Friend of Gov. Ryan, two others indicted in shakedown scheme

CHICAGO -- A close friend of Gov. George Ryan was indicted Tuesday on charges of shaking down state vendors for $2.8 million and sharing the cash with a powerful lobbyist and an unnamed state official.

"For the better part of a decade, when it came to contracts and leases with the secretary of state's office, the fix was in," U.S. Attorney Patrick Fitzgerald told a news conference.

He said the "fixer" was Lawrence E. Warner, 62. Fitzgerald said Warner, a longtime friend of the governor, had the run of the secretary of state's office under Ryan, virtually deciding who got certain contracts and leases, and going to the unnamed official when he needed more authority.

Donald Udstuen, 58, former lobbyist for the Illinois State Medical Society, was also named in the indictment along with businessman Alan Drazek, 61, a Ryan appointee to the Chicago Transit Authority board.

Ryan not charged

The charges were the latest in a four-year federal investigation of corruption in the secretary of state's office under Ryan, who was elected governor in 1998.

Ryan has been charged with no wrongdoing thus far, but his campaign and former campaign manager are under indictment on charges of secretly using state funds and employees for their political work.

More than 40 people have been convicted in the investigation, many of them former secretary of state's employees and campaign workers under Ryan.

Warner shook down both state landlords and vendors, according to the indictment. It said he shared the money with the unnamed official then passed a portion along to Drazek, who kept part, laundered the rest through his company, American Management Resources, and gave it to Udstuen.

Fitzgerald refused to name or give details concerning the unnamed "Official A" named in the indictment who shared in the money.

He also refused to say why Udstuen received some of the money.

Fitzgerald said Udstuen was cooperating in the investigation and had agreed to plead guilty to a tax charge. He and Drazek were each named in just one count of the 11-count indictment.

Udstuen and Drazek go back three decades in Illinois politics. Udstuen was patronage chief in the administration of the late Gov. Richard B. Ogilvie when Drazek was personnel director. Since then, Udstuen has become one of the most powerful lobbyists in Springfield.

The medical society has donated at least $247,000 to Ryan's campaigns since 1994, according to an Associated Press analysis of state campaign finance records.

Udstuen's position with the medical society gave him access to a political fund that has doled out almost $5 million to candidates since 1994, the analysis showed.

He recently resigned from his Illinois State Medical Society job as well as from a seat on the Metra board, which oversees Chicago-area commuter trains. Warner is an unpaid Ryan appointee to the Chicago Metropolitan Pier and Exposition Authority, which oversees the McCormick Place convention center and Navy Pier.

License sticker payoffs

Among other payoffs, the indictment charges that Warner received $332,000 starting in 1991 from a contractor who provided vehicle validation stickers required to be attached to Illinois license plates.

When secretary of state's officials proposed to do away with a "metallic security mark" that was proprietary to the vendor -- and thus open the contract to other companies -- Warner went to the unnamed Official A and got him to kill the idea, the indictment said.