Illinois Gov. George Ryan's Campaign, Two Former Aides Indicted

CHICAGO – Gov. George Ryan on Wednesday stood by two of his former top aides as "friends of mine," saying they are innocent until proven guilty of federal corruption charges.

Federal prosecutors say they are far from finished with the case that resulted in an indictment Tuesday against the two former aides and Ryan's campaign committee.

"The investigation has been vigorous, is vigorous and will continue to be vigorous," said U.S. Attorney Patrick Fitzgerald Tuesday announcing the 10-count racketeering indictment.

It is the biggest indictment to come out of a federal investigation into a licenses-for-bribes scheme that operated when Ryan was secretary of state. The 4-year-old investigation thus far has resulted in charges against 48 individuals and the conviction of 42.

The latest indictment portrayed a powerful political machine that operated as a "criminal enterprise" for seven years. It allegedly used secret payments and bribes to organize elections, then fired investigators, shredded and burned documents and lied to a grand jury to cover the trail.

Ryan has not been charged with wrongdoing, but his standing in the polls has dropped sharply during the investigation and he decided not to run for a second term as governor.

"They're friends of mine, and they've been friends of mine, and I hate to see their lives destroyed like this," Ryan said of the defendants Wednesday outside the Executive Mansion in Springfield. "But you know, there isn't much I can do about it."

"The nice part about living in America is you're innocent until proven guilty," added Ryan. He did not comment directly on the charges.

Ryan's spokesman, Dennis Culloton, said the governor knew nothing about the allegations involving two of his closest aides.

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

Bribes paid by unqualified truck drivers and others for Illinois driver's licenses in part fueled the machine, the indictment alleges. Prosecutors have said some $170,000 in bribe money ended up in Ryan's campaign fund.

Fitzgerald said he was aware of only two other campaign committees that had been indicted by the federal government: Richard M. Nixon's 1972 Campaign to Re-Elect the President and a fund operated by perennial presidential candidate Lyndon LaRouche.

Named in the indictment along with the campaign committee are Scott Fawell, 44, Ryan's former campaign manager and chief of staff, and Richard Juliano, 34, a former Ryan campaign manager who resigned last week as the U.S. Transportation Department's liaison to the White House.

Fitzgerald said Juliano is cooperating with investigators and plans to plead guilty to the one mail fraud count with which he is charged. Juliano attorney James S. Montana said his client resigned last week to "devote a fair amount of time" to helping in the investigation.

Fawell attorney Edward Genson issued a statement saying that his client "has committed no crime" and will plead innocent.

According to the indictment, in 1994 Fawell assigned secretary of state's employees to serve as foot soldiers in Ryan's campaign for re-election and in the campaign of a favored state senator who was facing a primary challenge. It said they not only worked on state time but also got pay raises and promotions in reward for their campaign work.

Not long after Ryan was re-elected secretary of state, Fawell began calling on state employees to work on behalf of Texas Sen. Phil Gramm, Ryan's favored candidate in the 1996 Republican presidential primary, the indictment alleged. At the same time, Republicans were fighting for control of the Illinois House and more state workers were mustered to help in key House races, according to the indictment.

There was no indication that Gramm or any of the GOP House candidates were aware of the alleged arrangements.

When Ryan launched his campaign for governor, secretary of state's employees fanned out to work for his election, according to the indictment. They used state cars, cell phones and computers, the indictment charges. It said that while some state employees worked for the campaign on public time, Fawell and Juliano also created new state positions for full-time campaign workers.

Among other things, the indictment asks that the Citizens for Ryan campaign fund forfeit approximately $1 million, and asks for forfeiture of Fawell's suburban house.

The indictment could have political ramifications in the Illinois governor's race this year.

GOP nominee Jim Ryan, the attorney general, could be hurt along with other Republicans if voters hold them responsible for the problems of the current governor. The governor and attorney general aren't related.

Rod Blagojevich, the Democratic candidate for governor, immediately went on the offensive after the indictments were announced.

"This is what happens when you have one-party rule for 25 years -- a culture of corruption and a code of silence," Blagojevich campaign chairman David Wilhelm said.

Jim Ryan spokesman Dan Curry dismissed that as a "phony issue" and argued that increased voter concern about trustworthiness would work to Ryan's advantage.

"One factor is going to be who do they trust more," Curry said. "That's a battle ultimately Jim Ryan is going to win."