Illinois Gov's Campaign Faces Indictment

Illinois Governor George Ryan's campaign committee and two former aides were charged Tuesday with racketeering in the biggest indictment to come out of a federal investigation into a licenses-for-bribes scheme when he was secretary of state.

The indictment says the committee secretly and illegally used state workers and public money for political work, from campaigns for the Illinois House to a 1996 presidential bid.

"The indictment alleges that Citizens for Ryan, as a campaign, for a number of years broke the law with considerable vigor," U.S. Attorney Patrick Fitzgerald said. "Public funds were stolen and plundered for political benefit."

Such practices began as early as 1994, the indictment said. Those involved allegedly tried to cover up the scandal by lying to a grand jury and shredding documents.

The probe began in 1998 as an investigation into whether secretary of state employees traded truck driver's licenses for bribes. It quickly expanded to include allegations that internal investigations were sabotaged and that state resources were doing campaign work on state time.

Prosecutors have said some $170,000 in bribe money ended up in Ryan's campaign fund. The Republican governor has not been charged with wrongdoing, but he decided against seeking a second term after the scandal hurt his popularity.

Dennis Culloton, a spokesman for Ryan, said the governor was not aware of the incidents alleged in the indictment.

"With regard to the campaign fund being indicted, it's not something that he's all that familiar with. He's a pharmacist, not a lawyer," Culloton said.

Scott Fawell, 44, Ryan's campaign manager and longtime former chief of staff, was charged with racketeering, mail fraud and conspiracy to obstruct justice. He was Ryan's top aide when Ryan was secretary of state.

Fawell is the highest-ranking official charged in the investigation. Forty-eight people have been charged and all but six have been convicted.

Fawell's lawyer, Edward Genson, said his client had done nothing wrong and would plead innocent.

Also charged was Richard Juliano, 34, the No. 2 man in the governor's 1998 campaign who became the U.S. Transportation Department's liaison to the White House. Prosecutors said he quit that job last week.

Juliano was a longtime secretary of state's employee and political aide to Ryan who also directed President Bush's 2000 campaign in Illinois.

Juliano's attorney, James Montana, said Juliano has been cooperating with investigators for more than six months and will plead guilty to a single count of mail fraud.

According to the 80-page indictment, Fawell and Juliano used secretary of state employees to staff campaign offices during Ryan's 1998 campaign and state funds were used to stock the campaign offices with supplies.

The two men allegedly concocted memos explaining why the employees deserved raises and promotions in state government. The money and promotions were really rewards for political work, the indictment said.

The indictment also said Fawell recommended reassigning and even firing certain secretary of state's employees to head off investigators.

The indictment also said that in 1996, Fawell had a number of Citizens for Ryan employees work on behalf of a Republican presidential primary candidate endorsed by Ryan. The candidate apparently was Sen. Phil Gramm of Texas.

The indictment also said payments of $30,000 to Fawell, Juliano and another unidentified individual were funneled through a private company to conceal the fact that state employees were involved.

Crucial to much of the racketeering scheme was a state vendor that allegedly helped pay for Fawell's vacations in Costa Rica, Canada and Wisconsin from 1991 to 1998. The indictment said Fawell failed to disclose the vacations on his state-required financial disclosure form.

According to the indictment, Fawell and others in 1998 directed a campaign employee to destroy and discard documents relating to the use of state employees in 1996 campaigns for the Illinois House of Representatives.

The employee then "directed the shredding and destruction of documents," according to the indictment. Garbage bags of shredded documents were ordered disposed of away from the campaign office and computers were "wiped" clean of evidence, it said.

Among other things, the indictment asks that the Citizens for Ryan campaign fund forfeit approximately $1 million in three bank accounts. It also asks for forfeiture of Fawell's suburban house.

The scandal reached beyond Illinois when officials warned other states that unqualified truck drivers may have traded tainted Illinois licenses for licenses elsewhere. Hundreds of licenses were revoked in Illinois and Florida, and New York officials ordered new tests for scores of truckers from Illinois.