With the power to sign government leases and dole out contracts, former Illinois governor George H. Ryan illegally steered business to his friends and cash to his family for more than a decade, a federal prosecutor charged Wednesday.
Once the scheme was in place, the onetime pharmacist from Kankakee began to appear with rolls of $100 bills in his pocket, Assistant U.S. Attorney Zachary T. Fardon told a 12-member jury. He said Ryan took free trips to Las Vegas and Jamaica, several times pretending to pay for the lodging at a friend's villa with a check, only to be repaid in cash.
"The fix was in in Illinois state government," Fardon said at the start of what is expected to be a four-month public corruption trial.
Ryan, best known as the Republican governor who lost faith in capital punishment and commuted the death sentences of 167 inmates in 2003, contends he is "absolutely not guilty." Between speeches to cheering anti-death-penalty audiences, he publicly protests his innocence, saying the government cannot prove he profited.
"The state of Illinois didn't get cheated out of anything," defense attorney Dan Webb told the jury. "Providing benefits to supporters is part of politics and is not a crime."
Webb, who likened Ryan's favors to the presidential practice of awarding ambassadorships to fundraisers and friends, chose not to address some of the most potentially damning evidence. He focused his fire on several contract deals and the credibility of the government's principal witness, former Ryan chief of staff Scott Fawell.
At a time when Illinois Republicans are reeling, the long-awaited trial is not just the final reckoning for the 71-year-old Ryan, who spent more than 30 years in public office. It is also the highest-profile public corruption trial overseen by U.S. Attorney Patrick J. Fitzgerald, who has targeted state and local corruption with a string of indictments.
Fitzgerald, also the special counsel in the CIA leak case, sat in the audience as Fardon laid out the government's case against Ryan and Lawrence E. Warner, a Chicago businessman. Prosecutors say Warner, 67, collected $3 million from insider leasing deals and thinly veiled shakedowns of companies doing business with Illinois, primarily when Ryan was secretary of state in the 1990s.
Fardon offered details that, if proven, open a startling window onto cronyism in the awarding of state contracts. Investigators contend Ryan put out the word to his staff that his friends should get their way. Those friends often tried to hide their profits, Fardon said.
In one case, the government contends, Warner manipulated the bid specifications for a million-dollar contract involving license plate stickers after demanding a non-negotiable fee from the winning company. In another, he allegedly bought a Joliet building for $202,000, disguised his ownership and leased it to Ryan's office for $239,000 in the first year alone.
When Fawell and others raised questions about Warner's influence, Fardon said, Ryan told them to "keep Larry Warner happy." The prosecutor said staff members "got the message loud and clear" that to cross Warner was to cross Ryan.
Harry Klein, who ran a Chicago currency exchange, allowed Ryan to use his Seven Seas villa in Jamaica. Sometimes Ryan would write a check for $1,000 or $2,000, ostensibly for rent, but Klein would repay him the same amount in cash, the government contends. Ryan allegedly once told his staff when negotiating a lease, "Do whatever Harry wants."
When Ryan was governor, a lobbyist named Ron Swanson heard from Ryan that Grayville, Ill., would be the site of a new prison. Swanson quickly went to a community leader and, using the information, which remained secret, promised he would win Grayville the bid in return for $50,000.
Swanson got his money and, in a figurative wink to his new client, allegedly arranged for Ryan to thank the community leader for his efforts at a ceremony announcing the prison site. Webb countered that Swanson was freelancing and that Ryan knew nothing about the charade.
The government charges that Ryan pocketed cash, gifts and free junkets and then lied about it to federal investigators, Illinois taxpayers and the Internal Revenue Service. He also allegedly steered $167,000 to relatives, as well as $300,000 to a longtime friend.
Apparently no witness can trace money directly to Ryan. Prosecutors contend Ryan "lived large" and was frequently flush with cash in $100 denominations. Yet Ryan's bank records, Fardon said, show that he never used an ATM and, in the space of a decade, withdrew a total of $6,700 in cash from his bank.
Terence Gillespie, representing Warner, said everything can be explained by the fact that his client and Ryan were "close personal buddies going way back."
"What went on was business. Business pure and simple," Gillespie told jurors. "It's a fact of life that . . . people who have friends in government are not prohibited from lobbying. The exact opposite is the case."