Former state official questioned about IBM deal engineered by Ryan co-defendant
By Rudolph Bush and Matt O'Connor
Tribune staff reporter
Published December 14, 2005, 10:32 PM CST
 
A former top official under Secretary of State George Ryan testified Wednesday that Ryan's co-defendant, Lawrence Warner, asked him to hold up on any computer projects because Warner was working on a deal with IBM.
Frank Cavallaro, who directed the office's computer department, said he agreed to the delay because "Mr. Warner was a good friend of Secretary Ryan's."
On cross-examination, Cavallaro acknowledged that he didn't know what project he stalled at Warner's request but that it wasn't a critical upgrade of the office's mainframe computer system. He also didn't know how long the delay lasted before Warner called back and said to go forward on the project.
Prosecutors charge that IBM hired Warner as a lobbyist in 1993 because of his close friendship with Ryan. They also allege that Warner reaped about $1 million from IBM as its revenues from sales to Ryan's office rose sharply over the next five years.
Cavallaro said he was hired by Ryan in early 1992 after he told Warner and Donald Udstuen, another close Ryan adviser, that he supported switching from the office's Honeywell-Bull mainframe to a new IBM system.
Prosecutors have also alleged that Warner passed on to Udstuen about $250,000 of his payments from IBM.
Testifying under a grant of immunity from prosecution, Cavallaro said he wasn't aware that Warner received a percentage of the IBM contract or that Udstuen profited from the deal as well.
Cavallaro testified that the Honeywell-Bull mainframe was in desperate need of replacement and that IBM had a superior product.
The switch didn't take place, though, until 1995 because of budgetary reasons, Cavallaro said.
Cavallaro also testified that Ryan once asked him why the secretary of state's office didn't do more business with Unisys, a computer company that had retained Ryan's friend, Al Ronan, as its lobbyist and had employed Ronan's wife, Cathy Adduci.
Ryan didn't mention either Ronan or Adduci in the brief conversation, Cavallaro said.
According to earlier testimony in the trial, Ryan and his former chief of staff, Scott Fawell, sought to award a contract to both Unisys and a second company, Viisage Technology, to create digital driver's licenses.
The arrangement was intended to benefit both Ronan and Warner, who represented Viisage, Fawell said, but Viisage alone won the lucrative contract.
Adduci could be called to testify by the government at the trial as soon as Thursday.
In other testimony Wednesday, Craig Pierce, the longtime chairman of the McDonough County Republican Party, testified that he handed Ryan a personal check for $500 at a political rally in 1996.
Ryan is charged with using money from political supporters for personal expenses, omitting the payments from campaign disclosure reports and failing to declare the income on his tax returns.
Pierce testified he made the check out to Ryan personally in gratitude for Ryan's appearance at a rally for a state legislator in the tiny Downstate town of Bushnell.
"You didn't care if he took his wife out to dinner with it? You didn't care if he bought a new set of golf clubs with it? You didn't care what he did with that money?" asked Timothy Rooney, one of Ryan's lawyers.
"I did not care what he did with that check," Pierce said. "No! I don't (care) now either! I want to go home," said Pierce, drawing laughs from the gallery and jury.
Prosecutors also presented testimony intended to show that Warner evaded cash-reporting requirements when he cashed two checks totaling $14,000 on successive days in 1997.
Attorney George Karcazes testified that he and Warner were on the board of North Community Bank when federal rules were discussed that any withdrawal of more than $10,000 in cash must be reported to the government.+++++++++++++++++++++++++++++++
For the Scandal page:
>From CBS 2 Chicago:Dec 14, 2005 6:45 pm US/Central
Former Computer Chief Testifies At Ryan Trial
Said Lobbyists Helped Him Get His Job
Mike Flannery

(CBS) CHICAGO The jury heard new evidence Wednesday in the George Ryan trial that a massive computer deal he approved was fixed from the start and not necessary.

CBS 2 Political Editor Mike Flannery reports a number of close friends of the former governor got rich off the $26 million deal.

Ryan's defense lawyers have argued that he had to buy an expensive new computer system when be became secretary of state, because the old one he inherited was on the verge of collapse, potentially halting the issuance of any new drivers' licenses.

But prosecutors Wednesday put Ryan's own former computer chief on the witness stand to tell new details of a scheme that made millions for some of Ryan's close associates.

Witness Frank Cavallaro startled observers when he testified his first offer to become Ryan’s computer director came not from Ryan, but from Bob Kjellander, then the highly-paid lobbyist for IBM.

Cavallaro said Kjellander asked him, “If you take the job would you support buying a new IBM computer system for Ryan’s secretary of state office?”

Cavallaro said he replied, “Yes I would.”

Then came Cavallaro's first face to face meeting with Ryan about the job. Cavallaro said Ryan told him the old computer he inherited from his predecessor Jim Edgar "is going to blow up."

After being offered the job by Ryan, some weeks later Cavallaro was summoned to Ryan's office suite in the state Capitol.

Ryan was terse and asked how much the new system would cost, Cavallaro testified

Cavallaro replied $26 million and said Ryan then got visibly angry, lit a cigar and ended the meeting.

Prosecutors said that they may conclude their case against George Ryan and his friend and co-defendant, Larry Warner, by mid-January. Defense lawyers have said they may need a month to present their case, meaning it could go to jury around St. Valentine's Day.