age in prison, or, worse, he will be acquitted by a jury of his peers and claim that he never did anything wrong in the first place.

Reprinted by permission of THE NEW REPUBLIC © 1998, The New Republic, Inc.