'The state of Illinois was for sale'

[MORTARDUDE]

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'The state of Illinois was for sale'
December 18, 2003

BY STEVE WARMBIR AND TIM NOVAK Staff Reporters Advertisement


For years, whispered tales of corruption dogged George Ryan.


On Wednesday, the whispers turned into a news conference.

The feds unleashed a barrage of criminal charges against the former governor, alleging he helped put state contracts and leases up for sale for his pals, while taking cash, loans, gifts and trips for himself or his family.

"What we allege is that the state of Illinois was taken advantage of by Ryan and his greedy friends," U.S. Attorney Patrick Fitzgerald said at a news conference Wednesday afternoon, televised live.

Ryan, 69, of Kankakee, whose political career had already been ended by the corruption scandal, is the sixth Illinois governor in history to be charged criminally. Ryan was charged with racketeering conspiracy, mail and tax fraud and lying to the FBI. He could face seven to nine years in prison if convicted.


HOW THE TRAIL OF CORRUPTION LEADS TO EX-GOV. RYAN


66 INDICTED, 59 CONVICTED: The political corruption probe Operation Safe Road was sparked by the sale of truck driver's licenses for bribes under then-Secretary of State George Ryan. Among the 59 people convicted under Operation Safe Road are Ryan's former chief of staff, Scott Fawell; his inspector general, Dean Bauer, and his close friend and adviser Donald Udstuen.

IT BEGINS WITH A CRASH IN MILWAUKEE
Ryan was celebrating his re-election as secretary of state in November 1994 when six children in the Willis family were killed in a freak accident in Milwaukee (right). Their parents' van ran over a piece of metal that fell off a truck, and the van burst into flames. Questions arose over how truck driver Ricardo Guzman (left) got his license in Illinois. No one realized the crash also would trigger the biggest political scandal in Illinois history.


THE CRASH LEADS TO THE LICENSES-FOR-BRIBES INVESTIGATION
The Willis family hired one of Chicago's top trial lawyers, Joe Power, who doggedly pursued allegations that Ryan's staff sold licenses to unqualified drivers in exchange for bribes and then tried to cover up what they did. Power's allegations began surfacing during Ryan's 1998 campaign for governor. Power won a $100 million settlement for the Willis family and sparked the Operation Safe Road investigation. Among the 66 people indicted so far (including Ryan) was Dean Bauer, a longtime Ryan friend who headed the inspector general's office. He eventually pleaded guilty to obstructing investigations.


THE INVESTIGATION UNCOVERS MORE CORRUPTION IN THE RYAN ADMINISTRATION
Bauer led federal investigators in new directions, eventually pointing to Scott Fawell, the chief of staff in the secretary of state's office who also managed Ryan's campaign for governor. Ryan decided not to seek a second term as governor in 2002, and federal investigators soon began indicting Ryan's closest advisers, starting with Fawell.

THIS NEW ARM OF THE INVESTIGATION LEADS TO INDICTMENTS OF RYAN'S INNER CIRCLE
One by one, Ryan's inner circle found themselves charged with influence-peddling and corruption. Donald Udstuen, one of the most powerful behind-the-scenes players, quickly pleaded guilty and began cooperating. Larry Warner, another Ryan loyalist, is still fighting the charges. Warner was re-indicted Wednesday.


THE CASE AGAINST GEORGE RYAN

The former governor could face 7 to 9 years in prison
1 count of racketeering conspiracy
9 counts of mail fraud
3 counts of lying to FBI agents
1 count of tax fraud
4 counts of filing false income tax returns




A STATEMENT FROM THE WILLIS FAMILY

The driver's license investigation was launched in reaction to a fiery November 1994 expressway accident in Wisconsin that killed six of the children of the Rev. Scott Willis and his wife, Janet. A truck driver involved was believed to have received his license through bribery at the secretary of state's corruption-plagued McCook licensing center. Following is a statement from Willis and his wife about Wednesday's indictment:

We began our lawsuit to simply find answers to our questions. Little did we know where that would lead. We understand that a person is innocent until proven guilty. However we are very grateful to have come to this point.

We thank [our attorney] Joe Power for his courage in opening the case and his determination to do right. We are also thankful to the media for being gracious toward us and for keeping the case before the public, to the federal prosecutors for their hard work in continuing their investigation, and to the many who have encouraged us and kept us in their prayers.

Janet and I have prayed and will continue to pray that justice will be done. We have also asked God to keep us from bitterness and give us strength to go on with whatever He would have us to do.


The former governor is the 66th person indicted in the Operation Safe Road investigation led by Assistant U.S. Attorney Patrick Collins. The five-year investigation began looking at secretary of state workers selling driver's licenses for bribes when Ryan ran the agency. Investigators followed the corruption -- which at times appeared to crop up wherever they looked and included some of Ryan's closest friends -- and came to Ryan himself.

"What we're alleging in the indictment basically is that the state of Illinois was for sale, for friends and family at times," Fitzgerald said. "It was cronyism where contracts were awarded to people, people were given inside information, they were acting upon it, and at times George Ryan was stepping into the process to make sure those interests were taken care of."

Ryan looked out for his friends, covered up his crimes and continued committing them even after FBI agents interrogated him. In return, those friends looked after Ryan and his family in a variety of ways, the feds allege.

One Ryan pal invested $6,000 in his son's cigar store, according to the indictment and sources.

The same friend lent $145,000 to a start-up firm that Ryan's brother, Thomas, helped create to monitor prisoners on house arrest.

Another Ryan friend allegedly paid for part of a trip to Disney World for the family of one of Ryan's children.

And yet another Ryan crony, who benefitted from a sweet state lease, provided free lodging in Jamaica for the governor.

Different death penalty defense



Ryan's attorney, Dan K. Webb, vowed a vigorous defense, pointing up two issues: Ryan's passion for justice and paucity of money.

"Most recently, [Ryan] has achieved worldwide renown as the only governor in the history of our nation to have the courage to reform a state's broken-down death penalty system that was putting innocent people on Death Row. The jurors will identify with his courage and public service," Webb said.

He also argued Ryan "has accumulated no personal wealth and has a very modest lifestyle. He makes ends meet each month based on Social Security payments and a job pension." Ryan receives a yearly pension of $128,087, which will increase next month to $185,727, state records show.

Prosecutors, though, suggest that Ryan received at the very least $167,000 from close pal Larry Warner, a Republican businessman who allegedly benefitted to the tune of millions of dollars from Ryan's help. The feds suggested that number was a bare minimum.

In addition to passing along money to Ryan, Warner shared the wealth he allegedly received while improperly influencing secretary of state contracts. Ryan allegedly directed more than $300,000 of that money to another friend at the time, Donald Udstuen, a former high-powered lobbyist.

Warner has already been charged criminally. In fact, Ryan was added Wednesday as a criminal defendant to the case pending against Warner. The longtime dinner companions could share a trial.

Udstuen, though, has not stayed loyal to his pal the former governor. Udstuen has pleaded guilty in his own corruption case and is cooperating with the feds.

Also included in the circle of indicted Ryan friends is longtime Republican lobbyist Arthur "Ron" Swanson, who is charged with seven counts of perjury for allegedly lying to a grand jury to cover up for Ryan. Ryan allegedly helped swing lobbying work to Swanson, whether it was working for a Wisconsin energy company or the agency that runs McCormick Place and Navy Pier. Swanson's attorney, Theodore Poulos, declined to comment.

While many of the allegations against Ryan had come out before in other cases, including the trial of his former right-hand man Scott Fawell, federal prosecutors on Wednesday presented a detailed overview for the first time. Fawell was convicted of political corruption earlier this year and sentenced to 61/2 years in prison.

Road to corruption



The feds allege that corruption began in 1991 after Ryan was first elected secretary of state and carried well through his two terms there and into the governor's office, which he left early this year.

When Ryan ran the secretary of state's office, Warner either allegedly shook down existing contract holders for money if they wanted to continue working for the office or got money from firms seeking fresh business with the state.

Take, for instance, computer contracts. Honeywell/Bull had the contract for the mainframe computer at the secretary of state's office when Ryan took office.

Warner, Udstuen and later Swanson allegedly met with a representative of the computer firm and essentially tried to shake the company down for $1 million to keep the state business, the feds allege. The firm refused and complained to Ryan.

Ryan said he had too much to lose and would get to the bottom of what his advisers were up to, according to the federal indictment.

Instead, the feds say, Ryan let Warner and Udstuen recommend an employee who would oversee the computer contract. That person in turn picked IBM, which had a deal with Warner. Warner received more than $990,000 from IBM, based on what it received in state contracts.

In another area, Ryan was even more active in helping his pal Warner. Warner allegedly had a similar kickback deal with a Chicago firm, American Decal Manufacturing, which provided validation stickers for drivers' licenses.

Ryan scolded a high-ranking state employee who dealt with the sticker contract, telling him to return Warner's phone calls promptly and not to get too close to a competitor of American Decal.

And when there was a unanimous recommendation to change the specs on the validation stickers -- a change that would have hurt American Decal -- Ryan told the employee to go back through the bureaucracy quietly and change things back, the indictment alleges.

Warner didn't work at the secretary of state's office but pretty much had run of the agency, the feds allege.

Ryan also signed off on three leases for secretary of state offices that helped out Warner and another friend, Harry Klein, a Republican developer and businessman. The feds allege that Ryan would stay at Klein's homes in Jamaica and California on vacation and engage in sham financial transactions to act as if he were paying for it. In fact, Ryan is accused of continuing to do this as governor even after federal agents asked him about it.

On Wednesday, reaction varied from outrage to delight over Ryan's indictment.

Joe Power was the attorney for Scott and Janet Willis, whose six children died in a fiery accident in Wisconsin involving a driver who had illegally received his driver's license in Illinois.

"It's a sad day for Illinois to know that the people of Illinois elected to the secretary of state's office, as well as the governor's office, a serial criminal."

Ryan and his chief aide were accused of helping cover up crimes in the secretary of state's office, partly by dismantling the agency's inspector general's office.

"I'm overjoyed by the outcome," said one former investigator in the office, Ed Hammer. "It makes a wonderful Christmas present."

But one of the Death Row inmates whom Ryan freed on Jan. 10, Aaron Patterson, promised to protest the case against the former governor and Nobel Prize nominee.

"I am outraged the feds would indict Gov. Ryan," Patterson said. "He took a bold step in releasing me and three other guys on pardons. We will wholeheartedly support Gov. George Ryan and we will fill the courtroom up."

Contributing: Michael Sneed, Dave McKinney, Abdon Pallasch, Frank Main