The article below appeared in the Daily Southtown. A big round of applause to all the district employees who finally spoke up. Bravo to the reporters Linda Lutton, Jonathan Lipman and Kati Phillips for all their great work. Let us hope other school employees, reporters and regular citizens will start to take a closer look at school finances in their districts. Illinois spends well over 20 billion dollars to educate over 2 million kids. We are sure that more than one school district out of the 850 plus school districts that exist are misusing their funds.
How the iron fist of Tom Ryan was smashed: behind the scenes of the investigation
Sunday, November 27, 2005
By Jonathan Lipman and Kati Phillips
When Hank Ribich showed up at Tom Ryan's door at 8:30 in the morning, Ryan was not at his best.
The superintendent of Sauk Village schools' hair was disheveled, his chin unshaved beneath his trademark bristly mustache.
Although Ryan's 6-foot-2-inch frame towered over the squat form of the state's attorney's investigator, it was Ryan who looked uneasy. His eyes were wide and his mouth open with surprise.
It was a school day, and Ribich had gone looking for Ryan at the district's headquarters first, before finding Ryan asleep at his Orland Park home. The former Chicago cop, who bears an equally imposing mustache, had come to deliver a grand jury subpoena. And with it, a message.
"We told him he should get an attorney," Ribich said. "He said he had an attorney, but it was a tax attorney. We told him ... you should get a criminal attorney."
It was the first subpoena in a criminal investigation into School District 168 that would ultimately end with the school board president indicted, hundreds of thousands of dollars of misdirected funds seized and Ryan imprisoned.
In an interview with the Daily Southtown, Ribich and Assistant State's Attorney Sandra Navarro explained how they investigated and eventually caught Ryan.
Ryan pleaded guilty last week to felony theft, admitting to stealing up to $100,000 from the district.
He was originally accused of stealing more than $100,000, intimidating and harassing witnesses, obstructing justice, bribery and official misconduct.
He was sentenced to eight years in prison and ordered to pay $400,000 in restitution to the district.
A scion of Chicago's powerful 19th Ward, Ryan had been the unquestioned leader of the district for 15 years and once treasurer of the Illinois Association of School Administrators.
Ribich was conducting his first full investigation since joining the special prosecution bureau of the Cook County state's attorney's office. Navarro had five years with the office.
Both had years of previous experience investigating financial crimes. But the pair had an additional advantage in this case. They already knew where to look.
In March, April and May, the Daily Southtown's Linda Lutton had written a series of stories detailing Ryan's illegal use of district funds to pay for his daughters' college education and gifts for family and friends.
Lutton "provided a blueprint, I think, for the investigation," Navarro said. "Before we even got involved."
The state's attorney's office began investigating after a phone call from the state schools superintendent, Randy Dunn. He had been prompted to action by the Daily Southtown stories.
Navarro's boss, special prosecutions bureau chief Scott Cassidy, decided to go after Ryan first.
"We wanted to know who his lawyer was going to be. We didn't really need any statements from him. The evidence was really rapidly unfolding," Cassidy said. "We also knew people were being intimidated out there, so we figured let's move on this fairly quickly. We wanted him out of there."
Ryan was unintimidated before the grand jury.
"He has that attitude about himself, that Ditka attitude," Ribich said, referring to former Bears coach Mike Ditka.
"It's arrogance," Navarro said. "Sometimes (before a grand jury) you can see a nervousness, or emotions, people cry. ... Someone did cry at the grand jury in this case; it was very upsetting the things people talked about in this case."
But Ryan, she said, was "emotionless" as he took the Fifth Amendment and refused to talk.
After that, the pair went after records. They amassed more than a dozen full-sized file boxes.
The paper trail was critical, but just as important were the district employees who began stepping forward. Cassidy said the Southtown's stories had people believing it was possible to catch Ryan.
"We had to put a trust in them," Ribich said. "It was like, 'We're not going to stop all of a sudden and go another way. We're going to take this all the way through.' "
An informal network of Ryan-hating parents and district employees already existed. Quickly, that network started spreading the word that the state's attorney's office needed help, Ribich said.
"Various clerical people who were terrified of (Ryan) gave us information," Navarro said. "Those are the true heroes, those who had the courage to come forward and to provide us with that information while they're still living under the iron fist of Ryan."
The investigators knew Ryan was intimidating witnesses. He had the entire district scared.
"Some of the employees described meetings where they felt like they were with the Godfather," Navarro said. Or like Al Capone in the movie "The Untouchables," she said.
"I don't know if you remember that scene where (Capone) walked around with the baseball bat, around the table," Navarro said. The scene in the movie ends with Capone brutally beating a man to death.
"You never knew what was going to happen next," Navarro said. "One witness ... she needed the job, but his actions made her physically sick before she came to work in the morning."
Ryan wore metal "heel savers" on the bottom of his shoes, Ribich said. They announced his presence as he strode down the halls.
"You always knew when he was in the building because you heard his cleats," Ribich said. "He'd make it a point to walk hard."
When Ryan was heading to visit a school, secretaries would call ahead to warn their colleagues.
"They would put out the announcement, 'Ryan's coming, hide the petty cash!' " Navarro said.
Petty cash was used for student activities, but Ryan would routinely pocket it, usually while lecturing staff about inadequate security and financial control.
District 168 is the second-poorest district in the county, and its three schools have lacked basic activities like music class or sports.
Ryan was dubbed a "reverse Robin Hood" by prosecutors for stealing from poor children to enrich his friends and family.
Many people in the district knew exactly what was going on, the investigators believe. Ryan hand-delivered bonus checks, directly demanding kickbacks.
"He expected you to pay, and he would tell you the amount, too," Ribich said. "He'd hand you the check, saying, 'Here, I expect $50 back tomorrow.' And you had to get it over there ASAP. Cash."
Others, such as the three school principals, were still loyal to Ryan, who gave them their jobs and took care of their needs with gifts and perks, Navarro said.
"He always had two or three envelopes on his desk that had money in it," Ribich said. "He made it known. You could see that each envelope had cash in it."
Ryan himself was closely monitoring the investigation. He told people what to say if they were appearing before the grand jury. Employees said he would watch Ribich closely on security monitors every time the investigator came to the district administration building.
"He hated it when I went out to the school district," Ribich said. "He'd get furious."
Although investigators were getting boxes and boxes of documents, not everything was matching up with the audit findings.
"It was like a 500-piece puzzle," Ribich said. "You throw all the stuff on the desk, and you look at it."
The witnesses coming forward were telling Navarro not to trust the records they were getting via subpoena. Ryan was altering them.
"When we sent subpoenas to the school district, (Ryan) would review everything, and then he would send it to (attorney Anthony) Scariano before we would even get it," Navarro said. "So they were free to change or amend and to pick and choose what we were going to see."
Some of the clerical workers in the district had saved original copies of the records they were ordered to change, and they supplied those originals to Navarro.
One worker hid original files in the basement, among the boxes holding the district's Christmas decorations. They were only rediscovered in the past few weeks, and Ribich dutifully drove out to photograph them.
In all, the investigators talked to 52 people. They put 24 of them before the grand jury to give sworn testimony. Only Ryan remained silent.
Every time another story appeared in the Southtown about a step in the investigation, Navarro would get "a flurry of calls" from employees and parents with tips.
People began to believe that Ryan, who had scared away so many others, was caught. Some began changing their stories.
"Some had a moment of epiphany where they felt used," Navarro said.
On July 26, school board president Louise Morales turned herself in to authorities and was charged with theft and official misconduct.
Because her name was the final authorization on improper spending, her case was easiest to prove, investigators said. And it sent a message to the community that the investigation was serious.
On Aug. 16, investigators searched Ryan's home and the district administrative office. The documents found at the district wound up being key, the investigators said.
"Then we could see things we didn't have available through the subpoenas," Navarro said. "They were originals."
"That is the eureka moment," Ribich said. "All of a sudden, bingo, you got him."
They already knew from bank records that Ryan typically took out lots of cash whenever he made a deposit, which is called a "split deposit." Searching Ryan's home, they found where that cash went. He was hoarding it.
"It was all over," Ribich said. "It was in dresser drawers, the closet. The majority of it was in the basement."
Investigators removed the cash from the house in a laundry basket.
Ryan's paychecks also were often converted into cash, so it's not clear how much of the cash found at his home came from illegal sources, the investigators said.
But since he used district money to pay for things he should have paid for himself — like meals — it didn't really matter. At least some of that money rightfully belonged to the district, and investigators seized all of it. The final haul was $730,000.End of an era
The search warrant finally convinced Ryan he was going to go down. His attorney opened negotiations with prosecutors to turn himself in.
Cassidy said Ryan wanted to avoid a trial that would almost certainly include embarrassing facts that would damage his personal and professional reputation.
They made a "gentleman's agreement" that Ryan would turn himself in, not ask for bail and eventually plead guilty. Prosecutors, in turn, would not press for a public trial and would agree to keep certain facts out of the court record.
"That said a lot to us at the time," Cassidy said. "When he agreed to do that we figured ... there's a sense of remorse here."
The investigation didn't end there. Ed Bernacki, Ryan's friend and the district's building and grounds supervisor, was charged Nov. 20 with misconduct, bribery and theft. He allegedly stole more than $100,000 from the district through rigged contracts for his company and other tricks.
His case and Morales' are still pending.
Other officials didn't deserve criminal prosecution, investigators said. Associate Supt. George Kunkel lacked day-to-day control over finances and helped investigators with their probe. Other employees were scared into doing things that may have been illegal.
Besides Morales, the school board didn't know what was going on, Navarro said.
"They were like an ostrich with their head in the sand," Navarro said. "Maybe they didn't want to know."
Investigators were surprised by the lack of fiscal control at the school district. The district's audits — which first identified problems with their accounts — were reviewed only by the school board.
Although those audits are sent to the state through the regional office of education, no one else ever reviews them.
"We want people to learn from Tom Ryan's mistakes, what not to do," Navarro said. "I don't know what they were thinking out there."
Jonathan Lipman may be reached at email@example.com or (708) 633-5979.