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 1
 SPECIAL REPORT
Fears and lobbying in Collinsville
Illinois kingpin Gary Fears works in mysterious ways
 
By C.D. STELZER / cdstelzer@gmail.com
First part of a two-part series. First published at focusmidwest.com in May 2010.
Nine Gateway Drive is far from K Street,the center of Washington’s influence-peddling industry. The address belongs toa now-vacant space in a strip mall locatedin Collinsville, Illinois, just east of St.Louis.This small town, which bills itself as thehorseradish capital of the world, seems anodd place for the Kingdom of Morocco tobe doing business, but, according to a2006 congressional lobbying report, theNorth African nation hired Collinsville-based Avatar Enterprises Inc. to helprepresent its interests in the United States.Gary R. Fears, the 63-year-old owner of Avatar, now lives in Boca Raton, Florida,but his career is deeply rooted in MadisonCounty politics, where he made his bonesdecades ago as a Downstate operative forthen-Gov. Dan Walker. Since leavingpublic life, Fears has traded on his insiderstatus and political connections to parlay aseries of controversial deals into abyzantine financial empire.The foundation of that empire began inthe early 1980s, when Fears receivedmillions from the state to build a hotel inCollinsville but eventually defaulted onthe loan, leaving Illinois taxpayers in thelurch. A decade later, he circumventedregulators and made a fortune selling hisfamily’s hidden ownership interest inIllinois’ first riverboat casino.Since then, Fears has invested in Indiancasinos and taken on exotic clients, amongthem an Internet gambling venture basedin Gibraltar and Morocco’s government-owned phosphate industry. His hired gunsinclude Republican and Democraticoperatives with access to the highest levelsof the federal government.If that’s not enough to give one pause,Fears’ latest acquisition is a Soviet
 
 2military aircraft that has been grounded fornearly a year because of litigation. Asoften is the case for Fears, the lawsuit isanother high-stakes craps game in a worldfilled with risk.Federal law enforcement agencies haveinvestigated Fears’ activities in the past,and he has been a person of interest incriminal investigations in at least twostates. Two of Fears’ business partnershave met untimely deaths. Fears also hasbeen the plaintiff or defendant in a raft of civil cases, and his international financialtransactions spurred the IRS to go afterhim for back taxes.But despite intense scrutiny by local,state and federal authorities, he has neverbeen cited for a single criminal violation.“I’ve got to be the most investigated guyin Southern Illinois,” Fears once told areporter, “and I’ve never even beencharged with illegal parking.”
The Venetian
 Fears grew up in Venice,Illinois, one of six childrenof car salesman Floyd Fearsand his wife, Edna.Sandwiched between theslaughterhouses of East St.Louis and the steel mills of Granite City, the towngained it name not for itsgrandeur but because thestreets sometimes turnedinto canals after a heavyrain.His 1964 senior class picture in
TheVenetian
shows a pensive young man witha dark, wavy pompadour. The high schoolyearbook lists him as class treasurer, officehelper, Booster Club member, castmember of the junior class play andsupporter of the Red Cross. Schoolmatesremember him as slightly overweight andhaving few friends.Fears’ first marriage ended in divorce inOctober 1969; his ex-wife was awardedcustody of their infant son.In 1968, he campaigned for liberal U.S.Sen. Eugene McCarthy, a MinnesotaDemocrat whose anti-war candidacyprompted President Lyndon B. Johnsonnot to seek a second term.Three years later, Fears stumped onbehalf of another maverick Democrat, DanWalker, who won the Illinois governorshipdespite fierce competition from Downstaterival Paul Simon and the powerful politicalmachine of Chicago Mayor Richard Daley.Under Walker, Fears acted as a fixer forthe Illinois Department of Transportation,settling disputes that were delaying thecompletion of Downstate portions of theinterstate highway system.
 
 3“It was a quagmire,” recalls retired
St. Louis Post-Dispatch
Illinois politicalcorrespondent Taylor Pensoneau. “Thesticking points included minority hiringquotas and other hot-button issues. Whatwas at stake was continued federalfunding.” In his biography of Walker,Pensoneau describes Fears as “animaginative hustler from Granite City whowas adept at finding shortcuts through redtape.”After Walker’s 1976 defeat, Fears quithis state job, but his political career wasn’tover. Within months he had vaulted ontothe national stage, joining the DemocraticParty’s national finance committee.With the advent of the Reagan era, the“imaginative hustler” switched his street-savvy panache for the acumen of aninvestment broker, and pragmatism took precedence over partisan politics. In thefuture, Fears the entrepreneur would crossparty lines whenever necessary. Politicsand business were both means to an end,the two sides of the same coin of therealm.“I personally don’t think it all thatfascinating,” says Fears of his rise fromobscurity. “I meet people all the time whocame from tough economic backgroundswho improve themselves by hard work. Itis what this country is based on.”
Hotel-motel time
 Fears’ dodgy deals date back to 1982,when he and partner B.C. Gitcho of Granite City received a $13.4 million stateloan from Republican Gov. JimThompson’s administration to build whatis now the Holiday Inn in Collinsville.When the hotel fell behind in its payments,then-Illinois Treasurer Pat Quinn (thestate’s current governor and a Democrat)sought to hold the borrowers in default,but his efforts were blocked in court.In 1995, newly elected Treasurer JudyBaar Topinka, a Republican, renegotiatedthe terms of the loan, but the state stillended up with the short end of the stick.Under the restructuring, the hotel wasallowed to skip quarterly mortgagepayments if it could show that it wasoperating at a loss. The loan and itsaccrued interest of more than $31 millionwere never repaid.A final 2007 audit conducted for the stateby an independent hotel managementcompany concluded that Fears’Collinsville Holiday Inn reported losses in2005 and 2006 that “under normal, usualand customary reporting … would haveresulted in a gain and thereby funds shouldhave been due and payable to the state.…”Alleging serious misconduct, currentIllinois Treasurer Alexi Giannouliasturned over 100,000 pages of documentsto federal prosecutors in Chicago, but U.S.Attorney Patrick Fitzgerald has so fardeclined to take action.“The entire project became a politicalfootball,” says Fears of the hotel deal. “Itis long forgotten that I became a limitedpartner in the late ’80s. [I] had nooperational role after that [and] noongoing liability beyond what wassupposed to be guarantees for a setamount.”
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