CHICAGO — Former Illinois Gov. Daniel Walker pleaded guilty Wednesday to fraud and perjury charges stemming in part from improper loans arranged for him from his own savings and loan institution before it went broke.
"I have broken the law and pleaded guilty," Walker read from a statement after entering his plea before U.S. District Judge Ann Williams. "I have deep regrets and no excuses."
Walker, a Democrat who served as governor from 1973 to 1977, faces a maximum of 15 years in prison and $505,000 in fines.
At a news conference earlier Wednesday, U.S. Atty. Anton Valukas said Walker had agreed to plead guilty to charges of bank fraud, misapplication of bank funds and perjury and agreed to cooperate "in this and related investigations." He declined to elaborate.
Walker, who turns 65 today, was chairman of the board and chief executive officer of First American Savings & Loan Assn. in suburban Oak Brook during the time covered by the charges.
In April, 1986, the thrift was declared insolvent by the Federal Home Loan Bank Board and put under conservatorship of the federal government.
Valukas stressed that Walker's involvement in loans issued by the institution, although fraudulent, did not play a role in its downfall.
He said that, when Walker's own borrowing from First American reached the limit allowable under federal banking regulations, the former governor asked his son, Daniel Walker Jr., and a close personal friend, Robert McCarthy, to seek loans from First American.
Valukas said Walker then used about two-thirds of the more than $265,000 they borrowed to meet personal obligations, such as making payments on a yacht and to cover expenses at his law offices. Those transactions resulted in the charges of misapplication of bank funds.
The perjury charge stems from denials that the elder Walker made to federal bank board investigators in the spring of 1986, when they sought to learn whether he had received proceeds from a loan made to a family member.
Valukas said the bank fraud charges stem from $1.1 million in loans received by Walker, or companies in which he held a substantial share of ownership, from five banks in Illinois, Florida and Arkansas.
Walker achieved national prominence by being elected governor over the opposition of the political machine of the late Chicago Mayor Richard J. Daley.