U.S. links Ryan to cover-up

From The Chicago Tribune:

U.S. links Ryan to cover-up
Prosecutors say he knew campaign records would be destroyed

By Matt O'Connor and Ray Gibson
Tribune staff reporters
Published December 19, 2002

Update: Gov. George Ryan left the governor’s mansion this morning without stopping to speak to reporters, the Associated Press reports.

Federal prosecutors alleged Wednesday that Ryan, in the midst of his 1998 campaign for governor, knew that campaign records showing misuse of state resources for political purposes were going to be destroyed by aides to keep them from falling into the hands of investigators.

The newly filed documents contend that Ryan was present in 1998 when his top aide, Scott Fawell, ordered a subordinate to destroy evidence that he expected federal agents to be looking for as part of their probe into a licenses-for-bribes scandal.

That and other allegations of Ryan's knowledge of illegal campaign activities provide the strongest suggestion yet by prosecutors that Ryan was personally involved in the scandal that has engulfed his administration for more than four years.

The allegations came in a new 76-page filing in which the government laid out in detail its evidence against Fawell and Ryan's campaign committee, both scheduled to go on trial next month on racketeering and fraud charges.

Meanwhile, new charges filed against Lawrence Warner, a member of Ryan's inner circle of political advisers, alleges he extorted nearly $3 million in kickbacks from seven state vendors. In May, Warner was indicted on similar charges in which prosecutors referred to a high-ranking former secretary of state official identified only as "SOS Official A."

The charges Wednesday did not reveal the identity of that official. However, they did say that the official received not only money from Warner, but property and other things of value. In addition, the government is now saying that members of the unnamed official's family and entities associated with the official received the same.

Earlier this year, Ryan denied being SOS Official A.

Late Wednesday, Ryan issued a statement declining to comment on specifics of the investigation but then cast doubt on the accuracy of the new allegations.

"As everyone knows, there are two sides to every story, two sides to allegations leveled by individuals claiming to recollect conversations and actions from several years ago," he said.

He added: "My conscience is clear and, in every public office I have ever held, I have respected the public trust."

As the scandal has deepened, Ryan's reactions to new revelations have ranged from contrite to annoyed to indignant.

Several times, Ryan has said he accepted personal responsibility for the scandal but denied any wrongdoing.

"I've said this happened on my watch and I have to take the hit for it, and I have," Ryan said in 1999. "Did I know about it, did I condone it, would I put up with it? Absolutely not."

Shortly after a federal raid on a suburban driver's license facility in September 1998 publicly exposed the federal licenses-for-bribes probe, prosecutors say Ryan was present when his then-scheduler William Mack was instructed by Fawell to remove and destroy campaign documents from secretary of state executive offices in Chicago.

Fawell made it clear to Mack that time was limited because of fears federal authorities might raid secretary of state offices, the government said.

In Mack's presence, Fawell then turned to Ryan and said words to the effect, "Hey George, I told Bill to go around and tell people to get stuff out of their offices," prosecutors alleged.

Mack and a group of state and campaign employees worked late into the night, removing campaign documents from more than 10 executive offices, shredding materials for three to six hours and then dumping eight to 12 garbage bags, authorities said.

The government filing also alleged that:

- In 1992, Ryan held a meeting in his Chicago office during which it was detailed how Brad Roseberry, a secretary of state employee, was working on state time on the state House campaign of Republican Bruce Clark, the husband of Ryan's niece.

- In the spring of 1995, in another meeting with Fawell in his Chicago office, Ryan agreed to personally endorse the presidential campaign of Sen. Phil Gramm (R-Texas) and suggested that they set up a budget item for consulting "so that some people can make some money" for their efforts for the Illinois campaign.

The filing said the Gramm campaign was not aware of anyone profiting from consulting arrangements.

Full-time state employees Richard Juliano and Fawell were paid consultants for the Gramm campaign, but their fees were laundered through a company operated by former state Rep. Roger Stanley, who has also been indicted in the Operation Safe Road probe, prosecutors allege.

They said that Fawell and Ryan "coordinated" the arrangement with Stanley's company.

Fawell, Juliano and "certain members of Ryan's family"--believed to be several of his daughters--split more than $33,000 in this way, prosecutors said.

- In the summer of 1996, Ryan and then-House Speaker Lee Daniels agreed that Ryan would provide employees from the secretary of state's office and Ryan's campaign committee, Citizens for Ryan, to help Daniels attempt to keep Republican control of the Illinois House.

Numerous Ryan staffers worked extensively on state time coordinating several key House campaigns in the suburbs and Downstate, the government alleged. Payments were filtered through a Stanley company.

Daniels (R-Elmhurst) is under federal investigation for misusing state employees on campaigns.

Daniels' spokesman, Gregg Durham, denied Wednesday the government's latest allegations, saying there was no intention to use state workers on state time for political purposes in the 1996 House races.

"That was paid for with campaign funds [and] to be done on their own time," Durham said.

- In late 1996 Ryan met in his Chicago office with Stanley who appealed for a short-term job with the secretary of state's office in order to sweeten his state pension. Stanley was later placed on the payroll for two months. Prosecutors have previously characterized the job as a ghost-payrolling scheme.

- For five consecutive Novembers in the 1990s, Ryan and his wife were guests, at no cost, at the palatial Jamaican estate of suburban businessman Harry Klein, who was awarded a lucrative lease from the secretary of state's office.

To conceal these "gifts," Ryan presented checks to Klein ostensibly to pay for the lodging, but Klein used cash to fully pay him back near the end of each trip, the government alleged.

Ryan has previously insisted he paid for the trips.

Prosecutors alleged that Ryan and Fawell decided to relocate an existing driver's license facility to a South Holland building owned by Klein, who then obtained a sweetheart lease deal.

- In 1994 Ryan talked by telephone with an investigator from his office about an internal investigation into a theft by a manager at the Naperville licensing facility. The investigator suspected $2,600 had been stolen so the manager could use the money to buy Ryan campaign fundraising tickets.

Two days after the telephone call, Ryan's inspector general, Dean Bauer, whose job it was to root out corruption, told the investigator to stop working on the case, the government said.

Bauer has pleaded guilty to corruption charges.

Prosecutors alleged Fawell gutted the inspector general's office, laying off or transferring investigators to keep them from exposing the links between the pressures to sell Ryan fundraising tickets and license selling.

In December 1994, Fawell wrote to Ryan telling him he needed to overhaul the inspector general's office to get "someone in there who won't screw our friends, won't ask about FR [fundraising] tickets, and who will run a no-nonsense shop,"prosecutors allege.

In another memo outlined by prosecutors, a month later Fawell indicated that he and Ryan had decided to "abolish" one troublesome investigator's post and alter the duties of others who were "trouble."

The government alleged that over the years, Fawell marshaled dozens of secretary of state employees to use as a personal army for Ryan's campaign and those of others, including his own mother's primary re-election contest in 1994.

At least six secretary of state employees--including then-Ryan press spokesman John Torre and Nat Shapo, now head of the Illinois Department of Insurance--assisted state Sen. Beverly Fawell (R-Glen Ellyn) on press relations, fundraising and polling while on state time, authorities said.

Scott Fawell's secretary balanced his mother's campaign checkbook, the government alleged.

Shapo and state Sen. David Sullivan (R-Park Ridge), at the time a secretary of state employee, were alleged to have done work on other campaigns on state time. But Shapo refused, prosecutors said.

"I went to great lengths to make sure I fulfilled my obligations to the taxpayers," Shapo said Wednesday.

Scott Fawell rewarded employees who were willing to work on the campaigns with promotions and pay raises, prosecutors said.

The government said one employee who was promoted and given a $20,000 salary hike for campaign work was told by Fawell: "You were there for George and we're there for you."

But when another employee complained about an exorbitant salary boost for a politically connected employee, Fawell responded, "What do I care, it's not my checkbook," prosecutors alleged. In addition to the stolen manpower, Fawell was alleged to have misappropriated reams of copy paper, parking spots, vehicles, cellphones and other state resources for campaign purposes.

The government detailed allegations of wholesale destruction of campaign records at the secretary of state offices in Chicago and Springfield and Ryan campaign offices in Chicago, Springfield and Homewood.

After a call from Fawell about a possible subpoena seeking documentation of campaign work on state time, Ryan's current chief of state, Robert Newtson, told his secretary to shred campaign records while he was head of the secretary of state's securities department, the government said.

Prosecutors also recounted how in fall 1999 Andrea Prokos, then working for Fawell at the Metropolitan Pier and Exposition Authority, brought Ryan campaign records to her home to hide.

Worried that investigators might obtain a warrant to search her home, Prokos moved the boxes to the home of a sister-in-law.

Prokos told her in-laws the documents could cause Ryan serious trouble, prosecutors said.

Prokos tried to burn the records in a barbecue grill but gave up when smoke and ashes blew about the yard, authorities said.

For the next two months, the in-laws randomly dumped documents in the garbage so as not to draw suspicion, according to the government.

Tribune staff reporters Ray Long and John Chase contributed to this report.