Chicago Lawyer’s 2008 Person of the Year: Dan Webb

By Maria Kantzavelos

In his corner office on the 46th floor of the downtown skyscraper that houses Winston & Strawn, Dan K. Webb, who usually arrives for work by 7 a.m., emerges from a desk covered with the case files of multiple clients, files stacked in growing piles.

Speaking in a slightly folksy fashion and a voice that offers a hint of his rural, west-central Illinois roots, the big-firm chairman is known as one of the most sought-after lawyers in the country. On a Monday evening in late October, his hand is smudged with ink as he leafs through the pages of his date book.

Days before one of his clients, longtime Republican power broker William Cellini, was indicted in the Operation Board Games probe of corruption in state government, the famed litigator’s workweek was to play out something like this:

A day in Chicago to prep a witness for an upcoming trial in California, sandwiched between two days in New York to meet with a client and attend a bar association event. Then more meetings back in Chicago on Friday.

”That’s my life this week,” Webb said, matter-of-factly.

It’s no wonder Webb says he doesn’t keep count of his cases.

”At any given time I may have … 20 to 30 client matters going on at the same time. They’re not all popping at the same time every day, but I have a fairly heavy caseload,” he said.

But it is when Webb is on the brink of trial or in the midst of the courtroom contest — putting in 15- to 18-hour work days with his mind focused intensely on the ins and outs of that one case — that he steps into a world he relishes most.

”I love trying cases. It’s what drives me. It gets my cork a bobbin’ and I love it,” Webb said. ”I like pressure. I like stress. And, I like moving. I thrive in that world.”

Now 63, Webb rose to prominence in Chicago in the early 1980s as the U.S. attorney who oversaw the landmark Operation Greylord probe of judicial corruption. He went on to successfully prosecute Iran-Contra operator John Poindexter, and has spent the last two decades in private practice defending corporations like Philip Morris, Microsoft, and General Electric, and a host of politicians, including former U.S. Rep. Dan Rostenkowski and former Illinois Gov. George H. Ryan.

It is Webb’s enormous preparation, his willingness to take tough cases and his down-home, ”winning way” with juries and judges that sets him apart from other excellent trial lawyers, said former Illinois Gov. James R. Thompson, who stepped down from Winston’s top leadership post in 2006, when Webb became its chairman.

”He’s No. 1,” proclaimed Thompson, a close friend and mentor of Webb’s since the early 1970s, when Webb was cutting his teeth as an assistant U.S. attorney in the Northern District of Illinois, where Thompson held the top spot as U.S. attorney. ”He just exudes sincerity. No court or juror would ever think that Dan was telling them something that wasn’t so.”

Described as a true ”generalist trial lawyer” who eagerly takes on caseloads that are impressive because of their volume, variety, and complexity, Webb is ”one of the more formidable courtroom lawyers in America today,” said prominent Washington, D.C., attorney Brendan Sullivan of Williams & Connolly, who has opposed Webb in several high-profile cases.

”He doesn’t pick the cases he can win and just try those. He steps into the arena and fights the good fight for his client, whether he’s the underdog or the favored,” Sullivan said. ”In this day and age, where you have so many so-called trial lawyers who don’t ever get to court, or if they do it’s once every 10 years — they’re the great pretenders. But Dan is the real thing.”

In recognition of an illustrious career that is rooted in Chicago, his resilience and doggedness as a trial lawyer who has long maintained his standing at the top echelon of his profession, with a reputation that extends beyond the United States, Webb has been selected Chicago Lawyer’s 2008 Person of the Year.

A passion for action

If the rule of thumb in real estate is location, location, location, Webb has one that sums up his passion for trial work.

”Action, action, action. I like the action,” he said, with a wide-eyed, kid-in-a-candy-store enthusiasm. ”I like the pure excitement of constantly being on stage, on trial, where you’ve got to get up and cross-examine a witness, you’ve got to give a closing argument, you’ve got to live by your wits.”

Webb’s genuine love of trying cases comes across clearly to his friends and colleagues.

”He is driven to be an extraordinary trial lawyer,” said 7th U.S. Circuit Court of Appeals Judge Joel M. Flaum, who has known Webb since the early 1970s, when Flaum served as a top assistant in the U.S. attorney’s office. ”He’s not a very materialistic guy. He’s not a guy that needs to have the most expensive watch, or car, or clothes. It’s just the love of trying cases.”

Beyond his skills as a ‘’stunningly good trial lawyer,” Webb embodies the traditional values of the profession, said Jenner & Block chairman Anton R. Valukas, a former U.S. attorney.

”He represents part of the old school — lawyers who can brilliantly try a case and then go out afterwards and share a glass with their opponent, knowing that both of them tried to their best,” Valukas said. ”It’s not about the money, it’s about the challenge.”

For Webb — who is said to consistently work more than 3,000 hours per year in a practice that mixes complex commercial litigation and white-collar criminal defense — 2008 has been especially busy.

This year he faced the likelihood of at least six trials, including the widely publicized defense of Detroit Mayor Kwame Kilpatrick, who recently entered a plea bargain agreement and was sentenced to four months in prison.

In a victory last year, Webb led a Winston trial team to a $58 million jury verdict for his client, Verizon Communications, in a patent infringement case in an Alexandria, Va., federal court against Internet phone company Vonage.

This year, while facing the prospect of about a half-dozen trials, Webb also served as chair of the Chicago Bar Foundation’s 2008 Campaign for Justice, which raised more than $1 million, a record-breaking amount for a citywide effort aimed at increasing the compensation of Chicago’s legal aid attorneys.

On a Webb trial team

At Winston & Strawn, the most sought-after assignments are to work with Webb, said managing partner Thomas P. Fitzgerald.

Being on a trial team with one of the best known trial lawyers in the country is never a ”’Mr. Webb’ thing — it’s ‘Dan,”’ said Thomas J. Frederick, a Winston partner who chairs the firm’s litigation department.

”Dan is a very even-keeled guy; very easy to work with. But he’s never happier than being on trial,” said Frederick, who has worked with Webb since 1989. ”There’s a real esprit de corps that breeds around a Webb trial team.”

In his dealings with people, from support staff to associates, partners and clients, ”there is no aspect of the prima donna to Dan — none,” said Bradley E. Lerman, a Winston litigation partner who works with Webb on major matters. ”He demands a high level of performance from everybody, but he’s as approachable and as ordinary as anybody, in terms of just a genuine, good person, dealing with people.”

Being on a Webb trial team also means its leader is the hardest worker of them all.

”People who think that the skill and the excellence they see in the courtroom is, somehow, the work of inspiration and not perspiration are missing the essential feature of Webb, which is, he simply outworks everybody,” Lerman said.

During his occasional downtime, Webb might catch a Cubs game at Wrigley Field, square off in a tennis match, or take a chance on some horseracing at the track or at a few rounds of poker or blackjack (”I was just in Las Vegas trying a case in Reno, and I taught everyone on my team how to play blackjack,” he said).

Running has been a constant outlet for Webb. Since age 30, he said, he has made the time for a run — whether it’s day or night, in a park or on a treadmill during a quick break from work.

”Running is my way of kind of getting in tune with myself, kicking out the cobwebs, and being healthy,” Webb said. ”There’s no question, it’s an addiction.”

If he’s at a trial site in some faraway city, Webb said he likes to break away for a 45-minute run.

”Then I get back in my room and I have all these thoughts. I put them on a piece of paper,” he said. ”Then, I sometimes drink some Jack Daniel’s (on the rocks, never with Coke), and I think more, and I write those thoughts down on a piece of paper.

”I put them in a folder called ‘Closing Argument,’ and three weeks later I read them over and decide which ones I really want to incorporate into a closing argument.”

Joy of victory vs. agony of defeat

After stepping down as U.S. attorney in 1985, Webb joined Winston & Strawn as a partner, and has been there ever since. With well over 100 trials under his belt in his 38-year-long career, he said he can’t point to the one case he’s most proud of.

Lining a wall of his office at the firm are framed courtroom sketches featuring him in scenes of some of the trials that resulted in what he acknowledged were major victories.

There’s one depicting Webb examining Bill Gates, when Webb represented Microsoft Corp. in 2002 as co-lead counsel in an antitrust case brought by nine states.

Another sketch depicts Webb in 1990 examining Oliver North during Poindexter’s trial, which resulted in a conviction that was reversed on a technicality on appeal.

And there are other mementos of his big wins, like the framed American Lawyer magazine cover featuring Webb with two other lawyers he worked with as chief trial counsel for General Electric Co. in 1994, when the Justice Department accused GE and the South African diamond company DeBeers of conspiring to fix the price of industrial diamonds.

That case, Thompson said, solidified Webb’s reputation as one of the nation’s top go-to litigators. Webb was able to persuade the judge to throw out the case after the government presented its evidence, Thompson recalled.

”He got up in front of the jury and he had this stand with a picture of the GE factory down the road in Columbus, Ohio. He said, ‘My name is Dan Webb. I represent General Electric. We make refrigerators,”’ Thompson recalled of Webb’s opening statement. ”He was taking the jury back to the ’50s when GE was the household brand in household appliances.”

The cases Webb has handled over the last two decades in private practice have run the gamut.

He represented the New York Stock Exchange in connection with an internal investigation over compensation to the former chairman, Richard Grasso, and continues to represent the NYSE in related litigation.

Webb lost a Big Tobacco case in a civil suit in Florida in 2000, when the industry was ordered to pay $145 billion, the largest civil judgment in U.S. history, Engle v. Philip Morris USA. But today, the case is considered one of his big wins, since the judgment was overturned on appeal.

While Webb has won some big cases, he has also seen some big defeats, which he concedes make him feel miserable for at least a few days.

”The agony of defeat is worse than the joy of victory,” Webb said. ”That’s one of the unfair things about what I do. When you win one, it feels good, but I don’t sit around and think too much about it. I just move on to the next one.”

One of Webb’s big defeats came with Ryan’s 2006 public corruption conviction.

”I felt very strongly about him and his family, and I felt very bad about losing that case,” Webb said.

Webb fought hard for his client and friend in a six-month trial that had him sparring with former Assistant U.S. Attorney Patrick Collins.

”It was both a chess match and a street fight,” said Collins, now a Perkins Coie partner whom Webb occasionally meets for lunch. ”He’s tenacious, very competitive. He has a killer instinct in him. Part of having a killer instinct is, you go for the jugular for your client and, he does that. If you want a gladiator, you want Dan Webb.

”I can honestly say, I’m a much better lawyer for being in a courtroom every day for six months with Webb.”

If Webb could have a do-over, it would be the case of David J. Shields, the former presiding judge of the Cook County Circuit Court’s chancery division who was convicted on bribery charges in 1991.

”I relived that case a thousand times to figure out how I could’ve done it differently, because it wasn’t a very complicated case, and I hated losing that case worse than any other case I lost in my life,” Webb said. ”I just know in my heart Dave was innocent of that crime.

”If I get a second life, I’m going to retry that case — I want a retry on that one. But you don’t get retries, and I don’t think you get second lives.”

Trail to trial lawyer

Growing up with his younger sister in Bushnell, a rural town of about 3,000 people in west-central Illinois, where ”everyone knows everybody,” Webb spent much of his youth pitching in on a grain farm about a mile from his boyhood home, where his grandfather and uncles raised hogs and cattle, and tended to corn and soybean fields.

”I did enough to learn that I just didn’t want to be a farmer,” said Webb, whose father juggled jobs delivering mail and selling farming equipment. His mother worked as a receptionist at a dental office.

”I can remember baling hay,” Webb said. ”Baling hay is where you get up in this hay mound and you’ve got to stack this hay up and it gets to be about 150 degrees in there. You’re in there all day long and you’re piling these bales with hay and all you want to do is get out of there and get a drink of water — and you learn what hard work is all about.”

From a young age, Webb said he knew he had to find a way out of Bushnell, ”a good little town with a lot of nice people,” he acknowledged.

”But I knew there was a whole world out there. I had to find a trail out to the world,” Webb said. ”Being a trial lawyer was my trail.”

It was a choice, Webb joked, between becoming a trial lawyer or living out his boyhood dream of playing second base for the St. Louis Cardinals, a team to which he still pledges an unyielding loyalty.

As a boy, Webb said, he ”could not be pried away” from his transistor radio and the gripping, play-by-play calls of announcers Harry Caray, Joe Buck, and Joe Garagiola.

But it didn’t take long for Webb to see the courtroom as his ticket out. That idea came to him at the encouragement of a high school guidance counselor, who observed the freshman in after-school debate classes.

”She thought, because of my skills on my feet as a debater, that maybe I ought to think about being a trial lawyer. She started giving me these books about lawyers,” Webb said. ”I took all this stuff she gave me and I thought: That’s it. I can do this. I can convince people of things.”

Webb’s sister, Diane Hoyle, recalled how her brother often monopolized the one television set in their childhood home, immersed in ”Perry Mason” episodes.

”We’d have to watch them, and then watch the reruns,” Hoyle said.

Eager to get on with law school and into the courtroom, Webb entered Western Illinois University in Macomb, where he signed on to a special, joint program with University of Illinois at Urbana-Champaign that would allow him admission to the law school after just three years of undergraduate studies.

”I was going to settle down in one of those towns around there [in Downstate Illinois] and practice law,” he said.

It was a combination of happenstance and conviction that drove a 21-year-old Webb to Chicago.

The program at Western was abolished as Webb was finishing his third year there, but still, he made his case and got his way. He sent out applications to other Illinois law schools and received an invitation for an interview on a Saturday morning from the dean of Loyola University Chicago School of Law.

As Webb remembers it, early on in the meeting, the dean closed the young student’s file when he discovered that he had no undergraduate degree and told him apologetically that he could not enter law school without it.

”That was my first challenge to be an advocate, because I had to convince him to let me in,” Webb said. He used his sympathy.

”I said, ‘I want to go to law school. I know I can make it. All I want to do is be a trial lawyer,”’ Webb recounted. ”I told him, ‘I’m not going to waste another year. I want to go to law school, I’m ready to go to law school, and you called me all the way up here, and then you misread my transcript. So, I want in.”’

After about an hour, Webb said, the dean agreed to make an exception.

”That was the biggest break I ever got in my life, because that guy, sitting in his office on a Saturday morning, made a decision to let me go to law school,” Webb said.

Webb took out loans to cover the costs of law school during his first year, living with two other roommates in a small apartment in Uptown, where a closet beside the toilet became his makeshift bedroom.

”I had my clothes hanging over my head and my bed underneath it and a toilet right next to me,” he said.

His sister recalled their mother’s reaction when she returned from a visit there.

”We didn’t have very much money. Dad and mom helped him when they could,” she said. ”My mother was just sick when she came home. She sat down and cried. It wasn’t really good living conditions.”

Lonely in a strange city and heading deeper into debt during his first year at Loyola, Webb switched to night school and worked by day at a bank as a supervisor for clerks who processed checks. That move, he said, opened up his world.

”I fell in love with the city, and I became a part of the city,” he said.

In the trenches

The second biggest break for Webb came around 1970. After graduating at the top of his law school class, he landed his first job in the U.S. attorney’s office, a place that would lay the foundation for his career and where he would form long-lasting friendships with a network of mentors and colleagues who would also move on to greater acclaim.

A naive ”farm kid” with ”hayseed still in my hair” walked into the office for a round of interviews at a time when leaders were charged with hiring a lot of new lawyers, said Samuel K. Skinner, former secretary of transportation and chief of staff for President George H.W. Bush, and a former U.S. attorney in Chicago.

Trial experience, said Skinner, now of counsel to Greenberg Traurig, was not an issue.

”We wanted people who were smart, articulate, didn’t look like they were arrogant or conceited, and had a great academic record.

Dan fit into that category,” Skinner said.

Judge William J. Bauer of the 7th U.S. Circuit Court of Appeals, was then the U.S. attorney who gave Webb his first job.

”I saw a guy who really wanted to be a good lawyer. He was smart, he was nice and he was eager,” Bauer said. ”I like hungry people and he was hungry. He wanted the job so bad he could taste it.”

Webb’s boyish looks also helped.

”At the time he looked about 16, and that was one of his traits,” Skinner said. ”They called him ‘Boy Lawyer.’ We always thought the jury kind of looked at him as their son.”

Thompson likes to tell the story of when Webb sat down that day for an interview with Arthur Connelly, then a top prosecutor in the office, who left the notation ”NBBR” on Webb’s application. When Thompson asked Connelly about the meaning behind the note, ”he said, ‘Nice boy, but rural,”’ Thompson recalled. ”I said, ‘That’s the point.’ He was fresh off the hammer factory.”

With that, Thompson said, Webb was hired. And within a couple of weeks, the Boy Lawyer was trying cases. He served as an assistant U.S. attorney for six years.

”Thompson and Bauer, they turned us loose,” Webb said. ”We had all this political corruption and we indicted all these people and we tried all these big cases, and we did a lot of good things. Those were challenging, fun years. That was a big break.”

U.S. District Judge Charles P. Kocoras was among the young assistants hired with Webb.

”I knew how good he was from the get-go,” Kocoras said. ”We were all driven to be the best, and I knew I could never be better than him. I could just tell how he assessed things; how hard he worked. If I put in 60 hours a week, he’d put in 70. If I put in 70, he’d put in 80. If I tried a major case, he’d try two of them.”

It was ”in the trenches” of the U.S. attorney’s office where Webb met some of the people he now considers some of his closest friends.

Fishing trips to Canada became an annual ritual for years, the latter of the trips extending into warmer destinations, like Costa Rica and Belize.

”It was a hoot,” Valukas said. ”They were typical road trips, the theory being, what happened on the trip stayed on the trip.”

Webb met his wife, Laura, in the U.S. attorney’s office. The two were married in 1974. Bauer presided over their wedding ceremony, with Kocoras serving as the groom’s best man. The couple raised five adoptive children — now ranging in age from 20 to 36. Thompson is godfather to three of them.

‘Yes’ to top prosecutor

By 1976, Webb left the U.S. attorney’s office to set up a litigation boutique downtown. A few years later, after Thompson became governor, Webb moved to Springfield to head up the Illinois Department of Law Enforcement.

Around the same time, Webb said, people were pushing him to run for public office, ”but I missed the courtroom. I just couldn’t stand not being in the courtroom.”

He returned to private practice for a short while, when U.S. Sen. Charles H. Percy approached him with the idea of serving as U.S. attorney. Webb by then was a fairly well-known lawyer in the city. His litigation boutique was doing well, he said, and he was not inclined to go back into government.

He almost turned down Percy’s invitation, until Bauer and Thompson convinced him otherwise.

”Thompson and Bauer, in particular, said, ‘You can’t say no to being U.S. attorney. To be U.S. attorney in Chicago is something that is just very special. … Don’t worry about the fact that you’re making all this money now. … There’s no other answer. The answer is yes.”’

President Ronald Reagan appointed Webb in 1981. In an ironic turn of events years later, Webb, serving as a special prosecutor in the Iran-Contra affair, cross-examined Reagan in the Poindexter case.

A highlight of Webb’s four-year tenure as U.S. attorney was Operation Greylord. In 1984 Webb personally prosecuted John M. Murphy, the first of the judges to stand trial as a result of the investigation of the Cook County court system.

Murphy was convicted, but Webb learned a valuable lesson early on during the trial, at the start of his cross-examination of the judge. It was a lesson that hit home again years later, he said, when he set out to cross-examine Reagan, the president whose politics he respected and who named him U.S. attorney.

When he set out to cross-examine Murphy, ”I had made up my mind that I had to show respect for his office. So, I had to be firm, but not harsh or aggressive.”

After about an hour, the court had recessed for the day, and Webb returned to his office.

”I knew it hadn’t gone well. It was just okay; it wasn’t great. There was so much at stake and if the jury believed him, I was finished,” Webb said. ”I just sat there for a while.”

Webb was trying to figure out what he did wrong, when a colleague gave him the answer.

”He said, ‘You are not being Dan Webb. You’re trying to tone down your style. You’re trying to show respect to this man, and you’re forgetting that he’s a defendant in a criminal case that took bribes. If you continue to cross him like this, we will lose this case.’

”I sat there for hours and redid the whole cross-examination. I slept for two or three hours and I was up and ready to go, and I felt really good,” Webb recalled. ”I was going to be Dan Webb again. I got up the next morning, and these people thought that I pretty much did the job on Judge Murphy.”

In the courtroom, Webb is admired for his methodical and relentless cross-examinations, a favorite part of a trial that he considers ”truly, an art.”

”The most challenging performance of a trial lawyer is figuring out how to approach someone who is dead-set on harming you,” Webb said. ”I have to figure out a way to find a path to show the jury that the witness is wrong, or mistaken, or lying. … Whenever I finish a good cross — that’s a good day.”

Webb, whose country charm is said to resonate with juries, said it was after he left Bushnell for law school in Chicago and began trying cases, that he came to appreciate his small-town roots.

”I think that kind of rural upbringing may have been a big blessing for me,” he said. ”I learned how to communicate with people in a very basic, simple way.”

But Webb is not one to rest on his laurels.

”I don’t believe that because I’ve had success in the past that it guarantees success in the future,” he said. ”Each case is a new challenge and something new to get done.

”If you lose a case, you are a loser — you’re no longer a winner,” he said. ”You better win one, because until you win one, you’re a loser.”

On the night when the nation elected its first African-American president, Webb — a self-described ”political junkie” who likes to devour ”every conceivable magazine and newspaper I get a hold of” — was cramming in some prep work in the quiet of his corner office before jetting off on a flight to New York. He was due to appear in court there the next morning, for a hearing in another case headed for trial.

For the last two decades, Webb said, he has kept a fairly consistent workload. With no intention of slowing down any time soon, Webb is geared up for about another 20 years.

”I’m 63 years old, and I love what I do,” Webb said. ”If I had to guess, I’ll practice law until about 80. As long as I’m healthy and as long as the clients want me … as long as I can try cases, I doubt if I’d retire.”

But somewhere along the way, Webb hopes to set aside a stretch of a few months to prepare for a trial of another sort.

”I am going to train for one marathon,” Webb said. ”That’s one of my goals before I leave this earth. I’ve already promised myself that.”

Who’s Paying Dan Webb’s BigLaw Bill in Detroit Mayor Case?

Posted Mar 25, 2008, 07:17 pm CDT
By Martha Neil

Hiring the chairman of Chicago's Winston & Strawn as one's criminal defense lawyer in a municipal corruption case obviously doesn't come cheap.

So observers are wondering who is paying Dan Webb to defend Detroit's embattled mayor, Kwame Kilpatrick. The answer to that question isn't entirely clear, but Webb says it's definitely not taxpayers who are picking up the tab, reports the Detroit Free Press. The newspaper notes that the mayor's personal money, a campaign fund, a political action fund and several charitable funds might all be possible sources of legal defense funds for Kilpatrick.

Says Webb himself: "I have never discussed publicly how my fees are being paid by my client regardless of who that client is. But I am familiar with the arrangements obviously that are being made for compensation for my firm, and the arrangement is perfectly proper."

As discussed in an earlier ABAJournal.com post, Kilpatrick was charged yesterday in an obstruction of justice case, along with his former chief of staff. The case may potentially put city lawyers on the hot seat, for recommending a controversial $8.4 million settlement to conclude a lawsuit that underlies the obstruction prosecution against the mayor.

The Day Clout Struck Out

By Steve Rhodes

Illustrations by Steven Brodner

One day about four years ago, a young man named Kevin Flynn paid a visit to Don Stephens, the feisty and plainspoken mayor of Rosemont. The two made an odd match. Stephens, then 69, had almost single-handedly transformed Rosemont from a seedy stretch of strip joints and garbage dumps near O'Hare into a tax-rich haven for airport hotels, restaurants, and office buildings. In the process, he had become one of the state's most powerful politicians. By contrast, Flynn, then 30, had a rather thin résumé–a business degree from Marquette and a few years working for his father, Donald Flynn, a former Arthur Andersen accountant who had made a fortune with Waste Management and Blockbuster Entertainment.

The day they met, however, the two had something in common. Stephens eagerly wanted to bring Rosemont a casino, with its promise of vast lucre for village coffers and his own conveniently placed associates. Kevin Flynn was in the casino business; he ran a Michigan City, Indiana, riverboat and his father owned an outfit named HP Inc., a company anxious to move its shuttered gambling operation from East Dubuque, Illinois, to a more promising location.

Despite their mutual interests, the meeting turned into a disaster. By Stephens's account, Kevin Flynn was little more than a cocky, gabby rich kid. "Kevin proceeded to tell me how he was going to save Rosemont and the whole world," Stephens recalled later in a deposition he gave in a federal lawsuit. "I gave him a very short time. I said goodbye and I told [the friend who had set up the meeting], 'Don't ever send that idiot in here again.'"

Yet, this incongruous pair ended up becoming cohorts in one of the grandest deals the state had ever seen, the proposed Emerald Casino in Rosemont. For a time, the arrangement looked like a triumph of clout–pure Illinois politics in all its glory and horror. The state legislature rewrote the Riverboat Gambling Act so Donald Flynn and his partners could move their East Dubuque casino license to Rosemont. The new operation was backed by an all-star assemblage of money and influence, from Amalgamated Bank's chairman Eugene Heytow to Chicago Bears icon Walter Payton. Chicago's Mayor Richard M. Daley gave the project his blessing, and Governor George Ryan signed the bill that made it happen; friends of both were among the investors.

And why not? The Emerald and its political caretakers were sitting on a gold mine. A Rosemont casino was expected to generate $400 million a year. Even at $750,000 for half a share, it wouldn't take long for investors to earn back their money and then some.

Stephens would get his payoff, too. Rosemont was anticipating an estimated $6.4 million a year in taxes for the first ten years and, because the village owned the land on which the casino would be built, at least $1.5 million in annual rent. In addition, the Emerald would be required to pay at least $4 million a year to a new tourism and economic development commission controlled by Stephens.

The deal looked so thoroughly wired shut that Emerald officials broke ground in October 1999 on a patch of land about a block west of the Donald E. Stephens Convention Center, just inside the Interstate 294 beltway.

Then something remarkable happened. The Illinois Gaming Board, hitherto known as a revolving door for lobbyists, lawyers, and political hacks, said no. Officially, the Emerald was rejected because the board concluded the Flynns, and Kevin in particular, had engaged in a string of lies and evasions about, among other matters, how the Rosemont deal had come together. The board also blamed the Flynns for having failed to screen two investors and a construction subcontractor with alleged Mob ties. But (suspected) lies and (alleged) Mob ties are rarely enough to kill deals in Illinois. What kills deals is the same force that creates them: politics.

A casino may yet open in Rosemont. But today the Emerald is caught in a rat's nest of litigation and recriminations. The story of–the rise and collapse of what was a sure thing offers an instructivesome would say dismaying–case study of how public projects are put together in this state. The players included many of the usual suspects and at least one surprise, Marvin Davis, the oil tycoon and entertainment mogul from Los Angeles. As usual, the big bucks were steered toward the well-off and well connected, and the bigwigs all wanted it to happen. What makes this case study remarkable is the anomalous fact that–for one day, at least–clout struck out.

Governor Jim Thompson, using a blackjack table as a desk, signed a riverboat-gambling bill into law in February 1990 at the Peoria Boatworks Complex, home to a maritime museum, restaurant, and paddlewheel excursion boat. In the background, a calliope blared "Happy Days Are Here Again." The state would award ten licenses, and virtually every ownership group that applied was stocked with the finest clout Illinois had to offer.

The first license, for example, went to the Alton Riverboat Gambling Partnership, whose politically connected investors included William Cellini, the downstate asphalt king and Republican fundraiser extraordinaire. (Cellini is now vying for a piece of the Joliet Empress.) The second license went to Rock Island Boatworks, owned by hotelier D. James Jumer, and stocked with friends of Thompson. The third license went to the Jo Daviess Riverboat Corporation, the first incarnation of the group that would pilot the Emerald, the cloutiest casino of all.

The Jo Daviess Riverboat Corporation was the idea of Galena real estate agent Jim Cox, the brother of former Democratic U.S. congressman John Cox. Jim Cox had sold a plot of land in the Galena Territory resort community to Jim Sheerin, a retired Hilton Hotels executive, former chairman of McCormick Place and past president of the Chicago Convention and Tourism Bureau. Cox and Sheerin struck up a friendship, often spending Sundays together watching their beloved Chicago Bears on TV.

"A guy with half a brain could probably get a riverboat out here," Sheerin told Cox one Sunday afternoon.

"I know a guy with half a brain," Cox replied. "What would a guy do?"

Sheerin coached Cox as he secured an option on a marina and an initial $3 million from investors. Then Sheerin hired a former Cook County Circuit Court judge, Louis Garippo, who had presided over the John Wayne Gacy trial, to represent the venture before the gaming board. (The board chairman, William Kunkle, had prosecuted Gacy.) In November 1990, the board awarded the Galena investors a license.

Although the boat would be docked 12 miles west of Galena, in East Dubuque, Illinois, it would be a nice complement to the nearby Eagle Ridge Inn & Resort and its two championship golf courses, the ski runs of Chestnut Mountain, and Galena's historical amenities. Sheerin persuaded Heytow, of the clout-heavy Amalgamated Bank & Trust, where William Daley, brother of the mayor, was once president, and Peer Pedersen, a powerful Chicago lawyer and a director of Waste Management, to invest in both Eagle Ridge and the riverboat. Heytow and Pedersen formed HP Inc. (the forebear of Emerald Casino Inc.) and rounded out the 18-person investor list with associates from Heytow's bank and former executives of his McCormick Inn, which had been demolished so McCormick Place could expand. Leonard Ring, an influential fundraiser for Richard M. Daley, also came on board.

The importation of Chicago investors prompted local speculation that the East Dubuque boat, named the Silver Eagle, was just a trial run for a Chicago boat. That speculation intensified when Mayor Daley proposed a $2-billion downtown theme park with at least four casinos just three months before the Silver Eagle opened its doors in 1992.

Chicago would have been tantalizing under any conditions. For HP, it was more so because the Silver Eagle was in trouble from the start. East Dubuque was a small market that included an Iowa riverboat competitor and a greyhound park. The faltering Silver Eagle was using only half of the 1,200 gaming positions (chairs at blackjack tables, spaces around a craps game, the number of slot machines, and so forth) allotted by its license. It wasn't long before Sheerin suggested HP use the balance of its positions in Chicago, or each of the existing licensees have a stake in a Chicago boat.

But Daley's casino proposal died in the legislature, and the failing Silver Eagle was shut down. HP would have to look elsewhere. In 1995, a Silver Eagle executive publicly called Rosemont the most appealing site in the state and begged for permission to transfer its gaming license there, but Attorney General Jim Ryan issued an opinion the license couldn't be transferred.

Don Stephens never liked the original riverboat legislation. He thought casinos should be based near convention centers, like the one in Rosemont bearing his name, not in depressed river towns. Milk the out-of-towners, not the down-and-out.

So a steady stream of casino executives eager to locate in Rosemont beat a path to the agreeable mayor's door, even though the state's ten licenses were already being used and the law didn't allow any of the riverboats to move off a navigable waterway. Under the right circumstances, these executives ventured, the law could be changed. In 1995, California oil billionaire Marvin Davis, who wanted to enter the casino business, decided Chicago held promise as a lucrative market. At the same time, Stephens was interviewing casino executives; a village consultant arranged a meeting with Michael Colleran, a Davis lawyer. The Rosemont mayor says he had no idea at first who Davis was. In a deposition for a lawsuit that later arose, Stephens described that first meeting with Colleran: "I can recall he sat there and told me how rich his boss was. . . . He's talking about this guy Marvin Davis, he could write a check for this, he could write a check for that, he could buy the whole city of Chicago. . . . I don't know what he was trying to impress me with."

Nevertheless, over the next few years, the Davis Companies commissioned architects and planners to develop blueprints for a Rosemont casino/entertainment complex, paid for an economic impact study, and even hired an engineering firm to do a traffic study.

Meanwhile, Davis schmoozed Stephens, once even sending a private plane to fetch him and his wife to California for dinner at Davis's home. "I don't think Marvin Davis ever mentioned a casino," Stephens recalled in his deposition. "He mentioned Barbra Streisand and Sidney Poitier. He had a whole bunch of Renoirs and he wouldn't let the Frogs look at them . . . the ambassador wanted to borrow his Renoirs and he wasn't going to give them to the Frogs. And we had a problem with Barbra Streisand with the show in the Horizon [now the Allstate Arena]. He said, 'Well, well, she's a friend of my wife, Barbara, but she's an F'ing bitch.' I said, 'Okay.'"

Unfortunately for Stephens, he could never persuade the legislature or then Governor Jim Edgar to allow gambling in Cook County. Stephens put Davis's plans into a drawer. But he didn't forget about them.

Donald Flynn, the son of a South Side Catholic school principal, has always had a knack for numbers. From 1972 to 1997, as treasurer, chief financial officer, executive vice-president, and board director, he was the financial smarts behind Oak Brook-based Waste Management, once the world's largest trash hauler. When Wayne Huizenga, a cofounder of Waste Management, left the company to form the video-rental pioneer Blockbuster Entertainment, Flynn was at his side. Flynn got very rich; in 1994, Chicago magazine estimated his net worth at nearly $500 million.

Although Flynn was one of the original investors in HP, urged on by Waste Management's Pedersen, a close friend, he was a relatively small player with a 7-percent stake. But when HP was on the brink of bankruptcy in 1996, Flynn stepped in with a $1.5-million personal loan that saved–and gave him control of–the company. A slimmed-down Silver Eagle reopened, with mostly slots and video poker, while HP continued its furious lobbying to get permission to move her. It also opened a riverboat in Michigan City, Indiana, called the Blue Chip Casino. Flynn's son Kevin was put in charge. "All I knew about gaming was losing money playing blackjack," Kevin recalls. "It was just a very unique opportunity. I thought it would be a fairly profitable business. The industry held no particular allure." The plan was to make the Blue Chip profitable enough to make up for the Silver Eagle's losses.

The Silver Eagle, however, could not be saved. In late June 1997, the gaming board–the state agency that regulates casinos–voted to revoke HP's license, ruling the company failed to show it could make the Silver Eagle profitable and failed to stay in compliance with a host of regulations. HP officials shuttered the boat for good in July and, angry that they hadn't been allowed to move from East Dubuque, made it clear they would tie up the license in the cumbersome, time-consuming appeals process. "We can't just smile and walk away," Donald Flynn told the board. "We don't want a fight, but we don't feel like we've been treated fairly."

Don Stephens may have been put off by Davis's pretensions and Flynn's brash ham-handedness, but the Rosemont mayor had a vision. He wanted not only a casino, but an entire entertainment complex, including a museum for antique automobiles, his passion. Davis had the experience to make a project like that a success; the Flynns controlled the one Illinois gaming license that was in flux. Stephens brought Davis, the Flynns, and other interested parties together, although it wasn't easy convincing the camps they needed one another. When Davis's lawyer Michael Colleran met HP's vice-president Joe McQuaid for the first time, in November 1998, the meeting was a bust. McQuaid, according to a lawsuit later filed by Davis, saw no reason to give Davis a piece of the action.

The next morning, Colleran was about to board a plane back to Los Angeles when he received an urgent phone call. Stephens wanted him to meet with McQuaid again. This time, Stephens would be there. They met in the coffee shop at the Rosemont Hyatt, where Stephens holds court and, according to the Davis lawsuit, McQuaid was persuaded that Davis's financial muscle (Forbes ranked him 82nd in its 2001 world's richest list) and entertainment industry expertise (he once owned 20th Century-Fox) could help HP get what it wanted.

Meanwhile, a friend of Stephens and a noted dealmaker, secretary of state George Ryan, was getting ready to move into the Governor's Mansion in Springfield. Campaign funds controlled by Stephens had given Ryan more than $45,000 that election year. The Silver Eagle's owners also greased the skids. In the campaign cycle leading up to the 1998 election, HP gave more than $87,000 to Ryan, House minority leader Lee Daniels, and Senate president James "Pate" Philip–the state's top three Republicans.

Even so, during the 1998 campaign, Ryan said he opposed opening Cook County to gambling. Stephens pushed to make a deal anyway, moving to woo Arlington Park impresario Richard Duchossois, who opposed a Rosemont casino because it would compete with his track. Duchossois had the clout in Springfield to block a Cook County gambling bill, so HP would need him on its side.

A deal was sealed at a chance meeting on East Pearson Street on December 1, 1998, according to the depositions given by Duchossois and Colleran, Davis's lawyer. On that day, Duchossois was supposed to meet Kevin Flynn for dinner at Bistro 110. Flynn didn't show, so after dinner Duchossois left to attend a reception for Edgar at The Ritz-Carlton. On the way there, Duchossois ran into Flynn, who said he had just met with Colleran in The Ritz-Carlton's lobby bar. A deal had been worked out for the ownership of a casino in Rosemont–given, of course, approval by the legislature. The Flynns and Davis would each get 37.5 percent, and Duchossois would get 20 percent. (The alleged deal allowed 5 percent for "local investors," probably politicians' friends.) According to his lawsuit, Davis would be slated to contribute $12 million toward the $30 million that would buy out HP's original investors. The deal, according to notes written by a Duchossois lawyer who was also there, was sealed with a handshake.

In the spring 1999 session, Representative Ralph Capparelli, a Democrat from the Far Northwest Side who does Stephens's bidding in the legislature, introduced a bill amending the Riverboat Gambling Act so it would allow a gaming license holder that had not been doing business on January 1, 1998, to relocate to any willing community. That meant letting HP move to Rosemont. Stephens stalked the Capitol halls in his Hawaiian shirt and sat behind an oval table in Capparelli's office twisting arms and trading favors. Much to Stephens's relief, Kevin Flynn let McQuaid do HP's heavy lifting. "I did see Kevin Flynn in Springfield," Stephens said in his deposition. "I said to Joe McQuaid, 'Get him out of here,' because he came in to Capparelli's office and I didn't think that Kevin Flynn would add anything to the mix."

Says Flynn: "I was there once or twice as a spectator."

The bill turned into a huge, expensive grab bag of goodies that bought off the most dangerous opposition. Rosemont's suburban neighbors, who might have feared crime and congestion would spill into their communities, got a share of the tax revenues the casino would generate. The horseracing industry got a subsidy to offset new competition for the gambling dollar. Cook County got a criminal justice fund created by gambling revenues. The University of Illinois got $4 million to repair its football field. The legislation allowed boats to stay docked, eliminating the farcical requirement that they cruise–a change that thrilled other riverboat owners. Stephens promised a group of legislators he would find an additional five votes for their gay rights bill. And Stephens told pols who feared a pro-gambling vote would hurt their next campaign that he would lend his formidable political operation to help them. The horse-trading was so intense Senator Denny Jacobs of Moline, known as the father of riverboat gambling in Illinois, told the Springfield State Journal-Register he felt like a whore.

Still, the bill was touch-and-go. Stephens recalled in his deposition that ten minutes before a vote in the House was called, Speaker Michael Madigan went to Capparelli's office to find Stephens and said, "'Don, I suggest you pull the bill. The best we can do is 56 votes. It can't pass. Pull it and you'll have another shot at it.'

"'And I said, 'Michael, I've been doing this for ten years. Either it's up or down. Call the bill. I'm going down.'

"He called the bill and, lo and behold . . . we got the 60-some votes."

That put Senate president Pate Philip on the spot. "I had talked to Pate Philip and Pate very cavalierly said, 'Get it out of the House and I'll get it through the Senate,'" Stephens recalled. "I believe in my heart of hearts Pate never thought we would get it out of the House. . . . [M]y true belief is he thought we'd never pass it anyway. He adjourned the Senate and went home."

Philip brought the Senate back and Stephens got his 30 votes in a roll call. But Senate minority leader Emil Jones Jr., a South Side Chicago Democrat, pulled one last maneuver on behalf of the black caucus, which bargained for increased state aid to poor communities. "We thought we had it passed," Stephens said. "And Emil Jones outsnookered Pate Philip. He somehow conned this downstate senator off the floor and then asked for a verification of the roll call. . . . The verification came up one vote short. . . . [W]e went back the next day and worked our butts off trying to make peace with the black caucus and that's when we got the bill passed."

Stephens emerged from Capparelli's office triumphant. Emil Jones later told Stephens, "I really wasn't opposed to the bill," according to Stephens's deposition. "I had to get what I wanted. . . . From now on maybe we can be friends."

With the legislature won over and virtually every powerful interest in the state behind the bill, Ryan wasn't about to stand in the way. He signed the bill in June 1999. But by that time, a rift had already developed between the business partners. A high-level Emerald insider says now once the legislation passed, Kevin Flynn's manner began to cause problems. "Kevin adopted kind of an arrogant 'I've-got-the-world-in-my-hands, I-can-do-anything' kind of attitude," the source says. To make matters worse, the source says, "[Kevin] was way, way over his head." Davis later claimed in a lawsuit around this time the Flynns stopped returning his phone calls. Stephens helped arrange a phone call to make amends, but it didn't go well. "Instead of Don Flynn calling back, Kevin Flynn called and hung up on Marvin and that made Marvin angry," Stephens said in a deposition.

Davis worried the Flynns were cutting him out of the purported deal–which had never been put in writing. Stephens suggested Davis buy out some of the original shareholders himself. None wanted to sell. HP was now looking like a dazzling investment. Renamed Emerald Casino Inc., it applied to the gaming board for renewal of its license, asserting under the new legislation, it was entitled to move to Rosemont.

In October 1999, Marvin Davis sued for $250 million or enforcement of the supposed lobby bar agreement. In a deposition, Kevin Flynn acknowledged discussions had taken place, but denied there was a deal. Emerald's lawyers argued Davis's suit was folly–surely a sophisticated businessman like Davis wouldn't make such a lucrative agreement on a handshake. Davis's lawyers retorted Flynn insisted nothing be put in writing until after the legislation passed because the deal wouldn't look good politically, given Davis is an out-of-state billionaire and Duchossois had worked both ends to get a taxpayer subsidy for horseracing at the same time he was given a piece of the competition.

The nifty casino alliance, built on hope and greed, started to crumble. Today, Kevin Flynn calls Davis's lawsuit and allegations absurd. But, Stephens says, "knowing Kevin Flynn, I'm not saying he didn't [make the deal], because he's an idiot. He'd say anything, especially if he thought he was talking to a billionaire." Duchossois, who would not comment for this story, essentially backs Davis's version of events in a deposition. "I believe there was a breach of trust, breach of confidence, a breach of contract or breach of a gentleman's agreement," he said. Still, Duchossois did not join Davis's suit, perhaps to avoid publicizing his role in the debacle, perhaps to keep his options open should either side prevail and build in Rosemont. In any case, U.S. District Court judge Ronald Guzmán threw the suit out of federal court, ruling it should be heard in state court. (Davis's appeal is still pending.)

And the damage had already been done.

Emerald officials were so sure they had a done deal they began building their casino in October 1999. Robert Vickrey, then chairman of the gaming board, says he was just days away from putting the Emerald on the agenda, and even scheduled a site visit, although he was forced to cancel. It seemed certain the chips would be flying in Rosemont in just a matter of time. The language of the legislation seemed to make the gaming board into little more than a bureaucratic prop. The board "shall grant the application and approval" once the licensee obtained permission from the new municipality, the law said. What could be clearer than that? The Emerald might indeed have sailed right through had the gaming board not been stalled by a lawsuit filed by a group of Lake County investors. Jilted in their bid to put a boat on the Fox River, they challenged the constitutionality of the new gaming legislation, arguing it was illegally designed to benefit just one party–HP/Emerald. A Cook County judge eventually dismissed the case, ruling the Lake County group did not have standing to sue, but in the meantime another judge ordered the gaming board to withhold a decision on the Emerald until the case was settled. Meanwhile, the gaming board was creating its own problems.

Like many government agencies, the five-member gaming board has always been cozy with the industry it regulates. The board's first chairman, William Kunkle, now represents several casinos before the board, including the Emerald. Emerald Casino Inc. senior vice-president Joseph McQuaid, a former Illinois State Police master sergeant, was an investigator for the original board. Former deputy counsel Donna More represents at least four riverboats and at least six licensed vendors before the board. The list continues.

There was no reason to think the board would be particularly tough on the Emerald, even though some board staffers were livid HP had been able to prolong its appeal of the license revocation until the law could be rewritten. But the staffers could just as well have been livid with the board itself–after Governor Ryan signed the new riverboat law, the board declared the earlier revocation moot, against the advice of chief counsel Mareilé Cusack.

While the Emerald matter was pending, Ryan appointed Gregory Jones to the board and named Sergio Acosta as administrator, the person who actually runs the board's daily business. Both were former federal prosecutors and both were recommended by Ryan's adviser Jeremy Margolis. At the time, Margolis was an attorney for the West Central Municipal Conference, a group representing the 71 suburbs that would share in the local tax revenues generated by the Emerald. In other words, Margolis's clients had a great financial interest in whether or not a gaming board would approve the Emerald. (Ryan and Margolis insist there was no conflict of interest.)

The other board members seemed likely to be compliant, too. Stuart Levine* (19-count indictment for fraud, kickbacks, influence peddling), a retired HMO executive and philanthropist, was a major campaign contributor to the Republican leadership in the General Assembly. Staci Yandle, a personal injury lawyer, was politically connected downstate. Joseph Lamendella, a tax lawyer, had once worked for a company with casino properties in Puerto Rico. And Robert Vickrey, who assumed the board chairmanship in the summer of 1999, just when the Emerald materialized, stated repeatedly the legislation left the board with no choice but to approve the Emerald.

* Stuart Levine, in the 58-page document plead guilty to joining with then Governor Rod Blagojevich, fundraiser Antoin ''Tony'' Rezko and others in a plot to force investment firms seeking business from the state Teachers Retirement System to pay millions of dollars in kickbacks through consultants.

But the board's compliance may have caused problems. In November 1999, while the Emerald was on hold, the board approved the purchase of the Joliet Empress by Las Vegas casino figure Jack Binion. In the months leading up to the vote, the board's staff had investigated Binion and uncovered a thick portfolio of alleged business improprieties, including contracts given to minorities who were really fronting for white-owned businesses. Their report came with a recommendation against approving Binion's purchase. Strangely, however, board chairman Vickrey had never asked for the staff's recommendation in pushing Binion through.

A few weeks later, the staff report on Binion was leaked to the Chicago Tribune. The subsequent story reinforced the notion the fix was in, and months later the board reversed its decision. Ryan's aides put out the word the governor would not stand for a board that coddled the industry. At the January meeting, Vickrey resigned–ostensibly to spend more time with his family and tend to his own business matters. (Ryan must have eventually cooled down; a year later he appointed Vickrey to the University of Illinois Board of Trustees.) Vickrey says it is unfair to characterize his board as a rubber stamp but refuses to discuss the Binion episode.

In losing Vickrey, the Emerald lost its biggest cheerleader on the board. Gregory Jones ascended to the chairmanship, and Ryan appointed to the board Sterling Mac Ryder, formerly a lawyer for the gaming board and onetime director of the state Department of Children and Family Services. Like Vickrey, Ryder said he thought the board had no choice but to approve the Emerald.

But in June 2000, the gaming board's chief lawyer, Mareilé Cusack, issued a surprising legal opinion. While the conventional interpretation of the "shall" language of the statute was reasonable, she said, there is another reasonable interpretation: the word "shall" applies only to the casino's relocation. It is still up to the board whether or not to renew the license. The board, she concluded, retained its authority to deny a Rosemont casino. The board adopted Cusack's interpretation with only Ryder dissenting. Then Cusack resigned, saying she wanted to spend more time with her family.

In time, the Emerald lost Ryder, too. In late November, Ryder said publicly he was leaning against the Emerald because of information being developed by the board's investigators. He told the Arlington Heights-based Daily Herald rejecting the Emerald would also send a message casinos could not be greased through the legislature.

When the lawsuit brought by the would-be Fox River casino investors was dismissed, on January 25, 2001, it cleared the way for the gaming board to vote on the Emerald at its January meeting four days later. For the first day and a half, the board met in private, digesting and discussing a 100-page staff report. On the afternoon of January 30th, the board emerged to a packed fifth-floor auditorium in a state office building at 160 North LaSalle Street. The crowd included reporters, antigambling activists, and the Emerald group–executives, lawyers, and investors, including former Chicago Bear Shaun Gayle and Connie Payton, Walter's widow. Gayle and Payton were among the investors brought on board to satisfy the legislature's diversity mandate.

After disposing of routine business, and hearing public commentary, some of it against the Rosemont casino, Jones asked Acosta for the staff's recommendation on the Emerald. Acosta recommended rejecting it, explaining the staff believed "Donald and Kevin Flynn ha[d] repeatedly made false and misleading statements" and that "organized crime ha[d] attempted in this case to gain . . . a foothold." The board then voted (4-1) not only to reject the Emerald, but to revoke its license. "It was wonderful to see people who thought they had a sure thing get screwed," says the Rev. Tom Grey, an antigambling activist who is the industry's archnemesis in Illinois.

The board put its denial in writing in March, explaining the Flynns had misrepresented the way the Rosemont deal had come together, failed to inform the board of stock sales, started construction without board approval, and allowed investors with Mob ties into the deal. The board does not cite Stephens for any misconduct. In fact, in public statements in January when the board denied the Emerald the go-ahead, board members had practically canonized the Rosemont mayor. In private, things were different. In the closed session before January's public meeting, board members fiercely debated whether to raise questions about Stephens in the denial, according to board sources. A board majority decided against that because they concluded there was enough malfeasance by the Flynns to jettison the Emerald without needlessly taking on the Rosemont mayor.

The implications of the written denial, however, raise the question of whether the board will ever approve a casino in Rosemont as long as Stephens is mayor. For example, the board blames the Flynns for accepting an investment in the Emerald from Sherri Boscarino, the wife of Nick Boscarino, whom the board cited as an associate of mobster William Daddano Jr. But in his deposition, Stephens acknowledges he introduced Sherri Boscarino to McQuaid at a political fundraiser for George Ryan at Stephens's spread in Lake Delavan, Wisconsin. What's more, the Chicago Crime Commission charged Daddano is a business associate of Stephens. Until recently, Nick Boscarino was partners with Stephens's son Mark in a cleaning company called Bomark, which has contracts for the Rosemont convention center and the Allstate Arena.

Kevin Flynn insists the Rosemont mayor "never suggested any shareholder, never endorsed any shareholder, and said from the very beginning, 'I want nothing to do with this, because it's obviously going to be scrutinized.'" But the high-level Emerald source says Flynn tells a different story inside the company. "Kevin Flynn says he was told to put Boscarino in, presumably by Don Stephens," the source says. Putting Boscarino in the deal was tantamount to taunting the board, the source says. "If Boscarino had to be taken care of, there are better ways to take care of Boscarino. It was so in-your-face."

Stephens denies any Mob ties. "If Nick is a hood, I don't know it," he says. "Show me something that's really Mob, and I'll resign."

The use of D&P Construction on the Emerald project was also a problem for the board. D&P is owned by the sister-in-law of John DiFronzo, whom the crime commission calls a Mafia operating director. The company is also a Stephens campaign contributor.

Kevin Flynn says Emerald executives never realized alleged organized crime connections were a board concern until 90 minutes before the meeting in which the casino was denied. "The notion that we had some fiduciary responsibility to investigate these people is ludicrous," Flynn says. "Absolutely ludicrous. [The gaming board has] intergovernmental relationships, they have access to the police computers; they can do all those things. We as a private company have never had the burden of doing investigations, nor do we have access to what they have."

The one board vote in favor of the Emerald at the January meeting came from tax lawyer and former Internal Revenue Service agent Joseph Lamendella, who strangely had not been reappointed or replaced even though his term had expired six months earlier. A former federal prosecutor, Lamendella thought the Emerald could save itself by replacing the Flynns with a pristine public gaming company. And he defended Stephens. "Rosemont, based upon what I have seen and heard, is not a bastion of organized crime," he said. "On the contrary, in my judgment, it's a model of municipal magnificence . . . the best and the most logical place for a casino anywhere in Illinois."

Then Lamendella resigned, saying he had lost his passion for the job.

"How did it happen? This is the land of the deal!" Reverend Grey says, laughing.

The Emerald crew are still wondering the same thing. Their best answer is the rules changed in midstream. The legislature intended to put a casino in Rosemont. The gaming board intended to let it happen. But the cumulative weight of the Davis allegations, the Binion embarrassment, the Vickrey resignation, and Cusack's board-empowering legal interpretation created a new playing field. Emerald would have to play it by the book.

The Emerald's leadership, however, never changed its approach, all along lambasting the board for its slow-footedness and–intentionally or not–engaging in a series of slights such as not filing paperwork the gaming board staff requested and failing to keep the board closely informed of construction contracts and changes among proposed shareholders. If it had been just one or two things that bothered the board–a single Mob-tied investor or an inconsistent explanation of events–a solution probably could have been found. Even board chairman Gregory Jones says it was "more the accumulation" of alleged problems that sank the Emerald, not any one thing in particular. Kevin Flynn says the Emerald is being held to a higher standard than casinos have been in the past, but Sheerin, the old Galena hand who worked with the gaming board to get the Silver Eagle off the ground, says, "I get a kick out of [the Emerald] guys. We couldn't turn a switch without getting board approval."

Emerald's executives seemed to believe throughout they were entitled to a casino. "[They] couldn't get over the notion that just because they want it they were gonna get it," says the Emerald source. Or, as HP president Kevin Larson said in 1998, "we believe that license is ours."

Of course, as Grey and others point out, the license was never theirs; it belongs to the state, and it is the license holder's privilege to get rich off it as long as the license holder meets the conditions laid down by the gaming board. Both gaming board and Emerald sources say Flynn and company lawyer Michael Ficaro took an aggressive–and alienating–tack instead of nurturing the board. The Emerald insider says some shareholders once beseeched Kevin Flynn to step back from a leading role because the board didn't like him. Flynn wasn't convinced. "'Kevin, they hate you!'" the shareholders told him, according to the source. "'Face it. You're not the guy to deal with it,'" they said. "[Kevin] just exploded: 'This can't be!'" the source says.

Clout doesn't die; it just finds another way. Three months after the Emerald was rejected, Representative Capparelli suggested enlarging the gaming board, and Representative Joel Brunsvold floated a plan to combine the state's gaming and racing boards. Both ideas were viewed by political insiders as ways to pack the gaming board to reverse the Emerald denial. Both plans died quickly.

As Chicago went to press, Ryan changed the board himself, replacing Ryder and Yandle with developer Elzie Higginbottom and former Dominick's CEO Robert Mariano. The new members, Ryan said in a statement, "will bring fresh perspectives grounded in their successful business careers."

The move wasn't a complete surprise. Last spring, Sun-Times gossip columnist Michael Sneed reported Ryder intended to leave the board. In fact, Ryder had already sent a letter to the governor asking to be reappointed. Ryder thinks the item was planted to send him the message he wasn't wanted, or to create an environment in which replacing him would not seem so controversial.

Meanwhile, Emerald Casino Inc. is working on three tracks. It is appealing its license revocation and the gaming board's January rejection through the board's administrative process. It has also filed suit against the board in Cook County court alleging the board violated the "shall" language of the riverboat legislation. Kevin Flynn now says he may accept a settlement in which a new ownership group comes in, and he and his father sell their interest–a welcome outcome, it seems, to some. In discussions with Governor Ryan, Stephens says, "the governor indicated that if the Flynns are the problem, why [not] just get the Flynns out."

Stephens, too, is still hard at work. In May he hired former federal prosecutor Dan Webb to represent the village before the board should the board reaward the revoked Emerald license somewhere other than Rosemont. As U.S. attorney, Webb indicted Stephens twice, once for allegedly lying on his taxes and another time for allegedly getting kickbacks in a land deal. Stephens beat the rap each time. Now Webb is a partner at Winston & Strawn, where former governor Jim Thompson is chairman. Thompson is a lobbyist for Duchossois, and sent a letter to the gaming board praising Stephens when it was weighing the Emerald's fate.

Stephens also must figure out what to do with the $40-million parking garage the village is building. Under the terms of its deal with Emerald, the casino company is supposed to reimburse the village for the cost of the garage. But without a license, Emerald is refusing to pay.

In May, Stephens had lunch in Rosemont with Grey. The minister was not won over; he gave the mayor a copy of the Methodist Church's social principles, which include an antigambling plank. Perhaps the final word, then, should be left to Grey, who–despite his principles–is happy to use a gambling expression to describe what happened to the bigwigs behind the Emerald: "They ultimately misplayed a sure hand."

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