From The Chicago Sun-Times:

Law firm kicked off Ryan case

June 11, 2002

BY STEVE WARMBIR FEDERAL COURTS REPORTER

In a highly unusual decision, a federal judge, using what she called "a harsh remedy" of "last resort," has barred a prestigious Chicago law firm from representing its longtime client, Gov. Ryan's campaign fund, at an upcoming corruption trial because of possible conflicts.

U.S. District Judge Rebecca Pallmeyer kicked Altheimer & Gray off the case against Citizens for Ryan. She ruled Monday that the firm's prior representation of former Ryan campaign manager Scott Fawell, also charged in the case, creates the "genuine possibility" of a conflict.

The decision is a blow to Ryan and his campaign fund, which has been represented by Altheimer & Gray for about four years.

The law firm kept close tabs on the federal investigation under Ryan while he was secretary of state. Any new law firm hired in the case will have thousands of pieces of paper to review.

The governor has denied any wrongdoing.

On Monday, Ryan spokesman Dennis Culloton said the governor "respectfully disagrees" with the decision, "but he will wait to hear about his options."

The governor could have his campaign fund try to appeal the judge's decision before trial, or accept the ruling and hire another law firm, which could delay the trial, or try to persuade Fawell to waive any conflicts.

So far, Fawell has declined to do so--a key factor for the judge.

Fawell has been charged with having state workers do campaign work on the public dime while squelching potentially politically embarrassing investigations and having documents shredded.

When Fawell was called before the grand jury in October 1998, he said he had consulted with Altheimer & Gray heavyweight Jeremy Margolis.

Although the law firm contends it was representing Fawell as an employee of the campaign fund, and not personally, the judge didn't buy that argument. The judge wrote that the firm owes Fawell "a duty of confidentiality and loyalty."

Because the law firm now represents another defendant in the case, the campaign fund, it may be unable to do that, the judge said.

For instance, the firm could now argue that Fawell's actions were improper and unauthorized by the campaign fund.

And Fawell could counter he relied on the advice of counsel when doing some of the misdeeds with which he is charged--such as having documents destroyed.

The judge also gave a preview of possible trial testimony from former Ryan campaign workers.

One told the grand jury that campaign officials "authorized diversion of state workers for six to eight weeks during the 1998 campaign." Another "has testified that she followed directions from a CFR official to box up for removal copies of checks relating to previous fund-raisers and to cease retaining copies of such checks."