Accusers: Ryan Knew of Document Shredding

For the first time in their four-year investigation of political corruption under Gov. George Ryan, federal prosecutors are suggesting that he was aware of possible unlawful conduct -- the shredding of campaign documents to keep them from being gathered as evidence.

In a 76-page court filing, prosecutors said Wednesday that Ryan, who was secretary of state at the time and running for governor, was present in September 1998 when an aide ordered the documents destroyed.

The fresh court papers present the most sweeping view thus far of corruption, going back as far as a decade, that federal prosecutors say flourished when Ryan was secretary of state.

Included are allegations that Ryan knew of campaigning on state time and was briefed on a theft investigation that was afterward shut down.

Document shredding occurred in Chicago and Springfield and Ryan's former and current chiefs of staff were involved in both, the papers say. Ryan staffers accused of doing campaign work on state time included a currently sitting state senator as well as the state insurance director.

The court papers were filed in advance of the trial of Scott Fawell, Ryan's former chief of staff and campaign manager, and the governor's campaign committee. Fawell and the committee are charged in a racketeering indictment with using state employees and funds for political work.

The trial is scheduled to start Jan. 8.

The federal investigation surfaced in September 1998 and in its early stages concentrated on bribes paid in return for drivers licenses. The prime focus at this stage is on political corruption among Ryan aides.

Fifty-seven people have been charged to date and 50 convicted.

In response to the fresh allegations, Ryan issued a statement saying he wouldn't comment on specifics but "there are two sides to every story."

"I will only repeat what I have said many times before: My conscience is clear and in every office I have held I have respected the public trust," the governor said.

U.S. Attorney Patrick J. Fitzgerald declined to comment beyond the allegations contained in the court papers.

The papers say Ryan was on hand in September 1998 when Fawell ordered another aide, William Mack, to get all campaign documents out of the secretary of state's office in the James R. Thompson Center in downtown Chicago and destroy them for fear agents would discover them in a raid.

After directing Mack to get rid of the documents, Fawell turned to Ryan and told him what he had done, the court papers say.

Ryan then left the office, they say.

That night, Ryan aides gathered up campaign press releases, volunteer lists, fund-raising documents and a host of other items -- including request forms for low-digit license plates, the papers say.

At the conclusion of a six-hour shredding operation, eight to 12 bags of shred were deposited in a dumpster, they say.

Mack is quoted as telling Ryan a few days later that the offices had been cleaned up. "Ryan made no response but gave no indication that he did not understand what (the aide) was talking about," the document says.

Prosecutors claim Ryan knew as early as 1992 about campaign work being performed on state time. They say he was on hand at a meeting when Fawell decided to keep on the state payroll an aide who was helping in the state legislative campaign of Bruce Clark -- Ryan's niece's husband.

It was also alleged that numerous Ryan staffers worked on state time on several key Illinois House races in 1996 after Ryan and then-House Speaker Lee Daniels agreed to the arrangement. A spokesman for Daniels, who recently resigned as chairman of the Illinois Republican Party over accusations that his government employees had done political work on state time, denied the allegation.

The fresh document also may shed new light on a $2,600 theft from a drivers licensing center in suburban Naperville. The center's manager, who according to prosecutors had lagged behind in collecting money for Ryan's campaign fund, came under investigation as a possible suspect.

Prosecutors had previously said the matter was dropped after the manager called his political sponsor -- state Senate President James "Pate" Philip, R-Wood Dale. But the fresh court papers say Ryan was briefed by the chief investigator on the case, including results of a polygraph.

A few days later, the investigation was closed with no action.

Ryan's current chief of staff, Robert Newtson, ordered the shredding of campaign documents in 1998 in Springfield after Fawell told him a subpoena was expected, prosecutors say.

Newtson declined to comment Wednesday night when reached by phone.

For the first time in the investigation, top Ryan aides were accused by name of performing campaign work on state time.

State Sen. Dave Sullivan, R-Mount Prospect, who was Ryan's executive assistant for intergovernmental affairs, was assigned to campaign work by Fawell in early 1998 and was soon spending 80 percent of his time on it.

He was receiving all of his pay from the state, the document says.

Prosecutors say Sullivan repeatedly asked to be taken off of the state payroll and put on the campaign payroll but was turned down by deputy campaign manager Richard Juliano on orders from Fawell. Juliano also was indicted in the case and has pleaded guilty to a single mail fraud charge.

Sullivan was later appointed to a vacant suburban state Senate seat with help from Ryan.

Illinois Insurance Director Nat Shapo had been working in the secretary of state's office in 1997 as a contractual employee, focusing on issues related to drunken driving.

Prosecutors say Fawell put him to work as head of opposition research for the Ryan campaign. For six weeks, he did primarily campaign work while continuing to draw state pay.

He asked to be put on the campaign payroll but Fawell refused, prosecutors say. They say Shapo eventually terminated his contract to avoid any more fraud to the state.