From Crain's' Chicago Business

Feds roll out details in Ryan case Alleges ex-Gov turns office over to lobbyist pals
By Greg Hinz
1/5-05
Former Illinois governor and secretary of state George Ryan engaged in a conspiracy of misconduct from his earliest days in office, U.S. prosecutors alleged on Tuesday in a new document unsealed by a federal judge. The document, a broad-ranging summary of government evidence known as a proffer, details in its 114 pages how Mr. Ryan allegedly all but turned his office over to two lobbyists, giving them free rein to win contracts for clients. In exchange, lobbyists Lawrence Warner and Ronald Swanson allegedly rewarded Mr. Ryan with donations to his campaign committee and tens of thousands of dollars in gifts and loans to Mr. Ryan and members of his family. Messrs. Ryan and Warner have pleaded innocent to federal racketeering and related charges. The state’s former chief executive “vigorously denies the hearsay allegations and innuendo” in the prosecution statement, and looks forward to being acquitted at a trial scheduled to begin in March, his attorneys said in a statement released late Tuesday. Mr. Swanson already has pleaded guilty to other federal charges. Key portions of the proffer appear to show the impact of statements by Scott Fawell, Mr. Ryan’s former top aide, who recently agreed to cooperate with prosecutors. “In reference to Secretary of State contracts and business, on multiple occasions, Ryan told Fawell in substance, “Let’s help Larry [Warner] if we can,” the court papers allege. “In conversations with Fawell, Ryan made it clear that he viewed helping Warner and Ryan’s other close friends as a priority for the Secretary of State’s Office.” Mr. Fawell and other did what they were told, the proffer states, with Mr. Warner and later Mr. Swanson allowed to “steer” contracts and given inside information that would benefit their clients. Thanks to his connections, Mr. Warner was able to boost his lobbying fee with one client from $2,000 to $5,000 a month—and tried to get $8,000 a month—prosecutors said. Mr. Swanson allegedly received $50,000 to lobby for construction of a prison that he, but not his client, knew that the state already had decided to build. Mr. Ryan sometimes let aides handle matters, and at other times directly intervened to help favored lobbyists. For instance, after an underling changed contract specifications to the disadvantage of a client of Mr. Warner’s, Mr. Ryan told the worker “he was unhappy with the change,” according to the court papers. “Warner is your friend,” Mr. Ryan allegedly told the aide. When secretary of state’s internal investigators learned of possible misconduct by aides involved in political fundraising, Mr. Ryan shut down their probe, the proffer states. As he allegedly told one official who suggested a broadened probe, “F--- you, Jack, these are my guys.” Mr. Ryan took office at secretary of state in 1991, and began a 4-year term as governor in 1999. Prosecutors said Mr. Warner provided $145,000 in financial benefits to a company founded and part-owned by Mr. Ryan’s brother, Tom. He also allegedly fixed the roof of Mr. Ryan’s home in Kankakee, arranged in a stock trade that made Mr. Ryan a $3,182 profit, invested $6,000 in George Ryan, Junior’s, cigar business, and paid $3,185 in expenses for the wedding of Mr. Ryan’s daughter, Lynda Fairman. Mr. Swanson allegedly hosted the governor and his wife at a Cancun condominium, gave Mr. Ryan money to gamble in Lake Tahoe, and picked up $2,200 in expenses at Disney World for the family of one of Mr. Ryan’s daughters. While Mr. Swanson has always denied giving gifts to Mr. Ryan, his records show a number of cash withdrawls that suggest he may have done so, prosecutors said. Defense attorneys had hoped to keep the document sealed, so as to avoid pre-trial publicity. But U.S. District Court Judge Rebecca Pallmeyer ruled that it would have less impact on potential jurors if released now than just before the trial, which is scheduled for March 14. (With files from AP) --