In a landmark verdict, a federal jury Wednesday convicted former Gov. George Ryan’s closest political confidant and Ryan’s campaign fund in a wide-ranging corruption scheme that diverted government resources for political gain and led to shredding of campaign documents to keep them from investigators.
The racketeering and fraud convictions of Scott Fawell, Ryan’s former chief of staff, and the Citizens for Ryan campaign committee mark the most significant prosecutions of the nearly five-year Operation Safe Road probe of Ryan’s scandal-scarred stewardship of the secretary of state’s office.
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The jury’s verdict represented the first time in U.S history that a political organization has been convicted of racketeering.
The convictions draw the probe ever closer to Ryan, who was linked by testimony at the trial to the scandal that crippled his political popularity and played a major role in his decision not to seek a second term as governor.
It may also signal a pivotal moment in Illinois’ political history by forcing an end to politics as usual in state government, said one attorney involved in the grueling two-month trial.
“I think everybody should beware that reform may be coming by way of criminal indictment,” said attorney Thomas Breen, who defended Citizens for Ryan. “I think for a long, long time we’ve mixed politics and government, and those days seem to be over with, or at least if you’re going to do it, beware.”
As he left the Dirksen Federal Building still free on bond, Fawell, 45, told reporters, “I can live with myself very easily.”
In a brief statement issued after the verdict, Ryan said he respected the jury system but was saddened by Fawell’s conviction.
“I do wish Scott well during the trying days ahead,” Ryan said. “He is a bright and talented young man, and this will be a tremendous strain on him and his family. Lura Lynn and I will keep them in our thoughts and prayers.”
At one point, prosecutors referred to the former governor as a co-schemer, and other government evidence suggested Ryan knew about the shredding of political documents at the secretary of state’s Chicago executive offices after the federal investigation became public knowledge during his winning 1998 governor’s campaign.
Ryan was also alleged to have profited from his endorsement in 1995 of ill-fated presidential contender Philip Gramm, sharing secret consulting fees with four of his daughters even though they didn’t do any work for the campaign, government witnesses said.
Glenn Poshard, Ryan’s 1998 Democratic gubernatorial opponent, said the Ryan campaign and Fawell made him look like a desperate politician when he called for investigation after investigation of improprieties by Ryan’s campaign committee.
“Now a jury comes back [and says] all of these things were true.”
So far Fawell has shown no inclination to cooperate with authorities against Ryan, but now that he has been convicted on nine felony counts and faces at least 5 years in prison, he might have to reconsider his options.
In addition, prosecutors could also give Fawell immunity from further prosecution to force his testimony before the grand jury following his sentencing.
Early sentencing urged
In an unusual move after the guilty verdicts, Assistant U.S. Atty. Patrick Collins, the lead prosecutor in Operation Safe Road, asked that Fawell’s sentencing not be delayed, saying, “There is an ongoing investigation.”
The seven-man, five-woman jury deliberated about seven days before convicting Fawell and Citizens for Ryan on charges of racketeering, mail fraud and conspiracy to obstruct justice. Fawell was also convicted of five additional counts of theft of government funds, perjury and filing false tax returns.
After the verdict, Citizens for Ryan agreed in principle to pay $750,000 to settle forfeiture allegations in the indictment.
Fawell, the brash chief of staff during Ryan’s tenure as secretary of state and campaign boss, was as unemotional for the verdict as he had been throughout the trial.
Moments before the verdict was announced, Fawell was joking with reporters in the courtroom that they should be working on other stories. “Why aren’t you covering the war?” asked Fawell, whose family has been a political force in DuPage County Republican politics for years.
Fawell’s attorney, Edward Genson, vowed to appeal the conviction.
Fawell “wanted his day in court,” Genson said. “He understood it was an uphill fight. None of us were surprised. You do the best you can. It’s very difficult to undo eight weeks of testimony.”
With Wednesday’s verdict, Operation Safe Road has snared 55 convictions, the third most of any public corruption probe in modern Chicago history behind the Operation Greylord investigation of court corruption and the Operation Phocus probe of city licensing and zoning practices, both in the 1980s.
While on state time, Fawell’s closest aides routinely worked on numerous campaigns at Fawell’s direction: Ryan’s 1994 re-election campaign for secretary of state; a 1994 primary fight involving Fawell’s mother, former state Sen. Beverly Fawell (R-Glen Ellyn); the 1996 campaigns of House GOP candidates throughout the state; Gramm’s 1996 presidential campaign; and Ryan’s 1998 campaign for governor.
Fundraising pressure
Employees were pressured to raise as much as $20,000 a year for Ryan’s political operation from the people and businesses they were supposed to be regulating. Promotions and the biggest pay raises went to the most politically active employees. Coveted low-digit license plates were exchanged for campaign contributions.
Fawell might as well have hung “a for-sale sign” on the glass doors to the secretary of state executive offices in Chicago’s Thompson Center, prosecutors charged. “That’s what this was about. We serve for money,” Assistant U.S. Atty. Joel Levin said in closing arguments.
As part of the forfeiture deal worked out with prosecutors, Fawell, whose assets have been depleted, wouldn’t be fined any money.
At prosecutors’ request, U.S. District Judge Rebecca Pallmeyer had previously frozen the campaign committee’s funds at $1 million to ensure there would be money to satisfy the forfeiture requirement.
The deal, if finalized by Thursday, won’t require the jury to return to decide the issue. In the meantime, Pallmeyer forbade jurors from discussing the case with reporters until the matter has been fully resolved.
Ryan OKs settlement
Breen said he obtained Ryan’s approval for the $750,000 settlement. “We would gladly reimburse anybody who may have been harmed because it was never the intention of the committee itself to take anything away that rightfully belongs to the people of the state of Illinois,” Breen said.
Breen said he doubted if Citizens for Ryan, its funds depleted and Ryan’s political future over, would appeal its conviction.
In convicting Fawell and Citizens for Ryan of racketeering, the jury found they had diverted state employees and supplies to numerous campaigns of Ryan and his political allies.
The trial exposed a Ryan administration seemingly more concerned about politics than the operation of one of state government’s most important elective offices.
The prosecution team–Assistant U.S. Attorneys Zachary Fardon and Levin and Collins, FBI Special Agent Raymond Ruebenson and Postal Inspector Basil Demczak–alleged Fawell held down costs in the 1998 campaign by stealing state office supplies, cellphones, even cases of paper.
Fawell, armed with a screwdriver, was spotted removing property tags from a state-owned refrigerator that was moved to his campaign office.
Attorneys for Fawell and Citizens for Ryan tried to put the Illinois political system on trial to fend off the charges, saying such patronage and fundraising practices had been commonplace in Illinois for decades.
But the jury “completely rejected that defense,” Collins told reporters. “If you are breaking the law, it’s not a defense that this went on 30 years ago, or 20 years or 5 years ago or is still going on.”
Sentencing set for June
The jury also convicted Fawell and Citizens for Ryan of shredding numerous garbage bags of political materials in the Chicago executive offices shortly after federal authorities raided a licensing facility in Melrose Park and began asking questions about rampant fundraising among employees.
Sentencing for Fawell and Citizens for Ryan is scheduled for June 26. The campaign committee faces probation.
Only two other campaigns–the Committee to Re-Elect the President, Richard Nixon’s 1972 campaign, and a presidential bid by Lyndon LaRouche–had been charged with federal criminal misconduct, but they were not charged with racketeering.
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Key events in the SOS office scandal
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1990
Nov. 6: George Ryan is elected secretary of state.
1992
September: Scott Fawell, Ryan’s chief of staff, directs full-time secretary of state employees to work on Kankakee state House campaign of Bruce Clark, husband of Ryan’s niece.
1993
Early: Fawell begins coordination of Ryan re-election campaign while working on state time.
March: Investigators for the secretary of state’s inspector general probe sale of Ryan fundraising tickets following raid at Libertyville facility.
1994
Fall ’93- Nov. 1994: Substantial campaign re-election work conducted by Ryan workers on state time.
February: Fawell orders his top staff to help the primary campaign of his mother, then-state Sen. Beverly Fawell.
Spring: Inspector general investigator probing missing cash at Naperville driver’s license facility directed to call Ryan. Within two days of call, investigators told to do no more work on case.
August: Fawell sets fundraising ticket-selling goals for agency directors and says not meeting them is unacceptable.
Nov. 8: Ryan re-elected. Highway crash outside Milwaukee involving trucker with fraudulent Illinois license kills six children.
Nov. 16: Dean Bauer, Ryan’s inspector general and a long time friend, tells others he suspects trucker got fraudulent license and had given investigation a high priority. No investigation was conducted.
December: Fawell writes memo to Ryan urging overhaul of inspector general’s office to get “someone in there who won’t screw our friends, won’t ask about FR (fundraising) tickets.”
1995
May 31: Fawell guts inspector general’s department.
Spring: Ryan, Fawell and others agree to endorse then-Texas Sen. Phil Gramm’s campaign for president. Ryan allegedly proposes a “consulting” line in Illinois campaign budget “so that some people can make some money.”
1996
Summer ’95-Feb. 1996: Gramm campaign makes consulting payments to Illinois firm that redistributes money to Fawell and others, including four of Ryan’s daughters.
Summer: Ryan and then-House Speaker Lee Daniels allegedly agree Ryan will dedicate coordinators for legislative campaigns to help keep Republican control of House.
Fall: Fawell assigns top aides to work on state time for a variety of Republican candidates. He and others are secretly paid for their work.
1998
January-August: State-paid resources, including office supplies, copy paper, industrial shredder, TV/VCR and refrigerator diverted to Ryan’s campaign for governor.
February: Fawell develops plans to divert state-paid employees to Ryan’s campaign, including a memo that workers “are all leaving their (state work) spaces ‘lived in.'”
Sept. 3: Federal agents arrest three people, including two top managers, for selling truck driver’s licenses as they execute search warrant at Melrose Park facility. It is the first public indicator of the Operation Safe Road probe into licenses exchanged for bribes.
September: With Ryan present, Fawell allegedly tells aide William Mack to make sure any campaign-related documents in secretary of state Chicago office are destroyed. That night, 8 to 12 bags of shredded documents taken to trash bin.
Sept. 11: Fawell receives subpoena to appear before federal grand jury investigating wrongdoing in secretary of state’s office.
September: Within days of shredding incident, Mack allegedly tells Ryan that Chicago office has been cleaned up.
Sept. 17: As Ryan runs for governor against Democrat Glenn Poshard, the Democratic Party launches a TV ad suggesting a link between Ryan and the November 1994 accident involving trucker with fraudulent license.
Oct. 6: Then-U.S. Atty. Scott Lassar says Ryan not target of federal probe.
Oct. 10: Ryan denies allegation that one of his former investigators was told to drop probe of trucker in deadly 1994 accident.
Oct. 13: Appearing before a federal grand jury, Fawell denies employees are pressured to sell Ryan fundraising tickets.
Nov. 3: Ryan elected governor.
December: Fawell approves state pay raises for secretary of state workers who had been helpful to campaign.
2000
Feb. 1: Bauer, Ryan’s inspector general, indicted on charges of covering up corruption to protect Ryan.
2001
Jan. 17: Bauer convicted after pleading guilty to obstruction of justice.
Aug. 8: Ryan announces he won’t seek second term.
2002
April 2: Federal government indicts Fawell and Ryan’s campaign committee, Citizens for Ryan, on public corruption charges.
May- June: Several close Ryan associates, including Lawrence Warner, Donald Udstuen and Roger Stanley, are indicted by federal government on charges that they improperly used their clout to make money off the state.
2003
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Jan. 13: Ryan leaves office.
Jan. 14: Opening statements begin in trial of Fawell and Citizens for Ryan.
March 19: Federal jury finds Fawell, Citizens for Ryan guilty.
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