From The Daily Herald:

Some question law firm's involvement in case
Associated Press

Prosecutors call her Witness A, but she wasn't the first person to
show up before a federal grand jury investigating the licenses-for-bribes
scandal with a lawyer from Altheimer & Gray at her side.

In fact, prosecutors say, she is among at least 40 people questioned
about possible corruption in Gov. George Ryan's campaign who have
been represented by the Chicago law firm, where Ryan adviser Jeremy
Margolis has a thriving political and government practice.

Witness A told the grand jury last June that after she was subpoenaed,
she was contacted by an Altheimer & Gray lawyer she did not know.
She testified she wasn't paying her lawyer and didn't know who was.

Troubled by Altheimer's involvement at so many stages of the years-long
investigation, federal prosecutors began a behind-the-scenes battle
to remove the firm as legal representative for some witnesses. But
even as a judge granted secret motions disqualifying Altheimer for
conflicts of interest, the firm was adding new clients in the investigation.

The dispute surfaced publicly after Ryan's campaign committee and
two former top aides were indicted April 2 on charges they secretly
used state workers and resources to run Republican political campaigns.

In a 21-page motion last Monday, the U.S. Attorney's Office said
Altheimer should be removed as legal representative for Ryan's campaign.
Prosecutors contend the firm has represented so many clients in the
case, including some likely to testify for the prosecution, that the
resulting conflicts threaten to "resonate throughout the trial."

U.S. District Judge Rebecca Pallmeyer has not yet ruled on the matter.

The motion does not mention Margolis by name, but it outlines his
firm's growing involvement in the case. Margolis was first hired by
Ryan in 1998, when he was secretary of state, to do an independent
review of the license-for-bribes scandal that threatened to derail
his campaign for governor. Ultimately Margolis became a legal representative,
personnel recruiter and public relations strategist for the administration.

Margolis declined Friday to answer questions about his involvement.

"You'll have to wait two weeks because we don't try cases in newspapers,"
Margolis said. "We'll be happy to give you a copy of our comprehensive,
responsive filing then."

Ryan's office has said Margolis' role was to ensure that all agencies
of state government under the governor's control cooperate with the
federal investigation. That role, combined with his firm's ongoing
representation of Ryan's campaign fund, has repeatedly put Margolis
and his firm at the center of the investigation.

At the beginning, Margolis handled all subpoenas and inquiries from
the prosecutors to the secretary of state's office and Ryan's campaign.
After Ryan's internal investigators dismissed complaints that truck
drivers' licenses were sold for bribes, Margolis said they had done
a thorough job.

Since then, dozens of state employees have been convicted in the
bribery scheme, in which at least $170,000 in bribe money ended up
in Ryan's campaign fund.

When state police investigated complaints that Ryan's employees
were doing political work on state time during the 1998 campaign,
an internal investigator for Ryan whom Margolis had recommended was
allowed to be present during interviews.

Later, when federal agents tried to interview state police about
the probe, Margolis intervened and ended the questioning. Ultimately,
state police officials were brought in front of a grand jury. The
racketeering indictment alleges Ryan's campaign chief and top aide
Scott Fawell, and other unnamed "agents of Citizens For Ryan," interfered
with the state police probe, in part by destroying documents and deleting
incriminating files from state computers.

Fawell also was charged in the indictment with lying in his first
testimony to the grand jury in 1998 - about a month before the November
election. At the time, he was represented by Margolis' firm.

Dozens of other witnesses have shown up to testify with lawyers
from Altheimer & Gray or lawyers who had been recommended by Altheimer
& Gray after the firm debriefed the witnesses, prosecutors said. Attorneys'
bills have been paid repeatedly by Citizens for Ryan, prosecutors
said.

"That arrangement continues to this day, with Citizens for Ryan
continuing to pay the attorney fees for numerous witnesses in the
federal investigation, including former clients that the United States
intends to call as trial witnesses who have incriminated Citizens
for Ryan in prior sworn testimony," prosecutors said.

The campaign has paid more than $1.3 million to lawyers over the
past two years, including more than $800,000 to Altheimer. Ryan aides
have refused to answer questions about the payments. Altheimer also
has landed more than $3 million in state contracts since Ryan became
governor, including work on the federal probe and related lawsuits.

As one example of potential conflict, prosecutors cite the case
of Witness B, who refused to tell prosecutors who was paying for her
Altheimer & Gray lawyer. The law firm told prosecutors she had no
incriminating information to offer. But a judge granted prosecutors'
request to remove Altheimer and Gray, according to the motion. After
that, the woman offered incriminating evidence against Ryan's campaign,
the motion said.

Secretary of State Jesse White has agreed there is an inherent conflict.
He terminated Margolis' contract a few months after taking office
and hired a new lawyer to coordinate the agency's response to the
federal investigation.