From the Chicago Tribune

U.S. probes Ryan pork to closed track
Ex-governor gave $750,000 grant to Sportsman's

By Ray Long
Tribune staff reporter
Published October 9, 2003
SPRINGFIELD--A federal grand jury in Chicago is conducting a criminal
investigation into a $750,000 state grant to the owners of the shuttered
Sportsman's Park in Cicero that was approved by former Gov. George Ryan's
administration three days before Ryan left office, according to sources
familiar with the probe.
A subpoena was delivered to the state on April 3 seeking all records
pertaining to the grant, one of the sources said.
Federal agents have also made inquiries about the grant, according to
another source.
Disclosure of the probe comes as the administration of Gov. Rod Blagojevich,
who succeeded Ryan on Jan. 13, is demanding repayment of the money.
The National Jockey Club, which has long showered Ryan and other Illinois
politicians with generous campaign contributions, had already closed the
facility before obtaining the grant. It is fighting the request to return
the money.
Ed Duffy, a former Sportsman's officials who is now a Jockey Club
consultant, defended the propriety of the grant and said that officials of
the organization had no knowledge of a federal inquiry.
"None of us have been contacted" by federal authorities at the Jockey Club,
Duffy said.
In approving the grant, the Ryan administration said the money was to be
used to reimburse the Jockey Club for some of the construction costs
incurred years earlier in converting what had been an 11,000-seat
horse-racing track into a 70,000-seat stadium for both horse racing and
NASCAR-type events.
The conversion turned into a financial disaster and the Jockey Club ended
horse and auto racing at Sportsman's last year. The group recently sold the
facility to Cicero for $16 million.
The grant was one of thousands made in recent years by Ryan and Illinois
legislators from a secret pool of more than $1.6 billion they had set aside
to bankroll pet projects. A handful of those grants have drawn scrutiny from
federal authorities, but the investigation of the Jockey Club grant is the
first involving a grant sponsored by Ryan.
One focus of the federal inquiry, the sources said, is the shifting
rationale behind the grant explained in state documents as the proposal
moved through the bureaucracy.
Documents obtained by the Tribune earlier this year showed that the
Department of Commerce and Community Affairs, the agency that oversaw most
pork-barrel grants in the Ryan administration, had once outlined the
$750,000 as "operating assistance" for expenses to provide "low- or no-cost
housing to low-income backstretch workers" at the track.
But when the grant was finally approved, the explanation was radically
different. The contract signed by the state and Jockey Club officials on
Jan. 10 described the purpose of the grant as "reimbursement of prior
incurred costs" for concrete, masonry and paving during the conversion of
the track in 1998 and 1999 to create the speedway.
Though the Jockey Club had already placed the 80-acre complex on the market,
the grant agreement went on to state that the funds were headed to a
"significant tourism destination, generating a corresponding economic
benefit to the region."
Jockey Club officials have maintained the grant was the fulfillment of a
commitment Ryan made to the facility in 2000 or 2001.
Duffy said the proposed operating assistance for housing backstretch workers
and the reimbursement for concrete costs were among grant options considered
by the Ryan administration. He said the administration made the final call.
Duffy also defended the grant, saying the Jockey Club had followed the
rules. "We've done everything we were required to do under the contract," he
said.
Jockey Club representatives met with Blagojevich administration officials in
May to discuss whether the grant had been properly used. Afterward, the
officials demanded repayment. The Jockey Club has requested an
administrative hearing to air out the issue.
Laura Hunter, a spokeswoman for the Department of Commerce and Economic
Opportunity, the renamed Department of Commerce and Community Affairs, said
she could not confirm or deny the existence of a federal probe into the
Jockey Club grant.
Randall Samborn, a spokesman for the U.S. attorney's office in Chicago, also
said he could neither confirm nor deny whether an investigation is under
way.
Though it opened with high expectations, the auto-racing track quickly
proved a drain on the Jockey Club's finances. By the time the grant was
awarded, the Jockey Club had closed the horse track and announced it would
no longer sponsor events at the facility it called the Chicago Motor
Speedway.
As Ryan prepared to leave office, he accelerated the pace of approval for
dozens of pork-barrel projects.
Shortly after Blagojevich took over, he froze spending on all pending pork
grants, though he later relaxed the freeze.
The $750,000 state check to the Jockey Club was issued in the brief window
between when Blagojevich took the oath of office on Jan. 13 and when he
ordered the freeze a few days later.
The Jockey Club grant is the only pork grant for which the Department of
Commerce and Economic Opportunity has sought repayment since Blagojevich
took office, the agency said.