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Indictment targets Ryan fund, ex-aidesApril 3, 2002 BY STEVE WARMBIR, TIM NOVAK AND DAVE MCKINNEY STAFF REPORTERS Federal prosecutors unleashed a full-scale attack Tuesday on Gov. Ryan's inner sanctum, indicting two former top campaign aides--one "like a son" to Ryan--and Ryan's campaign fund for "engaging in a pervasive pattern of fraud and corruption" over seven years. Ryan's campaign had numerous secretary of state workers do election work for him and other campaigns while being paid by taxpayers, prosecutors allege. Secretary of state workers were expected to sell fund-raising tickets and meet financial goals and in return got bonuses, raises and promotions for helping Ryan and other politicians, prosecutors allege. And when a variety of probes threatened Ryan's political future, state investigators were fired, documents destroyed, and lies told, the feds say. "Public funds were stolen and plundered for political benefit," U.S. Attorney Patrick Fitzgerald said in announcing the indictment, which reached the highest levels yet in the Ryan administration. The 80-page indictment contains numerous allegations against Ryan's former chief of staff, Scott Fawell, who is accused of using secretary of state workers to help his mom's political campaign, and later taking favors, including Costa Rican prostitutes, from a political ally who is not named in the indictment. Sources identified the ally as a former state legislator, Roger "The Hog" Stanley. Fawell and two others, including Ryan's daughter, Lynda Pignotti, also received a total of $30,000 in questionable payments for campaign work in 1995 and 1996 from one of Stanley's companies, according to the indictment and sources. Pignotti has not been charged with any wrongdoing, and a spokesman for Ryan did not believe she was involved. Regarding the governor himself, Fitzgerald repeatedly declined to answer any questions. The governor has not been charged in the probe, dubbed Operation Safe Road. Other Ryan associates and friends are believed to be under investigation, and Fitzgerald vowed to pursue the probe "vigorously." Ryan's campaign fund is the first in the nation to be indicted on a federal racketeering conspiracy, a law originally created to combat the mob. Other funds charged with crimes include those of Richard Nixon and former presidential candidate Lyndon LaRouche. Prosecutors want to seize more than $1 million from Ryan's fund, which had more than $2 million as of December. Ryan on Tuesday avoided reporters at the state Capitol by being whisked out through an underground tunnel. His spokesman, Dennis Culloton, said Ryan was saddened for the two men but that his conscience was "clear" and he would charge ahead to finish his term. The allegations also rippled out to the two men vying to replace Ryan, Democrat Rod Blagojevich and Republican Jim Ryan. Blagojevich called on Ryan, the state's attorney general, to return all campaign contributions he had received from the governor, and a Jim Ryan spokesman said Tuesday that the process already was under way. Overseeing the corruption in the Ryan campaign, prosecutors allege, was Fawell, 44, of St. Charles. Fawell served as Ryan's chief of staff throughout most of the 1990s and has been described as being "like a son" to Ryan, sources said. Before, the closest person to Ryan convicted in the ongoing corruption scandal was his friend and former inspector general in the secretary of state's office, Dean Bauer. Bauer was sentenced to a year behind bars for obstructing justice. Helping Fawell was Richard Juliano, a once-rising star in the GOP and University of Chicago graduate who went from Ryan's deputy campaign manager in the 1998 governor's race to a high-ranking Department of Transportation official in the Bush administration. Fawell was suspended Tuesday with pay from his $195,000 job running McCormick Place and Navy Pier, a public job Ryan gave him. Juliano, who quit his job last week, is expected to plead guilty to one count of mail fraud and is cooperating with prosecutors. In recent days, Fawell has been in Hawaii with a friend, sources said. He could not be reached for comment, nor could his wife. The couple could lose their St. Charles home, which the government wants to seize. Fawell's prominent attorney, Edward Genson, blasted the indictment against his client. "My client is being penalized for something that happens in Illinois politics every day," Genson said. "The poor guy is being indicted for helping his mom. How many prosecutors have helped their moms?" Genson blamed the cascade of allegations against his client as coming from government witnesses who have been granted immunity and are making up stories. Juliano's prominent attorney, Jim Montana, stressed his client was cooperating fully with the feds: "As the indictment reflects, Mr. Juliano, beginning as a young college student, took orders, direction and instructions from his boss and political mentor, Scott Fawell. Mr. Juliano regrets not exercising appropriate judgment and independence during that period." Fawell allegedly used secretary of state employees and resources for the state Senate primary campaign of his mother, Beverly Fawell, in 1994, according to the indictment and sources. State employees, while being paid by the public, also worked on Ryan's 1994 re-election campaign for secretary of state, the 1996 presidential primary campaign of Ryan-endorsed candidate Phil Gramm, and races for the 1996 Illinois House and Ryan's 1998 campaign for governor. When state investigators started looking into secretary of state employees selling licenses for bribes--and considered the possibility that the misdeeds were tied to raising money for Ryan--Fawell either had the investigators fired or reassigned, prosecutors allege. Fawell later lied to a federal grand jury looking into the scandal, according to the indictment. Fawell also is accused of having two companies tied to an individual not named in the indictment help pay salaries of state workers doing campaign jobs for the 1996 races for Gramm and Illinois House Republicans; the practice essentially helped camouflage that the state employees were working on the campaign. The state workers were allegedly getting money from two sources, the state and the companies, owned by former state lawmaker Roger Stanley, sources said. Fawell has a close relationship with Stanley. Shortly after the 1996 campaign, Fawell approved the creation of a job in the secretary of state's office for Stanley to boost his pension, the indictment alleges. From 1991 to 1998, Fawell allegedly took trips from Stanley, including vacations to Costa Rica, Door County and Lake Ontario. And Fawell, Juliano and Ryan's daughter took about $30,000 in questionable payments in 1995 and 1996 for campaign work from one of Stanley's firms, according to the indictment and sources. Contributing: Annie Sweeney and Lynn Sweet Fawell made name with tough tactics BY DAVE MCKINNEY AND TIM NOVAK STAFF REPORTERS SPRINGFIELD--Scott Fawell was livid. Republican Al Salvi, trying to turn around a tight race against Democrat Jesse White for secretary of state in 1998, suggested corruption was rampant in the secretary of state's office under George Ryan. Ryan promptly swung his support to White. And Salvi's top aide got a tongue-lashing from Fawell, Ryan's campaign manager.
"Fawell called me at home, screaming at me, 'Who does Al Salvi think he is? Eliot f------ Ness? We're going to bury that story, and we're going to bury Al Salvi and all you SOBs,' " Salvi's former campaign manager Rod McCulloch recalled. That political flashpoint in Fawell's career now seems ironic given that federal prosecutors have dropped a 10-count indictment on Fawell and pressed corruption-related charges against a lower-ranking campaign aide and the governor's $2.3 million political warchest. If anyone is now truly facing the threat of being buried--at least in a legal sense--it is George Ryan's onetime top aide, whose mercurial style and cutthroat political sense made him an attractive commodity to some of the state's best-known Republican officeholders, dating back to former Sen. Charles Percy. "He likes to play power politics, hardball," one top GOP strategist said of Fawell. "Not just political tactics, but in dealing with people, calling people that they didn't give enough [money].... It's a take-no-prisoners attitude. He's not afraid to yell and scream at people. He's not averse to payback. You wouldn't want to turn your back on him." Fawell, 44, comes from well-bred political stock. The Fawell family traces its roots to DuPage County's original settlers and has sent its members to Congress, the Statehouse and, in Scott Fawell's case, to the $195,000-a-year plum assignment overseeing McCormick Place and Navy Pier. Fawell is the son of former state Sen. Beverly Fawell (R-Glen Ellyn) and Bruce Fawell, a former judge who once headed DuPage County's court system. His uncle is former U.S. Rep. Harris Fawell (R-Ill.). Scott, nicknamed Scooter, grew up in West Chicago, loved to play hockey and, in college, developed a love for politics. After graduating from North Central College in Naperville, Fawell snagged his first political job as Percy's driver in the early 1980s, a job he held for almost a year. Fawell never got lost while behind the wheel and had a knack for keeping the disheveled senator's belongings in order. "Scott showed all the promise of a very good political aide," the 83-year-old Percy said from Washington, D.C. "Most young people wanted to work as policy aides or researchers, but not Scott. He wanted to be in the field, on the road, out where the action was." Following the stint under Percy, Fawell worked in the Illinois Department of Employment Security as an assistant director and at the Illinois State Toll Highway Authority as a lobbyist. In between those posts, he volunteered to work on the Jim Thompson/George Ryan gubernatorial ticket in 1986. Two years later, after that ticket won, Fawell began his long partnership with Ryan. He went to work as a special assistant to then-Lt. Gov. Ryan, later running Ryan's successful 1990 and 1994 campaigns for secretary of state. Fawell was Ryan's chief of staff in the secretary of state's office from 1992 to 1999, outfitting his Thompson Center office with sports memorabilia, including seats from the old Chicago Stadium and an autographed Scottie Pippen photograph on his wall. "Scott did a terrific job of putting it all together," Ryan told Sun-Times political columnist Steve Neal in late 1998, reflecting on Fawell's three winning campaigns in the 1990s. "Scott lives and breathes politics. He loves it and has a good feel for it." Behind the scenes, federal prosecutors contend, Fawell ran Ryan's office with an iron fist, having a hand in shutting down politically embarrassing investigations, routinely blurring his state and political activities, and overseeing a fund-raising apparatus that meant promotions for employees who sold the most Ryan campaign tickets. Some of Fawell's alleged misdeeds began surfacing in the 1998 gubernatorial race against Glenn Poshard, who even produced an intercepted Ryan campaign memo authored by Fawell that directed state employees to perform political work. Ryan attempted to distance himself politically from Fawell by appointing him CEO of the Metropolitan Pier and Exposition Authority shortly after taking office. Last December, Fawell's brother helped set up a legal defense fund, and several political friends helped solicit legislators and other to contribute. One of those working on Fawell's behalf is lobbyist Al Ronan, who has represented clients before the McPier board and has represented McPier in Springfield. "From what I've heard through the grapevine, it isn't going real good," said one lawmaker, who was told only $5,000 was raised during the fund's first few months. During public appearances in Chicago or in Springfield, Fawell openly addressed the likelihood of being a marked man, denying that he oversaw any illegal activities in Ryan's office and taunting federal prosecutors to indict him if they had the evidence. "Nothing happened in that place that is any wrongdoing. People can write and say what they want. But in the end, I'm absolutely convinced ... the governor, myself or anyone else in the hierarchy of the campaign or in the office will be exonerated," Fawell told reporters in Chicago last August. Asked if months and months of speculation about his role was taking a personal toll, Fawell replied, "I sleep fine. Because you know what? I know what I did, and I know I did nothing wrong." Contributing: Fran Spielman Work for Illinois GOP led to White House job Tapped early on by the Bush administration, Richard Juliano quickly accepted a top job in the Transportation Department, moving his family from Park Ridge to the Washington suburbs. As the Transportation Department's White House liaison, Juliano, 34, was the chief overseer of political appointments, handling a full range of personnel functions. Juliano voluntarily resigned from the post on Friday, aware that an indictment was coming from the U.S. attorney. Juliano will plead guilty to one count of mail fraud stemming from when he was the deputy manager for Ryan's 1998 campaign for governor. He is cooperating with authorities. The department said in a statement that Transportation Secretary Norman Mineta "has the highest personal regards for Rich who, from his first day on the job, served the department ably and with distinction." Juliano arrived in Washington after a career tied to Gov. Ryan and aide Scott Fawell. In a statement from Juliano's lawyer, Fawell was called Juliano's "boss and political mentor. ... Mr. Juliano regrets not exercising appropriate judgement and independence during that period." Juliano ran the Illinois Bush-Cheney campaign. He served in several positions when Ryan was Illinois secretary of state, managing his 1994 election and other political races where Ryan had a stake in the outcome. Lynn Sweet Indictments dig an early hole for state GOP candidates BY STEVE NEAL SUN-TIMES COLUMNIST None of them has been accused of wrongdoing. But the GOP's statewide ticket has been tainted in the wake of Tuesday's indictments. Scott Fawell, who was Gov. Ryan's closest aide, and Richard Juliano, who ran President Bush's Illinois campaign, are the top Republicans to be indicted in the licenses-for-bribes scandal. Attorney General Jim Ryan, the Republican nominee for governor, who had been anticipating these indictments, sought to distance himself from Gov. Ryan during the recent GOP primary by attacking him in commercials. Among the reasons that Jim Ryan took this pre-emptive strike is that his own polling has shown that Illinois voters are in an angry mood about the licenses-for-bribes scandal that put a cloud over the current Republican administration. In attacking the governor, Jim Ryan was looking ahead to the November election. What Republican strategists are worried about is that both Ryans, though not related or politically close, are blurred in the public mind because they share the same last name and are members of the same political party. In last month's bitter GOP primary, conservative gubernatorial candidate Patrick O'Malley ran a vicious commercial in which Jim Ryan's portrait morphed into George Ryan. O'Malley made wild and unsubstantiated allegations linking Jim Ryan to George Ryan's troubles. Even though O'Malley showed reckless disregard in making these charges, Jim Ryan's image was undeniably tarnished. Democratic gubernatorial candidate Rod Blagojevich should think long and hard before he seeks to make a link between Jim Ryan and George Ryan's troubles. Not all of Blagojevich's allies are squeaky clean. In addition to Jim Ryan, three other prosecutors are on the GOP ticket: Jim Durkin for the U.S. Senate, former Knox County State's Attorney Carl Hawkinson for lieutenant governor, and DuPage State's Attorney Joseph E. Birkett for attorney general. Their law-enforcement backgrounds are considered an asset by GOP strategists. But the Fawell and Juliano indictments are a definite liability. Scandals have had a major impact in Illinois politics. President Bill Clinton's troubles were a factor in the GOP's 1994 sweep of all statewide offices and both houses of the state legislature. In the 1974 elections following President Richard Nixon's resignation, Democrats recaptured both houses of the Illinois Legislature. Both parties have been brought down by scandals. In the fall of 1950, Sen. Estes Kefauver of Tennessee held a hearing in Chicago to investigate organized crime. Chicago Police Capt. Dan "Tubbo" Gilbert, the Democratic nominee for Cook County sheriff, admitted to the committee that he had assets of what would be the equivalent of $3.6 million in today's currency and an annual income of what would be $450,000--many times his salary. The Chicago Sun-Times obtained a copy of Gilbert's secret testimony and published it five days before the election. Gilbert, who became infamous as the "world's richest cop," dragged down the state and Cook County Democratic tickets. Tuesday's indictments could be just as costly to Illinois Republicans. Where matters stand in licensing scandal Q. How did the licenses-for-bribes scandal start? A. It began unfolding in 1994 on the night George Ryan was re-elected to a second term as secretary of state. That same day, a part fell off a truck driven by Ricardo Guzman, causing an accident that killed six children of the Rev. Duane Scott Willis and his wife, Janet. Their attorney, Joseph Power, found that Guzman illegally obtained his commercial truck driver's license, a charge that hounded Ryan while he was running for governor in 1998. Ryan indignantly denied that his office ever gave out driver's licenses in exchange for campaign contributions. Q. What's been proved so far? A. Federal officials have found that while Ryan was secretary of state, he amassed a multimillion-dollar campaign fund partly with the help of state employees who sold fund-raising tickets to people who did business with the office, such as those seeking driver's licenses and low-digit license plates. Q. Is the investigation over? A. No. U.S. Attorney Patrick Fitzgerald vowed Tuesday that the investigation will continue "vigorously.'' There are other Ryan aides and friends who have obtained lawyers to respond to other areas under investigation. More indictments are reportedly due soon. |
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