From the Sun-Times:

Ryan son-in-law got $55,000 gift

January 24, 2006

BY NATASHA KORECKI Federal Courts Reporter

Forced to take the stand, George Ryan's son-in-law reluctantly testified Monday that Ryan's campaign paid him $55,000 for consulting work he didn't do.

The son-in-law, Michael Fairman, testified that he battled gambling and alcohol problems and used some of the campaign money to pay down gambling debts.

Fairman, a salesman for an electrical supplier and never a political consultant, also told jurors at the former governor's public corruption trial that Ryan pal Larry Warner once gave him $5,000 to pay off gambling debts, but he couldn't remember if he repaid Warner, a co-defendant in the case.

After finishing often tense testimony, a somewhat shaken Fairman walked over to Warner when court recessed.

"I'm so sorry, I'm so sorry," he told Warner, as the two shook hands. As Ryan family members, including Fairman's wife, Lynda, huddled around him in the courtroom, Ryan slapped Fairman on the back and reassured him that he did a good job on the stand.

Feds: Ryan family were paid perks

Fairman twice testified before the grand jury but refused to meet with prosecutors for subsequent interviews. Negotiations to allow Fairman to submit written testimony fell through. Fairman testified under a letter of immunity.

Ryan, 71, also a former secretary of state, is accused of steering contracts to friends such as Warner, 67, and taking financial perks in return. Some of those benefits went to Ryan family members, prosecutors contend. Prosecutors say the $5,000 to Fairman was among the benefits that flowed between Ryan and Warner, who is also charged with shaking down state vendors for business.

The trial, which entered its 17th week Monday, has put a strain on Ryan's family, which he has tried to shield from the spotlight. Last week, prosecutors and defense attorneys struck a deal to get written testimony from Ryan's five daughters, keeping them off the stand.

Prosecutors expect to rest their case this week.

Fairman, who met his wife as she worked as a cocktail waitress at the Empress Casino in Joliet, said Ryan gave them the money in a series of checks from 1996 to 1997. Some of the checks carried the words "consulting work" or "consulting" on the subject line.

"Was the money a gift, sir?" Assistant U.S. Attorney Zachary Fardon asked.

"Um, I didn't understand it to be a gift," Fairman hesitated, then struggled to correct himself. "Well, I don't know, we needed some money, we got some money ... so I guess I did understand it to be a gift."

Defense: Checks declared to IRS

Fairman fought a gambling addiction at the time, where he often made $100 bets and carried $5,000 credit lines at two casinos, he said. In 1999, Fairman claimed more than $66,000 in gambling debts. Fardon asked if he used the campaign money toward gambling. "Not all of it," he said. It went toward other debts, too, he said.

Fardon pressed Fairman as to whether he truly did any work. Fairman, who nervously took deep breaths and sometimes anxiously raised his voice, said he passed out fliers and traveled for Ryan fund-raisers but conceded: "I basically did not do a whole lot for this money."

"Setting aside 'a whole lot,' did you do anything for this money?" Fardon persisted.

"Basically, no. I didn't," Fairman said.

He said he and his wife declared the $55,000 on their income taxes. Prosecutors say that Ryan, too, should have paid taxes on the money and didn't until the feds turned up the heat.

But Ryan's lawyer, Dan Webb, has said that Ryan paid the IRS what he owed it in 1996 and 1997 through amended tax forms filed in 2002.

'I'm not lying. I just freaked out'

Fairman though said he didn't declare the $55,000 in a 1997 bankruptcy petition even though he was getting some of the checks at the same time.

Fairman also told Warner lawyer Ed Genson he asked Warner for $5,000 but Ryan knew nothing of it. Fairman then acknowledged he couldn't say if Ryan knew of the arrangement.

Fairman said he didn't remember specifically repaying Warner but said he always repaid his debts in cash. In previous grand jury testimony he said he repaid his debts by check. He attributed the discrepancy to nervousness.

"It just blows my mind that I said that," Fairman said. "It looks like I'm lying, I'm not lying. I just freaked out."

HIGHLIGHTS

PROSECUTION: George Ryan son-in-law Michael Fairman said he got $55,000 from Ryan's political campaign in 1996 and 1997 for consulting work he didn't do.

DEFENSE: Fairman paid taxes on that money and Ryan paid, too, in his 2002 amended tax returns.

UP NEXT: IRS Agent Shari Schindler continues tax and bank-record testimony.