Former Ryan aide talks about Grayville deal
Lobbyist allegedly used inside information about prison
By MIKE RAMSEY
COPLEY NEWS SERVICE
Published Thursday, December 22, 2005

CHICAGO - Federal prosecutors lifted the curtain a little higher Wednesday on the alleged bilking of Grayville boosters who paid $50,000 to a lobbyist friend of former Gov. George Ryan in hopes of landing a maximum-security prison.

Former Ryan aide Matt Bettenhausen told jurors in Ryan's racketeering and fraud trial that the then-governor selected Grayville from a short list of finalists during a February 2001 staff meeting at his Statehouse office. He said that after the meeting broke up, Ryan walked into an outer room and encountered former state senator Ron Swanson, an office fixture, and told him about the southeastern Illinois town being chosen.

"Well, that's good," Bettenhausen quoted Swanson as saying.

He said he told Swanson the information was confidential and agreed to inform him about plans for a public announcement in Grayville.

Bettenhausen was Ryan's deputy governor for justice and public safety and participated in the prison site-selection process. After Sept. 11, 2001, he became Ryan's homeland security czar and today serves that role for California Gov. Arnold Schwarzenegger.

Prosecutors in Ryan's sweeping corruption trial alluded to the Grayville prison selection in their opening statements to jurors in late September. In court documents, the assistant U.S. attorneys have said Swanson approached Grayville leaders and offered to lobby on their behalf for a $50,000 fee, even though he knew from Ryan the town already had won the prison.

Swanson allegedly gave Ryan cash and gifts in return for steering government-related business opportunities his way.

Bettenhausen said Swanson did not appear at the April 2001 announcement in Grayville but asked him to tell Ryan to thank Dr. Clyde Wilson during a speech delivering the news. Wilson, according to prosecutors, was a Grayville community activist who raised money from business leaders to pay Swanson's fee in March 2001. Ryan complied with Swanson's request to recognize Wilson, Bettenhausen said.

Ryan's lead defense attorney, Dan Webb, cautioned jurors Sept. 28 that "Ron Swanson probably ripped off Grayville for $50,000," but he said there is no evidence Ryan was responsible. On Wednesday, he asked Bettenhausen if Ryan did anything wrong in talking with Swanson.

"Did George Ryan say anything to you that led you to believe Ron Swanson would misuse that information?" Webb asked.

"No," Bettenhausen said.

Assistant U.S. Attorney Zachary Fardon fired back with a series of questions that demonstrated how quickly after the staff meeting Ryan let the news slip about Grayville to Swanson.

"Was it less than three minutes?" the prosecutor asked.

"Probably," Bettenhausen said.

"Was it less than two minutes?"

"Probably."

Another former Ryan aide, Illinois Commerce Commission member Kevin Wright, testified Wednesday he was concerned that Ryan insiders such as Swanson were hanging around the office too much because they had a "self-interest in the outcomes" of government business being conducted there.

Additional prosecution witnesses were expected to appear today to testify about Grayville. The prison project was canceled by Ryan's successor, Gov. Rod Blagojevich, for budgetary reasons.

Swanson, 78, has pleaded guilty to perjury and awaits sentencing.

In other testimony Wednesday:

Wright said he called a ranking official in the Illinois comptroller's office in the mid-1990s -when Ryan was secretary of state - to speed up state payments to a vendor called Comguard. The electronic home-detention monitoring company was co-owned by Ryan's brother, Tom, and did business with the state Department of Corrections. Wright said he was directed to contact the comptroller's office by a Ryan secretary.

Nancy Smith, a Kankakee resident who was caregiver to Ryan's mother-in-law, said she received four checks totaling $6,000 from Ryan's political organization in 1998 but did no campaign work for him. Ryan allegedly did not claim personal expenses he paid from his campaign fund.

Ryan, 71, is charged with racketeering conspiracy, mail and tax fraud, filing false tax returns and lying to federal agents. He is standing trial with a co-defendant, Chicago businessman Larry Warner, 67, who allegedly manipulated state contracts and leases with Ryan's OK.