From The Chicago Sun-Times:

U.S. to probe Daniels' staff

June 28, 2002

BY DAVE MCKINNEY SUN-TIMES SPRINGFIELD BUREAU

SPRINGFIELD--House Republican leader Lee Daniels' political problems deepened Thursday as Attorney General Jim Ryan disclosed a federal probe into Daniels' staff and worked behind the scenes to oust Daniels as state party chairman.

With his leadership of the party already under fire, Daniels has become mired in allegations that virtually his entire Chicago staff was deployed to hotly contested legislative campaigns in 2000 while on state time. Following hundreds of campaign visits, Daniels' staff allegedly billed taxpayers for more than $16,000 in mileage and other reimbursements.

Ryan, the party's nominee for governor, and other GOP leaders fear Daniels' problems could worsen the party's chances in November to keep the governor's mansion and the state Senate.

Two high-level Republican sources familiar with the effort to replace Daniels confirmed that former Gov. Jim Edgar and GOP fund-raiser and construction magnate Jim Kenny head a wish list of potential replacements for the embattled DuPage County politician, who became party chairman in 2000.

With the effort to ease Daniels out described as at a "delicate" juncture, neither Edgar nor Kenny has been contacted, and they could not be reached by the Chicago Sun-Times. Daniels, who has not been charged with wrongdoing, refuses to step aside, contending he personally was unaware of any criminal activity in his office.

Meeting with reporters in Springfield, Ryan said U.S. Attorney Patrick Fitzgerald's office informed him that it intends to investigate Daniels' staff. Ryan turned over evidence to Fitzgerald that was obtained last week from Chicago elections lawyer Richard Means. A Fitzgerald spokesman refused to confirm or deny the existence of a probe into Daniels or his staff.

The Daniels allegations come as party candidates are trying to find shelter from the fallout of Gov. Ryan's corruption scandal. The governor's campaign fund faces racketeering charges for misusing state resources for political gain.

"To get Daniels the hell out shows that we really have moved beyond all this stuff, that we are going to run a campaign and ticket that won't tolerate this," said a source linked to one of Illinois' highest-ranking Republican officeholders. "If you leave him there, it's like a festering sore."

When asked whether Daniels should step aside as GOP chairman, the attorney general offered no outward signs of support, saying only: "I may have more to say about that later, but I'm not going to comment on it right now."

Daniels spokesman Gregg Durham reiterated that his boss was among the first to call for Jim Ryan to investigate allegations from the 2000 campaigns and downplayed the idea of any orchestrated effort to usher out Daniels. If the attorney general is serious about wanting Daniels replaced, Durham said, all he needs to do is pick up the phone.

"What's going on now with the political lynch mob roaming the cell phone alleys and street corners isn't good for the party. It isn't good for anybody," Durham said. "Jim Ryan knows Lee Daniels' phone number."

In a footnote to Thursday's developments, Ryan declined to say whether Lt. Gov. Corinne Wood also might be drawn into the federal probe. In addition to providing time sheets and vouchers involving Daniels' staff, Means gave Ryan a long memo written by a top Wood aide outlining how members of her staff worked exhaustively on various Republican legislative races in 2000.

Jim Ryan dodged when asked whether Wood's conduct was under review by either his office or by Fitzgerald. "I'm not going to get into all the nuances our offices are doing or other law enforcement agencies are doing," Ryan said. "It's not appropriate."