Another key member of former Gov. George Ryan’s kitchen cabinet was indicted Wednesday, hit by federal perjury charges for allegedly lying to a grand jury about pocketing a $50,000 lobbying fee to win a new state prison for a southern Illinois town even though he knew Ryan had already decided to place it there.
Arthur “Ron” Swanson, a high-powered lobbyist for three decades, was also accused of lying about a ghost-payrolling job he held at the Metropolitan Pier and Exposition Authority. He was also charged with lying about an alleged $4,000 payment that he gave another Ryan confidant in the men’s room of a Chicago restaurant as compensation for steering a lucrative lobbying job to Swanson.
Authorities also alleged that Swanson perjured himself when he denied giving money to an undisclosed high-ranking official in the governor’s office to gamble at a casino in Nevada in the Lake Tahoe area.
Sources with detailed knowledge of Swanson’s grand jury testimony identified the official as Ryan, but there was no indication in the charges of wrongdoing by the former governor.
In announcing the latest indictment of a Ryan associate in the ongoing federal Operation Safe Road investigation, U.S. Atty. Patrick J. Fitzgerald said Swanson lied during three separate grand jury appearances, even though he had been given immunity from prosecution if he told the truth.
Operation Safe Road began in 1998 as a probe of license-selling during Ryan’s tenure as secretary of state, but it moved into Ryan’s inner circle with charges of shakedowns and coverups. Swanson, 77, of southwest suburban Homer Glen, is the 65th defendant charged; 58 have been convicted so far.
Swanson’s indictment makes it clear that the investigation has expanded into the governor’s office during Ryan’s term.
Reached at his Kankakee home Wednesday, Ryan declined to comment.
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According to the charges, Swanson was questioned during his grand jury appearances in 2002 and 2003 about whether he provided cash, merchandise, gift certificates or vacation lodging to public officials in the secretary of state and governor offices or their family members.
Swanson’s lawyer, James Streicker, said he was disappointed with the indictment, contending Swanson, a longtime diabetic, had recently had a stroke as well as an infection and shrinkage of the brain.
“It may be that he made mistakes in the grand jury or misstatements or his memory was inaccurate, but at no time did he go into the grand jury and intentionally lie,” Streicker said. “If his memory failed him, it may well be in part because of his health condition.”
Swanson, a state senator in the 1960s, was one of a handful of Ryan pals who could walk into the governor’s main office and pass by the secretaries without having to check in.
Flashy rings, easy access
Wearing flashy rings and usually a suit, Swanson would be a frequent guest at the governor’s mansion or join Ryan and other friends at local restaurants during the legislative session.
Before he left office, Ryan had backed the state’s purchase of Lincoln Tower, a Springfield office-apartment complex laden with alleged environmental and structural problems, for about $21 million in a controversial deal that would have meant a broker’s fee of up to $1.7 million for Swanson. Atty. Gen. Lisa Madigan rejected the deal.
The Tribune reported this year that federal investigators had subpoenaed records of the Lincoln Tower deal, but Wednesday’s indictment made no allegations about that proposal.
According to the charges, Ryan chose Grayville in February 2001 over two other communities for the site of a new maximum-security state prison, but he did not immediately disclose his choice to the public. The indictment alleged Swanson was tipped the same day by one or more officials in Ryan’s office on the decision.
A week later, Swanson signed an agreement with retired Grayville dentist Clyde W. Wilson to lobby the state to win the project for the town, state lobbying records show. Wilson has since died.
Swanson was paid a $50,000 fee for his efforts on March 12, the indictment alleged.
A month later, Ryan announced Grayville’s selection in a crowded local gymnasium and acknowledged Wilson’s efforts in promoting the town. Construction of the prison fell victim to the state budget crisis.
The indictment alleges Swanson perjured himself by denying to the grand jury he knew Grayville had already been selected when he was hired by Wilson.
According to the charges Swanson withdrew up to $175,000 from bank accounts from 1999 through 2001, including about $35,000 at the time of Ryan’s decision to pick Grayville for the prison site.
Swanson was accused of lying to the grand jury when he denied keeping withdrawals under $10,000 each to avoid triggering rules that would have required disclosure of the transactions to federal officials. The government also labeled as a lie Swanson’s claim that he spent substantial amounts of cash for clothing at a Chicago-area men’s shop.
According to authorities and the sources familiar with Swanson’s testimony, Swanson was tabbed for a lucrative lobbying job in mid-1999 for Wisconsin Energy Corp. with Ryan’s blessing and intervention.
The Milwaukee-based energy company later opened an electric plant on Chicago’s Southeast Side.
In need of a lobbyist to handle regulatory and governmental issues, a company intermediary turned to Donald Udstuen, another prominent Ryan adviser, according to the sources.
Udstuen conferred with Ryan and then, with Ryan’s concurrence, recommended to the company that it hire Swanson, according to the charges and sources.
Swanson later passed $4,000 to Udstuen in the restaurant bathroom, the charges allege.
By late April 2002, Udstuen was cooperating with the government and secretly taped a conversation with Swanson, authorities said. According to the charges, Swanson offered to lie about the $4,000 payment, saying he would deny the payment ever was made.
According to the charges, Swanson perjured himself by denying he offered to lie about the $4,000.
The indictment also alleges that Swanson lied about his lobbying job with McPier, the public agency that operates Navy Pier and the McCormick Place convention center and was run at the time by Scott Fawell, Ryan’s former chief of staff at the secretary of state’s office. Earlier this year, Fawell was convicted on fraud and racketeering charges stemming from the Safe Road probe.
According to the charges and sources, a high-ranking McPier official instructed its outside lobbyist, the Chicago law firm Mayer Brown Rowe & Maw, to hire Swanson as an additional lobbyist even though the firm wasn’t looking for assistance.
From 2000 through 2002, Mayer Brown hired Swanson’s lobbying firm at $60,000 a year, a cost picked up by McPier, the indictment said.
Swanson was charged with lying to the grand jury by claiming he worked in 2000 on behalf of McPier, meeting with legislators and the law firm every two to four weeks at its Springfield office. Fitzgerald alleged that Swanson did little or no work for McPier.
A spokeswoman for Mayer Brown confirmed the hiring of Swanson. She said the firm has fully cooperated with federal investigators.
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Gambling allegations
Swanson was also accused of concealing that he once gave Ryan money to gamble in the Lake Tahoe casino. In a grand jury appearance, Swanson said Ryan gambled with his own or his wife’s money, according to the indictment.
Swanson also was alleged to have concealed a fraudulent insurance claim in which he inflated by more than $10,000 the cost of art restoration after a 1998 fire at his Springfield office.