From the Copley/Peoria Journal-Star

'The state was for sale'
December 18, 2003

By MIKE RAMSEY
Copley News Service
CHICAGO - The long-anticipated criminal indictment of former Illinois Gov.
George Ryan came Wednesday, more than five years after federal authorities
began looking into corruption under Ryan in the secretary of state's office.
The 69-year-old Kankakee Republican is accused of engaging in a pattern of
racketeering during his two terms as secretary of state and single term as
governor, a period covering 1991 to 2003. Eighteen counts against Ryan
include tax and mail fraud and making false statements to authorities.
"What we're alleging in the indictment is basically the state of Illinois
was for sale," U.S. Attorney Patrick Fitzgerald said. "What we allege is the
state of Illinois was taken advantage of by Ryan and greedy friends."
Ring of associates
Ryan allegedly helped fix contracts and leases for cronies, concealed
kickbacks and income for himself and family members and other benefits
totaling $167,000 and lied to federal agents. Many of the accusations have
surfaced in previous cases against Ryan insiders, including that of Chicago
businessman Larry Warner, 65, whose earlier indictment was melded with
Ryan's this week in grand-jury proceedings.
Prosecutors say Warner received about $3 million from deals on secretary of
state contracts and leases he made with Ryan's knowledge or help and told an
associate he intended to share proceeds with Ryan. The government seeks $3.1
million in restitution from both defendants, along with Warner's financial
interests in secretary of state leases.
"I submit that the citizens of this state deserve honest government. They
deserve honest government from the secretary of state and their govenor, and
they should expect no less," Fitzgerald said during a packed news conference
to announce the 91-page indictment.
The document totals 22 counts, including charges leveled exclusively at
Warner.
Ryan's initial court appearance hasn't been scheduled, but he is expected to
plead innocent. His defense attorney, former federal prosecutor Daniel K.
Webb, issued a written statement pointing to Ryan's decades of public
service, his high-profile efforts to reform the death penalty in Illinois
and his "modest lifestyle."
"He makes ends each month based on Social Security payments and a job
pension," Webb said. "He has no meaningful holdings of stocks or bonds -
only a modest home in his hometown of Kankakee, Illinois. The jury will
easily conclude this is not the financial picture of a man who has engaged
in the type of activities alleged in this indictment."
A long time coming
The charges follow the March 19 racketeering conviction of Ryan's former top
aide, Scott Fawell, who oversaw the secretary of state's office and Ryan's
successful 1998 campaign for governor. Ryan's political campaign fund also
was convicted and paid $750,000 in forfeitures and restitution.
Earlier this month, Fawell's former top assistant and girlfriend, Alexandra
Coutretsis, pleaded guilty to a single count of perjury and agreed to assist
federal investigators.
Ryan for months has been considered a likely candidate for indictment, but
rumors intensified this week that he would become the 66th defendant in
"Operation Safe Road." The federal probe began in 1998 amid allegations that
secretary of state employees sold commercial driver's licenses for bribes
because they were under pressure to raise political funds for Ryan.
The investigation had roots in a fatal November 1994 highway accident
involving an illegally licensed truck driver that resulted in the deaths of
six children in Wisconsin. The accident and the upward-moving federal
investigation hounded Ryan for the remainder of his political career and is
believed to be the reason he did not seek re-election as governor.
"Today is not a day of celebration for the members of the Operation Safe
Road investigative team ... but it is a day of substantial pride in the hard
work that has been done to advance this investigation," lead prosecutor
Patrick Collins said.
Allegations
The indictment places Ryan at the center of several schemes. Among the
allegations:
n Ryan and Fawell short-circuited an internal investigation into political
fund-raising by secretary of state employees by dismantling the inspector
general's division.
n Ryan caused the diversion of secretary of state resources for his
political benefit and proposed skimming "consulting" payments as some of his
employees assisted with Texas Sen. Phil Gramm's presidential bid in Illinois
during the mid-1990s. Ryan failed to disclose the shares he passed along to
some of his family members and later made false statements about the money
on his state and federal income tax forms, the indictment says.
n Gov. Ryan in early 2001 told a lobbyist, "Associate 1," about his
intention to award a state prison project to downstate Grayville among the
finalists. The lobbyist - previously identified as Arthur "Ron" Swanson, who
is fighting perjury charges - angled for a $50,000 job to lobby for
Grayville shortly before that information was made public.
n Ryan lied to federal agents in three interviews in 2000 and 2001 while he
was governor. In one instance, Ryan falsely said he reimbursed a figure
identified as "Associate 2" for staying at the associate's Jamaica lodging.
Ryan brokered a secretary of state lease for the associate. Previous reports
have identified him as wealthy landlord Harry Klein.
Donald Udstuen, another defendant who had been indicted with Warner last
year, is cooperating with the government. He allegedly made $300,000 off
Warner-orchestrated transactions. A third defendant, Alan Drazek, was
accused of money-laundering and also is cooperating.
Jail and fines
Fitzgerald, who became Chicago's top federal prosecutor in 2001 as "Safe
Road" gained momentum, faced several questions about the circumstances of
the Ryan indictment.
He said the racketeering and tax charges needed the approval of his
superiors in the U.S. Justice Department - a normal protocol. The charges
come right before Christmas because the latest grand jury's term expired
Wednesday, Fitzgerald said. Collins, his assistant, said the panel had been
working for 20 months, which included an extension.
Fitzgerald also downplayed questions about Ryan's efforts to reform the
death penalty, which earned the governor worldwide attention. Ryan halted
executions in Illinois in early 2000 after several death row inmates had
been exonerated, and he commuted remaining death sentences to life in prison
shortly before leaving office.
"I know people have strong feelings that support what he did regarding the
death penalty. Other people have strong views the other way. It has nothing
to do with this case," Fitzgerald said.
The charges against Ryan have potential penalties that range from three
years for tax fraud to 20 years for racketeering, and fines could start at
$250,000. If convicted, a judge would impose a sentence within federal
guidelines.
Prosecutors said the "Safe Road" investigation continues, even with the
indictment of Ryan. The case recently yielded an offshoot probe into past
corruption at Chicago's "McPier" agency, which oversees McCormick Place and
Navy Pier.
Fawell oversaw McPier as Gov. Ryan's highly paid appointee until incumbent
Gov. Rod Blagojevich, a Democrat, took office in January. Fawell is serving
time in a federal prison.