From the Chicago Sun-Times:

Campaign cash went to personal use: lawyers

January 18, 2006

BY ABDON M. PALLASCH Legal Affairs Reporter

Prosecutors on Tuesday led George Ryan's income tax preparers on a journey through Ryan's use of campaign funds to cover such expenses as:

Forty-two thousand dollars for Chicago Bulls tickets and season passes; $19,000 for Kankakee Country Club dues and expenses; $7,500 for Renato's Restaurant in Florida; $6,000 for hotel expenses in Pebble Beach, Calif.; $5,200 for the Fountainbleau Hotel in Miami Beach; $4,500 for the Loews Ventana Canyon Resort in Tucson, Ariz.; $1,700 for the Duty Free in Jamaica; $1,600 to use a boat phone in Jamaica; and $1,100 for La Casa Del Habano and the Club de Golf in Cancun, Mexico.

Ryan's accountants encouraged him to declare much of that for "personal use" and pay taxes on it, which was legal under the law in effect at the time. The law has since been changed.

Paid for doing nothing?

HIGHLIGHTS

PROSECUTION: George Ryan told his accountants about some but not all of the campaign funds he converted to personal use.

DEFENSE: The practice was "perfectly legal" as long as Ryan declared the income and paid taxes on it.

UP NEXT: Deb Detmers, a former finance director of Citizens for Ryan, is expected to testify that state workers campaigned for Ryan on state time.

Accountant Arnold Lederman had asked Ryan's attorney Bob Bickel about the long list of items listed as campaign expenses and Bickel told him, "George feels that campaign funds are his money and he can do whatever he wants with them," Lederman testified Tuesday.

Prosecutors were more interested in what Ryan did not claim as personal expenses: $23,000 in 1996 and $32,000 in 1997 that the campaign fund paid Ryan's son-in-law Michael Fairman to be "a consultant." Prosecutors say that was illegal use of the funds because Fairman -- who filed bankruptcy at the time -- performed no work.

Intermediary took questions

Lederman, Ryan's Chicago accountant and tax preparer, followed Robert Montague, Ryan's longtime accountant from Momence who worked on Ryan's tax returns up until about 1997.

Prosecutors asked both men if Ryan ever mentioned the $55,000 paid to Fairman among the expenses he was willing to claim as personal expenses paid by his campaign committee. Both men said he did not. Ryan also never told them about money from Phil Gramm's presidential campaign that Ryan allegedly directed to his family members, they said.

Lederman explained that while he usually spoke directly to the person whose income tax forms he was working on, in Ryan's case, he was told to direct all questions to Bickel.

Did Ryan ever mention $500 that Ryan supporter Richard DeSantis gave to Ryan or $500 he gave to Mrs. Ryan? Or $500 that Craig Pierce, chairman of the Republican Party in Downstate McDonough County, gave Ryan?

No, the accountants said.

How about $349 for air travel by Nancy Smith, Assistant U.S. Attorney Joel Levin asked Montague.

No, Montague said.

Longtime friend questioned

Prosecutors appeared to be laying the groundwork to argue that Ryan was selective about which personal uses of campaign funds he disclosed and paid taxes on.

Also Tuesday, prosecutors questioned Larry Stern, a longtime friend of Ryan co-defendant Larry Warner, about a stock tip Warner gave Stern on a company called Visage, which Warner was helping to get a driver's license contract in Illinois.

Stern said it was not clear in his conversation with Warner whether the company had already closed the deal to issue licenses in Illinois, but he said he knew Warner was involved as a consultant or lobbyist with the company. Stern bought the stock and made a $3,000 profit, he said.

Prosecutors hope to wrap up their case Monday.