From the Tribune:

Witness: Ryan camp put the arm on Phil Gramm

By Rudolph Bush and Matt O'Connor
Tribune staff reporter
Published November 16, 2005, 3:30 PM CST

A political consultant who helped run U.S. Sen. Phil Gramm's failed 1996 presidential campaign testified today he had no idea former Gov. George Ryan received consulting fees from the campaign after he endorsed the Texas Republican.

John Weaver, a longtime director of Republican campaigns, also said that when he objected to spending more than $100,000 on "consulting" in Illinois, Ryan's top aide, Scott Fawell, told him, "This is the way we do things in Chicago. This is the way it's going to be done."

Ryan, 71, and lobbyist friend Larry Warner, 67, are charged in a 22-count federal indictment with racketeering, mail fraud and other offenses, accused of having used Ryan's office to enrich themselves.

In today's trial testimony in U.S. District Court in Chicago, Weaver, now a senior strategist for Arizona Sen. John McCain's political action committee, said Gramm needed the help of a powerful Republican organization to win in Illinois.

Weaver said there were only two such organizations -- one devoted to then-Gov. Jim Edgar and the other loyal to Ryan, who was then the Illinois secretary of state.

Gramm strategists believed Edgar would back the front-runner for the GOP presidential nomination, Sen. Bob Dole of Kansas, Weaver said. So Gramm's people began to court Ryan, hoping he would help them win important Illinois delegates.

In early 1995, Ryan told Weaver he would endorse Gramm, but they would "need to work out the details," the consultant testified.

In mid-March of that year, Weaver said, he sat down with Fawell, Ryan's chief of staff; and Ryan's main political advisor, Richard Juliano, to work out a budget for running Gramm's primary campaign in Illinois. Listed among the usual costs for advertising and supplies was the more-than $100,000 consulting line item.

"I believe I said something along the lines of, `This is really high,'" Weaver said. Fawell responded with his "this is the way we do things" reply, Weaver said.

Weaver said the campaign approved half the amount proposed by Fawell and Juliano. He was later told the fees should be paid to a company called American Management Resources.

"Mr. Juliano, I believe, informed me this was a consulting firm that would recruit, train and oversee people collecting petitions for the Gramm campaign," Weaver said.

Prosecutors contend American Management Resources was a front company set up by Ryan's friend Alan Drazek to funnel Gramm's campaign money to Ryan, Fawell, Juliano and others.

Juliano and Fawell, who have both been convicted in the scheme and are cooperating with prosecutors, have both testified to receiving thousands of dollars from the Gramm campaign.

"Did Mr. Fawell or Mr. Juliano ever indicate Mr. Fawell or Mr. Ryan would be the recipients of the consulting fees?" Assistant U.S. Atty. Patrick Collins asked.

Weaver said they had not. He also said that in his experience of some 250 campaigns, no elected official who endorsed a candidate had ever received compensation.

Outside the presence of the jury, Collins said Ryan represented to the IRS that Gramm's campaign wanted to pay him. Collins called Ryan's assertion "absurd," saying, "It never happened."

Sticker manufacturer gets stuck

In earlier testimony today, the former president of a Chicago company that produced license plate stickers for the secretary of state's office testified he feared losing the critical contract if he didn't pay Warner $5,000 a month.

James Motter testified he ran American Decal & Manufacturing from April 1994 to September 1995, and during that time, he agreed to increase Warner's monthly lobbyist's fee from $3,000 to $5,000 in response to Warner's threat to resign.

"He explained he played an important [role] for the company in maintaining the contract with the secretary of state," Motter said.

Warner had signed on as American Decal's lobbyist in 1991, shortly after Ryan became secretary of state. Prosecutors charge that during Ryan's tenure, Warner shook down the company for nearly $400,000.

In a May 1994 meeting, Warner told Motter that American Decal's main competitor, 3M, had contacted him about becoming their lobbyist, Motter said.

At the time, the state's specifications for the stickers contract favored American Decal because it required a special metallic security mark the company produced, Motter said.

Warner also told Motter he played a key role in ensuring that the specification would not be changed, Motter said.

"I viewed it as a threat to the business," said Motter, adding that the sticker contract represented 10 percent of the small company's sales.

On cross-examination, Warner's attorney, Carolyn Gurland, asked if Warner ever directly said American Decal would lose the contract if he wasn't retained.

"It was implied," Motter said, adding that he couldn't recall if Warner directly said it.

Gurland also tested Motter's knowledge of the stickers contract specifications. The witness acknowledged 3M could have created a similar product, with a metallic security mark, and bid on the state contract.

The Associated Press contributed to this story