From the State Journal Register

1/5/2005
Ryan charges detailed Prosecutors say he was warned in 1992
By MIKE RAMSEY COPLEY NEWS SERVICE CHICAGO –
In spring 1992, Cook County State's Attorney Jack O'Malley advised Illinois Secretary of State George Ryan that there might be cases of misconduct within his office that should be investigated. Ryan offered this curt response: "---- you, Jack, these are my guys." Later, in 1998, a top aide expressed concerns that secretary of state employees were being diverted at taxpayer expense to work on Ryan's gubernatorial campaign. But Ryan took a "cavalier approach" and ignored the complaint because "the ends justified the means." Federal prosecutors make those claims, along with scores of others, in a 114-page court document made public Tuesday in advance of the former governor's March 14 racketeering trial. A federal judge unsealed the Dec. 23 "proffer" - a preview of evidence the U.S. government wishes to introduce to prove a criminal conspiracy - over the objections of defense attorneys that the pretrial publicity it generates will taint potential jurors. U.S. District Judge Rebecca Pallmeyer said during a brief hearing that any harmful effects can be offset by carefully selecting jurors. "The sooner we get this information out," she said, "the sooner it becomes a part of yesterday's news." The filing generally rehashes Ryan's December 2003 indictment alleging the Kankakee Republican steered business to pals, received kickbacks and gifts and engaged in other corrupt activities during his 1991-1999 stint as secretary of state and four-year term as governor. Ryan adviser Larry Warner, a Chicago lobbyist, is a co-defendant and allegedly fixed secretary of state contracts and leases while pocketing proceeds and distributed low-digit license plates as political favors - all with Ryan's approval. Prosecutors, however, offer some fresh details and anecdotes in the document, mention the names of new ancillary figures and telegraph the kind of testimony they expect from their star witness, federal prisoner Scott Fawell. Fawell, Ryan's former right-hand man and 1998 political campaign manager, is cooperating with the federal agents following his 2003 racketeering conviction. Also aiding the government is former Ryan insider Donald Udstuen, a lobbyist who allegedly was in on contract schemes. He pleaded guilty in a separate corruption case. "In reference to SOS contracts and business, on multiple occasions, Ryan told Fawell, in substance, 'Let's help Larry (Warner) if we can,'" the proffer says. In one case, prosecutors say, Ryan directly intervened to ensure that American Decal Manufacturing, a company Warner extorted thousands of dollars from, would continue to provide license-renewal stickers to the secretary of state's office under contract. When Ryan employee Jim Covert tried to alter bid specifications for the stickers in 1993 to foster competition, Ryan contacted Covert and "indicated he was unhappy with the change," then had him switch the specifications back to favor American Decal, the proffer said. Warner allegedly bragged to an American Decal official at a cocktail party that he could get Ryan employees fired "but found it was easier just to give them small gifts and 'stroke them' into doing what he wanted." Warner also made $834,000 over a five-year period from Massachusetts company Viisage Technologies for helping it win a contract to produce new digital drivers' licenses, prosecutors said. Warner told a Viisage official he was influential with Ryan, the new document says. In return for Ryan's patronage, prosecutors say, Warner provided gifts and other benefits to Ryan and his family. He allegedly helped Ryan daughter Lynda Fairman in 1995 with flood-related damages of $11,326; fronted $6,000 in expenses for a Ryan roof repair in 1996; invested $6,000 in George Ryan Jr.'s cigar business the following year; and advanced about $145,000 in "loans" to Comguard, a struggling company in which Ryan's brother, Tom, had an interest. The firm oversaw the electronic monitoring of parolees on home detention. Ryan allegedly tried to use his influence to drum up state business for Comguard. Other people who allegedly lavished gifts on Ryan or his family included businessman and landlord Harry Klein - prosecutors say he allowed Ryan and his wife, Lura Lynn, the use of his Jamaica home and benefited from a secretary of state lease - and Arthur "Ron" Swanson, a lobbyist and former state senator. Ryan allegedly spurred others to hire Swanson and tipped him off about an undisclosed prison-selection site in Grayville so that the lobbyist could use the knowledge to his advantage. In return, Swanson allegedly gave Ryan and his wife expensive gifts that included a limoge box, Cuban cigars, Lladro art, golf bags, cuff links and ornate figurines. He also may have funneled cash Ryan's way, based on large bank withdrawals, the government says. Prosecutors also dredge up incidents from the earlier Fawell trial, seeking to hang them on Ryan. They say Ryan knew of Fawell's use of state employees for political campaigns at public expense and approved of Fawell's cover-ups in the mid-1990s as some secretary of state employees were taking bribes for drivers' licenses because they were pressured to raise political funds. The document mentions the fatal 1994 traffic accident in Wisconsin that involved a truck driver who had received a fraudulent license in Illinois. Six Chicago children died in the accident, which later spawned the federal Operation Safe Road investigation into the Ryan-era secretary of state's office. In the proffer, Ryan is characterized as fiercely loyal to his friends, willing to overlook corruption and defiant, as demonstrated in the expletive-laden exchange with the Cook County prosecutor in 1992. Another official recounted the episode to investigators, saying "he was stunned by the import of the statement - that Ryan's political people were not to be touched," the document says. Ryan and Warner both have pleaded innocent to the myriad charges in the indictment, which include mail fraud, filing false tax returns and lying to federal agents. One of Ryan's attorneys, Brad Lerman, earlier this week characterized the government's proffer as a "one-sided" document that will hurt the former governor's chance of getting a fair trial. Warner's attorney, Ed Genson, agreed. He, like Lerman, had asked Judge Pallmeyer not to unseal the filing until after the trial begins. "This makes it more difficult," Genson told reporters as he exited the Dirksen Federal Building in downtown Chicago. "You guys have a First Amendment right - you're exercising it, that's fine. But you can't deny the fact that by the virtue of your exercise of that right, you are in some way prejudicing our ability to pick a fair jury. You can't deny it." Attorneys for Swanson and Udstuen could not be reached for comment. Doug Finke and Dana Heupel of the State Capitol Bureau contributed to this report. Mike Ramsey can be reached at (312) 857-2323 or cnsramsey@aol.com.