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Did Gov. Ryan cost us a dime?

Chicago Sun-Times (IL)-February 19, 2006
Author: James L. Merriner, The Chicago Sun-Times

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We expect our public officials to give us honest government. OK, in Illinois we don't expect it, but we should because we have a right to it. Congress said so. It's the law.

So if former Gov. George Ryan really committed the dishonest acts he is charged with, then the jury in his ongoing trial should find him guilty, right?

If only it were that simple. At least Ryan's jurors, having listened to mind-numbing testimony since Sept. 28 with weeks apparently still to go, might wish it were that simple.

Of the 22 counts against Ryan, seven accuse him of depriving the people of Illinois of his honest service in office. Such charges first faced another former governor, Otto Kerner, in the early 1970s.

The feds were investigating Kerner, at the time a respected federal appeals judge, in a racing stock scam. William Bauer, the U.S. attorney in Chicago, had trouble finding a law that Kerner might have broken. Kerner had not directly stolen any money from private persons or taxpayers. He merely had taken a sweetheart stock deal from a racetrack owner, then rewarded her with favorable racing dates and other boons from state government.

An assistant U.S. attorney dusted off an obscure provision of an 1872 mail fraud statute and said Kerner could be charged with failing to provide "loyal and honest services." U.S. attorney Bauer scoffed: "Do you mean to tell me if some guy sends a love letter to his mistress he's defrauded his wife of his loyal services?"

Don't laugh -- the mail fraud law since then has been so broadly applied, that might happen. Bauer's successor, James R. Thompson, aggressively pushed honest-service cases against Kerner and many others. Kerner was convicted in 1972 of mail fraud and also of bribery, perjury and tax evasion.

Thompson later was elected governor four times, but his national influence in championing mail fraud cases against public and private corruption still is not fully recognized. By 1980 Jed S. Rakoff, now a federal judge in New York, wrote, "To federal prosecutors of white-collar crime, the mail fraud statute is our Stradivarius, our Colt .45, our Louisville Slugger, our Cuisinart -- and our true love. We may flirt with [other laws] and call the conspiracy law 'darling,' but we always come home to the virtues of [mail fraud], with its simplicity, adaptability, and comfortable familiarity. It understands us and, like many a foolish spouse, we like to think we understand it."

In Chicago, a new U.S. attorney, Dan Webb, threw mail fraud charges against crooked Cook County judges in the Operation Greylord scandal of the 1980s. Then, wham! The Supreme Court ruled in 1987 that there is no such thing as "intangible rights to honest and impartial government." Mail fraud, the court said, applies only when people are cheated out of money or property. The decision, McNally vs. U.S., upset some Greylord convictions but came too late to help Kerner, who died in 1976.

Justice John Paul Stevens was so angered by the McNally ruling that he read parts of his dissent from the bench, a rarity on the Supreme Court. As a young lawyer, Stevens had made his name by exposing corruption on the Illinois Supreme Court.

Prosecutors echoed Stevens' warning that McNally would let political crooks run wild. One such prosecutor was a U.S. attorney in New Jersey named Samuel A. Alito. He would be nominated to the Supreme Court by President Bush and confirmed on Jan. 31.

The justices declared in McNally that if Congress wanted to establish a right to honest government, it had to say so. Which it did, just a year later. In 1988 the late Sen. Paul Simon of Illinois and others sponsored a bill to outlaw "a scheme or artifice to deprive another of the intangible right of honest services." In the inscrutable way of Congress, it was passed with little debate and tacked on to a War on Drugs bill. It became known as Section 1346 of the mail fraud statute.

So that settled it, right? We have a right to honest government.

Not exactly. Section 1346 issues clog the courts to this day. Suppose you hold no public office or job but you effectively control the awards of public contracts and patronage. Suppose, that is, that you are Lawrence E. Warner, the businessman now on trial as Ryan's co-defendant. Being a private citizen, do you have a duty to give honest service to taxpayers?

As U.S. Appeals Judge Richard A. Posner of Chicago wrote in an unrelated case in 1999, "a century of interpretation of the [mail fraud] statute has failed to still the doubts of those who think it is dangerously vague." Defense lawyers perennially argue that Section 1346 is unconstitutionally vague, but the courts have not agreed. There was one appellate ruling in New York in 2002 -- "The plain meaning of 'honest services' in the text of Section 1346 simply provides no clue to the public or the courts as to what conduct is prohibited under the statute." However, that decision applied narrowly to just that one case.

Dan Webb, the fighting prosecutor who put Greylord judges in jail, is now Ryan's defense attorney. He asked the trial judge, Rebecca Pallmeyer, to dismiss the Section 1346 charges against Ryan. In August 2004, she declined. Co-defendant Warner got a break, though. In November 2003, Pallmeyer dismissed Section 1346 charges against Warner in part because he held no public office.

Whether or not Ryan or Warner is guilty as charged is for the jury to decide. What is clear is that, like Otto Kerner, those two are not accused of outright stealing of public or private money. They are accused of defrauding the public through various murky scams.

Before we start indicting more politicians, we might think about what exactly constitutes public corruption. Mail fraud (likewise, wire fraud) laws are so broad and so vague that they invite prosecutorial overreaching. Congress should either repeal Section 1346 or spell out what it means.

Even if the law is fixed, chasing political crooks will remain mostly the job of federal cops. In effect, we have handed over to the federal government our job of cleaning up state and local governments. Is this really where we wanted "reform" to take us?


James L. Merriner, author of Grafters and Goo Goos: Corruption and Reform in Chicago, 1833-2003, is writing a biography of former Gov. George Ryan.
Edition: Final
Section: Controversy
Page: B02

Index Terms: Opinion
Record Number: 10FE77DBE73DCAA8
Copyright (c) 2006 Chicago Sun-Times, Inc.
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