From the Chicago Tribune

New details on Ryan pal allegations
Filing reports ex-governor's staff rewarded
By Matt O'Connor
Tribune staff reporter
Published February 19, 2004
A new government filing Wednesday offered more details about allegations
that lobbyist Arthur "Ron" Swanson gave expensive gifts to former Gov.
George Ryan and his wife and cash gifts to half a dozen Ryan staffers in
return for steering him lobbying work, inside information on state contracts
and other benefits.
Swanson admitted giving "contributions" to legislators in return for their
"official action" and eventually described in one grand jury appearance,
after initial denials, how he had paid an undisclosed state senator $1,000
for his help in killing a bill, prosecutors allege.
The new details came as the government sought to block attempts by Swanson's
lawyers to have his indictment dismissed on allegations that prosecutors
abused the grand jury process.
Swanson was indicted last summer on perjury charges as part of the Operation
Safe Road probe and was named in Ryan's racketeering indictment in December
as an unindicted co-schemer based on their alleged corrupt relationship.
The two longtime friends have both pleaded not guilty to the charges.
Swanson's lawyers have accused prosecutors of setting "a perjury trap" by
repeatedly calling Swanson before the grand jury and questioning him for
hours. The defense maintained that Swanson, 77, suffers from a number of
diseases that may have impaired his thinking and memory.
But prosecutors contended that transcripts of Swanson's grand jury
appearances show a witness who appeared to be "in full control of his
faculties" and didn't display any memory lapses.
In their 95-page response to the defense Wednesday, prosecutors said the
numerous grand jury appearances were necessary as the investigation unfolded
in recent years and more and more evidence was uncovered implicating
Swanson.
The government filing described how Swanson stuffed an envelope containing
$4,000 in cash in the pocket of Donald Udstuen, a close adviser to Ryan, as
the two stood in a restroom at Lino's Restaurant in Chicago following a
dinner attended by Ryan.
Prosecutors alleged that during the men's room payoff, Swanson hinted he
would give Ryan a kickback as well. The $4,000 was allegedly compensation
for a lucrative lobbying job that Ryan had steered Swanson's way with
Udstuen's help, authorities said.
Udstuen, worried about the federal probe, later returned the $4,000 to
Swanson. Udstuen has pleaded guilty and cooperated with authorities.
The government filing also revealed that shortly after Ryan took office as
secretary of state, Swanson solicited a lobbying fee of between $750,000 and
$1 million from Honeywell-Bull, a computer vendor vying for a mainframe
computer contract.
Honeywell-Bull officials were "appalled" by the proposed retainer, refused
to hire Swanson and had their long-standing lobbyist tell Ryan of the
solicitation.
Instead, IBM won the $20 million contract after Udstuen and Lawrence Warner,
a Ryan friend also now under indictment, shared $1 million in commissions
and fees, authorities said.
Prosecutors also alleged that in 2001 Swanson obtained $50,000 to lobby for
the southern Illinois town of Grayville to win a state prison after Ryan had
personally told him he had already chosen that site.
According to the government filing, by late 2002, prosecutors began focusing
on the extraordinary amounts of cash kept by Swanson, including $30,000 in
withdrawals in the weeks after he pocketed the allegedly bogus $50,000
lobbying fee.
Swanson claimed he started hoarding cash in response to his wife's fears
about Y2K, authorities said.
After first denying it, Swanson admitted paying $1,000 a number of years
earlier to a state senator, though he characterized it as a political
contribution, authorities said.
According to the filing, Swanson admitted making campaign contributions to
legislators in return for their taking "official action" on his behalf.
Swanson also acknowledged that he had hosted Ryan at his vacation time-share
in Cancun, Mexico, and had been a guest of Ryan's son, Homer, in Lake Tahoe,
Nev.
In one grand jury appearance, Swanson claimed that Ryan had gambled during
the Lake Tahoe trip with his own money. But prosecutors said Swanson had
told a third party that he had given Ryan the money with which to gamble.
Later, Swanson testified he had given Ryan $200 to gamble for him and that
Ryan gave him $200 in chips at the end of the evening.
Swanson denied ever giving cash to Ryan or his wife, Lura Lynn, but admitted
giving them both expensive gifts, many valued in excess of $500.
When confronted by prosecutors, Swanson admitted as well that he once paid
for a Disney World vacation for the family of one of Ryan's children, saying
it was "a gesture of goodwill." Swanson said he didn't tell Ryan or his wife
but recalled that Lura Lynn Ryan had found out about his role in the
vacation and thanked him.
Swanson also acknowledged that for six to eight years he also had given cash
gifts to about six Ryan staffers.
At first, Swanson denied he lobbied Ryan, saying they didn't discuss
business. Eventually, he admitted lobbying him on behalf of three clients.
But by his final grand jury appearance, Swanson acknowledged lobbying Ryan
on behalf of trade groups for beer distributors and mortgage brokers, as
well as the Chicago law firm of Mayer Brown Rowe & Maw, authorities said.
Copyright © 2004, Chicago Tribune