From the Associated Press

Ryan says he's no 'prostitute'

Former gov rips Gramm's trial comments

Friday, November 18, 2005

By Mike Robinson
The Associated Press
An angry George Ryan lashed out at former political ally Phil Gramm on Thursday night, saying the former Texas senator had called him a "prostitute" on the witness stand and suggesting that Gramm had been entangled in the Enron Corp. scandal.

"If Sen. Gramm wants to use the word prostitute, perhaps he should look within," Ryan said.

Ryan made the comments after his racketeering trial recessed for the day, where Gramm had been a prosecution witness. Gramm, a former presidential hopeful, testified he never approved thousands of dollars in consulting payments to Ryan's daughters and staff in return for Ryan's endorsement and said his campaign would not have condoned it.

"It's sort of like the difference between love and prostitution," the folksy former Texas senator testified during a hearing with jurors out of the room.

"You don't pay people to like you," Gramm said.

Ryan took issue with those comments outside the courtroom: "Mr. Gramm referred to me as a prostitute, and I really feel that I absolutely have to respond to that."

Ryan said he got about $11,000 in what he described as "consulting fees" from Gramm's presidential campaign and declared: "I earned every penny of it."

The 71-year-old Ryan and his lobbyist friend, Larry Warner, 67, are charged in a 22-count indictment with racketeering, mail fraud and other offenses. They deny wrongdoing.

According to the indictment, Ryan's daughters and two aides received consulting payments from Gramm's 1996 presidential campaign while Ryan was endorsing the Texan for the GOP nomination.

Witnesses say the money was paid to a Chicago-area consulting company by the campaign and the company then issued checks to the Ryan daughters and Ryan aides Scott Fawell and Rich Juliano.

Gramm testified that he knew nothing about the payments but wouldn't have approved them.

The hearing had been held to determine what Gramm might say if asked why he wouldn't have approved the payments.

At that point, he made his comment about love and prostitution.

Judge Rebecca R. Pallmeyer immediately ruled that nothing of the sort could ever be said before the jury because it could prejudice the jury against Ryan.

Gramm never actually referred to Ryan as a prostitute.

Hours later, when Ryan was leaving the courthouse, he stopped in front of a bank of cameras and denounced the former Texas senator. He said he had worked hard for Gramm in 1996, raising money, rounding up delegates and hauling in voters to help him get a tie in the Iowa Straw Poll.

He also suggested Gramm decided "not to run for re-election to United States Senate following serious allegations of wrongdoing by Sen. Gramm and his wife regarding Enron — perhaps investigators should revisit the Enron matter and the role the Gramms played in the demise of Enron, if any."

The Gramms have never been charged with wrongdoing in the Enron scandal. A telephone number for Gramm could not immediately be found.

Wendy Gramm had been chairwoman of the Commodity Futures Trading Commission before she became a member of the Enron board of directors in 1993. As head of the agency, she backed an exception for the trading of energy products, which benefited Enron and other energy-trading companies.

In 2000, Phil Gramm was single-handedly blocking a futures trading bill that Enron wanted. He later lifted his objections after calls from Clinton administration officials and industry executives, including chief executive Kenneth L. Lay.

Top Enron executives face trial in January on fraud, conspiracy and other charges stemming from various alleged schemes over several years to fool investors into believing Enron was a financially solid company before it spiraled into bankruptcy in December 2001.

At Ryan's trial, when Gramm was brought in front of the jury and asked about making a payment in return for an endorsement, prosecutors were supposed to confine him to yes or no answers.

Assistant U.S. Attorney Zachary T. Fardon asked him whether paying for an endorsement would "dilute" the value of the endorsement.

"With friendship or support, it's not something that you buy," Gramm said with jurors now listening. He said that doing so "would dilute more than value of the endorsement — it would dilute your character" and affect perceptions of "the kind of person you are."

Ryan attorney Bradley E. Lerman sought to soften the impact of the testimony, suggesting that the money might have been for something other than an endorsement. Gramm said that he had not even been aware of the payments until shown a campaign budget and a contract by prosecutors.

Gramm said he played no role in drawing up the campaign's Illinois budget, which called for $103,500 in payments to consultants.

"Did you ever pay George Ryan to buy his endorsement?" Lerman asked.

"No," Gramm said.

After leaving the stand, Gramm refused to talk with reporters, was escorted down a back elevator by federal officials and whisked away by car.