Gov. Ryan's friend pleads innocent to scheme

CHICAGO -- A close friend of Gov. George Ryan's pleaded innocent Thursday to fixing $2.8 million in state contracts as part of a shakedown scheme.

Lobbyist Larry Warner, 60, smiled and shook his head when reporters asked about federal charges that he had taken payoffs from vendors and funneled some of the money to a so-far unnamed "Public Official A."

Warner's attorney, chief defense counsel Edward Genson, told reporters he expected his client would be cleared.

"I don't think that when the facts come out about this anyone will think he violated the law," Genson said. "... It was a legitimate transaction, all the transactions here."

The brief arraignment before Judge Rebecca Pallmeyer was the latest in the government's four-year-old Operation Safe Road investigation.

Fifty-four individuals have been charged in the investigation, which initially focused on bribes paid in exchange for driver's licenses but has since branched into other corruption under Ryan. The governor has been charged with no wrongdoing but is retiring after one term.

The May 21 federal racketeering indictment said Warner fixed contracts for a computer system costing almost $1 million and a high-tech driver's licensing system and two others.

It said that he had also seen to it that the secretary of state's office signed three leases.

In return, the indictment said, Warner received payments from the vendors and landlords and divided the money between himself, former State Medical Society lobbyist Donald Udstuen and Public Official A.

The Udstuen money was laundered through a company owned by Alan Drazek, the indictment said. Drazek was personnel director under the late Gov. Richard B. Ogilvie and Udstuen was Ogilvie's patronage chief.

Genson told reporters after the arraignment that he does not know who Public Official A is.

"They haven't notified me yet," Genson said. "I expected to be notified about this in about 10 days."

Pallmeyer gave federal prosecutors that amount of time to turn over to Genson investigative material he is entitled to have for the defense.

Genson acknowledged that Warner was very close to the governor.

"Is Larry Warner a good friend of the governor? Yes," Genson said. "He has been a good friend of the governor for 30 years. He thinks he (Ryan) is a fine man and he thinks he's been doing good things."

Federal prosecutors indicated they might seek to have Genson disqualified as Warner's attorney on conflict-of-interest grounds.

Another Genson client is former Ryan campaign manager Scott Fawell, who is under indictment in the same investigation on charges of secretly using public money and public employees to do political work in Ryan's 1998 campaign and other races.

But Genson said he would get a signed waiver, allowing him to represent both clients.

Drazek has pleaded innocent to a single tax count in the indictment. Udstuen is cooperating in the investigation and has made public his plan to plead guilty to a single tax count.