From the Tribune:

Ryan kin admits accepting money

By Matt O'Connor
Tribune staff reporter
Published January 23, 2006, 9:21 PM CST

Michael Fairman, a son-in-law of former Gov. George Ryan, testified Monday that Ryan's co-defendant, Lawrence Warner, lent him $5,000 months before he declared bankruptcy in 1997 because of a gambling addiction, but Fairman couldn't remember if he paid the money back.

Fairman also said he received $55,000 in Ryan campaign funds in 1996 and 1997 but admitted he didn't do any political work for the money.

Prosecutors contend the $5,000 was among the financial benefits that Warner provided to Ryan and his family in return for steering him lucrative state business while Ryan was secretary of state.

Ryan is also accused of disguising campaign expenditures to relatives as political payments when in fact they were gifts for which he failed to pay income taxes.

A week ago, four of Ryan's daughters were able to avoid having to testify at their father's corruption trial when prosecutors agreed to read statements of what their testimony would be.

But after similar discussions failed, Fairman took the witness stand under a grant of immunity from prosecution to testify in sometimes humiliating detail about his heavy gambling, drinking woes and financial burnout.

Fairman said he met his wife, Lynda, while she worked as a cocktail waitress at a Joliet riverboat casino. A second marriage for both, they wed on New Year's Eve of 1995 at the Ryan family home in Kankakee.

Testifying he knew Warner from Warner's close friendship with Ryan, Fairman said he pulled Warner aside in 1997 and asked him to lend him "5-grand." Warner wrote out the $5,000 check to him dated March 10, 1997.

"It was at a time I was hurting for money because of my gambling, and I felt comfortable enough with him" to ask, Fairman said.

Assistant U.S. Atty. Zachary Fardon hit hard at Fairman for his testimony in two grand jury appearances in 2002, but Fairman said he "clammed up" because of nerves.

"I was trying to tell the truth," Fairman said. "I just got nervous. I said some things I just didn't mean. I've got nothing to hide."

In his first grand jury appearance, Fairman said he was certain he had repaid the $5,000 to Warner by check. According to an excerpt from a transcript of the grand jury appearance, a prosecutor asked if there was no check, had Fairman never paid back the money?

"As far as I know, I owe him the money," Fairman replied in May 2002.

Indeed, in court filings, prosecutors have said there is no record of such a check.

On Monday, Fairman insisted he had paid his debts with cash, usually after he scored "big hits" while gambling, he said.

"It just blows my mind that I said that," Fairman said in reference to his claim before the grand jury that he had paid Warner by check. "I was nervous. It looks like I was lying, but I wasn't lying. I just freaked out."

But pressed by Fardon, Fairman acknowledged he couldn't specifically remember repaying the $5,000 to Warner.

On cross-examination, Fairman admitted his gambling grew out of control as he bet on sports with a bookmaker in addition to playing craps and blackjack at riverboat casinos for as much as $200 a bet. He filed for bankruptcy in August 1997.

In a statement read to jurors last week, Lynda Fairman said she called her father for help when the couple were having significant financial difficulties in 1996.

Over the next year, Ryan paid Michael Fairman $55,000 in campaign funds. Some of the checks indicated the money was for consulting.

Fairman, an electrical-supply salesman, said he passed out some fliers and signs for Ryan and "did some traveling." But pressed by Fardon, he said he hadn't done "a whole lot for the money."

"Did you do anything for the money?" Fardon asked.

"Basically, no, I did not," Fairman said.

Under questioning by Timothy McCaffrey, one of Ryan's lawyers, Fairman also insisted that Ryan played no part in Warner's lending him the $5,000.

But under renewed questioning by the prosecution, Fairman admitted he hadn't talked to Ryan about the loan but couldn't say if Warner had apprised Ryan of the money.

Fardon asked him if he had spent more than half of the $55,000 in Ryan campaign funds on gambling.

"No way," Fairman replied. "We used the money to pay off plastic as best we could until it became overwhelming."

Fairman acknowledged he hadn't divulged the $55,000 from Ryan's campaign in his bankruptcy filing or on two applications for home equity loans at the time.

Fairman also testified that Warner, an insurance adjuster, helped him collect $16,680 from his insurer as a result of a sewage backup and flood at his Glenview home in February 1997.

Warner didn't take the standard 10 percent fee for his work—another financial benefit, prosecutors maintained, that Warner gave to Ryan's family. The defense contended Warner was simply doing a favor for a friend.