* I was surprised that nobody followed up on my subscriber-only story this week, so I decided to use it in my Sun-Times column. Let’s all try to be very, very careful in comments, please. I don’t want to see any rumors posted and he’s innocent until proven guilty. With that in mind, read on…
The biggest story under the Illinois Statehouse dome this week wasn’t the landmark change to public employee pension plans.
It wasn’t the Senate’s passage of a school voucher measure.
It wasn’t that state Sen. Susan Garrett might very well be Gov. Quinn’s choice as a running mate.
The story that had everybody talking was something I wrote for my newsletter subscribers about how a well-known Statehouse lobbyist admitted he had been cooperating with a federal corruption investigation for the past two years.
Bob Swaim has been around forever. He lobbies for the gaming industry and several other clients. Last week, a very brief story appeared in the Springfield newspaper that Swaim had been indicted by the Central Illinois U.S. Attorney’s office on tax charges. He allegedly owes the IRS almost $400,000 going all the way back to 1990.
On Monday, Swaim sent an e-mail to a group of friends that shocked them to no end.
“More than two years ago,” Swaim wrote, “I was pressured into cooperating with the Federal Government regarding their investigations of public corruption in Springfield and Illinois.”
Swaim claimed he did “everything” the feds asked him to do during those two years. But last December, the government allegedly revealed to him that some of his friends were “the targets of their investigation.” He stopped cooperating, he said, and the feds played “hardball” with him, leading to the indictment.
Everybody on that e-mail list probably choked on their coffee when they read those lines. If the feds really are playing hardball with him, they could grab that e-mail and see who belongs to his inner circle of friends. Not a smart move.
The first thing I did when I obtained the e-mail was call the U.S. Attorney’s office in Springfield. I wanted to get the standard “We can’t comment on an ongoing investigation” response and to make sure I wasn’t going to blow a case or something. I don’t need any trouble with the federales. No way.
After a very pleasant U.S. Attorney representative thanked me for the heads up, I called Swaim, but he understandably refused to talk.
I wanted to know how far he went. For instance, did he wear a wire? Was the probe related to Rod Blagojevich or were they looking at something completely different? I didn’t get a chance to ask much else.
Those same questions, and more, were asked by many folks under the dome this week.
Some tried to replay in their heads any conversations they had with Swaim during the past two years that could be taken out of context (or worse).
Others pondered whether there were any warning signs. Just about everybody debated who those allegedly targeted “friends” were and what the feds were up to.
The vast majority of people in politics are honest, even scrupulous. But it’s not hard to see how much pressure the feds can use to make their cases.
Heck, even I’m scared of them, and I have no reason to be. There’s no telling what somebody might say under those circumstances.
Also, the stain on state politics that the Blagojevich indictment has wrought is making this business intolerable for some.
Another investigation will just make matters worse for the honest ones, at least in the short term.
“Just what we need,” one guy said with a sigh this week as he tried to pass a bill. “More heat.”
“Now I find myself in a strange and unfair place,” Swaim wrote to his friends.
Yeah, so does everybody else while we all wait around to find out what’s really going on.
Again, make sure to keep the comments free of rumors and other over the top stuff. You don’t want to be banned for life, do you? Thanks.
- Leave a Light on George - Friday, Mar 26, 10 @ 9:01 am:
What the heck good is a story like this if you can’t share rumors?
- Amalia - Friday, Mar 26, 10 @ 9:05 am:
Rich, great reporting! it is very hot material, so it’s no wonder you were the only one brave enough to touch it. lots for folks
to worry about here.
- South Side Mike - Friday, Mar 26, 10 @ 9:07 am:
Man, I can’t imagine some of the “interesting” conversations that a lobbyist involved in the gaming industry would have with legislators or his bosses. And I don’t blame you, Rich, for not wanting to be under the Feds’ microscope. I’m not too tin-foily, but if the Feds are out to get you, there’s an awful lot that can get misconstrued during the course of regular conversations. And I bet there were some cold sweats caused by that email, especially for people whose conversations with Swaim were far from any legal gray area.
So Rich, when maybe one of the papers follows up on this column, will some of the recipients of Swaim’s email be identified (with their significance, if they are not well-known publicly), or is that information for subscribers only?
- wordslinger - Friday, Mar 26, 10 @ 9:08 am:
Big heat from a new source, the Springfield federales. I wonder if there’s any collaborative effort between the Central District and Fitz?
- Redbright - Friday, Mar 26, 10 @ 9:12 am:
$400,000 in back taxes is an awful lot. Who was paying how much for what?
- Ravenswood Right Winger - Friday, Mar 26, 10 @ 9:14 am:
Redbright is spot on. That is an awful lot of income to not report.
- Ravenswood Right Winger - Friday, Mar 26, 10 @ 9:14 am:
Allegedly, of course.
- Secret Square - Friday, Mar 26, 10 @ 9:28 am:
“Allegedly, of course.”
Unless you work for WGN or Tribune Co., in which case that’s a bad word…
- You Go Boy - Friday, Mar 26, 10 @ 9:29 am:
Excellent story - we’ll see what kind of legs it has…or how many “friends” are now using their legs to get out of state. One point of contention, however. I often read how the vast majority of pols are honest. I can’t refute that, but I ask if they are aware of dishonesty and don’t do anything about it, are they still honest?
- Secret Square - Friday, Mar 26, 10 @ 9:32 am:
“I wonder if there’s any collaborative effort between the Central District and Fitz?”
I’d be awfully surprised if there wasn’t, or if there hasn’t been all along. It would be nice to know whether this investigation concerns Blago-era or Blago-related activity, or something more recent; but I guess we’ll just have to wait to find out.
- CircularFiringSquad - Friday, Mar 26, 10 @ 9:37 am:
A. The 400K streches over a 20 year period
B/ THE biggest story is why the rest of the media “missed” this and continued to serve their standard slop ( i.e. whatever passes through the private suite)
- Justice - Friday, Mar 26, 10 @ 9:40 am:
Perhaps Bob Swaim’s friends should worry, but my money would be on his adversary’s having to worry. What better way to get even than to engage them in a compromising conversation. Perhaps they should be trying to recall the reason for those chance meetings?
- unspun - Friday, Mar 26, 10 @ 9:44 am:
I don’t know Swaim, but I pity him (no matter what he did or didn’t do).
Will this affect the Noland/Rauschenberger campaign? Raush is a client of Swaim.
- Been There - Friday, Mar 26, 10 @ 9:53 am:
===$400,000 in back taxes is an awful lot. Who was paying how much for what?===
Redbright, since they are going after him for 1990-1994 that means he must not have filed for those years. Otherwise there is a statute of limitations. Even if you only owed a few thousand per year, with ongoing penalties and interest you would easily hit $400,000. It is a lot like not paying your payday loan on time.
- (618) Democrat - Friday, Mar 26, 10 @ 9:54 am:
How about this novel concept. Just be honest, ethical and abide by the law. Then you don’t have to worry about the Feds.
Having worked in the private sector my entire life I really don’t get it. These people have the best jobs in the world and they just can’t play by the rules.
Reap what you sow.
- Elliott Ness - Friday, Mar 26, 10 @ 9:57 am:
The Feds always issue indictments the week before the deadline for paying taxes, April 15th. Same with the State taxes due.
Swaim made a lot of money lobbying for Casinos back when they came to Illinois. Why would he think he wouldn’t get caught not paying taxes like everyone else.
The story sounds like Swaim is willing to do a couple of years extra to help his friends. Isn’t that what several of Rod’s friends said too? Now that they were told the time they could get, they changed their tune.
- Carl Nyberg - Friday, Mar 26, 10 @ 10:00 am:
Would the Justice Department split a high profile case against a governor between two different U.S. attorneys?
Justice, I would hope U.S. attorneys would not engage in entrapment. If the Justice Department allowed a U.S. attorney to build a case on a cooperating witness grudge and entrapment, it would be fodder for contesting a whole bunch of Justice Department investigations.
- fed up - Friday, Mar 26, 10 @ 10:00 am:
Just a guess Swaim cooperated and the investigation is ending after 2 pluse years. Swaim still gets indicted but gets a reduced sentence for cooperation. He sent the email because he knew his cooperation was going to be made public soon and was trying to get ahead of the story and reasure some friends that he didnt hurt them. A two year investigation means the feds probably flipped some others using info from swaim. It will be interesting to see what this branches out into.
“I was pressured into cooperating with the Federal Government regarding their investigations of public corruption in Springfield and Illinois.”
Everytime I hear of public corruption in Illinois I flashback to the scene in Casablanca ” I’m shocked, shocked to find that gambling is going on in here!”
- South Side Mike - Friday, Mar 26, 10 @ 10:04 am:
Fed up, that line is especially appropriate given that one of his clients is the gambling industry.
“I’m shocked, shocked to find that video poker is going on in here!”
- Siriusly - Friday, Mar 26, 10 @ 10:12 am:
I don’t know him and don’t even have any rumors to share, but this is the top un-reported story of the week.
Pension reform part 1 is still a bigger story, but it was covered everywhere.
- Cousin Ralph - Friday, Mar 26, 10 @ 10:12 am:
My guess is that the US Atty and FBI in Springfield have their own investigation going on. It is fair to presume that the offices in Chicago, Fairview Hts. and main justice and FBI HQ are aware of it and who are the targets and will pass on any info they get that is related. However, it may be a bit presumptious to assume Fitzgerald is playing some major roll.
Excellent reporting Rich. One suspects that Swain is not the only one the Feds have been using.
However, since it goes back at least 2 years, that means it was started during the Bush Adm. not the Obama Adm.
One thing many people dont fully appreciate is that every US Atty in the country has to get approval first from the Public Integrity section at main Justice to publically indict a high public official. Generally, the Public Integrity section is staffed with career justice professionals. However, in these circumstances, efforts by the politically connected to kill a prosecution at main Justice is not uncommon. It is also not uncommon for Public Integrity to delay the announcement of indictments until after the current election cycle is over. The Bush Adm and Fitzgerald regularly announced high profile indictments after an primary or general election. My point is that it may be some time before we learn who has been targeted unless Swain’s email effectively shut down the investigation.
- ABCBoy - Friday, Mar 26, 10 @ 10:23 am:
===
Redbright is spot on. That is an awful lot of income to not report
===
The $400K isn’t “non-reported income,” it’s “back taxes.” Which means that he raised way more cash than that–say, $1 million+ that wasn’t reported. Granted, it was over a period of 20 years. But still, that’s a lot of cash.
- Been There - Friday, Mar 26, 10 @ 10:48 am:
===The $400K isn’t “non-reported income,” it’s “back taxes.” Which means that he raised way more cash than that–say, $1 million+ that wasn’t reported. ====
ABCBoy, see my post above. It probably is not all back “taxes” but taxes plus penalties and interest. From 1990 to now that snowballs into mostly penalties and interest.
- Cosmic Charlie - Friday, Mar 26, 10 @ 10:48 am:
I’ve always wondered why US Attorney’s have press people since they never ever say anything other than “We cannot comment on an ongoing investigation.”
What a cake job. Sit around saying no comment all day, throw together the occassional press conference, and look out the window. AND, then collect a federal pension. Not bad. I envy them all.
- Redbright - Friday, Mar 26, 10 @ 11:06 am:
Seems to me if most of that $400K was penalties his attorney could have gotten him out of it.
I would expect that Swaim started this cooperation himself way back when by volunteering that he knew where the feds needed help and he could get there for them.
- Way Way Down Here - Friday, Mar 26, 10 @ 11:51 am:
WHOA! I feel badly for Bob.
- Friend of Liberty and Justice - Monday, Mar 29, 10 @ 1:37 pm:
I guess I am not understanding what the thanks to Rich for reporting this is. No offense to you, Rich, looks like there aren’t many details available yet. So, essentially Bob sent out an email letting people know that he had been forced to cooperate with the feds against his will, and that he is being indicted for taxes. Hmmm. Very informative.. guess I will wait to cast my judgement until more is available.